NCsoft Earnings Release Q4, 2007

Transcription

1 NCsoft Earnings Release Q4, 2007 February 13, 2008 NCsoft CORPORATION OK-san Bldg , Samsung-dong, Kangnam-gu, Seoul , KOREA Tel: Fax : Copyright NCsoft Corporation. All Rights Reserved

2 Table of Contents 01. Disclaimer 02. Consolidated Company 03. Earnings Highlights 04. Game Launch Schedule 05. Guidance 06. User Statistics 07. Appendix Parent Earnings

3 Disclaimer Disclaimer The financial results for Q4 of 2007 have been prepared on an un-audited basis, and may be subject to change during independent auditing process. Some of the information and data in the material have been prepared based on assumptions. There can be no assurance that the assumptions used by NCsoft are correct and even if they are, that the effect of such assumptions on NCsoft s business and results of operations will be as projected. Therefore, NCsoft will not be responsible for individual investment decisions based solely on this material.

4 Consolidated Company The consolidated company NCsoft (Controlling Company) Consolidated Subsidiaries Equity Method Affiliates NC Interactive (100%) Orion Soft (100%) ArenaNet (100%) J Interactive (100%) NC Europe (100%) NCRC (100%) NC Japan (60%) NCsoft Japan (100%) NC Taiwan (85%) NC China (100%) NC True(49%)

5 Earnings Highlights Consolidated Sales & Profit Quarterly Annual (Unit : W Mn) 4Q 07 3Q 07 QoQ(%) 4Q 06 YoY(%) FY '07 FY '06 YoY(%) Net Sales 89,069 80,050 11% 90,221-1% 329, ,679-3% - Online Game Sales 85,803 75,548 14% 85,463 0% 314, ,923-1% - Royalties 3,266 4,502-27% 4,758-31% 15,301 21,756-30% Expenses 76,990 70,315 9% 74,806 3% 280, ,401-5% Operating Profit 12,078 9,735 24% 15,415-22% 49,484 43,278 14% (%) 14% 12% 17% 15% 13% Pre-tax Profit 14,057 13,702 3% 17,652-20% 62,103 50,016 24% (%) 16% 17% 20% 19% 15% Net Income 10,289 10,075 2% 18,650-45% 45,047 38,052 18% (%) 12% 13% 21% 14% 11% 1) NC Taiwan has been consolidated beginning 1Q07. Royalties in FY 06 include royalties from NC Taiwan (6.3 billion Won). 1/19

6 Earnings Highlights Online Game Sales Mix by Games * NC Taiwan has been consolidated beginning 1Q07. 1) Royalties in FY 06 include royalties from NC Taiwan (6.3 billion Won). Quarterly Annual (Unit : W Mn) 4Q 07 3Q 07 QoQ(%) 4Q 06 YoY(%) FY '07 FY '06 YoY(%) Korea 55,815 47,760 17% 53,459 4% 205, ,161-4% - Game Sales 52,645 43,403 21% 48,826 8% 190, ,880-2% - Royalties 3,170 4,357-27% 4,633-32% 14,876 21,281-30% North America 15,129 13,662 11% 18,008-16% 54,606 60,869-10% Europe 7,181 8,181-12% 10,776-33% 27,647 30,065-8% Japan 8,461 7,798 9% 7,978 6% 31,990 32,584-2% Taiwan 2,483 2,649-6% - New 9,698 - New Total 89,069 80,050 11% 90,221-1% 329, ,679-3% 4Q 07 QoQ 3Q 07 4Q 07 YoY 4Q 06 Taiwan Japan3% 9% Europe 8% North America 17% Royalties 4% Korea 59% Japan 10% Europe 10% Taiwan 3% North America 17% Royalties 5% Korea 55% Taiwan Japan 3% 9% Europe 8% North America 17% Royalties 4% Korea 59% Japan 9% Europe 12% North America 20% Royalties 5% Korea 54% 2/19

7 Earnings Highlights Online Game Sales Mix by Games Quarterly Annual (Unit : W Mn) 4Q 07 3Q 07 QoQ(%) 4Q 06 YoY(%) FY '07 FY '06 YoY(%) Lineage 31,839 23,651 35% 29,988 6% 111, ,049-6% Lineage II 33,836 32,424 4% 30,581 11% 131, ,206 10% CoH / CoV 5,401 5,721-6% 5,532-2% 23,446 25,016-6% Guild Wars 9,240 13,012-29% 18,635-50% 42,058 52,600-20% Tabula Rasa 5,019 - New - New 5,019 - New Others % % 1, % Total 85,803 75,548 14% 85,463 0% 314, ,923-1% QoQ YoY 4Q 07 3Q 07 4Q 07 4Q 06 Tabula Rasa Guild6% Wars Others 1% 11% Lineage COH/V 37% 6% Lineage II 39% Guild Wars 17% Other 1% COH/V 8% Lineage II 43% Lineage 31% Tabula Rasa Guild6% Wars Others 1% 11% Lineage COH/V 37% 6% Lineage II 39% Guild Wars 22% Other 1% COH/V 6% Lineage II 36% Lineage 35% 3/19

8 Earnings Highlights Royalties Breakdown Quaterly Annual (Unit : W Mn) 4Q 07 3Q 07 QoQ(%) 4Q 06 YoY(%) FY '07 FY '06 YoY(%) Lineage 2,936 3,900-25% 2,922 0% 13,280 12,870 3% Taiwan 2,828 3,758-25% 2,810 1% 12,775 12,430 3% China % 92 4% % H.K % 20-40% % Lineage II % 1,634-86% 1,570 8,207-81% Taiwan , % - 6, % China % 154-1% % Thailand % % 961 1,278-25% Guild Wars % % Taiwan % % Others % % % * Royalty Total 3,266 4,502-27% 4,758-31% 15,301 21,756-30% Other royalties consist of non-game royalties, such as royalties for character and goods guidebooks, from Korea and Japan. 4/19

9 Earnings Highlights Consolidated Cost Structure (COGS + SG&A) (Unit : W Mn) 4Q 07 3Q 07 QoQ(%) % of total sales % of total cost FY '07 FY '06 YOY(%) Payroll 35,191 33,822 4% 40% 46% 138, ,854 6% Sales Variable Costs 9,708 7,566 28% 11% 13% 33,222 38,269-13% - Royalties % 1% 1% 3,650 4,609-21% - Payment processing fees 2,726 3,750-27% 3% 4% 11,544 9,917 16% - Sales commissions 1,402 1,344 4% 2% 2% 5,896 8,585-31% - Box production costs 3, % 4% 5% 8,142 9,470-14% - Other sales variables 997 1,219-18% 1% 1% 3,990 5,688-30% Advertising 5,504 6,532-16% 6% 7% 16,677 20,921-20% Depreciation & Amortization 6,290 4,917 28% 7% 8% 20,551 24,678-17% - Depreciation 4,151 3,654 14% 5% 5% 14,588 19,687-26% - Amortization 2,139 1,263 69% 2% 3% 5,963 4,991 19% Others (*) 20,297 17,478 16% 23% 26% 71,334 80,679-12% Total : 76,990 70,315 9% 86% 100% 280, ,401-5% (*) 4Q 07: Bandwidth cost (1,351), Rent(3,847), Wage for outsourced staff(1,774), outsourced R&D(1,014), etc. 5/19

10 Earnings Highlights Quarterly Sales by Equity-Method Affiliates Quaterly Annual (Unit : W Mn) 4Q 07 3Q 07 QoQ(%) FY '07 FY '06 YoY(%) NC China 915 1,430-36% 3,930 3,343 18% (RMB Mn 7.4) (RMB Mn 11.7) (RMB Mn 32.2) (RMB Mn 27.9) NC True % 1,698 2,203-23% (Baht Mn 11.9) (Baht Mn 15.5) (Baht Mn 58.9) (Baht Mn 87.4) Total 1,270 1,888-33% 5,628 5,546 1% 6/19

11 Earnings Highlights Equity Method Gain or Loss Breakdown (Unit : W Mn) 4Q 07 3Q 07 QoQ(%) FY '07 FY '06 YoY(%) Korea (522) (273) Loss continued (1,297) (302) Loss continued Orion Soft 23 (13) Turn to black (148) (114) Loss continued J Interactive (127) (263) Loss continued (734) (188) Loss continued Next Play (418) 3 Turn to red (415) - New Overseas % (987) (3,655) Loss continued NC Taiwan(*) (809) - NC China 32 (16) Turn to black (823) (1,263) Loss continued NC True 17 (3) Turn to black (241) (945) Loss continued NCRC (82) (5) Loss continued 41 (89) Turn to black NCsoft Japan % 36 (549) Turn to black Total (268) (251) Loss continued (2,284) (3,957) Loss continued * NC Taiwan has been consolidated beginning 1Q07. 7/19

12 Game Official Launch Schedule ( 08) 1st Half, nd Half, 2008 Aion Point Blank FPS Korea Punch Monster a side-scrolling RPG Dragonica a side-scrolling RPG Love Beat Rhythm & Dance North America /Europe Guild Wars 2 -beta test Aion Japan Aion, Tabula Rasa China /Taiwan Aion 8/19

13 Earnings Guidance (Unit : W Mn) FY 08 Financial Forecast 2008 Estimation (I) YoY(%) 2008 Estimation (II) YoY(%) 2007 Sales 350,000 6% 380,000 15% 329,716 - Online Game Sales 335,000 7% 365,000 16% 314,415 Lineage 106,000-5% 106,000-5% 111,401 Lineage II 138,000 5% 138,000 5% 131,154 CoH / CoV 22,000-6% 22,000-6% 23,446 Guild Wars 29,000-31% 29,000-31% 42,058 Tabula Rasa 15, % 15, % 5,019 Others 25, % 55, % 1,337 - Royalty Sales 15,000-2% 15,000-2% 15,301 Expenses 293,000 5% 314,000 12% 280,232 Operating Profit 57,000 15% 66,000 33% 49,484 (%) 16% 17% 15% Pre-tax Profit 67,000 8% 77,000 24% 62,103 (%) 19% 20% 19% 9/19

14 Earnings Highlights Consolidated Balance Sheet (Unit : W Mn) Change Asset 547, ,490 40,693 Current Asset 368, ,405-4,497 (Cash & cash equivalents) 51,009 49,369 1,640 (Short term investments) 240, ,849-10,272 (Accounts Receivables) 39,744 39, Fixed Asset 178, ,085 45,190 (Investment) 10,004 40,745-30,741 (PPE) 124,811 84,599 40,212 Liability 98,283 85,221 13,062 Current Liability 91,311 79,752 11,559 Fixed Liability 6,972 5,469 1,503 (Debt) Shareholder's Equity 448, ,269 27,631 (Paid in Capital) 10,237 10, /19

15 User Statistics Operating Metrics (Lineage) Korea As of December 2007 Servers Highest concurrent users 187, , , , , , , , ,469 Monthly access 1,627, , , , , , , , ,065 Personal accounts 309, , , , , , , , ,818 Taiwan Servers Highest concurrent users 134, , , , , , , , ,897 Monthly access 472, , , , , , , , ,625 Japan Servers Highest concurrent users 14,534 12,448 12,836 12,643 10,599 12,016 10,339 9,322 9,899 Monthly access 74,671 76,027 69,641 76,191 80,019 79,252 48,083 56,430 57,187 China Servers Highest concurrent users 14,149 18,376 20,399 17,246 19,551 20,705 25,354 18,414 16,740 Monthly access 110, , , , , , , ,127 91,886 U.S Servers Highest concurrent users 2,200 2,224 2,311 2,780 3,732 3,205 3,077 2,299 1,862 Monthly access 9,059 9,759 9,685 9,727 11,953 9,202 9,093 6,999 6,414 * Highest concurrent users: Number of users that play simultaneously at one point in time (highest record of the given month) * Monthly access: Number of unique users that log on at least once in the given month * Personal accounts: Number of users that pay flat monthly fees 10/18

16 User Statistics Operating Metrics (Lineage II) Korea As of December 2007 Servers Highest concurrent users 119, , ,183 97, , , , , ,285 Monthly access 730, , , , , , , , ,096 Personal account 174, , , , , , , , ,334 Taiwan Servers Highest concurrent users 71,301 78,550 72,713 66,497 55,571 46,768 50,950 47,063 45,906 Monthly access 198, , , , , , , , ,080 Japan Servers Highest concurrent users 40,088 44,631 48,843 50,188 52,684 49,268 49,693 48,736 54,475 Monthly access 105, , , , , , , , ,703 China Servers Highest concurrent users 43,026 37,806 18,438 18,085 16,888 15,238 16,594 15,946 19,897 Monthly access 354, , , , , , , , ,662 U.S & Europe Servers Highest concurrent users 28,309 32,767 32,099 42,287 32,732 32,767 31,465 30,867 29,055 Monthly access 76,435 89,337 83,221 94, ,039 87,652 84,720 78,953 79,986 Thailand Servers Highest concurrent users 10,202 11,000 7,941 7,616 6,596 5,903 7,232 6,259 5,010 Monthly access 59,938 64,920 52,516 45,778 31,727 30,416 31,637 26,004 43,029 11/18

17 User Statistics Operating Metrics (City of Heroes/Villains) U.S & Europe As of December 2007 Servers Highest concurrent users 23,730 23,699 22,274 21,500 17,728 14,767 26,669 15,910 17,058 Monthly access 194, , , , , , , , ,250 Operating Metrics (Guild Wars) US & Europe As of December 2007 # of Accounts activated to date 1,270,000 1,490,000 2,080,000 2,447,000 3,122,000 3,555,000 3,917,000 4,500,000 4,878,000 12/18

18 Appendix Parent Earnings Sales & Profit Quarterly Annual (Unit : W Mn) 4Q 07 3Q 07 QoQ(%) 4Q 06 YoY(%) FY '07 FY '06 YoY(%) Sales 61,452 51,474 19% 57,686 7% 222, ,456-2% - Korea 52,752 43,403 22% 48,826 8% 191, ,880-1% - Royalty 8,700 8,071 8% 8,860-2% 31,550 33,576-6% Expenses 46,418 43,329 7% 46,235 0% 175, ,610 0% Operating Profit 15,034 8,146 85% 11,451 31% 46,881 51,846-10% (%) 24% 16% 20% 21% 23% Pre-tax Profit 14,424 12,220 18% 18,969-24% 58,328 47,266 23% (%) 23% 0% 33% 26% 21% Net Income 10,289 10,075 2% 18,650-45% 45,047 38,052 18% (%) 17% 20% 32% 20% 17% 14/19

19 Appendix Parent Earnings Sales Breakdown - Korea Quarterly Annual (Unit : W Mn) 4Q 07 3Q 07 QoQ(%) 4Q 06 YoY(%) FY '07 FY '06 Lineage 30,540 22,254 37% 28,128 9% 105, ,721 PC Café 4,175 4,182 0% 5,682-27% 18,283 22,218 Personal 26,365 18,072 46% 22,446 17% 87,115 88,503 Lineage II 21,984 20,984 5% 20,611 7% 84,969 82,558 PC Café 5,261 5,359-2% 6,179-15% 21,697 25,682 Personal 16,723 15,625 7% 14,432 16% 63,272 56,876 Others % % Total 52,752 43,403 22% 48,826 8% 191, ,880 15/19

20 Appendix Parent Earnings Royalties Breakdown Quaterly Annual (Unit : W Mn) 4Q 07 3Q 07 QoQ(%) 4Q 06 YoY(%) FY '07 FY '06 Lineage 3,364 4,258-21% 3,494-4% 14,838 14,762 Taiwan 2,828 3,758-25% 2,810 1% 12,775 12,430 Japan % % 1,203 1,484 China % 92 4% U.S % % H.K % 20-40% Lineage II 3,946 3,699 7% 5,197-24% 14,975 18,370 Taiwan 983 1,077-9% 1,170-16% 3,908 6,122 Japan 2,001 1,532 31% 2,497-20% 6,594 6,843 China % 154-1% U.S / Europe % 1,066-32% 2,903 3,321 Thailand % % 961 1,278 Guild Wars % % Taiwan % 65-48% Japan % 93-15% Tabula Rasa 1,276 - New - New 1,276 - Others % 11-91% Royalty Total 8,700 8,071 8% 8,860-2% 31,550 33,576 16/19

21 Appendix Parent Earnings Cost Structure (COGS + SG&A) Quarterly (Unit : W Mn) 4Q 07 3Q 07 QoQ(%) % of total Sales % of total Cost Annual FY '07 FY '06 YoY(%) Payroll 22,962 24,613-7% 37% 49% 98,439 95,332 3% Sales Variable Costs 4,091 3,329 23% 7% 9% 15,272 22,297-32% - Royalties % 0% 0% % - Payment processing fees 1,998 1,559 28% 3% 4% 6,930 9,917-30% - Sales commissions 1,402 1,344 4% 2% 3% 5,896 8,585-31% - Other sales variables % 1% 1% 2,235 3,561-37% Advertising 4,147 3,190 30% 7% 9% 10,377 12,116-14% Depreciation & Amortization 2,737 2,346 17% 4% 6% 9,264 11,920-22% - Depreciation 2,356 2,157 9% 4% 5% 8,328 11,153-25% - Amortization % 1% 1% % Others (*) 12,481 9,851 27% 20% 27% 42,322 33,945 25% Total : 46,418 43,329 7% 76% 100% 175, ,610 0% 17/19

22 Appendix Parent Earnings Quarterly Sales by Subs. & JVs Quaterly Annual (Unit : W Mn) 4Q 07 3Q 07 QoQ(%) FY '07 FY '06 YoY(%) NC Interactive 15,435 13,746 12% 55,562 62,013-10% ($Mn 16.7) ($Mn 14.8) ($Mn 59.8) ($Mn 64.9) ArenaNet 3,130 3,213-3% 12,020 12,708-5% ($Mn 3.4) ($Mn 3.5) ($Mn 12.9) ($Mn 13.3) NC Japan 8,468 7,798 9% 31,997 32,585-2% (JPY Mn 1,040) (JPY Mn 990) (JPY Mn 4,051.6) (JPY Mn ) NC Taiwan 2,521 2,649-5% 9,736 15,144-36% (TW Mn 88.8) (TW Mn 93.9) (TW Mn 344.1) (TW Mn 515.1) NC Europe 7,040 8,181-14% 27,506 30,081-9% ( Mn 3.7) ( Mn 4.4) ( Mn 14.8) ( Mn 17.1) NC China 915 1,430-36% 3,930 3,343 18% (RMB Mn 7.4) (RMB Mn 11.7) (RMB Mn 32.2) (RMB Mn 27.9) NC True % 1,698 2,203-23% (Baht Mn 11.9) (Baht Mn 15.5) (Baht Mn 58.9) (Baht Mn 87.4) Total 37,864 37,475 1% 142, ,077-10% 18/19

23 Appendix Parent Earnings Equity Method Gain or Loss Breakdown Quaterly Annual (Unit : W Mn) 4Q 07 3Q 07 QoQ(%) FY '07 FY '06 YoY(%) Korea (522) (273) Loss continued (1,297) (302) Loss continued Orion Soft 23 (13) Turn to black (148) (114) Loss continued J Interactive (127) (263) Loss continued (734) (188) Loss continued Next Play (418) 3 Turn to red (415) - New Overseas (1,507) 696 Turn to red (416) (15,304) Loss continued NC Interactive 1, % 7,509 (7,525) Turn to black NC Japan (422) 730 Turn to red 1,512 1,116 35% ArenaNet (1,950) (1,459) Loss continued (6,806) (5,854) Loss continued NC China 32 (16) Turn to black (823) (1,263) Loss continued NC Taiwan (309) 88 Turn to red (1,588) (809) Loss continued NC Europe (599) 580 Turn to red (56) 614 Turn to red NC True 17 (3) Turn to black (241) (945) Loss continued NCRC (82) (5) Loss continued 41 (89) Turn to black NCsoft Japan % 36 (549) Turn to black Total (2,029) 423 Turn to red (1,713) (15,606) Loss continued 19/19