SEMIANNUAL BUSINESS REPORT 2014

Transcription

1 SEMIANNUAL BUSINESS REPORT 2014 January 1 to June 30, 2014 Stock Code: 3659

2 Message from the President Our Core Strategic Theme is Focus I would like to start by taking this opportunity to express my deepest gratitude to all of our shareholders for your continued support. We think that the only way to build a large and financially successful games company is to make great games. The only way to make great games is by treating games as an art form and demanding that we only make art that we are proud of. In order to do this, our key operational word is focus. We focus our resources only on those things that are likely to substantially grow our business. During the first half of 2014, we have been applying that focus around three areas: Products, People and Partners. This laser-like focus has led to an exciting pipeline of games, a clearly defined mission that is gathering the attention of the global development community, and a truly world-class lineup of partnerships. We believe that this will result in games that are truly fun and wildly differentiated that will continue to amaze and delight our customers for months and years to come, which is the best way for us to grow our business, and drive shareholder value. Owen Mahoney President and Chief Executive Officer Globalization+Creativity 1 SEMIANNUAL BUSINESS REPORT 2014

3 Semiannual Overview We are focusing our resources on Products, People and Partners. Products: Our goal is to create the best in online games Products New Games: We have a laser-like focus on quality. We have pared down the development to games that really matter- those that are truly fun and differentiated Live Games: We are focused on longevity and user retention over short-term monetization to build a robust revenue base People: Demand commitment to the highest standard of game development and operations People Partners Our mission is to develop the highest quality online games to build revenue over time. Our clearly defined mission and objectives are drawing the attention of the global development community Partners: Only partner with developers who are as dedicated to online game quality as we are Our approach is to combine our expertise in online free-to-play with world-class development capability to build and grow fantastic online games for our players around the world Performance Trend Revenue (Millions of yen) Operating income (Millions of yen) Net income (Millions of yen) Earnings per share (Yen) 2nd Quarter FY2013 (January 1 to June 30) 80,988 34,141 26, nd Quarter FY2014 (January 1 to June 30) 84,385 31,133 20, *Based on International Financial Reporting Standards (IFRS) *Net income refers to net income attributable to owners of the parent, as stated in Nexon s consolidated financial results. SEMIANNUAL BUSINESS REPORT

4 Performance Report Steady growth in the PC online and mobile businesses. First Half Results PC online game markets continued to grow worldwide, and the mobile game markets expanded quickly along with the rapid spread of smartphone use. In the first half of the fiscal year, we strengthened our game development capabilities, entered into new business alliances, delivered new high-quality game titles, and enhanced native application development capabilities in our mobile business. In South Korea, revenue was up year-over-year due to the excellent performance of Legion of Heroes (mobile), FIFA Online 3 (PC), and FIFA Online 3M (mobile), in addition to the impact of a weaker Japanese yen. Revenue was 84,385 million, operating income was 31,133 million, and net income was 20,229 million*. *Net income refers to net income attributable to owners of the parent, as stated in Nexon s consolidated financial results. 2nd Quarter FY2014 (April 1 to June 30, 2014) Revenue by Platform Business Outlook We are focusing our efforts on the following: Thoroughly reallocate resources to create the best games with a commitment to quality. Improve existing games to strengthen in-game balance and increase player retention. Focus on mobile games, creating games that are both fun and differentiated. Partner with carefully selected world-class developers. We will continue to grow by delivering new games sought by users worldwide, and continuously creating new trends in the game industry. 2nd Quarter FY2014 (April 1 to June 30, 2014) Revenue by Region China 37 % PC online Mobile 77% 23% South Korea Japan 36% 21% North America 3% Europe and Other Regions 3% 3 SEMIANNUAL BUSINESS REPORT 2014

5 First Half Topics New initiatives implemented in the first half of FY2014. Rapid Growth of South Korean Mobile Game Business Mobile revenues increased for two consecutive quarters in South Korea along with the rapid growth of the mobile business. In particular, Legion of Heroes, which offers a high-quality game experience comparable to that of a PC online game, and FIFA Online 3M, which fully synchs with its PC counterpart, grew to become hit titles. We plan to continue delivering high-quality and unique fun mobile titles to each region of the world. Legion of Heroes Copyright NEXON Korea Corporation & NDOORS Corporation. All Rights Reserved. FIFA Online 3M Copyright Electronic Arts Inc. All Rights Reserved. Partnerships with World Class Western Talent In the first half of this fiscal year, we announced three new strategic partnerships with the aim of expanding our business in the US and Europe. We will continue to find opportunities to build partnerships with leading development talent in the US and Europe, capitalizing on our deep understanding of the F2P business and our global footprint. Partners in the West Robotoki SecretNewCo Rumble Entertainment Splash Damage Shiver Entertainment Socialspiel Entertainment TURBO Studios United Front Games Boss Key Productions CSR Activities for Children We launched the special website 2014 NEXON Summer Support Project geared to upper elementary and junior high school students. As part of this project we provided a Board Game Creator Kit that can be used as independent study material over summer vacation, and we also held a One-day NEXON Employee Experience Event in which we invited students to our office. One-day NEXON Employee Experience Event SEMIANNUAL BUSINESS REPORT

6 IR Related Activities We engage in IR activities to deepen understanding of our business. Interim Dividend We have been paying out interim dividends of 5 per share since the fiscal year ended December 2013 upon careful review of our business performance, earnings outlook and other factors depending on our business standing, in accordance with our policy of returning profits to the shareholders through such measures as dividends from retained earnings and stock splits. Acquisition and Cancellation of Treasury Stock To raise capital efficiency and gain flexibility in our capital policy, we implemented a share buyback program totaling 10,569,800 shares for a total acquisition cost of approximately 10.0 billion from May 14 to August 14, In conjunction with this, we have cancelled all treasury stock currently held by the Company. 10yen 5yen (year-end) 5yen (interim) December 2013 Total shares acquired Total acquisition cost Acquisition period 10yen(forecast) 5yen (year-end) 5yen (interim) December ,569,800shares Approx billion yen May 14 to August 14, 2014 IR Policy and Activities Disclosure materials such as our Consolidated Financial Results, investor presentation materials, and earnings conference and conference call information are made available on our IR website. In addition, we have a dedicated IR team with highly trained, multilingual staff to deepen the understanding of the Company s business among a wider range of investors. This team carries out IR activities on a global basis, in addition to holding meetings for individual investors. NEXON Co., Ltd. IR website 5 SEMIANNUAL BUSINESS REPORT 2014

7 Corporate Overview & Share Information (as of June 30, 2014) Corporate Prof ile Corporate Name NEXON Co., Ltd. Founded December 18, 2002 Location Paid-in Capital Business Board of Directors 2-3-1, Shinkawa, Chuo-ku, Tokyo Tel ,000 million PC online game development and services Mobile game development and services Portal site planning and management President and Chief Executive Officer Director Director External Director External Director Full-time Statutory Auditor Statutory Auditor Statutory Auditor Corporate Share Information Owen Mahoney Jiwon Park Jungju Kim Satoshi Honda Shiro Kuniya Toshishige Tanaka Iwao Ohtomo Ryoji Mori Total number of authorized shares 1,400,000,000shares Number of shares issued 439,852,900shares Number of shareholders 9,246 Major Shareholders (Top 10) Name of Shareholders NXC Corporation 198, % NXMH B.V.B.A. 72, % CBHK-KOREA SECURITIES DEPOSITORY-SAMSUNG STATE STREET BANK AND 10, % TRUST COMPANY Min Seo 9, % CBNY-ORBIS SICAV 7, % Japan Trustee Services Bank, Ltd. 5, % (Trust Account) CBNY-ORBIS FUNDS 5, % Treasury stock 4, % The Master Trust Bank of Japan, Ltd. (Trust Account) Shareholder Breakdown Number of Shares ( Thousand Shares) 14,714 4,45 1 Ratio (%) 3.35% 1.01% Foreign corporations, etc 403,825, % Financial institutions 22,775, % Individuals and other 5,508, % Treasury stock 4,61 3, % Securities companies 2,914, % Corporations in Japan 215, % SEMIANNUAL BUSINESS REPORT

8 IR Information Fiscal year Annual general meeting of shareholders Record date Dividend record dates The number of shares per unit Administrator of shareholder registry Contact Method for public notices From January 1 to December 31 March December 31 June 30 and December shares Sumitomo Mitsui Trust Bank, Limited 1-4-1, Marunouchi, Chiyoda-ku, Tokyo Sumitomo Mitsui Trust Bank, Limited Stock Transfer Agency Planning Department 2-8-4, Izumi, Suginami-ku, Tokyo URL Electronic public notices are to be used. However, in the event that an accident or other unavoidable circumstances make it impossible to use an electronic public notice, the notices will be published in Nihon Keizai Shimbun. Public notices URL NEXON Co., Ltd , Shinkawa, Chuo-ku, Tokyo