Fourth Quarter 2004 Financial Results. March11, 2005

Transcription

1 INVESTOR RELATIONS Fourth Quarter 200 Financial Results March11, 2005

2 Disclaimer The financial results for Q of 200 have not been reviewed or audited, and may be subject To change following the completion of our independent audit.this release also contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that are based on our current expectations, assumptions, estimates and projections about us and our industry. The forward-looking statements are subject to various risks and uncertainties. Actual results may differ materially from those contained in such forward-looking statements, as a result of a number of factors, including without limitation, the popularity of our games; our ability to generate sufficient cash flow from operations to meet our operating needs; Increasing competition in the online game industry and other factors beyond our control. Investors are directed to our reports and documents filed from time to time with the U.S. Securities and Exchange Commission for additional factors that should be considered prior to investing in our securities. We disclaim any responsibility, and do not intend, to update or other wise revise the forwardlooking statements in this release, whether as a result of new information, future events or other wise. Because of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this release might not occur in the way we expect,or at all. Investors should not place undue reliance on any of the forward-looking statements.

3 Contents 1. Preliminary Q0 & FY0 Results 2. FY 2005 Targets

4 Income Statement Summary Quarterly Annual Q0* 3Q0 QoQ FY'0* FY'03 YoY Revenue 16,390 16,60 16,22 0.2% 6,38 2,31 52% - Subscription 3,362 3,36, ,252 18,559-12% - Royalties & License Fees 11,130 11,18 11,083,235 22,80 9% - Mobile % % - Others 1,62 1, % 3,1 1, % Expenses,156,18 8,535-16% 26,260 19,58 3% Operating Profit 9,233 9,23,88 18% 38,18 22,853 6% 56% 8% 59% 5% Pre-tax Profit 8,118 8,153 6,921 18% 33,96 1,20 95% 50% 2% 52% Net Income 8,023 8,05 5,386 50% 29,285 1,669 0% 9% 33% 5% 35% *These FY0 results are preliminary in nature and have not been audited or reviewed. The actual results are subject to change following the completion of the audit. *The exchange rate applied in the presentation is Market Average Exchange Rate in Korea effective as of March 9, 2005, which was 1 equal to 1,

5 Revenue Breakdown Quarterly Annual Q0* 3Q0 QoQ FY'0* FY'03 YoY Subscription 3,362 3,36, ,252 18,559-12% Korea 2,51 2,582 3, ,25 16,186-2 U.S , ,52 2,33 9% Royalties & License fees 11,130 11,18 11,083,235 22,80 9% Japan,295,313,335-16,818 9,008 8% Taiwan-H.K 3,32 3,38 3,33 1,233 8,526 6% Thailand 1,398 1,0 1,285 9% 5,2 2,592 3% China % 2,655 1,800 8% Philippines % 2, % Indonesia , % Others % 1, Mobile % % Animation & Others 1,62 1, % 3,1 1, % Animation , Character M/D % 1, % Others % % Total 16,390 16,60 16,22 0% 6,38 2,31 52% *These Q0 and FY0 results are preliminary in nature and have not been audited or reviewed. The actual results are subject to change following the completion of the audit. 2

6 Cost Structure (COGS+SG&A) Q0* 3Q0 QoQ FY'0* %of total Sales FY'03 %of total Sales YoY Payroll 2,032 2,01 2,382-1%,559 12%,33 % Depreciation ,633 % 1,82 3% 8% Service Fees 1,309 1,315 1,129 16%,692 % 3,23 9% 26% Advertising 1,29 1,25 2,20-5%,61 %,285 % 8% R&D % 2,029 3% 1,59 % 2% Rental % % - Employee Benefit % Others ,126 5% 2,16 6% 15% Total,156,18 8,535-16% 26,260 19,58 6% 3% *These Q0 and FY0 results are preliminary in nature and have not been audited or reviewed. The actual results are subject to change following the completion of the audit. 3

7 Other Expenses & Income Tax Q0* 3Q0 QoQ FY'0* %of total Sales FY'03 %of total Sales YoY Interest Income (20) (21) (92) 162% (9) (9) 0.2% % Interest Expense %,3 % 5,9 1% -25% Others % 18 (205) 0.5% Total 1,115 1, %,682 % 5,68 13% -1% Income Tax (13) (13) 1,380-3,963 6% 2,535 6% 56% *These Q0 and FY0 results are preliminary in nature and have not been audited or reviewed. The actual results are subject to change following the completion of the audit.

8 Balance Sheet 200YE* 2003YE Change () Asset 60,55 60,15 28,62 28,65 31,950 Current Asset 3,8 3,9 1,230 1,30 20,606 (Cash & cash equivalents) 16,335 16,05 5,382 5,05 11,000 (Short term investments) 8,862 8,900 1,593 1,600,300 (Accounts Receivables),289,320 6,958 6, Fixed Asset 22,0 22,805 11,12 11,61 11,3 (PPE) 1,88 1,951 5,60 5,69 9,25 (Leasehold deposits),1,192 3,896 3, Liability 13,36 13,9,89,9 2,550 Current Liability 8,01 8,3 9,0 9,09 (612) Fixed Liability 5,035 5,05 1,88 1,895 3,162 Shareholder's Equity,019,221 1,5 1,821 29,00 (Paid in Capital) 2,123 2,132 2,123 2,132 - Liability & Shareholder's Equity 60,55 60,15 28,62 28,65 31,950 *These Q0 and FY0 results are preliminary in nature and have not been audited or reviewed. The actual results are subject to change following the completion of the audit. 5

9 Contents 1. Preliminary Q0 & FY0 Results 2. FY 2005 Targets

10 Assumptions for 2005 Targets Our FY2005 targets are based on certain assumptions, including but not limited to the following: - the number of peak concurrent users and their playing time of Ragnarok Online remains increase by ~20% year-on-year in the markets in which we operate this game; - we are able to achieve the anticipated marketing and promotional effects from the launch of "Ragnarok the Animation" in multiple markets; - we are successful in implementing several major updates to Ragnarok Online as currently scheduled and those updates are well received by the market; - the number of peak concurrent users of R.O.S.E. Online should reach approximately 6,000 in Korea market; - we and our overseas licensees are successful in commercially launching our games, both Ragnarok Online and R.O.S.E. Online, in additional overseas markets as currently contemplated; - the pricing of our games remain at its current level in the case of Ragnarok Online, and are set at levels we anticipate in the case of R.O.S.E. Online; - the royalty and license fee revenues generated from overseas markets are not subject to increased volatility in, or material adverse impact from, foreign exchange rates; - our business is not adversely impacted by any material competitive threats or risk factors that our business, industry and business environment are subject to. 6

11 2005 Targets 2005YE 200YE* Growth Revenue 90, 91,0 6,162 6,38 -Subscription 21,9 21,200 16,182 16,252 30% -Royalties & License fees 62,30 63,000,06,235 2% -Others 6,80 6,900 3,93 3,951 5% Operating Profit 8,38 8,556 38,015 38,18 2% 53% 59% Pre-tax Profit 6, 6,369 33,353 33,96 38% 5 52% *These FY0 results are preliminary in nature and have not been audited or reviewed. The actual results are subject to change following the completion of the audit. *The exchange rate applied in the presentation is Market Average Exchange Rate in Korea effective as of March 9, 2005, which was 1 equal to 1,00.30.

12 1Q 2005 Targets 1Q 05 Q 0 () QoQ 1Q 0 () YoY Revenue 15,32 15,800 16,60 -% 16, Subscription,082,0 3,36 2,696-13% - Royalties & License fees,953 11,0 11,18 -,919 2% - Others ,906-68% 1 5% Operating Profit 8,653 8,690 9,23-6% 11, % 56% 69% Pre-tax Profit,58,90 8,153-8% 9,0-23% % 50% 6 *These FY0 results are preliminary in nature and have not been audited or reviewed. The actual results are subject to change following the completion of the audit. *The exchange rate applied in the presentation is Market Average Exchange Rate in Korea effective as of March 9, 2005, which was 1 equal to 1,

13 RO Statistics Korea Japan Taiwan& Hong Kong Thailand China Philippines Malaysia& Singapore Indonesia USA Europe Australia ACU 3Q02 2,966 13,880 Q02 31,29 1,930 56, ,823 1Q03 28,598 15,58 58, ,695 65,0 22 2Q03 29,3 1,68 5, , , ,8 3Q03 33,91 1, , , , , , ,000 Q03 2,931 1, , , , ,25 30,8 2,85 3,8 1Q0 30,059 15, , , , ,059 3,1 16,89 3 9,56 2Q0 22,051 11, , , , ,208 38,0 28,61 20,26 11,230 2,125 3Q ,508 13, , ,592 19,98 3 0,002 36, , ,881 12, ,818 Q ,58,19 19, , ,18 3 8, , , ,053, ,92 1 1,083 9