GungHo Online Entertainment, Inc. FY2013 Financial Results Feb 4, 2014
FY2013 Financial Highlights Director CFO Kazuya Sakai 2
FY2013 Summary Record High Sales and Income 3
Trends in Consolidated Sales & Operating Income (Unit: millions of yen) 180,000 160,000 140,000 Sales Operating Income Sales Operating Income increase(yoy) increase(yoy) 163,060 120,000 100,000 80,000 91,228 60,000 40,000 20,000 0 25,821 10,293 9,240 9,607 9,298 1,743 1,844 1,176 FY2009 FY2010 FY2011 FY2012 FY2013 4
Trends in Quarterly Consolidated Sales & Operating Income Sales increase (YoY) (Unit: millions of yen) 50,000 45,000 Operating Income Sales Operating Income 43,717 increase (YoY) 41,639 46,799 40,000 35,000 30,000 25,000 30,904 26,538 23,360 22,712 20,000 18,616 15,000 10,000 5,000 0 14,121 6,886 3,291 3,846 4,561 248 770 1,392 1Q 2012 2Q 3Q 4Q 1Q 2013 2Q 3Q 4Q 5
(Unit: millions of yen) Trends in Quarterly Data of Mobile Consumer Business 50,000 40,000 30,000 20,000 P&D continues to grow PAZUDORA Z is good sales Record high sales in 4Q 42,132 SaleSales s Operating Income Operating Income Rate 35.4% 45.8% 56.7% 12,159 64.5% 29,226 18,849 64.0% 26,958 40,322 59.4% 45,556 52.0% 23,937 23,705 100.0% 80.0% 60.0% 40.0% 10,000 0 (10,000) 6,897 1,195 1,936 2,730-142 685 1,251 1Q 2012 2Q 3Q 4Q 1Q 2013 2Q 3Q 4Q -11.9% 20.0% 0.0% -20.0% (Note) Above amount not including adjustments 6
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Trends in Quarterly data of PC Online Business Because of user shift from PC to smartphone, the ways of playing PC game have been changed (Unit: millions of yen) 2,500 2,000 1,500 1,000 500 - (500) (1,000) 2,162 26.8% 580 1,969 1,892 15.3% 16.8% 301 317 2,020 9.5% 191 1,728 2.5% 43 1,634-5.0% -80 S Sales al Operating Income e Operating Income Ratio 1,360 1,285-16.5% 1Q 2012 2Q 3Q 4Q 1Q 2013 2Q 3Q 4Q -225-558 -43.4% 40.0% 30.0% 20.0% 10.0% 0.0% -10.0% -20.0% -30.0% -40.0% -50.0% (Note) Above amounts are not including adjustments 8
Consolidated Profit and Loss Sheet summary (YoY) Unit: millions of yen Jan. Dec. 2012 Jan. Dec. 2013 Amount Component ratio Amount Component ratio Change ratio YoY Sales 25,821 100.0% 163,060 100.0% 531.5% Sales increase with success of P&D and other smartphone game Cost of sales 9,399 36.4% 53,119 32.6% 465.1% Fee increase to platformers Gross profit margin 16,421 63.6% 109,941 67.4% 569.5% SGA 7,123 27.6% 18,713 11.5% 162.7% Ad expenses increase by TV commercials Operating income 9,298 36.0% 91,228 56.0% 881.1% Ordinary income 9,355 36.2% 90,104 55.3% 863.1% Equity method investment loss by Supercell 1.2 billion yen (Cost of stock acquisition) Net income 8,209 31.8% 54,768 33.6% 567.1% Corporation tax etc. 35.3 billion yen 9
Consolidated Balance Sheet Summary Unit: millions of yen End of Dec 2012 End of Dec 2013 Change ratio Note Current Assets 19,722 87,396 343.1% Cash and deposits increase with sales increase Tangible Fixed Assets 509 420 17.6% Intangible Fixed Assets 3,077 2,635 14.4% Investment and other Assets 1,775 34,939 1,868.2% Investment securities increase with acquisition of Surpercell Total Fixed Assets 5,362 37,994 608.5% Total Assets 25,085 125,390 399.9% Current Liabilities 4,939 46,731 846.1% Accrued tax payable, etc. increase Fixed Liabilities 754 1,231 63.2% Long-term debts of subsidiary increase Total Liabilities 5,693 47,962 742.4% Net Assets 19,391 77,428 299.3% Accumulated earnings increase Total Net Assets and Liabilities 25,085 125,390 399.9% 10
First Dividend 250 yen per share We perform a stock split at the rate of 100 per 1 common stock on January 1, 2014 and adopt a unit stock system to assume the number of the stock of 1 unit 100 stocks. In addition, we pay a dividend based on a number of stocks before stock split about the year-end dividend of FY2013, because an effective date of stock split is January 1, 2014. 11
Acquisition of Treasury shares 3 billion yen 12
Monthly Non-consolidated Sales Forecast January 16.5 billion yen (87.4% YoY increase) 1.P&D(Japan) : Achieved 24M downloads on Jan. 4 th 2.Road to Dragon : Achieved 2M downloads on Jan. 1 st 3.P&D(Hong Kong Taiwan) : Start service for Android os on Jan. 23 rd 4.Divine Gate(Japan) : Achieved 2M downloads on Jan. 23 rd 5.P&D(Worldwide) : Start collaboration with Hello Kitty World from Jan. 27 th 6.PAZUDORA Z(Japan) : Cumulative number of shipments over1.3m units Note 1: There is a possibility that the numerical value above will be revised. Note 2: It is not guaranteed that an achievement above will continue into the future. 13
GungHo Growth Strategy CEO Kazuki Morishita 14
Worldwide Sales Rank Worldwide Game Revenue Rank No.1 *AppAnnie APP ANNIE INDEX : 2013 RETROSPECTIVE The Top Trends of 2013 15
Worldwide Publisher Sales Rank Worldwide Sales Rank by Publisher No.1 *AppAnnie APP ANNIE INDEX : 2013 RETROSPECTIVE The Top Trends of 2013 16
Overwhelming No.1 In Smartphone Market 17
1 2 3 KAZUNOMICS 18
1 Maximize Existing Value 19
1 Gain Stable Profit Establish Brand 20
1 One Source Multi-Use 21
1 Over 1.3 million units! *As of January 31, 2014 *Including download sales in Nintendo eshop 22
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1 P&D for smartphone New game addition Coming soon 24
2 Create New Value 25
2 Accumulate Profit Base Establish Further Pillar 26
2 けり Divine Gate 2 million DL Princess Punt Sweets 7 million DL Amount of downloads are not including overlap. 27
Downloads Rank in JAPAN 23million DL 7milliom DL Downloads Rank in JAPAN No.1 *AppAnnie APP ANNIE INDEX : 2013 RETROSPECTIVE The Top Trends of 2013 28
Sales Rank in JAPAN Sales Rank in JAPAN No.1 *AppAnnie APP ANNIE INDEX : 2013 RETROSPECTIVE The Top Trends of 2013 29
2 Release of New Game Feb. 10, 2014 30
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3 Strengthen Overseas Expansion 32
3 Maximize Income Further Growth Base 33
3 Utilization of SUPERCELL Cooperation with Overseas Branch 34
3 Universal Release of New Game 35
1. Maximize 1 2 3 Existing Value 2. Create New Value KAZUNOMICS 3. Strengthen Overseas Expansion 36
Essence 37
Essence= Development of Fun Game 38
Only GungHo that made P&D can beyond P&D 39
Only original can beyond original 40
We are the World. 41
The strategy, plan and forecast within this material have been determined based on information available at this moment. Therefore, actual performance and similar information are subject to influence from various factors, and may differ from the forecasts presented herein. Please be aware that this material includes risk and uncertainty. The company disclaims any obligation to update or revise information and data, whether as a results of new information, future events or otherwise. 42