9th Fiscal Year, Earning Presentation (2017.07.01~2017.12.31) Investor Relations 2018.02.13.
Disclaimer Financial results and operating performance on this article is made for investors favor, and could be change as a result of final settlement results. We do not assure the perfectness of financial result described in this article. Also, the data could be change due to the future events. This earning presentation is based on (17.07.01~17.12.31, 6 months) 9th Fiscal Year. But, calendar date is used in some pages to help investor s to understand, and, those are written as 17 4Q. This article contains future expectation data. This is related to future events and shows the company s future expected financial and business results. But, the actual results can be different due to the unexpected change in global and domestic financial markets, change in industry s conditions and change in company s business plan. We do not take any responsibilities from any losses due to this data. 2
Contents 1. 9th Fiscal Year Highlights 2. Summary of performance 3. Progress of Revenue 4. Structure of Revenue 5. Operation Expenses 6. Non-Operating Expenses 7. 10th Fiscal Year Highlights [ Appendix ] - Financial Statement(Consolidated) 3
1. 9th Fiscal Year Highlights (2017. 7. 1~2017. 12. 31) Business expansion of Black Dessert to the Global Markets and New Platforms Continuous game contents update including add new character Progress of Revenues (CY) (Unit : Million Won) Effort to pro-long PLC Securing extended Game Life cycle period ( Record the highest number of concurrent connections since service is launched in S. Korea ) 1,172 616 Launching overseas Service launched in new regions such as South East Asia, Turkey and others. Entering stable stage for Global game IP 11 217 '14 '15 '16 '17 Game Publishing : PearlAbyss H.K. Limited (in Hongkong) Progress of Profits (CY) (Unit : Million Won) Establishment overseas branch Server and network services : PearlAbyss EU B.V.(in Netherlands) PearlAbyss SEA Pte. Ltd.(in Singapore) 646 Securing overseas branches for extending global business 446 Preparing Black Dessert Mobile Gameplay released by Media Showcase of PearlAbyss in Nov. 2017 Mobile pre-registered users exceed over 3.7M Membership of Online community exceed over 350 thousands (53) 120 '14 '15 '16 '17 4
2. Summary of performance (2017. 10. 1~2017. 12. 31) 24.7 billions won Sales, 6.3 billions won Operating profits and 1.1 billions won Net profits recorded in 9th Fiscal Year, Second Quarter Sales (62.7%) increases, operating profits (21.0%) and net profits (88.3%) decrease compare to same period last year Operating revenues Operating profit Net profits (Unit : Million Won, %) 31,805 33,030 27,606 24,779 53% 66% 67% 20,885 22,190 55% 15,184 26% 63% 48% 15,204 59% 19,615 49% 13,558 15,231 8,026 6,337 9,649 5% 1,129 16. 4Q 17. 1Q 17. 2Q 17. 3Q 17. 4Q 24.7 billions won Sales YoY 62.7% Increased QoQ 10.2% Decreased 16. 4Q 17. 1Q 17. 2Q 17. 3Q 17. 4Q 6.3 billions won Operating profits YoY 21.0% Decreased QoQ 58.3% Decreased 16. 4Q 17. 1Q 17. 2Q 17. 3Q 17. 4Q 1.1 billions won Net profits YoY 88.3% Decreased QoQ 91.7% Decreased 5
3. Progress of Revenue (2017. 10. 1~2017. 12. 31) A strong Korean won (KRW) affected negative impact financially for overseas revenue (Decrease in accounting recognition of overseas sales) Revenue growth due to increase in user indicator will be recognized in the first quarter of 2018 <Regional sales of Black Desert > (Unit : Million Won, %) South Korea US/Europe Asia 5,279 11,086 10,992 18,455 4,829 4,260 4,453 4,870 9,633 16,497 7,331 6,256 10,973 9,087 2,508 16 4Q 17 1Q 17 2Q 17 3Q 17 4Q 16 4Q 17 1Q 17 2Q 17 3Q 17 4Q 16 4Q 17 1Q 17 2Q 17 3Q 17 4Q * Except unearned revenues and other revenues 6
4. Structure of Revenue (2017. 10. 1~2017. 12. 31) Continuous contents updating maintains regional indicators - 40% increased in concurrent connections compare to same period last year in South Korea. (Highest record since service is launched in South Korea) - Releasing new game character (Mystic) improved regional user indicators in US and Europe - New and returned game users increased after one year anniversary of Taiwan service Regional sales of Black Desert Operating profit of Black Desert 47% 37% 53% 56% 56% 45% 24% 35% 42% 41% 23% 45% 18% 60% 52% 41% 39% 31% 26% 24% 30% 18% 16% 18% 20% 37% 16% 13% 17% 21% 16 4Q 17 1Q 17 2Q 17 3Q 17 4Q Korea Asia America/Europe * Including package and In-Game Charge 16 4Q 17 1Q 17 2Q 17 3Q 17 4Q Korea Asia America/Europe * Except unearned revenues and other revenues 7
5. Operation Expenses (2017. 10. 1~2017. 12. 31) 18.4 billions won as a 2Q Operation expenses which is 6.0 billions (48.5%) increased compare to last quarter (unit: million won,%) Category FY 09 1Q (17.3Q) FY 09 2Q (17.4Q) QoQ FY 09 (17.07.01~17.12.31) Operation expenses 12,422 100.0% 18,441 100.0% 6,029 48.5% 30,864 100.0% Cost of labor 5,701 45.9% 7,542 40.9% 1,841 32.3% 13,243 42.9% Commission Fee 1,941 15.6% 2,085 11.3% 144 7.4% 4,026 13.0% Advertising Fee 1,455 11.7% 5,212 28.2% 3,757 258.2% 6,667 21.6% Stock compensation Cost 1,345 10.8% 1,345 7.3% - 0.0% 2,691 8.7% D&A 420 3.4% 583 3.2% 163 38.8% 1,002 3.3% Other cost 1,561 12.6% 1,674 9.1% 113 7.3% 3,234 10.5% Quarterly status of employees and the proportion of development staff (unit: million won,%) Category 16.4Q 17.1Q 17.2Q 17.3Q 17.4Q Employees status 193 100.0% 207 100.0% 241 100.0% 287 100.0% 333 100.0% Development 161 88.4% 164 79.3% 183 75.9% 209 72.8% 233 70.2% Others 32 16.6% 43 20.7% 58 24.1% 78 27.2% 99 29.8% (*) Except Taiwan Corporation and Turkish office 8
6. Non-Operating Expenses (2017. 10. 1~2017. 12. 31) 4.9 billions won as a 2Q Non-operating expenses (unit: million won,%) 항목 FY 09 1Q (3Q 17) FY 09 2Q (4Q 17) QoQ FY 09 (17.07.01~17.12.31) Gain and losses related foreign currency Gain and losses on foreign currency Gains and losses on foreign currency exchange 637 (5,414) (6,051) -949.62% (4,776) (235) (753) (517) 219.76% (989) 873 (4,661) (5,533) -634.13% (3,788) Interest Revenues 144 566 422 293.28% 710 Interest Expenses 7 0 (7) -104.12% 7 Other Operating Revenues 15 7 (8) -53.78% 22 Other Operating Expenses 16 6 (10) -63.36% 22 Equity Income and losses on Investments Non-operating expenses (total) 152 (31) (183) -120.26% 121 925 (4,877) (5,802) -627.20% (3,952) Amount of foreign currency hold in each quarter ( Conversion into KRW ) (unit: million won) 기간 16.4Q 17.1Q 17.2Q 17.3Q 17.4Q Foreign currency amount 38,102 48,033 66,011 81,149 83,769 9
7. 10th Fiscal Year Highlights (2018. 1. 1~2018. 12. 31) 1 Black Desert Online 2 Black Desert Mobile Black Desert Online officially launched in Thailand and South East Asia ( 01. 17. 2018) Serviced in Thai and English, the whole region of South East Asia and Indonesia Premium CBT complete : Feb. 09 ~ 11 Official service release date : To be announced Preparing local service in China Gradually plan to launch in the other countries, after domestic service is launched 3 Black Desert Console 4 New project IP Black Desert Console is under development. Releasing Scheduled for 2Q. 2018 New Project is targeted to release in second half of 2018 PC, Console / Genre : MMO + FPS + AOS Mobile / Genre : MMO + CASUAL 10
Appendix Summary of Consolidated Financial Statement 11
A1. Summary of Consolidated Financial Statement [Consolidated Financial Statement] (Unit : million won) 2017.06.30 2017.12.31 Assets Ⅰ. Current Asset 93,335 279,877 Cash and Cashable assets Short term financial assets Available for sale financial asset Account receivables & Other receivables 46,905 240,510 17,379 16,286 4,900 4,771 23,329 16,692 Other Current assets 823 1,618 Ⅱ. Non Current assets 8,357 16,795 Account receivables & Other receivables Long term financial assets Investment from relational company 207 3,066 131 126 1,806 603 Tangible Assets 2,989 6,238 Intangible Assets 1,023 4,222 Deferred tax asset 2,202 2,542 Total Assets 101,693 296,673 * This financial statement could be change through final settlement. (Unit :million won) 2017.06.30 2017.12.31 Liabilities Ⅰ. Current Liabilities 19,915 19,757 Other liabilities 4,773 7,372 Income tax payable 3,068 1,527 Other current liabilities 12,074 10,858 Ⅱ. Non Current liabilities 3,230 1,757 Other non current liabilities 2,899 973 Deferred tax liabilities 330 0 Defined benefit liabilities 0 785 Total Liabilities 23,145 21,514 Capital Ⅰ. Capital Stock 5,133 6,033 Ⅱ. Capital Surplus 2,587 181,490 Ⅲ. Capital Adjustments 424 3,115 Ⅳ. Other comprehensive Income 0 (570) Ⅴ. Retained Earning 70,403 85,090 Ⅵ. Non controlling interest - - Total Capital 78,548 275,159 12
A2. Summary of Consolidated Financial Statement [Consolidated Statement of Comprehensive Income] (Unit : million won) 8th Fiscal year (2016.07.01~2017.06.30 / 12 months) 9th Fiscal Year (2017.07.01~2017.12.31 / 6 months) Operating Revenues 92,730 52,385 Operating Expenses 33,162 30,874 Operating Profits 59,568 21,521 Finance profit and loss (983) (4,073) Incidental profit and loss (139) - Gain or loss from equity method (69) 121 Income before income tax 58,376 17,569 Income tax 7,515 2,882 Net profits 50,861 14,687 * This financial statement could be change through final settlement. 13
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