August 9, 2017
DeNA Co., Ltd.
Copyright © DeNA Co., Ltd. All Rights Reserved.
Financial Results
Strategy and Initiatives
Guidance
Reference
1
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Financial Results SummaryCore game business results and non-GAAP operating profit were in line with Q1 guidance
*One-time factors discussed on slide 6
After careful review of the expected income tax benefit from the closure of the West game business, determined that no additional benefit could be taken for Q1
(billion yen)
Item
FY2016
FY2017
Q1
Q2
Q3
Q4
Q1
YoY Change
QoQ Change
Revenue*
38.3
38.2
32.2
35.1
36.5
-5%
4%
Revenue excl. Sports
32.8
32.0
31.6
33.7
30.1
-8%
-11%
Operating profit (IFRS)
7.4
7.9
3.4
4.5
6.4
-13%
42%
Operating profit(Non-GAAP)**
7.8
7.9
3.4
5.8
7.4
-4%
27%
Operating profit excl. Sports
6.0
5.7
5.0
7.2
5.2
-13%
-28%
Profit before tax
7.0
8.1
5.8
4.6
8.1
15%
74%
Income tax expense
1.7
1.8
-12.7
2.7
2.5
45%
-8%
Profit for the period
5.3
6.3
18.6
2.0
5.6
5%
185%
Profit for the period: Owners of the parent
5.2
6.1
17.6
2.0
5.3
3%
163%
Profit for the period: Non-controlling interests
0.2
0.2
1.0
-0.1
0.3
71%
-
EPS (Yen)
35.63
41.78
121.13
13.94
36.67
3%
163%
*For IFRS revenue, we defer revenue over the period that we expect the user to use a particular game in games that have a sin gle payment model or are similar to that model.
**For full reconciliation of GAAP to Non-GAAP metrics, please see the reference section. 2
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Financial Results by Segment (IFRS)(billion yen)
Item
FY2016
FY2017
Q1
Q2
Q3
Q4
Q1
YoY
Change
QoQ
Change
Revenue
38.3
38.2
32.2
35.1
36.5
-5%
4%
Game
26.1
24.3
23.6
27.4
24.3
-7%
-11%
E-commerce
4.6
4.9
5.1
4.5
4.0
-15%
-12%
Sports
5.5
6.3
0.6
1.4
6.3
16%
348%
New Businesses and Others
2.3
3.0
3.1
2.1
2.1
-8%
2%
Adjustments
-0.3
-0.2
-0.2
-0.3
-0.2
-
-
Operating profit
Operating profit margin
7.4
19%
7.9
21%
3.4
11%
4.5
13%
6.4
18%
-13%
-
42%
-
Segment profit / loss*
7.2
8.0
3.6
6.9
6.5
-10%
-6%
Game
6.9
6.3
6.1
9.4
7.3
7%
-22%
E-commerce**
0.4
0.6
0.5
0.7
-0.5
-
-
Sports
1.8
2.2
-1.6
-1.3
2.2
25%
-
New Businesses and Others
-1.2
-0.9
-1.4
-1.6
-1.4
-
-
Adjustments
-0.7
-0.1
-0.0
-0.3
-1.2
-
-
Other income ***
0.1
0.1
6.1
0.1
0.3
95%
108%
Other expenses***
0.0
0.2
6.2
2.5
0.4
1248%
-85%
*During Q1 FY2017 we reviewed the segment allocationof overall companycosts, and reflected those changes for each segment for past quarter results starting Q1 FY2016. The breakdown of businesses and services in each segment has not changed. These updated segment operating results have not been audited
**Recorded 872 million in cost of sales as corrections of costs attributed to DeNA Travel during FY2016 and before
***Includes non-extraordinary gains and losses under Japanese GAAP (e.g. Loss on sales / retirement of tangible / intangible assets)
3
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Cost and Expense Breakdown (IFRS)(billion yen)
Item
FY2016
FY2017
Q1
Q2
Q3
Q4
Q1
YoY Change
QoQ Change
Cost of Sales
14.9
14.8
12.9
13.7
15.0
1%
9%
Personnel Expenses
1.3
0.9
1.1
0.8
1.1
-13%
44%
Depreciation and amortization
2.2
2.3
2.3
2.1
2.1
-3%
-1%
Outsourcing expenses
2.5
2.9
2.6
2.5
2.8
12%
14%
Commission fees
6.1
5.8
5.8
6.4
5.8
-5%
-10%
Others*
2.8
2.9
1.2
1.9
3.1
12%
65%
Selling, general, and
administrative expenses
16.2
15.4
15.7
14.5
15.0
-7%
3%
Personnel Expenses
3.7
3.6
3.6
3.7
4.1
11%
12%
Sales promotion & Advertising expenses
3.2
2.8
2.9
2.2
2.6
-18%
17%
Outsourcing expenses
& Commission fees
7.3
7.0
7.0
6.6
6.3
-13%
-4%
Others
2.0
2.0
2.3
2.0
1.9
-1%
-3%
Other income**
0.1
0.1
6.1
0.1
0.3
95%
108%
Other expenses**
0.0
0.2
6.2
2.5
0.4
1248%
-85%
Consolidated employee
headcount
2,497
2,496
2,413
2,400
2,441
-2%
2%
*Recorded 872 million in cost of sales as corrections of costs attributed to DeNA Travel during FY2016 and before
**Includes non-extraordinary gains and losses under Japanese GAAP. (e.g. Loss on sales / retirement of tangible / intangible assets)
4
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Game BusinessVirtual currency consumption and segment operating profit performed in line with guidance
Virtual Currency Consumption* Game Business Segment Operating Profit**
FY2016 FY2017
*Includes consumptionof free virtual currency
FY2016 FY2017
**During Q1 FY2017 we reviewed the segment allocation of overall companycosts, and reflected those changes for each segment for past quarter results starting Q1 FY2016. These updated segment operating results have not been audited.
5
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E-commerce BusinessRevenue*
Processing Settlement
Updates
Transactions from non-DeNA services continue to grow
Travel
Gross transaction value for Q1 of 15.4 billion yen** (12.2 billion yen for Q1 FY2016)
Recorded 872 million (maximum possible) in cost of sales as corrections of costs attributed to DeNA Travel during FY2016 and before
Have always taken measures to amend the discrepancy between the data in the systems used for travel agency operations and on account balances
Identified maximum possible additional costs while pursuing
initiatives that aimed to completely resolve the issue, including reforming our accounting system, increasing data accuracy, and strengthening oversight
Since impact on the financial results for previous fiscal years is
limited, the maximum possible amount is all recorded in Q1
Auction
Pace of decline in the number of paid members is softening
*Previous quarter revenue has been restatedto exclude the DeNA Shopping and au Shopping Mall businesseswhich were sold on December 28, 2016.
**From FY2017, the gross transaction value for the travel business includes the gross transaction value from the Singaporesubsidiary. (Q1 FY2017 gross transaction value: 1.3 billion yen) 6
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Sports Business
Yokohama DeNA Baystars achieved new team record for average stadium attendance per home game for the first half of the season (38 games total)
Signed the I☆ (LOVE) YOKOHAMA Agreement (Comprehensive Agreement to Promote Sports and
Energize Regional Economy) with the City of Yokohama in March 2017
The Yokohama Stadium expansion plan was approved by the Yokohama City Council in June 2017
Home Game
Average Stadium Attendance*
Expansion Plan for Yokohama Stadium (Announced March 2017)
Increase capacity to 35,000 (currently 29,000)
Starting construction in November 2017, with construction to mainly take place in the off-season, in preparation for usage during the 2020 Tokyo Olympics
Total cost: approx. 8.5 billion yen (estimate)
*Average stadium attendance per game for Yokohama DeNA Baystars home games each regular season (including home games held outside Yokohama Stadium)
**The 2017 figure is the average attendance per home game for the first half of the 2017 season (38 games), while the 2011 to 2016 figures represent the average attendance per home game for the who le season 7
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Financial Results
Strategy and Initiatives
Guidance
Reference
8
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Strengthening Business Portfolio and View for Mid to Long Term Growth
Continue to strengthen the core game business
Over the long term, create multiple new business pillars
Use FY2020 as a checkpoint to confirm our progress towards achieving our long term goals
Proactively utilize M&A opportunities to strengthen our portfolio
Operating Profit 100 billion yen level
Other Pillars
Operating Profit
Checkpoint to Long Term Goal
billion yen Game
Business
FY2016 Actual FY2020 Long Term Goal 9
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DeNA's Business PortfolioGames & Entertainment
Sports E-Commerce &
Net Services
Internet + AIHealthcare Automotive
10
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Game Business (Nintendo Alliance)Released in February 2017
Focusing on operations as we perform rapid updates and run events for this title with the goal of making it enjoyable over a long period of time
Reached a satisfactory level of sales
© 2017 Nintendo / INTELLIGENT SYSTEMS
Released for iOS in December 2016 and for Android in March 2017
Distributing in 165 countries and regions, progress in download growth
© 2016 Nintendo
*All titles referenced on this slide are published by Nintendo 11
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Game Business (Nintendo Alliance)Future titles
Scheduled for release during FY2017
More detailed information about the release timing will be provided later
The Nintendo Partnership is a mid to long term partnership, and we will announce more details about the future title lineup at the appropriate timing
Future partnership titles are in development
*All titles referenced on this slide are published by Nintendo 12
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Game Business (Excluding Nintendo)Good progress in strengthening of in-game operations of existing key 1st and 2nd party titles as well as in new releases
Gyakuten Othellonia
Exceeded 12 million downloads (as of July 28, 2017) Promotional push started end of July,
including TV commercials
Uta Macross
Launched August 3, 2017
First rhythm game in the Macross series Reached 200,000 pre-registrations
13
*Images are of the game in development
©'82,'84,'92,'94,'95,'97,'02,'15 BW ©'07 BW/MFP・M ©'09,' 11 BW/MFP ©DeNA
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New Businesses & Others (Updates): Media Business*Business Results Recent Updates
(million yen)
Item | FY2016 | FY2017 | |||
Q1 | Q2 | Q3 | Q4 | Q1 | |
Revenue* | 976 | 1,484 | 1,229 | -29 | 31 |
Segment profit / loss* | -603 | -236 | -849 | -1,195 | -586 |
*The above figures are based on management accounting, following the allocation of shared costs for the relevant business; review procedures have not been undertaken in accordance with the Financial Instruments and Exchange Act.
*From FY2017, the Curation Platform Business was renamed the "Media Business."
On August 8, established MERY Co., Ltd.*, a joint venture with SHOGAKUKAN formed to jointly operate a digital media business mainly focused on women's fashion
*An equity method affiliate company
(Ownership: SHOGAKUKAN 66.66%; DeNA 33.34%)
Will reform the operating structure of the previous MERY service, and create all articles through a new process, with the aim to create a completely new type of media
This joint venture will incorporate SHOGAKUKAN's expertise in article publishing, including planning, editing, and reviewing, and DeNA's expertise in building systems and online marketing
DeNA has no plans to operate media independently
Expect losses for the media business to continue to shrink quarter-over-quarter
14
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New Businesses & Others (Updates): Automotive BusinessProvides a service that allows for smooth taxi dispatch, making use of a demand forecasting system that utilizes AI
Plan to run field tests from September 2017 in certain areas in Yokohama, in cooperation with the City of Yokohama and the Kanagawa Taxi Association
These field tests are a part of the I☆ (LOVE) YOKOHAMA Agreement
TaxiBell: Taxi Dispatch App Utilizing AI
Taxi
Driver's Dedicated Device
Dispatch App
User
Increase revenue for taxi
*
companies through
matching and AI-driven demand forecasting
System
*Trademark pending for the service name and logo 15
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Financial Results
Strategy and Initiatives
Guidance
Reference
16
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Consolidated Financial Guidance for Q2 FY2017Q1 | FY2016 Q2 Q3 | Q4 | FY2017 | ||
Q1 | Q2e | ||||
38.3 | 38.2 | 32.2 | 35.1 | 36.5 | 36.3 |
32.8 | 32.0 | 31.6 | 33.7 | 30.1 | 30.0 |
Revenue(IFRS)
Revenue excluding Sports
(bill ion yen)
Q1 | FY201 Q2 | 6 Q3 | Q4 | FY2017 | |
Q1 | Q2e | ||||
7.4 | 7.9 | 3.4 | 4.5 | 6.4 | 7.8 |
+0.1 | -0.2 | -0.4 | +0.5 | +0.1 | -0.2 |
+0.3 | +0.2 | +6.4 | +0.8 | +0.9 | - |
-0.0 | - | -5.9 | - | - | -0.1 |
7.8 | 7.9 | 3.4 | 5.8 | 7.4 | 7.5 |
6.0 | 5.7 | 5.0 | 7.2 | 5.2 | 5.5 |
Reconciliation of operating profit to non-GAAP operating profit
Operating profit (IFRS)
Accounting adjustments related to seasonality, net Acquisition and restructuring related expenses Sales and disposition related gains
Non-GAAP operating profit
Non-GAAP operating profit excl. Sports
17
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Financial Results
Strategy and Initiatives
Guidance
Reference
18
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IFRS to Non-GAAP ReconciliationFY 2016
(bil lion yen)
FY 2017
Q1 Q2 Q3 Q4 Q1
Reconciliation of Operating profit to Non-GAAP operating profit
Operating profit(IFRS) 7.4 7.9 3.4 4.5 6.4
Accounting adjustments related to seasonality, net +0.1 -0.2 -0.4 +0.5 +0.1
Acquisition and restructuring related, net +0.3 +0.2 +6.4 +0.8 +0.9
Sales and disposition related gain (loss) -0.0 - -5.9 - -
Non-GAAP operating profit 7.8 7.9 3.4 5.8 7.4
Profit (loss) from seasonal sports business -1.8 -2.2 +1.6 +1.3 -2.2
Non-GAAP operating profit excluding Sports 6.0 5.7 5.0 7.2 5.2
FY 2016
FY 2017
Q1 Q2 Q3 Q4 Q1
Reconciliation of Operating profit to Non-GAAP EBITDA
Operating profit(IFRS) 7.4 7.9 3.4 4.5 6.4
Accounting adjustments related to seasonality, net +0.1 -0.2 -0.4 +0.5 +0.1
Acquisition and restructuring related expenses +0.3 +0.2 +6.4 +0.8 +0.9
Sales and disposition related gains -0.0 - -5.9 - -
Depreciation and amortization +2.7 +2.8 +2.9 +2.7 +2.6
Retirement of fixed assets (excl. one-time factors) +0.0 +0.2 +0.1 +0.8 +0.3
Non-GAAP EBITDA 10.5 10.9 6.4 9.4 10.4
*Please consult the Q4 FY2015 Operating Results for more information regarding our introduction of Non -GAAP disclosure
19
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Consolidated Cash Flow Overview(billion yen)
FY2016 | FY2016 Apr-Jun | FY2017 Apr-Jun | |
Operating cash flow (A) | 22.7 | 5.8 | 11.7 |
Profit before tax | 25.6 | 7.0 | 8.1 |
Depreciation and amortization | 11.1 | 2.7 | 2.6 |
Income tax paid | -9.8 | -3.9 | -2.1 |
Others | -4.2 | -0.0 | 3.1 |
Investing cash flow (B) | -7.4 | -2.2 | -3.1 |
Financing cash flow | -2.4 | -4.8 | -5.9 |
Cash dividends paid | -2.9 | -2.8 | -4.5 |
Cash dividends paid to non-controlling shareholders | -2.0 | -2.0 | -1.2 |
Others | 2.5 | 0.0 | -0.3 |
FCF ((A)+(B)) | 15.3 | 3.6 | 8.6 |
Cash and cash equivalents (Consolidated) | 88.2 | 73.7 | 90.8 |
(Non-consolidated basis) | 57.0 | 47.0 | 61.4 |
20
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Segment BreakdownSegments | Businesses |
Game Business | Japan and international game businesses |
E-Commerce Business | Sub-segment names (Major service names in parenthesis)
|
Sports Business | Baseball, Running Club, etc. |
New Businesses and Others | Sub-segment names (major service names in parenthesis)
|
21
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The information and data contained within this presentation and these presentation materials have been determined based on information available as of August 9, 2017. The company disclaims any obligation to update or revise such information and data, whether as a result of new information, future events or otherwise.
In addition, any forward-looking statements contained in this presentation or these presentation materials are based on our opinions and information available as of August 9, 2017, and involve uncertainty. Please be aware that the actual performance data and similar information are subject to influence from diverse factors and may differ from the forecasts presented herein.
DeNA Co., Ltd.
22
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DeNA Co. Ltd. published this content on 09 August 2017 and is solely responsible for the information contained herein.
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