PowerPoint 프레젠테이션 - NHN Entertainment

Investor Relations
June 2016
Table of Contents
1Q16 Earnings Summary
Business Strategy
- Mobile Game
- Web-board Game
- PAYCO: Easy Payment
- COMICO: Mobile Webtoon
Appendix
2
1Q16 Earnings Summary
Y/Y
Q/Q
(KRW m)
1Q15
4Q15
1Q16
Sales
138,128
217,799
203,618
47.4%
-6.5%
Game
107,588
116,644
121,467
12.9%
4.1%
PC
57,683
47,950
48,773
-15.4%
1.7%
Mobile
49,905
68,694
72,695
45.7%
5.8%
30,540
101,155
82,151
169.0%
-18.8%
Technology
15,916
22,966
19,258
21.0%
-16.1%
Commerce
8,767
50,111
38,619
340.5%
-22.9%
783
20,484
17,459
2,130.7%
-14.8%
5,074
7,594
6,816
34.3%
-10.2%
151,938
227,499
194,421
28.0%
-14.5%
Commission
47,768
104,015
86,216
80.5%
-17.1%
Labor
55,306
60,362
61,548
11.3%
2.0%
Marketing
20,496
28,785
13,375
-34.7%
-53.5%
Depreciation
9,404
10,537
9,283
-1.3%
-11.9%
Communications
6,405
6,668
6,640
3.7%
-0.4%
12,560
17,133
17,359
38.2%
1.3%
Operating Income
-13,810
-9,700
9,197 Turned to Profit Turned to Profit
OPM
-10.0%
-4.5%
4.5%
+14.5%p
+9.0%p
Non-op Income
12,759
54,999
30,304
137.5%
-44.9%
Non-op Expense
10,195
17,914
6,780
-33.5%
-62.2%
-11,247
27,385
32,721 Turned to Profit
19.5%
Income Tax
-745
5,284
n/a
55.5%
Net Income
-10,501
22,101
24,506 Turned to Profit
10.9%
-7.6%
10.1%
12.0%
Others
Entertainment
Others
Operating Expenses
Others
Pre-tax Income
NPM
8,215
+19.6%p
+1.9%p
[Sales] Down 6.5% Q/Q or up 47.4% Y/Y to KRW 203.6b
[PC] Increased 1.7% Q/Q to KRW 48.8b due to web-board
game updates and seasonality effect
[Mobile] Up 5.8% Q/Q to KRW 72.7b thanks to record high
revenue from “LINE Disney Tsum Tsum” and
“Crusaders Quest” in addition to full-quarter
contribution from “Youkai Watch Puni Puni”
[Others] Decreased 18.8% Q/Q to KRW 82.2b after the high
season during the previous quarter
[Domestic Games] KRW 67.2b, or 55% of total game revenue
[Overseas Games] KRW 54.3b, or 45% of total game revenue
[Operating Expense] Decreased 14.5% Q/Q to KRW 194.4b
[Commission] Down 17.1% Q/Q to KRW 86.2b due to the low
season for the commerce business and decreased
revenue from games recognized on a gross basis
[Labor] Increased 2.0% Q/Q to KRW 61.5b due to increased
number of headcounts
[Marketing] Down 53.5% Q/Q to KRW 13.4b due to cost
effective marketing activities
[Depreciation] Decreased 11.9% Q/Q to KRW 9.3b due to
asset disposal and suspension of PC online games
[Operating Income] Thanks to recovery of games’ profitability
and cost-saving efforts, returned to profit,
recording KRW 9.2b or 4.5% margin
[Net Income] Recorded KRW 24.5b or 12.0% margin due to
turnaround and decreased non-operating expenses
3
1Q16 Earnings Summary
Changes in 1Q16
Mobile’s record-high revenue
for two consecutive quarters (KRW 72.7b)
“LINE Disney Tsum Tsum” posted
a new high (Launched Jan 2014)
“Youkai Watch Puni Puni”
full-quarter contribution
and increased sales thanks to marketing
Expected Changes in 2016
Likelihood of recovery in web-board
business thanks to deregulation
Global expansion of mobile games
Use of well-known IP’s
Positive changes in PAYCO indicators
on the back of offline service expansion
“Friends Pop for Kakao” remained solid
amid recording 10m downloads
Signs of web-board games’ recovery
being observed since deregulation in March
Offline service launched in March
Expenses declined due to cost-effective marketing
Expansion of PAYCO-based O2O services,
such as “UNIONE”
Service expansion and monetization
with various business models
4
Business Strategy
Mobile Game
Easy Payment
Targeted AD
5
Business Strategy
/ Mobile Game
Global Market Outlook
Domestic Market Outlook
40.4
(단위:
(Unit:십억달러)
USD b)
(단위:KRW
십억원)
(Unit:
b)
22% of Asian Market
America
S.S.America
35.0
19%
Europe
4,403
N. America
3,971
30.1
6.4
Asia
3,592
24.5
7.4
8.2
5.3
7.3
2,914
4.2
17.6
2,328
3.1
6.3
5.2
3.6
23.5
17.5
20.2
14.3
10.4
2013
2014
2015
2016
2017
(Source: Korea Creative Content Agency)
2013
2014
2015
2016
2017
(Source: NewZoo, Enterbrain, PWC)
6
Business Strategy
/ Mobile Game
Game Business Transformation
모바일
총매출
Mobile
(Gross Sales)
모바일
순매출
Mobile
(Net Sales)
PCPC
2013
2014
2015
2016
Mobile-oriented Business Structure
Increased Contribution from Net Revenue Games
Shutdown of Sluggish PC Games
7
Business Strategy
/ Mobile Game
Collaboration x Partnership
8
Business Strategy
/ Mobile Game
Major Games
LINE Disney
Tsum Tsum
LINE Disney Tsum Tsum
Youkai Watch Puni Puni
LINE POP2
Friends Pop for Kakao
Crusader’s Quest
Launched: Jan 2014
Launched: Oct 2015
Launched: Nov 2014
Launched: Aug 2015
Launched: Nov 2014
1Q16 Sales: KRW 113b
1Q16 Sales: KRW 25b
1Q16 Sales: KRW 16b
1Q16 Sales: KRW 13b
1Q16 Sales: KRW 8b
Available in Global
Available in Japan
Available in Global
Available in Korea
Available in Global
9
Business Strategy
/ Mobile Game
New Pipeline
Marvel
Tsum Tsum
God of High School with NAVER Webtoon
Genre: RPG
Launching: 2H 2016
Available in Korea
Angry Birds Game
Launching: 2H 2016
Available in Global
Marvel Tsum Tsum
LINE RUSH
Genre: Puzzle
Genre: Running
Launching: 2H 2016
Launching: 2H 2016
Available in Global
Fish Island 2
Genre: Casual Sports
Launching: 2H 2016
Available in Global
10
Business Strategy
/ Web-board
Web-board Regulation
Feb 2014
2-year Regulation
Implemented
Key Regulations
Betting amount limitation
24-hr lockout upon
KRW 100k daily loss
Prohibition of
Opponent Selection
Mar 2016
Strategy
Major Changes
New Additions
Betting Amount per Round
KRW 30k ▹ KRW 50k
New addition games, such as Texas
Hold’em and Black Jack, to increase
user engagement
Monthly Maximum Spending
KRW 300k ▹ KRW 500k
Opponent Selection Prohibited
▹ Allowed in lower-limit games
User Authentication
Every Quarter ▹ Every Year
Business Impact
Business Impact
User-base and revenue contraction
due to regulation
Expectations for business
improvement on deregulation
Mobile Expansion
Mobile “Hangame Dual Gostop”
successfully integrated
with PC service
11
Business Strategy
About
/ Easy Payment: PAYCO
PAYCO
On & Offline
Various Options & Benefits
Security Protection
(Triple layer FDS adopted)
12
Business Strategy
PAYCO Indicators
/ Easy Payment: PAYCO
*As of end-Apr 16
5.0m Registered Users
3.6m Paying Users
Avg # of Transactions per PU
Male 41%
Female 59%
30’s 32%
20’s 36%
‘15 Aug
Sep
Dec
’16 Jan
40’s 15%
Feb
Mar
ETC
Apr
13
Business Strategy
/ Easy Payment: PAYCO
Online Service
“User Retention Program” to
promote continuous use
Merchant-base gradually increasing
① Choose “PAYCO”
as payment method
② Apply discount coupons
or reward points
Online Merchant
100,000 online merchants
Mid to large-sized merchants
Additional Features Planned
PAYCO Widget (AOS)
Mobile Payment
Money Transfer
Biometric Authentication
Membership Cards
Cash Withdrawal
14
Business Strategy
/ Easy Payment: PAYCO
Offline Service
Providing benefits to users to
expand personal experience
with PAYCO
Reviewing to open PAYCO NFC
terminals to potential partners
① Open “PAYCO” App
② Select “Pay Offline”
③ Touch PAYCO NFC Terminal
PAYCOxT-Money Merchants
100,000 offline merchants
T-Money merchants secured
through investment in TMONET
PAYCO Merchants
15
Business Strategy
/ Easy Payment: PAYCO
Targeted Advertising
Established “NHN D&T” and “NHN TX” to Enhance Technique and Expedite Decision Making Process
Optimized Ad Services to Audience, Advertiser and Platform
TOAST eXchange : Real-time Online Ad Bidding Platform Optimized for Targeted Ads
Advertiser
Data Collection
Data Management
AD Business
Big-data Collection
User Segmentation
Targeting Strategy Development
AD Logics Development
AD Sales
Media
DSP
AD Agency
Media Rep
Demand Side Platform
DMP
Inventory Buying
Ad Efficiency Management
Data Mgmt Platform
NHNE EC/Game
Partners
Data
Traffic(PV/Click)
Analysis of
Targeted Users’
Behavior as well as
Advertisers and Media
Toast Exchange
RTB Ad Bidding Platform
Available for PC/Mobile Web
(Mobile App in 2H16)
Partner Center
Exchange AD Traffic with
Outside N/W, DSP
SSP
Supply Side
Platform
Maximizing
Media’s Sale
Business Strategy
/ Easy Payment: PAYCO
PAYCO-based O2O Services
Unione
Integrated Management Service
for Private Educational Institutes
• Launched in 3Q15
• Tuition easy payment service
• Student attendance check
• Shuttle bus location system
• Mobile bulletin board for parents
• Institutes subscribed to “Unione”: 350
Strategy
Additional O2O services to be introduced (e.g Mobile Student ID, Mobile Meal Coupon)
17
Business Strategy
/ Mobile Webtoon: COMICO
Mobile Webtoon: COMICO
New BM Additions
User Traffic Trend (Source: Nielson)
Comico
Comico+
A사
B사
• Oct 2013: Released in Japan
• Jun 2014: Released in Taiwan
• Oct 2014: Released in Korea
• Mar 2015: Released in Thailand
• May 2016: Released in China
• As of 1Q16, 250 titles being offered
4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16
18
Business Strategy
Pay-per-view
/ Mobile Webtoon: COMICO
Animation
Movie
Adult-targeted premium
webtoon platform,
“COMICO Plus”,
successfully launched
Top 5 COMICO titles
to be made into
animation
COMICO’s popular title,
“Confession Devil” to be
made into film
Recorded 10m
downloads during the
first week of service
“ReLife”, the most
popular title, to be
made into a comic
book as well as musical
in France
Filming to begin
in 2017
COMICO Shop
Operating
“COMICO Shop”
which sells IP-based
products
Also, publishing
popular titles into
hardcopies
Video Streaming
Mobile Game
Animation streaming
service launched
in Apr 2016 through
joint venture with
Daewon Media
Currently in
development of
mobile game using
well-known COMICO
characters
Currently offering 63
popular animation
contents, including
“One Piece” and
“Dragon Ball”
To be launched
in 2H16
19
Appendix
/ Company Info
Holding Structure
Description

Listed Market
KOSPI
Stock Code 181710 KS
Joon-Ho Lee,
34.4%
Retail, 37.8%

19,565,025 shrs (Treasury 356,210 shrs)

Treasury, 1.8%
Overseas
Institution,
12.5%
Employees (As of end-1Q16)
3,544 (Consolidated)
667 (NHN Entertainment)
Executives,
1.3%
Domestic
Institution,
12.2%
Listed Shares

Headquarters
Play Museum, Seong-nam City, Gyeong-gi, Korea
As of Apr 30, 2016
Ownership of domestic institutions and others internally estimated
20
Appendix
/ Major Affilliates
NHN PlayArt (100%)
NHN Godosoft (100%)
NHN COMICO (100%)
Accommate Holdings (59%)
NHN Hangame (100%)
Bee3Stars (58%)
NHN Entertainment USA (100%)
1300K (100%)
NHN PIXELCUBE (100%)
Fashion POP (63%)
NHN STUDIO629 (100%)
NHN BLACKPICK (100%)
NHN STARFISH (100%)
BUGS (41%) – 104200 KS
NHN Investment (100%)
NHN Techorus (100%)
NHN GOODFRIENDS (100%)
K-Innovation (100%)
NHN Korea Cyber Payment (30%) – 060250 KS
PNP Secure (100%)
NHN TICKETLINK (100%)
PIOLINK (29%) – 170790 KS
TMONET (24%)
UBIVELOX (8.8%) – 089850 KS
Ticket Monster (2.7%)
Devsisters (17%) – 194480 KS
Webzen (19%) – 069080 KS (To be disposed on July 7)
Thumb Age (9.7%) – 208640 KS (Listed on KOSDAQ on May 13)
NHN Entertainment AD (100%)
NHN TX (Toast eXchange) (100%)
NHN D&T (Data & Technology) (100%)
Mocoplex (10%)
21
Appendix
/ Revenue Breakdown
Revenue by Business
(KRW m)
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
Sales
166,062
158,388
153,405
163,827
152,128
119,798
136,210
148,727
138,128
125,625
163,050
217,799
203,618
Game
161,928
154,947
146,191
156,779
147,061
112,076
118,184
114,162
107,588
90,454
101,472
116,644
121,467
PC
135,183
120,853
114,315
119,461
102,802
67,451
69,232
66,693
57,683
46,938
49,033
47,950
48,773
26,745
34,094
31,877
37,319
44,259
44,625
48,952
47,470
49,905
43,516
52,439
68,694
72,695
4,135
3,441
7,214
7,048
5,067
7,722
18,026
34,565
30,540
35,171
61,578
101,155
82,151
Mobile
Others
Game Revenue by Region
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
Domestic
68.0%
69.5%
69.7%
71.5%
67.0%
56.5%
57.1%
58.2%
61.0%
56.7%
58.0%
59.5%
55.3%
Overseas
32.0%
30.5%
30.3%
28.5%
33.0%
43.5%
42.9%
41.8%
39.0%
43.3%
42.0%
40.5%
44.7%
22
Appendix
/ Parent Financials
Income Statement
(KRW m)
Sales
Game
Others
Operating Expenses
Commission
Labor
Marketing
Depreciation
Others
Operating Income
1Q15
56,752
53,386
3,366
63,441
28,549
18,056
10,294
3,305
3,237
-6,689
2Q15
41,683
38,319
3,365
53,241
21,858
16,828
8,487
2,765
3,304
-11,558
3Q15
45,306
40,471
4,836
68,072
23,635
14,983
22,965
2,990
3,499
-22,765
4Q15
43,774
38,111
5,663
64,962
24,737
14,172
20,033
3,234
2,786
-21,187
Operating Margin
1Q16
48,607
42,795
5,811
52,499
23,605
15,079
7,657
2,919
3,239
-3,892
-11.8%
-27.7%
-50.2%
-48.4%
-8.0%
Financial Income
Equity Method Income
Other Income
Financial Expense
Equity Method Loss
Other Expense
Pre-tax Income
Income Tax
Net Income
2,330
0
868
348
0
2,085
-5,924
-756
-5,168
32,799
0
920
5,066
0
1,380
15,715
-1,151
16,865
3,520
91,590
1,544
1,384
829
6,122
65,554
12,286
53,269
2,830
84
761
1,666
16,349
454
-35,981
-5,863
-30,118
32,532
0
6,401
488
0
584
33,969
-186
34,155
Net Income Margin
-9.1%
40.5% 117.6%
-68.8%
70.3%
Balance Sheet
(KRW m)
Current Assets
Cash and Cash Equivalent
Accounts Receivables
Others
Non-current Assets
Tangible Assets
Intangible Assets
Investment Assets
Others
Total Assets
Current Liabilities
Accounts Payables
Short-term Borrowings
Accrued Income Taxes
Others
Non-current Liabilities
Long-term Accounts Payables
Allowance for Severance Pay
Others
Total Liabilities
Shareholders’ Equity
Paid-in Capital
Capital Surplus
Capital Adjustment
Other Comprehensive Income
Retained Earnings
Total Equity
1Q15
416,613
323,584
71,368
21,661
1,033,732
31,845
16,040
892,136
93,712
1,450,346
63,213
27,012
26,756
1,227
8,218
33,713
8,174
21,402
4,136
96,926
1,353,420
9,783
1,273,687
-24,978
46,431
48,497
1,353,420
2Q15
323,708
233,844
68,969
20,895
1,194,542
36,140
15,999
1,046,221
96,183
1,518,251
127,592
23,277
95,985
0
8,330
35,496
8,351
22,160
4,985
163,088
1,355,162
9,783
1,273,667
-24,763
31,113
65,362
1,355,162
3Q15
324,563
210,610
88,400
25,553
1,407,146
50,021
14,673
1,247,314
95,139
1,731,709
100,464
39,566
35,874
15,325
9,698
78,562
8,835
22,665
47,063
179,026
1,552,683
9,783
1,273,667
-24,069
174,672
118,631
1,552,683
4Q15
244,788
126,927
100,268
17,593
1,393,754
50,006
13,895
1,235,968
93,885
1,638,541
93,025
29,248
35,777
17,491
10,508
58,106
8,791
10,776
38,539
151,130
1,487,411
9,783
1,273,667
-23,813
129,926
97,849
1,487,411
1Q16
243,427
123,871
103,359
16,197
1,409,419
48,901
13,703
1,252,614
94,202
1,652,846
88,349
20,200
32,800
23,655
11,694
52,619
7,078
11,320
34,222
140,969
1,511,878
9,783
1,273,667
-23,712
120,136
132,004
1,511,878
23
Appendix
Income Statement
(KRW m)
Sales
Game
Others
Operating Expenses
Commission
Labor
Marketing
Depreciation
Communications
Others
Operating Income
/ Consolidated Financials
1Q15
2Q15
3Q15
4Q15
1Q16
138,128 125,625 163,050 217,799 203,618
107,588 90,454 101,472 116,644 121,467
30,540 35,171 61,578 101,155 82,151
151,938 133,845 185,662 227,499 194,421
47,768 42,220 68,515 104,015 86,216
55,306 52,267 54,913 60,362 61,548
20,496 12,827 32,410 28,785 13,375
9,404
8,341
9,921 10,537
9,283
6,405
6,497
6,497
6,668
6,640
12,560 11,693 13,407 17,133 17,359
-13,810
-8,220 -22,612
-9,700
9,197
Operating Margin
-10.0%
Financial Income
Equity Method Income
Other Income
Financial Expense
Equity Method Loss
Other Expense
Pre-tax Income
Income Tax
Net Income
8,603
3,178
978
1,158
4,318
4,719
-11,247
-745
-10,501
Net Income Margin
-7.6%
-13.9%
-4.5%
4.5%
15,479 243,122
7,055
4,283
467
1,786
3,492
4,773
3,904
4,765
2,644
8,884
4,741 208,157
2,377 56,950
2,364 151,207
-6.5%
48,663
1,036
5,301
6,814
3,402
7,698
27,385
5,284
22,101
22,706
1,479
6,120
624
3,938
2,218
32,721
8,215
24,506
10.1%
12.0%
1.9%
92.7%
Balance Sheet
(KRW m)
Current Assets
Cash and Cash Equivalent
Accounts Receivables
Others
Non-current Assets
Tangible Assets
Intangible Assets
Investment Assets
Accounts Receivable
Others
Total Assets
Current Liabilities
Accounts Payables
Short-term Borrowings
Accrued Income Taxes
Others
Non-current Liabilities
Long-term Accounts Payables
Long-term Borrowings
Allowance for Severance Pay
Deferred Income Tax Credits
Others
Total Liabilities
Shareholders’ Equity
Paid-in Capital
Capital Surplus
Capital Adjustment
Other Comprehensive Income
Retained Earnings
Non-controlling Interests
Total Equity
1Q15
682,666
517,611
125,054
40,001
849,258
67,009
159,374
489,176
112,251
21,449
1,531,924
167,850
69,902
57,664
4,084
36,200
66,803
4,699
19,217
30,175
7,363
5,349
234,653
1,276,207
9,783
1,237,659
-28,557
-8,487
65,810
21,064
1,297,271
2Q15
679,333
501,289
141,397
36,647
956,924
74,019
252,870
492,116
114,163
23,756
1,636,258
226,626
74,844
111,499
3,762
36,521
78,407
15,397
19,304
31,930
4,521
7,255
305,033
1,259,924
9,783
1,237,639
-39,036
-16,548
68,085
71,301
1,331,224
3Q15
683,341
466,805
155,200
61,336
1,159,128
92,772
258,053
666,383
117,192
24,728
1,842,469
210,622
103,487
46,786
22,345
38,005
122,112
16,968
17,848
32,854
46,732
7,710
332,735
1,436,541
9,783
1,237,639
-38,476
8,230
219,365
73,194
1,509,734
4Q15
682,730
443,500
180,758
58,472
1,150,600
105,571
307,563
600,514
116,262
20,689
1,833,330
232,901
113,836
45,101
29,101
44,862
97,918
17,308
17,416
18,920
36,097
8,178
330,819
1,426,967
9,783
1,237,639
-38,327
-33,031
250,904
75,543
1,502,510
1Q16
686,365
440,660
173,665
72,040
1,148,955
105,424
307,252
596,458
118,151
21,670
1,835,320
223,363
91,067
46,747
35,623
49,926
91,841
15,562
15,318
20,262
30,705
9,994
315,203
1,447,129
9,783
1,237,639
-38,395
-37,213
275,315
72,988
1,520,117
24