fy2012 presentation 1105 final2 e - ir pocketpdf.irpocket.com/c3624/ja1b/pqa2/vaot.pdf25+...

Consolidated Financial Results (For the Year Ended September, 2012)

November 5th 2012 AXEL MARK INC.

(TSE Mothers:3624）

2

Contents

4Q Summary Differences btw Forecasts and Result (FY) Financial Results (Yearly) Differences btw Forecasts and Result(4Q) Extra Ordinary Losses (4Q) Overview of PL (Q on Q) Overview of Balance Sheet Quarterly Results Quarterly Results by segments OperaXng Profit by segments Total number of Downloads Topics

-‐-‐-‐-‐-‐-‐-‐-‐ 4 -‐-‐-‐-‐-‐-‐-‐-‐ 5 -‐-‐-‐-‐-‐-‐-‐-‐ 6 -‐-‐-‐-‐-‐-‐-‐-‐ 7 -‐-‐-‐-‐-‐-‐-‐-‐ 8 -‐-‐-‐-‐-‐-‐-‐-‐ 9 -‐-‐-‐-‐-‐-‐-‐-‐ 10 -‐-‐-‐-‐-‐-‐-‐-‐ 11 -‐-‐-‐-‐-‐-‐-‐-‐ 12 -‐-‐-‐-‐-‐-‐-‐-‐ 13 -‐-‐-‐-‐-‐-‐-‐-‐ 14 -‐-‐-‐-‐-‐-‐-‐-‐ 15

Market Environment Comparison of Game Genre History of Gaming Market Our focus Strategies of Next Year Up-‐front Investment / Good Return The number of new service releases

-‐-‐-‐-‐-‐-‐-‐-‐ 18 -‐-‐-‐-‐-‐-‐-‐-‐ 19 -‐-‐-‐-‐-‐-‐-‐-‐ 20 -‐-‐-‐-‐-‐-‐-‐-‐ 21 -‐-‐-‐-‐-‐-‐-‐-‐ 22 -‐-‐-‐-‐-‐-‐-‐-‐ 23 -‐-‐-‐-‐-‐-‐-‐-‐ 24

-‐-‐-‐-‐-‐-‐-‐-‐ 32 -‐-‐-‐-‐-‐-‐-‐-‐ 33 -‐-‐-‐-‐-‐-‐-‐-‐ 34 -‐-‐-‐-‐-‐-‐-‐-‐ 35 -‐-‐-‐-‐-‐-‐-‐-‐ 36 -‐-‐-‐-‐-‐-‐-‐-‐ 37 -‐-‐-‐-‐-‐-‐-‐-‐ 38 -‐-‐-‐-‐-‐-‐-‐-‐ 39

Our focuses Company Overview Our business Social game Content business Strategy of expansions for smartphone Mobile adverXsement business Business domain

Arad Senki SG -‐1 Arad Senki SG -‐2 Content and AdverXsement Business 1Q Forecast Total Shareholder’s Return

-‐-‐-‐-‐-‐-‐-‐-‐ 25 -‐-‐-‐-‐-‐-‐-‐-‐ 26 -‐-‐-‐-‐-‐-‐-‐-‐ 28 -‐-‐-‐-‐-‐-‐-‐-‐ 29 -‐-‐-‐-‐-‐-‐-‐-‐ 30

l．4Q Quarterly Report

ll．Forecasts and Strategies of Next Year

lll．Appendix

l．4Q Quarterly Report

4

4Q Summary

Social Game Business Quarterly Revenue　562million yen (QoQ increase 19%) Revenue of “Pro-‐Yakyu Chronicle” is Underperforming.

Content ant Adver@sement businesses Content business: Holding stable revenue and Expanding business for smartphone AdverXsement business: The revenue is slowly-‐decreased.

Extra Ordinary Losses 29mil yen Impairment Losses caused by broadening working space à Preparing for our business expansion in the future

２

３

１

5

Differences btw Forecasts and Result (FY)

The revenue of Social game fell short of the esXmaXon. Total Revenue is at the highest level. OP reaches a record profit in the past.

mil yen Results Forecasts %

Total Revenue 3,888 4,007 97.0%

Opera@ng Profit 226 272 83.0%

Ordinary Profit 228 270 84.4%

Net Profit 190 216 87.9%

FY2012 ended September 30th

6

Financial Results (Yearly)

Mil yen

■Total Revenue （FY2008-‐FY2012）

■Opera@ng Profit （FY2008-‐FY2012）

Mil yen

(Consolidated)

Social　1,700 Mil yen Content　 1,343 Mil yen Adver@sement 845 Mil yen

FY2008 FY2009 FY2010 FY2011 FY2012 (Consolidated) (Consolidated)

FY2008 FY2009 FY2010 FY2011 FY2012 (Consolidated)

7

Revenue of “Pro-‐Yakyu Chronicle” is Underperforming.

Mil yen 4Q Results

4Q Forecasts

Changing factors

Revenue 1,010 1,130 Social Game ▲88mil yen Mobile AdverXsement ▲22mil yen Content 　　　　 ▲9mil yen

Opera@ng Profit ▲4 42

>Short of Gross Mergin >Increasing cost of development “Arad Senki SG”

Differences btw Forecasts and Result(4Q)

8

Impairment Losses

Removal Expenses

Extra Ordinary Losses (4Q)

Early-‐terminaXon fee regarding the office of Indi soiware co. 12mil yen

Impairment losses caused by office renewal and others 5mil yen

5 mil yen

24 mil yen

Costs of broadening working space 12mil yen

9

Overview of PL (Q on Q)

Increasing HR Costs and Outsourcing Costs

Million yen 4Q (3months) 3Q (3months)

QoQ amounts % amounts %

Total Revenue 1,010 100.0 969 100.0 +4.2%

COGS 589 58.3 539 55.6 +9.2%

Gross margin 421 41.6 430 44.4 ▲2.0%

SGA 425 42.0 358 36.9 +18.7%

(marke@ng cost) (92) 9.1 (80) 8.2 +15%

Opera@onal Profit ▲4 ▲0.3 71 7.3 -‐

non-‐opera@onal profit 5 0.4 0 -‐ -‐

non-‐opera@onal cost 1 0.0 3 0.4 ▲66.6%

Ordinary Profit ▲0 ▲0.0 68 7.0 -‐

Net profit ▲3 ▲0.2 59 6.1 -‐

10

Overview of Balance Sheet Enhancing our financial posi@on

by profit growth and repayment of debt

Million yen FY2012 Ended Sep.30th

FY2011 Ended Sep.30th

Million yen FY2012 Ended Sep.30th

FY2011 Ended Sep.30th

Current Assets 1,332 1,017 Current liabili@es 451 361 　 Cash 729 767 Accounts payable-‐trade 190 138 Accounts receivable 555 233 Current loan 10 155 Others 60 16 Others 250 67 Allowance for doub]ul accounts ▲ 13 0 Non current liabili@es 27 -‐ Non current Assets 644 148 Total Liabili@es 479 361 Property, plant and equipments 32 4 　　Capital 563 563 Intangible assets 519 65 　Capital surplus 1,164 623 Investments and other assets 92 78 　Retained earnings ▲ 184 ▲ 376 Lease and guarantee deposits 89 207 Treasury Stock ▲47 ▲6 Others 3 20 Total shareholders equity 1,496 804 Allowance for doub]ul accounts -‐ ▲ 148 Total liabili@es and

net assets 1,976 1,166 Total Assets 1,976 1,166 Capital ra@o 75.7% 69.0%

11

Quarterly Results

4Q：Increasing cost of development next big Xtle

Million yen 1Q 2Q 3Q 4Q Fiscal Year

Total Revenue 924 983 969 1,010 3,888

Opera@ng Profit 74 84 71 ▲4 226

Profit Ra@o 8.1% 8.5% 7.3% ▲0.4% 5.8%

12

Quarterly Results by segments

19.3%up

10.3%down

924 983 969 9.6%down

1,010

Social Game: The revenue has increased in three consecuXve quarters. Content and AdverXsement : The revenues are slowly decrease.

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OperaXng Profit by segments

Million yen Social Game Content Adver@se

ment Head

Quarters Total

Revenue 1,700 1,343 858 ▲12 3,888

Opera@ng Profit 177 236 35 ▲222 226

Profit Ra@o 10.4% 17.5% 4.0% -‐ 5.8%

FY 2012

14

Total number of Downloads

90 160

330

1,190 950

840

670

1,300

1,480 1,610

1,820 1,940

2,070

2,000,000+

Units: thousands

「Kingdom Chronicle」 Launch :9/8/2011

「Osama Game」 Launch:11/28/2011

「Adventure Chronicle」 Launch:3/2/2012

「Legions of the sky」 Launch:5/10/2012

「Kingdom Wars」for mobage West

Launch:9/25/2012

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Strengthening our organizaXon for future growth

Topics

“Region of the Sky” recorded a big seller. •  Excellent Real-‐Xme Banle •  Reached 350k users, high ARPPU

Strength our organiza@on of Social Game development •  The strengthening enables us to develop a new social game for oversea markets.

AXEL MARK and DeNA agreed strategic alliance. •  Launched “Kingdom Wars” on September 25th •  This is the first Xtle aier the agreement

ll．Forecasts and Strategy for next year

Social Game

18

Market Environment

■The number of Subscribers and Shipments (in Japan) FY2016 Subscribers 81million（FY2012　25million） FY2016 Smartphone’s shipments 35million（FY2012 27million）

FY2012 Smartphone’s shipments 618million （World Wide） Source：IHS iSuppli

Source: MMR

Source: Ichiyoshi Research InsXtute Inc. (October 2012)

■Mobile Game (World Wide) Market Size FY2011 502bil yenà FY2012 950bil yen

950

502

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Genre of Games

Casual Game Mid-‐core Game Core Game

Defini@on

Casual games are typically disXnguished by their simple rules and lack of commitment required in contrast to more complex hardcore games.

Interim range of Casual game and Core game

Deep immersion games. Games preferred by hard core gamers, which play to take significant Xme and pracXce on games.

Game Genre

Puzzle game Card game AcXon game

Real-‐Xme banle game SimulaXon Game Role-‐playing Game

3D shooXng game Spectacular MMORPG

Our Games

Kingdom Chronicle Osama Game Adventure Chronicle Pro-‐Yakyu Chronicle

Region of the Sky Arad Senki SG (to be launched)

－

Our Focus Genre of our games

20

Market environment of Social game in Japan

Future

Market size

Casual Game

Mid-‐core Game

Core Game

Casual game only

Mid-‐core game with the rise of smarfphone

Core game with ultra high-‐spec smartphone

Present

FY2012 34billion yen Source: Yano research

FY2010 14billion yen Source: Yano research

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Our focus

Our focus is Mid-‐core gaming market. Mid-‐core users spend much money and take longer Xme than casual gamer.

ARPU

high

Xme long

Casual game

Mid-‐core game

：low ：short ：large

ARPU Spending @me Marketability

：high ：long ：small-‐middle

ARPU Spending @me Marketability

22

Strategies of Next Year

Go global

Large-‐scaled IP game @tle

・We’re developing games for mobage Global with DeNA.

・”Arad Senki SG” will be launched in mid of November. Pre-‐registered users: 50,000+ (as of October 29th )

Improve our gaming system ・Improving our Real-‐Xme Banle system. That will make saXsfied users. And we realize high ARPU. ・Developing both browser-‐based games and game applicaXons

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Up-‐front Investment / Good Return

Improving gaming system User sa@sfac@on High ARPU

ARPU

Xme

BEP

Our exis@ng gaming system

Improved gaming system

Recording expenses occurred in advance

Development costs, HR cost and outsourcing cost, are recorded at the occurrence Xme (month).

S-‐in S-‐in

24

The number of new service releases

FY2012 1H

FY2012 2H

FY2013 1H

May 2012 Region of the sky

July 2012 Pro-‐yakyu Chronicle

September 2012 Kingdom Wars

November 2011 Osama game

March 2012 Adventure Chronicle

Coming Soon!

Coming Soon!

Coming Soon!

Coming Soon!

November 2012 Arad Senki SG

・We’ll launch 5 new Xtles in FY2013. (the Xtles for oversea and domesXc markets)

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Arad Senki SG

Will be launched soon!

当資料はアクセルマーク株式会社が作成したものであり内容に関する一切の権利は当社に帰属しています。（※プロ野球選手肖像を除く）複写及び無断転載はご遠慮下さい。当資料は当社が当社の現在発行している、また将来発行する株式や債券等の保有を推奨することを目的に作成したものではありません。また、当資料は当社が信頼できると判断した情報を参考に作成していますが当社がその正確性を保証するものではなく、事業計画数値に関しても今後変更される可能性があることをご了解下さい。

(ｃ) 2012 NEXON and Neople / AXELMARK

26

Arad Senki SG

Highly qualified items same as original “Arad Senki” on the web

Social-‐oriented system and strategy

Fully enjoyable gaming system for users

Content Business AdverXsement Business

28

Content and AdverXsement Business

Focus on South Asian market, especially Indonesia, Vietnam and Philippines. InvesXgaXng the business feasibiliXes of search engine, media and adverXsement

Focus on Comics DistribuXon for smartphone OperaXonal improvement and increasing the rate of margin

Adver@sement Business

Content Business

Oversea Business

Keeping the margin from feature phone business Developing AD network business for smartphone

29

1Q Forecast

We currently defer the disclosure of our forecast.

→We’ll disclose 1Q forecast as soon as we’ve esXmated the revenue of social gaming business, especially regarding a new game and an a game for oversea market.

30

Total Shareholders’ Return

We establish the organizaXon for increasing both in sales and profits. Our company mission: ”Fun” makes the world connected.

Treasury Stock

Dividend

Improvement Shareholder’s value

We purchased treasury stocks in this September for future M&A and exercise of the stock opXon rights. Further purchasing in discussion. The number of treasury stocks: 1,230 (2.7% of exisXng shares)

Non-‐dividend in FY2013. We’ll make an annual dividend aier we completely clear our cumulaXve loss.

31

Appendix

32

Our Focuses

・Global Provide Search Engine and social games

・Social 　Social network games for mobage

・Smart phone 　Contents distribu@on for smart phone.

All rights reserved by AXEL MARK. Information and Statements made in this presentation regarding our current plans, estimates, strategies and beliefs, including forecasts, are forward-looking statements about the future performance of AXEL MARK.

33

Company Overview

Company Name

Business

Capital

President

Head Count

Subsidiaries

Stock code

AXEL MARK INC.

Social Game, Content distribuXon, Mobile AdverXsement

563 million yen (As of September 30th 2012)

Junji Oshita

Address Harmony Tower, 1-‐32-‐2 Honcho, Nakano-‐ku, Tokyo, Japan

120 (consolidated, as of September 30th 2012)

AXELBEAT (Overseas business), INDI SOFTWARE (Social game)

3624 (Tokyo Stock Exchange Mothers SecXon)


34

Our Business

•  Card Banle game,6 Xtles for mobage

Social Game Business

•  Distribute music, movie, comic, and fortune-‐telling for smart phone and feature phone

Content Business

•  AD network for mobile (smart phone and feature phone) •  Provide search engine for oversea carriers

Mobile AdverXsement Business

All rights reserved by AXEL MARK. InformaXon and Statements made in this presentaXon regarding our current plans, esXmates, strategies and beliefs, including forecasts, are forward-‐looking statements about the future performance of AXEL MARK.

35

Social game

Original @tles Oversea IP @tles

Kingdom Chronicle

Adventure Chronicle

Region of the sky Osama game Pro-‐yakyu Chronicle Kingdom Wars

36

Content Business

DistribuXon for smart phone and feature phone

Entertainment Contents for Feature Phone Music, Movie, Comic, and Fortune-‐telling

eBook Service for smart phone

Entertainment Contents for Smart phone Comic and Fortune-‐telling


37

Strategy of Expansions for smart phone

The expansion depends on the anXcipaXon of market growth

Feature Phone Smart phone

Music

Comic

eBook

Fortune-‐telling

Movie

Music

Comic

eBook

Fortune-‐telling

Movie


38

Mobile AdverXsement Business

AD network

Content Search

Adver-‐Xsers AD

agency ・SelecXon of opXmum adverXsing method ・SelecXon of most suitable media Tie-‐up media

12,000+

Music sites Gevng music easily!

Other portal sites


39

Business Domain

ProducXon Packaging MarkeXng DistribuXon Users Contents

Social game

Mobile adver@sement

Contents distribu@on

Overseas

Connect Users and Contents


40

”Fun” makes the world connected.

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