Corporate Strategy Meeting (Eidos Integration)
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Corporate Strategy Meeting (Eidos Integration) April 22, 2009 1 SQUARE ENIX HOLDINGS CO., LTD. Statements made in this document with respect to SQUARE ENIX HOLDINGS CO., LTD. and its consolidated subsidiaries' (together, “SQUARE ENIX GROUP") plans, estimates, strategies and beliefs are forward-looking statements about the future performance of SQUARE ENIX GROUP. These st at ement s are b ased on management' s assumpti ons and b eli ef s i n li ght of i nf ormati on avail abl e t o it at th e time these material were drafted and, therefore, the reader should not place undue reliance on them. Also, the reader should not assume that statements made in this document will remain accurate or operative at a later time. A number of factors could cause actual results to be materially different from and worse than those discussed in forward-looking statements . Such factors include , but not limited to: 1. changes in economic conditions affecting our operations; 2. fluctuations in currency exchange rates, particularly with respect to the value of the Japanese yen, the U.S. dollar and the Euro; 3. SQQyppUARE ENIX GROUP’s ability to continue to win acceptance of our products and services, which are offered in highly competitive markets characterized by the continuous introduction of new products and services, rapid developments in technology, and subjective and changing consumer preferences; 4. SQUARE ENIX GROUP’s ability to expand international success with a focus on our businesses; and 5. regulatory developments and changes and our ability to respond and adapt to those changes. The forward-looking statements regarding earnings contained in these materials were valid at the time these materials were drafted. SQUARE ENIX GROUP assumes no obligation to update or revise any forward-looking statements, inclu ding forecasts or projections , w hether as a resu lt of new information , s ubseq uent e vents or other wise . The financial information presented in this document is prepared according to generally accepted accounting principles in Japan. 2 SQUARE ENIX HOLDINGS CO., LTD. Profile of Eidos Company Name Eidos plc Incorporation November 1995 (Eidos Interactive was incorporated in 1990) Location of Headquarters United Kingdom (Wimbledon) Development and publishing of interactive Principal Business entertainment Fiscal Year-end June 30 (to be changed to March 31) Tomb Raider, Hitman, Kane & Lynch, Major IPs Deus Ex, etc. Crystal Dynamics (U.S.), Key Studios IO Interactive (Denmark), Eidos Montreal (Canada), etc. 3 SQUARE ENIX HOLDINGS CO., LTD. Eidos Financial Highlights (Million £) 200 179 150 129 119 100 50 8 0 -50 -30 One-time Net Revenue -88 -100 restructuring charges Pre-tax Profit -150 -136 Average 06年6月期 07年6月期 08年6月期 Headcounts 900 867 1,080 834 (Most Recent) FY2006 FY2007 FY2008 4 SQUARE ENIX HOLDINGS CO., LTD. GBP 5.0 606 0.0 1.0 2.0 3.0 4.0 . 0 2005年4月 2005年5月 Eidos Historical Stock Price 2005年6月 2005 2005年7月 2005年8月 2005年9月 2005年10月 2005年11月 2005年12月 2006年1月 2006年2月 2006年3月 2006年4月 Historical 2006年5月 2006 2006年6月 2006年7月 2006年8月 2006年9月 2006年10月 2006年11月 2006年12月 2007年1月 2007年2月 2007年3月 2007年4月 5 2007年5月 2007 2007年6月 2007年7月 2007年8月 2007年9月 Stock 2007年10月 2007年11月 2007年12月 2008年1月 2008年2月 2008年3月 2008年4月 2008年5月 2008 2008年6月 2008年7月 SQUARE ENIXHO 2008年8月 Price 2008年9月 2008年10月 2008年11月 JPY GBP 2008年12月 年 月 2009 2009 1 JPY Equivalent JPY 2009年2月 Source: Bloomberg Source: 2009年3月 2009年4月 32p LDINGS CO.,LTD. 1,000 1 200 0 200 400 600 800 , 200 Summary of the Transaction Transaction Method Scheme of Arrangement Effective Date April 22, 2009 Offer Price 32 pence per share Number of Shares 263,586,730 Outstanding Total Value of Approx. £84.3 million (JPY 12.1 billion) Outstanding Shares Financing Internal Cash Post-acquisition 100% Ownership Exchange rate used for conversion: £1 = JPY144 6 SQUARE ENIX HOLDINGS CO., LTD. Square Enix Group Square Enix Holdings Square Enix Group Taito Group Eidos Group JPY78.4 billion JPY69.1 billion JPY17.1 billion (£119 million) (Net Revenue, FY08) (Net Revenue, FY08) (Net Revenue, FY08) 2,139 FTEs 937 FTEs 834 FTEs Number of FTEs for Square Enix Group and Taito Group are as of December 2008, £1 = JPY144 7 SQUARE ENIX HOLDINGS CO., LTD. CustoCustomermer ProfileProfile to IIdentifydentify 1) Bene fit from various chihoices o f access Customer Devices/Media Content/Services 8 SQUARE ENIX HOLDINGS CO., LTD. CustoCustomermer ProfileProfile to IIdentifydentify 2) Have mu ltipl e personaliti es Customer Devices/Media Content/Services 9 SQUARE ENIX HOLDINGS CO., LTD. CustoCustomermer ProfileProfile to IIdentifydentify 3) Commun ity-oritdiented Customer Devices/Media Content/Services 10 SQUARE ENIX HOLDINGS CO., LTD. Essence of Entertainment Business ② Customer Devices/Media ① Content/Services VlValue 11 SQUARE ENIX HOLDINGS CO., LTD. Essence of Entertainment Business ② Customer Monetization ① Devices/Media Content/Services 12 SQUARE ENIX HOLDINGS CO., LTD. Critical Success Factors of Entertainment Business 1. Brand Value 2. Various Interfaces with Customers - Deliver content conforming to various devices/media - Promote specialties in various business segments - Expand operations globally 3. Community Management Skills 13 SQUARE ENIX HOLDINGS CO., LTD. Enhanced Portfolio of Quality Franchises Square Enix Final F antasy > 85 m illion uni ts Dragon Quest > 47 million units Kingdom Hearts > 12 million units Eidos Tomb Raider > 30 million units Hitman > 8 million units 14 SQUARE ENIX HOLDINGS CO., LTD. TrTrackack RRecordecord ooff EiEidosdos FrFranchisesanchises (11)) Tomb Raider Tomb Raider 1996 Tomb Raider II 1997 Tomb Raider III 1998 Tomb Raider : The Last Revelation 1999 Tomb Raider Chronicles 2000 Tomb Raider : The Angel of Darkness 2003 Tomb Raider : Legend 2006 Tomb Raider Anniversary 2007 Tomb Raider : Underworld 2008 0 2 4 6 8 Million Units 15 SQUARE ENIX HOLDINGS CO., LTD. TrTrackack RRecordecord ooff EiEidosdos FrFranchisesanchises ((2)2) Hitman Kane & Lynch Kane & Lynch : Dead Men 2007 Million Units Hitman : Codename 47 2000 0 1 2 3 4 Hitman2 : Silent Assassin 2002 Deus Ex Hitman : Contacts 2004 Deus EX 2000 Hitman : Blood Money 2006 Million Units 2003 Deus EX : Invisible War Million Units 01234 0 1 2 3 4 Just Cause Just Cause 2006 Million Units 01234 16 SQUARE ENIX HOLDINGS CO., LTD. Worldwide Organizations (Pre-acquisition) Taito Korea Corp. Square Enix Ltd. Square Enix Holdings Co., Ltd. Square Enix Co., Ltd. Taito Corporation Square Enix, Inc. Square Enix (China) Co., Ltd. Beijing Taxin Cultural Amusement Co., Ltd HQ, Sales, Operations Development studios 17 SQUARE ENIX HOLDINGS CO., LTD. Worldwide Organizations (Post-acquisition) IO Interactive (Denmark) Hamburg sales office (Germany) Crystal Dynamics, Square Enix Ltd. (UK) Taito Korea Corp. Redwood Shores sales office Eidos Creative Software (Korea) (USA) (China) Square Enix Holdings Co., Ltd. Eidos Hungary Square Enix Co., Ltd. Eidos Montreal (Canada) Taito Corp. (Japan) Paris sales office Square Enix, Inc. (France) (USA) Square Enix (China) Co., Ltd. Beijing Taxin Cultural Amusement Co., Ltd (China) Eidos, Eidos Interactive, Beautiful Game Studio, Eidos Games Studios, Rocksteady Studios (()UK) HQ, Sales, Operations Development Studios 18 SQUARE ENIX HOLDINGS CO., LTD. Strategic Significance of Eidos Integration 1. Successful completion of Square Enix G’fi“Mhi”Group’s first “Metamorphosis” - From “Mono” to “Multi” 2. Direct synergies to be expected - Multi-use of Eidos content - Economies of scale in sales/marketing - Shared technologies and functions - Establishment of global business infrastructure 19 SQUARE ENIX HOLDINGS CO., LTD. Corporate Strategy Meeting (Eidos Integration) April 22, 2009 20 SQUARE ENIX HOLDINGS CO., LTD..