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I. Financial Statements - Financial Position Investor Relations 2021 February 2021 Disclaimer This financial information in this document are consolidated earnings results based on K-IFRS. This document is provided for the convenience of investors only, before the external audit on our 4Q 2020 and 2020 financial results is completed. The audit outcomes may cause some parts of this document to change. In addition, this document contains “forward-looking statements” – that is, statements related to future, not past, events. In this context, “forward-looking statements” often address our expected future business and financial performance, and often contain words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks” or “will”. Our actual results to be materially different from those expressed in this document due to uncertainties. Investor Relations 2021 TABLE OF CONTENTS I Studio Dragon at a Glance II 4Q20 & 2020 Earnings Release III 2021 Growth Strategies Appendix I Studio Dragon at a Glance 1. Highlights 2. Comprehensive Studio 3. Studio Dragon at a Glance 4. No.1 Studio in Korea 1 Highlights IP Value Up Financial Performance Viewership Intl. Revenue Intl. Revenue WORLDWIDE Rating Growth Proportion 5titles 7% 41% 43% International OP Margin Creators ASP Growth Licensing <New titles> Improvement 231creators 157titles 29% +3%p 5 | Investor Relations 2021 – I. Studio Dragon at a Glance 2I. Comprehensive Studio 6 | Investor Relations 2021 – I. Studio Dragon at a Glance 3I. Studio Dragon at a Glance 6,093 28 27 25 22 18 2,756 16 1,164 1,180 Studio 2015 2016 2017 2018 2019 2020 Dragon Note (1) Each companies’ audit report (consolidated basis) 7 | Investor Relations 2021 – I. Studio Dragon at a Glance 4I. No. 1 Studio in Korea ① Production Capability (1) 8 | Investor Relations 2021 – I. Studio Dragon at a Glance 4I. No. 1 Studio in Korea ① Production Capability (2) 9 | Investor Relations 2021 – I. Studio Dragon at a Glance 4I. No. 1 Studio in Korea ② Business Capability 10 | Investor Relations 2021 – I. Studio Dragon at a Glance 4II No. 1 Studio in Korea ③ Stable Profit Structure Annual Production Trend Production Cost to Revenue Revenue to Cost of Sales Unit: titles Unit: Wbn 525.7 468.7 28 27 25 379.6 22 286.8 18 195.5 89.8% 86.1% 85.8% 83.6% 85.4% 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Note Companies’ homepage and other sources 11 | Investor Relations 2021 – I. Studio Dragon at a Glance II 4Q20 & 2020 Earnings Release 1. 4Q20 Highlights 2. 4Q20 & 2020 Operating Performance 3. Programming 4. Distribution 5. Cost 1 1 4Q 2020 Highlights <Tale of the Nine Tailed> <Start-Up> <The Uncanny Counter> <Awaken> <True Beauty> <Mr. Queen> <Sweet Home> Intl. Revenue ASP Growth Revenue Proportion IP W137.7bn 52.5% W34.9bn New titles +18% (+41.3% YoY) (+20.0%p YoY) (-8.3% YoY) 13 | Investor Relations 2021 – lI. 4Q20 & 2020 Earnings Release 1 1 4Q20 & 2020 Operating Performance Summary 2020 Revenue W525.7bn (+12.2% YoY): IP value up(1) attributable to enhanced presence of K-drama → top-line growth OP W49.1bn (+71.1% YoY): Enlarged intl. proportion driven by distribution leverage, limited cost increase → rapid growth 4Q20 Revenue W137.7bn (+41.3% YoY): All-time high international revenue(2) → top-line growth OP W4.6bn (TB YoY): Increased cost (+31.2% YoY) mainly due to produce premium quality → led qualitative growth Revenue Operating Profit Net Profit Unit: Wbn Unit: Wbn Unit: Wbn 11.5 % 10.8 % 525.7 10.5 % 9.3% 9.4 % 8.3 % 468.7 48.9 6.6 % 40.8 6.1 % 5.6 % 5.6% 379.6 39.4 279.8 286.8 219.2 43.7 162.1 195.5 49.1 32.3 111.9 39.9 35.8 33.0 29.6 75.4 28.7 23.8 26.4 178.1 208.7 197.0 21.2 131.2 13.0 87.8 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Programming Distribution Others Operating Profit OP Margin Net Profit NP Margin Note (1) Long-tail value, increased ASP, OSMU, etc., (2) All-time high international revenue via upscaling size of <Sweet Home> and fortifing distribution efficiency 14 | Investor Relations 2021 – lI. 4Q20 & 2020 Earnings Release 2 4Q20 & 2020 Operating Performance Programming 2020 Revenue W197.0bn (-5.6% YoY): Fewer lineups on-air due to COVID-19 amid increased digital lineups → slight decrease 4Q20 Revenue W40.7bn (-10.9% YoY): Titles on-air continually declined, new titles(1) excelled performance→ negative growth 2020 4Q20 Programming Revenue Production Trend(2) Programming Revenue Unit: Wbn Unit: titles Unit: Wbn 208.7 197.0 65.4 14.4 178.1 28 27 35.3 25 9.5 1 2 22 45.7 45.2 27.6 45.7 131.2 40.7 18 0.8 7.4 25.7 87.8 194.3 27 17.8 168.6 161.7 25 25 21 45.7 44.4 41.2 105.5 18 37.8 38.3 70.0 -0.5 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 4Q19 1Q20 2Q20 3Q20 4Q20 Captive Non-captive TV Digital Captive Non-captive Note (1) <Start-Up>, <The Uncanny Counter>, etc., (2) Includes all titles in progress 15 | Investor Relations 2021 – lI. 4Q20 & 2020 Earnings Release 3 4Q20 & 2020 Operating Performance Distribution 2020 Revenue W279.8bn (+27.6% YoY): IP value up led by upscaling size of original, increased ASP → intl. continued to excel 4Q20 Revenue W86.3bn (+101.6% YoY): Delivered <Sweet Home>, expanded library sales, normalized domestic VOD record high 2020 4Q20 Distribution Revenue No. of Library Sales Distribution Revenue Unit: Wbn Unit: titles Unit: Wbn ※ (1) 0.89bn 1.04bn 1.31bn 1.44bn 1.56bn 179 279.8 86.3 152 27 75.7 66.9 219.2 124 26 108 162.1 25 50.9 226.6 42.8 72.3 85 23 59.4 111.9 160.4 152 52.8 75.4 110.2 19 126 67.2 99 31.7 42.1 83 44.2 66 44.7 51.9 58.8 53.2 16.3 31.2 11.1 14.1 8.8 14.0 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 4Q19 1Q20 2Q20 3Q20 4Q20 Domestic International Old Titles New Titles Domestic International Note (1) Average distribution revenue per title (distribution revenue / number of library sales) 16 | Investor Relations 2021 – lI. 4Q20 & 2020 Earnings Release 4 4Q20 & 2020 Operating Performance Cost 2020 OPEXW476.6bn (+8.3% YoY): Fewer lineups, pre-emptively reflected cost, implemented reasonable cost policy → limited increase 4Q20 OPEX W133.1bn (+31.2% YoY): COGS Ratio 89.1% (-8.7%p YoY), SG&A Ratio 7.6% (+1.2%p YoY) COGS and SG&A Ratio OPEX Breakdown(1) Unit: Wbn Unit: Wbn 4Q19 1Q20 2Q20 3Q20 4Q20 2018 2019 2020 89.8 86.1 85.8 Production COGS 48.6 61.9 75.0 46.8 76.3 185.6 232.7 260.0 83.6 85.4 Labor Costs 6.4 5.4 5.4 7.8 9.5 18.8 21.7 28.2 Depreciation 0.5 0.6 0.6 0.8 0.9 0.3 1.9 2.9 Amortization 27.7 25.6 44.7 18.9 24.1 75.0 115.0 113.3 4.9 4.9 4.1 4.1 3.0 Commissions 12.6 11.3 13.9 11.2 15.6 39.1 50.8 52.1 Others 5.6 3.9 4.9 4.8 6.7 20.9 17.9 20.1 2016 2017 2018 2019 2020 OPEX 101.4 108.7 144.5 90.3 133.1 339.7 440.0 476.6 COGS Ratio SG&A Ratio Note (1) COGS + SG&A Cost 17 | Investor Relations 2021 – lI. 4Q20 & 2020 Earnings Release III 2021 Growth Strategies 1. Industry 2. Growth Strategies - Global, Digital II1 2021 Growth Strategies - Industry Korea OTT Market Size Korea OTT Market in 2021 (Unit: Wbn) 780 635 ” 514 W400bn for 3 years W870bn in Korea W300bn for 4 years 415 307 Original Collaboration Launched 2H 2021 2016 2017 2018 2019 2020 <Pachinko>, <Mr. Robin> with 11 Street Coupang Play 19 | Investor Relations 2021 – lII. 2021 Growth Strategies 2 2021 Growth Strategies “Strengthen IP, Developed by Studio Dragon” Global Digital Create New Culture, . Co-develop global projects . Accelerate shift to digital Premium Asia No. 1 Studio . Secure quality and performance . Diversify genres and formats Storyteller Group . Scale up to blockbuster . Fortify digital platform strategy . Intl. revenue proportion: 70% . Intl. revenue proportion: 43% . Expand lineups and deliveries of . Intl. revenue growth: 50% (5Y CAGR) G G global project . ASP increase: 18% (YoY) [Global Project] [Digital Lineup] . ASP increase: target double digit . Digital lineup growth: double digit . Expand new business model . Digital lineup: 3 titles 10+titles 2titles →9+titles D (2020) (2021) D . Strategical collaboration with OTTs, maximize profit Establishment~2020 2021 2022~ 20 | Investor Relations 2021 – lII. 2021 Growth Strategies 2 2021 Growth Strategies - Global International Originals Global Partners Developed by SD 2titles Co-developed 8titles International Original <Queens of the Desserts> Skydance <Hotel Deluna> Alison Schapker (Producer/Writer) 21 | Investor Relations 2020 – lII. 2021 Growth Strategies I2 2021 Growth Strategies - Digital Global Universe Fandom Mid-form Audience iQIYI etc. 3titles Digital Lineup Netflix 3titles (Unit: titles) Double TVING titles Digit 3+ <My Roommate> 9+ 2 <Juvenile Judgement> 1 2019 2020 2021(E) 2022(E) 22 | Investor Relations 2020 – lII. 2021 Growth Strategies Investor Relations 2021 APPENDIX 1 Corporate Overview 2 Vision 3 Business Model 4 Financial Statements Summary 1.
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