FY2017 Q3 Earnings Result Briefing Session Mixi, Inc
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FY2017 Q3 Earnings Result Briefing Session mixi, Inc. Table of Contents ・Financial Condition ・Business Condition -Entertainment Business -Media Platform Business ・FY2017 Earnings Estimates ・Appendix ©mixi, Inc. All rights reserved. 2 Financial Condition ©mixi, Inc. All rights reserved. Quarterly Profit/Loss Unit: millions of yen FY2017/Q3 FY2016/Q3 Change FY2017/Q2 (Oct 2016 – Dec 2016) (Oct 2015 – Dec 2015) (YoY) (Jul 2016 – Sep 2016) Net Sales 56,320 54,933 2.5% 39,325 Operating 22,227 23,630 ▲5.9% 14,153 Income Ordinary 22,261 23,646 ▲5.9% 13,836 Income Profit Attributable % to Owners of 15,984 15,602 2.4 9,301 Parent ©mixi, Inc. All rights reserved. 4 Segment Adjusted EBITDA ・Segment operating income before depreciation and amortization (EBITDA) Unit: millions of yen FY2017/Q3 FY2016/Q3 Change (Apr 2016 – Dec 2016) (Apr 2015 – Dec 2015) (YoY) Entertainment Net Sales 131,805 140,303 ▲6.1% Segment Operating ▲14.3% Income (EBITDA) 60,255 70,348 Media Platform Net Sales 11,184 9,981 12.1% Segment Operating ▲26.2% Income (EBITDA) 1,484 2,013 ©mixi, Inc. All rights reserved. 5 Quarterly Sales ・Entertainment:Maintaining a stable, high number of Domestic Monster Strike active users. ・Media Platform:Expansion of multiple stable businesses. Unit: millions of yen 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY2015 FY2016 FY2017 Mediaplatform 2,674 2,782 2,783 2,426 3,078 3,246 3,656 3,462 3,322 3,895 3,967 Entertainment 10,044 19,452 30,528 42,226 47,002 42,025 51,276 55,051 44,022 35,429 52,353 ©mixi, Inc. All rights reserved. 6 Quarterly Cost of Sales ・Outsourcing costs: Increasing with increased sales in the entertainment business. Unit: millions of yen 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY2015 FY2016 FY2017 Outsourcing 1,068 1,764 2,702 3,307 4,482 4,428 5,212 5,076 4,284 3,284 5,990 Personnel expenses for development 250 262 273 383 314 461 358 551 483 649 455 Content procurement expenses 35 34 34 34 34 34 33 33 33 33 34 Depreciation 22 24 29 32 23 25 25 26 19 20 23 Rental charges 145 156 140 168 232 237 237 208 189 197 233 Purchases 1 1 1 1 319 243 1,400 403 321 340 422 Others 31 27 44 29 58 57 170 59 56 45 49 ©mixi, Inc. All rights reserved. 7 Quarterly SG&A Expenses ・Advertising costs: Reported 17.3 billion yen for Q3(YTD) and projected 23 billion yen the fiscal year. Unit: millions of yen 30,000 25,000 20,000 15,000 10,000 5,000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY2015 FY2016 FY2017 Settlement fees 3,486 6,439 10,210 13,131 14,938 13,429 16,235 16,599 13,632 11,095 17,454 Advertising 1,665 2,459 2,711 2,924 2,693 4,075 4,299 4,750 5,341 5,776 6,184 Outsourcing 220 244 266 293 376 326 594 217 418 554 531 Personnel 591 568 621 803 843 1,083 929 1,200 951 1,536 970 Rents on properties 147 142 140 139 162 183 189 190 237 291 303 Amortization of Goodwill 72 72 72 72 585 621 544 566 409 409 499 Tax and public charge 35 65 99 181 255 250 257 311 283 254 316 Others 290 274 385 390 413 484 814 589 550 680 622 ©mixi, Inc. All rights reserved. 8 Business Condition ・Entertainment Business ・Media Platform Business ©mixi, Inc. All rights reserved. Monster Strike ©mixi, Inc. All rights reserved. 10 Domestic Initiatives in Q3 ・Increased media mix programs to new year . Oct Nov Dec Jan Large scale 3-year campaign New year campaign promotions Collaboration with X’mas New year In-Game ☆ ☆ 3-year event “Yu Yu Hakusho” event event Video ( st ) contents Anime 1 season Monster Strike THE MOVIE ©mixi, Inc. All rights reserved. 11 Monster Strike THE MOVIE ・Mobilized 390,000 visitors in the opening two days, achieving debut 1st place. ・Positive response to connection between anime, film, and game. Production : LIDENFILMS/ULTRA SUPER PICTURES/ XFLAG PICTURES Distribution:Warner Bros. December 10 , 2016 Screening in 300 cinemas nationwide ©mixi, Inc. All rights reserved. 12 Domestic Initiatives in Q4: In-Game Collaboration ・Finalized project for collaboration with popular game series "FINAL FANTASY" to commemorate its 30-year anniversary. Coming Soon ©mixi, Inc. All rights reserved. 13 Merchandising Planning to open in May, 2017. ©mixi, Inc. All rights reserved. 14 Business Condition ・Entertainment Business ・Media Platform Business ©mixi, Inc. All rights reserved. Media Platform Business ・Expansion of multiple stable businesses with a long lifespan. Sales Trend of Media Platform Business Unit: millions of yen 4,000 3,000 Others 2,000 Find Job! SNS ”mixi” Wedding support 1,000 business チケットキャンプ TicketCamp MUSE&Co. 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY2015 FY2016 FY2017 ©mixi, Inc. All rights reserved. 16 TicketCamp/Family Album Mitene One of the Largest Ticket Flea Market Apps in Japan Children’s Photo/Video Sharing App Released in June 2013 Released in April 2015 ・Signed sponsorship contract with ・Broadcasting first TV commercials starting from Pacific League Marketing Corporation (PLM). February. Begin TicketCamp sponsored content on Pacific League ・Over 1 million users with 28 million photos uploaded TV from March. per month (As of January 2017) ・ The GMV steadily expanding along with the number of users ©mixi, Inc. All rights reserved. 17 FY2017 Earnings Estimates ©mixi, Inc. All rights reserved. Revision of FY2017 Earning Estimates ・Downward revision of net sales due to sluggish overseas expansion and performance of some new game titles. Upward revision of profits through major reductions in advertising costs via effective advertising activities. Estimated Q4 entertainment business net sales is approximately 60 billion yen. ・Revised year-end dividend forecast to 91 yen per share, increased by 18 yen from the previous forecast. Unit: millions of yen Unit: millions of yen FY2017 70,000 (Apr 2016 – Mar 2017) 60,000 Latest Previous 50,000 206,000 218,000 Net Sales 40,000 30,000 Operating 86,000 80,000 Media Platform Income 20,000 Entertainment Ordinary 86,000 80,000 10,000 Operating Income Income Profit 0 Attributable to 59,000 54,000 Q1 Q2 Q3 Q4 . Owners of Parents Actual Actual Actual Estimated ©mixi, Inc. All rights reserved. 19 Appendix ©mixi, Inc. All rights reserved. BS / CF Unit: millions of yen FY2017/Q3 FY2016/Q3 (End of Dec 2016) (End of Dec 2015) Current Assets 135,739 116,730 Non-Current Assets 24,471 23,448 Total Assets 160,210 140,179 Current Liabilities 22,674 35,570 Non-Current Liabilities 156 87 Net Assets 137,379 104,521 FY2017/Q3 FY2016/Q2 (Apr 2016 – Dec 2016) (Apr 2015 – Dec 2015) CFs from Operating Activities 9,275 31,927 CFs from Investing Activities ▲1,419 ▲1,066 CFs from Financing Activities ▲22,997 ▲5,893 Cash and Cash Equivalents at End of Period 111,170 90,380 ©mixi, Inc. All rights reserved. 21 Company Overview Company name mixi, Inc. Establishment June 3, 1999 Capital 9.69 billion yen Location of main office Sumitomo Shibuya First Tower Building 7F, 1-2-20 Higashi, Shibuya-ku, Tokyo, 150-0011 President Hiroki Morita Outside Director Tatsuya Aoyagi Director Yasuhiro Ogino Corporate Auditor Takako Kato Executive officers and directors Director Koki Kimura Outside Corporate Auditor Takayuki Sato As of Oct 25, 2016 Director and Founder Kenji Kasahara Outside Corporate Auditor Hiroyuki Wakamatsu Employees 684(regular employee only) Total number of shares issued 81,879,450 shares Kenji Kasahara 44.47% THE BANK OF NEW YORK 1.44% Major Shareholders STATE STREET BANK AND TRUST COMPANY 1.28% As of Sep 30, 2016 CHASE MANHATTAN BANK GTS CLIENTS ACCOUNT ESCROW 1.20% CBLDN-CDSIL AS DEPOSITARY FOR OLD MUTUAL GLOBAL INVESTORS SERIES 1.07% As of Dec 31, 2016 ©mixi, Inc. All rights reserved. 22 History 1997 November Start of operations of “Find Job !” Internet site for Help Wanted business 1999 June Founding of E-Mercury, Inc. 2000 October Reorganization of E-Mercury 2001 February Start of “@Press” for proxy distribution of news releases February Start of social networking service SNS“mixi” 2004 March Official Start of social networking service SNS“mixi” February Company name changed to mixi, Inc. 2006 September Shares listed on Tokyo Stock Exchange, Mothers Market 2011 April Find Job! spun off as separate company, mixi recruitment, Inc. 2012 March Established mixi America, Inc. in the U.S. July Established I-Mercury Capital, Inc. September Established nohana, Inc. 2013 October Start of operations for smartphone games app Monster Strike December Acquired all shares of Diverse, Inc. converted to subsidiary 2014 March Received approximately 6.5 billion yen from public offering funded capital increase Acquired all shares of MUSE & Co., Ltd. converted to subsidiary March 2015 Acquired all shares of Hunza, Inc. converted to subsidiary July Received approximately 17.5 billion yen from public offering funded capital increase ©mixi, Inc. All rights reserved. 23 Group Companies Business Units mixi, Inc. mixi recruitment, Inc. SNS mixi and Monster Strike Find Job!, a platform for matching companies and job-seekers, specializing in Internet sector personnel nohana, Inc. Diverse, Inc. Hunza, Inc. nohana family photo book service, fostering family communication through Matching platform focused on marriage Ticket Camp, a ticket flea-market photographs service Investment companies I-Mercury Capital, Inc.