financial results of q3 fye september 2015...financial results of q3 fye september 2015 Ⅰ. q3 fye...

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Connecting Markets East & West August 13, 2015 IGNIS LTD. Opinions, forecasts and other forward-looking statements included in these documents represent the judgment of IGNIS Ltd. at the time that these documents were created, and no guarantee is made as to the accuracy of the information contained in those statements. Please be aware that there may be large variations between the contents of forecasts and the actual financial results, for any number of reasons. Financial Results of Q3 FYE September 2015

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Page 1: Financial Results of Q3 FYE September 2015...Financial Results of Q3 FYE September 2015 Ⅰ. Q3 FYE Sep 2015 results IGNIS LTD. Overview of Q3 2 Sales of the native social game ‘BOKU

Connecting Markets East & West

August 13, 2015

IGNIS LTD.

Opinions, forecasts and other forward-looking statements included in these documents represent the judgment of IGNIS Ltd. at the time that these documents were created, and no guarantee is made as to the accuracy of the information contained in those statements.

Please be aware that there may be large variations between the contents of forecasts and the actual financial results, for any number of reasons.

Financial Results of Q3 FYE September 2015

Page 2: Financial Results of Q3 FYE September 2015...Financial Results of Q3 FYE September 2015 Ⅰ. Q3 FYE Sep 2015 results IGNIS LTD. Overview of Q3 2 Sales of the native social game ‘BOKU

Ⅰ. Q3 FYE Sep 2015 results

Page 3: Financial Results of Q3 FYE September 2015...Financial Results of Q3 FYE September 2015 Ⅰ. Q3 FYE Sep 2015 results IGNIS LTD. Overview of Q3 2 Sales of the native social game ‘BOKU

IGNIS LTD.

Overview of Q3

2

Sales of the native social game ‘BOKU & DRAGONS’and the free native app‘breaker:block breaker’were favorable

Unable to post profits however, because of increases in platform charges paid (related to billing revenue for‘BOKU & DRAGONS’and‘breaker:block breaker’as well as increases in promotional expenses for ‘BOKU & DRAGONS’

FYE Sep 2015Q3

FYE Sep 2015Q3 yoy Difference

Sales 613 522 17.4% 91

Free Native Apps 150 364 -58.7% -214

Free Content Model ‘Hybrid’Apps 2 46 -94.1% -43

Native Social Game 459 111 312.7% 348

Operating Profit -70 219 ‐ -290

OP Margin - 42.1% ‐

Ordinary Profit -122 214 ‐ -336

Ordinary Profit Margin - 41.0% ‐

Net Profit -132 118 ‐ -250

Net Profit Margin - 22.6% ‐

breaker:block breaker

BOKU & DRAGONS

(Unit: Million)

Page 4: Financial Results of Q3 FYE September 2015...Financial Results of Q3 FYE September 2015 Ⅰ. Q3 FYE Sep 2015 results IGNIS LTD. Overview of Q3 2 Sales of the native social game ‘BOKU

IGNIS LTD.

PL for Q3 (cumulative)

3

(unit:million yen)

“BOKU & DRAGONS”started to contribute to income from this Q3. However,

it was not large enough to cover for losses accumulated in the first half of theyear, and so performance for Q3 (cumulative Q1-Q3) posted a decrease insales and profit, yoy.

(Consolidated)

yoy Difference

Sales 1,120 1,310 -14.5% -190  Free Native Apps 542 826 -34.4% -283   Free Content Model "Hybrid" Apps 34 240 -85.9% -206  Native Social Games 543 242 123.9% 300Operating Profit -313 350 -189.4% -663  OP margin - 26.8% - -

Ordinary Profit -395 344 -214.8% -740  Ordinary profit margin - 26.3% - -

Net Profit -443 191 -331.9% -634  Net profit margin - 14.6% - -

KPIFYE Sep 2015

Q1- Q3 CumulativeFYE Sep 2014

Q1-Q3 CumulativeDifference

Number of titles released within the term 39 42 -3  Free Native Apps 34 35 -1   Free Content Model "Hybrid" Apps 4 7 -3  Native Social Games 1 0 1

FYE Sep 2015Q1- Q3

Cumulative

FYE Sep 2014Q1-Q3

Cumulative

Page 5: Financial Results of Q3 FYE September 2015...Financial Results of Q3 FYE September 2015 Ⅰ. Q3 FYE Sep 2015 results IGNIS LTD. Overview of Q3 2 Sales of the native social game ‘BOKU

IGNIS LTD.

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

Others 46 63 65 48 97 103 107 172 128 104 110

Commission 8 4 6 7 7 10 14 15 15 21 24

Rent etc.(※) 1 9 18 16 16 16 16 16 50 63 63

Platform charges 0 0 2 1 20 51 42 23 0 27 132

Advertisement and promotion 6 17 59 40 116 75 17 185 20 59 222

Recruitment 1 13 9 14 8 11 7 6

Personnel 27 31 37 42 48 70 89 104 117 119 124

0

100

200

300

400

500

600

700

800

Others

Commission

Rent etc.(※)

Platform charges

Advertisement and promotion

Recruitment

Personnel

Analysis on expenses

4

FYE Sep 2013 FYE Sep 2014 FYE Sep 2015

Overall cost increased mainly due to promotion cost of the native social app “BOKU & DRAGONS”and platform charges paid

※Includes depreciation for facilities at the head office

(unit:million yen)

Page 6: Financial Results of Q3 FYE September 2015...Financial Results of Q3 FYE September 2015 Ⅰ. Q3 FYE Sep 2015 results IGNIS LTD. Overview of Q3 2 Sales of the native social game ‘BOKU

IGNIS LTD.

Free native apps development plan for FYE Sep 2015

SM

ALL

ME

DIU

MLA

RG

E

Income contribution

Development situation of free native apps

We are enthusiastically preparing to release numerous titles of

medium- and large- sized apps to expand the number of users

5

9Titles7Titles

・SpeedTest・QRCodeReader

5 other titles

13Titles・Zaku zaku Tyrol

・One stroke sketch11 other titles

6Titles•Brain puzzle!Nan-pre

Lv1005 other titles

Girls Chat

Fivy

*Small-sized apps:Developed within 1 month, Medium-:Developed in 1 to 3 months, Large-:Developed in 3 months or more

Wasp

Picthy

Suddenly Fired

breaker

Kabukicho Tower

HOT NEWS

Income contributionPair Pair

with

Income contribution

Income contributio

nIncomecontribution

Increase number of usersImprove apps

Income contribution

Income contribution

Incomecontribution

Page 7: Financial Results of Q3 FYE September 2015...Financial Results of Q3 FYE September 2015 Ⅰ. Q3 FYE Sep 2015 results IGNIS LTD. Overview of Q3 2 Sales of the native social game ‘BOKU

IGNIS LTD.

MAU trend of free native apps

6

Although MAU(※)is on a declining trend, this is in line with the shift in our apps portfolio, and is still maintaining a high level

※the number of users who used our free native apps at least once in a month

Trend in MAU of free native apps(unit:users)

Dec 2013 Mar 2014 Jun 2014 Sep 2014 Dec 2014 Mar 2015 Jun 2015

Page 8: Financial Results of Q3 FYE September 2015...Financial Results of Q3 FYE September 2015 Ⅰ. Q3 FYE Sep 2015 results IGNIS LTD. Overview of Q3 2 Sales of the native social game ‘BOKU

IGNIS LTD.

DLs and Sales Ranking for BOKU & DRAGONS

7

Sales ranking trend in JP

※As of August 9th

138

386 421 483

750

1,247 1,277

164

326

453

499

579 596

FEB MAR APR MAY JUN JUL AUG

Android version iOS version

138

550

746

936

1,8731,826

1,249

(unit: thousand downloads)

Monthly DLs figures(cumulative)

Number of days ranked

within 100

Android version 155 days

iOS version 84 days

0位

50位

100位

150位

200位

250位

300位

350位

400位

450位

2/2

3

3/2

3/9

3/1

6

3/2

3

3/3

0

4/6

4/1

3

4/2

0

4/2

7

5/4

5/1

1

5/1

8

5/2

5

6/1

6/8

6/1

5

6/2

2

6/2

9

7/6

7/1

3

7/2

0

7/2

7

8/3

8/1

0

Android version iOSversion

1st

Released

2/20

Released

3/12

th

th

th

th

th

th

th

th

th

Page 9: Financial Results of Q3 FYE September 2015...Financial Results of Q3 FYE September 2015 Ⅰ. Q3 FYE Sep 2015 results IGNIS LTD. Overview of Q3 2 Sales of the native social game ‘BOKU

IGNIS LTD.

Progress against initial forecast

8

(unit: million yen)

We adjusted our sales forecast upward for the full year, as sales from“BOKU & DRAGONS”is favorable.

We have left our profit forecast unchanged as we plan to increase investment for the future, and foresee increased expenses in the area of promotion and strengthening of development structure.

Q1 Actual Q2 Actual Q3 ActualActual

(Q1-3 cumulative)May 2015forecast

Revisedforecast

Progress againstrevised forecast

Sales 243 263 613 1,120 1,700 2,000 56.0%

OperatingProfit

-101 -140 -70 -313 -504 -504 -

OrdinaryProfit

-117 -155 -122 -395 -553 -553 -

Net Profit -89 -221 -132 -443 -582 -582 -

FYE September 2015 FYE September 2015 full year forecast(Consolidated)

Page 10: Financial Results of Q3 FYE September 2015...Financial Results of Q3 FYE September 2015 Ⅰ. Q3 FYE Sep 2015 results IGNIS LTD. Overview of Q3 2 Sales of the native social game ‘BOKU

Ⅱ.Strategies toward renewed growth

Page 11: Financial Results of Q3 FYE September 2015...Financial Results of Q3 FYE September 2015 Ⅰ. Q3 FYE Sep 2015 results IGNIS LTD. Overview of Q3 2 Sales of the native social game ‘BOKU

IGNIS LTD.

Towards renewed growth

10

2012~2014

Currently, we are here

Creating new standards, over and over again

Develop products that will achieve 100 million

downloads

Develop products that will achieve 10 million

downloads

Develop products that will achieve 1 million

downloads

Aspiring to develop products that will become the“next standard”usedby a hundred million and more people, we will set on to a new stage ofchallenge

Incom

e e

xp

an

sio

n

Page 12: Financial Results of Q3 FYE September 2015...Financial Results of Q3 FYE September 2015 Ⅰ. Q3 FYE Sep 2015 results IGNIS LTD. Overview of Q3 2 Sales of the native social game ‘BOKU

IGNIS LTD.

Business strategy① Free native apps

11

Medium & large size Mainly

Communication genre

In order to expand user base and strengthen income base, we willcontinue to develop medium and large size apps

Expanding Apps Portfolio Developing Long Lifetime Apps for Increasing MAU

Tool-type apps

Long life time

Small size

Launch apps which can produce profits in the short term

Casual games

Short life time

Large size

Strengthen income base by enhancing business of medium- and large size

Continue with current business for small-sized apps

Page 13: Financial Results of Q3 FYE September 2015...Financial Results of Q3 FYE September 2015 Ⅰ. Q3 FYE Sep 2015 results IGNIS LTD. Overview of Q3 2 Sales of the native social game ‘BOKU

IGNIS LTD.

Business strategy ② Native social games

12

Next titleIntend to make

further leaps, with the know-how acquired

with the previous two game titles

12

Release of “BOKU & DRAGONS”

Feb. 20th 2015 Android version

March 12th iOS version

Achieved 1.8 million downloads

Secured stable revenue

Events were also well received!

We will continue to strengthen our operation structure, to strengthen our billing business and strive for further

growth!

Page 14: Financial Results of Q3 FYE September 2015...Financial Results of Q3 FYE September 2015 Ⅰ. Q3 FYE Sep 2015 results IGNIS LTD. Overview of Q3 2 Sales of the native social game ‘BOKU

IGNIS LTD.

Direction of growth moving forward

13

We will continue to provide highly satisfying apps for our users, creating services that will become the new standard

Advertising Revenue Billing Revenue

Free Content Model ‘Hybrid’Apps(Comic)

Free Native Apps(Tool)

ignition inc.

swagApp inc.

IGNIS AMERICA, INC.

Free Native Apps(Communication)

Native Social Game

Free Native Apps(Casual Game)

ALTR THINK, Inc.

IGNIS AMERICA, INC.studioking inc.

swagApp inc.

Areas of special focus from now on

Page 15: Financial Results of Q3 FYE September 2015...Financial Results of Q3 FYE September 2015 Ⅰ. Q3 FYE Sep 2015 results IGNIS LTD. Overview of Q3 2 Sales of the native social game ‘BOKU

Ⅲ. What is IGNIS?

Page 16: Financial Results of Q3 FYE September 2015...Financial Results of Q3 FYE September 2015 Ⅰ. Q3 FYE Sep 2015 results IGNIS LTD. Overview of Q3 2 Sales of the native social game ‘BOKU

IGNIS LTD.

What is IGNIS?

【Company Profile】

IGNIS is a company which provides greatly demanded, high quality

applications for users of mainly smartphones.

15

Company name IGNIS LTD.

Capital 559,467,600 yen

Founded May 31, 2010

Headquarters Ebisu Business Tower 12th floor, 1-19-19 Ebisu, Shibuya-ku, Tokyo

Headcount 105 (as of June 30, 2015)

Main Businesses Mobile app businessDesign, development, operation and sales of smartphone applicationsGame businessDesign, development, operation, and sales of social games for smartphones

Main Group Companies

ib inc., IGNIS AMERICA, INC., ignition inc., swagApp inc.,studioking inc., ALTR THINK, Inc.

Page 17: Financial Results of Q3 FYE September 2015...Financial Results of Q3 FYE September 2015 Ⅰ. Q3 FYE Sep 2015 results IGNIS LTD. Overview of Q3 2 Sales of the native social game ‘BOKU

IGNIS LTD.

Corporate Vision and Mission

16

経営理念Vision

“Until we impact the world, we won't be satisfied.”

ミッションMission

“Creating new standards, over and over again.”

Page 18: Financial Results of Q3 FYE September 2015...Financial Results of Q3 FYE September 2015 Ⅰ. Q3 FYE Sep 2015 results IGNIS LTD. Overview of Q3 2 Sales of the native social game ‘BOKU

IGNIS LTD.

Message from the Founder

17

This is the idea that we had when we established IGNIS LTD. in May 2010.

‘IGNIS’ is Latin for ‘fire’.

Since ancient times, fire has been thought of as being one of the four major

elements essential for living.

People huddling around a fire, communication being born… this is how the

human race has evolved.

Now, fire is completely integrated into the lives of everyone, and it has

become ‘something that everyone takes for granted’.

We want to advance the evolution of the world by continuing to come up

with new standards; standards for the era to come.

We are strongly motivated and want to be a group that burns with

enthusiasm for its work.

This is the idea that is contained in our company name.

“To make an impact on the world by constantly creating ‘newstandards’ over and over again.”

Page 19: Financial Results of Q3 FYE September 2015...Financial Results of Q3 FYE September 2015 Ⅰ. Q3 FYE Sep 2015 results IGNIS LTD. Overview of Q3 2 Sales of the native social game ‘BOKU

IGNIS LTD.

Profiles of Top Management

18

Our management team has frontline production ability as producers andengineers

➣ Quick and appropriate management judgment➣ Reasonable and convincing appraisal system to maximize employees

performance

President and CEO QIAN KUNTop Producer

Producer of multiple “hit” appsDriving force and at the frontline for the commercialization of Tool-type Apps, and creation of business models for Free Contents Hybrid Apps, etc.

Representative Director and CTO Takaaki SuzukiTop Engineer

Expert in a wide range of development languages for full native apps. Manages native social game business. Responsiblefor business decisions and management from the perspective of a top engineer.

Page 20: Financial Results of Q3 FYE September 2015...Financial Results of Q3 FYE September 2015 Ⅰ. Q3 FYE Sep 2015 results IGNIS LTD. Overview of Q3 2 Sales of the native social game ‘BOKU

IGNIS LTD.

Our Business model

19

Apps are provided to users through the Apps Store and Google Play.Revenue comes from advertisements listed in the apps and billingwithin the apps.

Apps Design & Development

Smartphone Platforms (Apps Store / Google Play)

Apps Supplied Billing Revenue Delivery of in-app advertisement

IP / Apps

Supplied

Revenue Share

Ad

. Rev

enu

e

Ad. Agency

Smartphone Users

AdvertiserIP Rights

Holders /

Partners

Other Content

Providers in the Same

Industry

Sale & Transfer of Apps

Page 21: Financial Results of Q3 FYE September 2015...Financial Results of Q3 FYE September 2015 Ⅰ. Q3 FYE Sep 2015 results IGNIS LTD. Overview of Q3 2 Sales of the native social game ‘BOKU

IGNIS LTD. 20

Business Domain

We focus on areas where user needs are high in the smartphonemarket. By creating subsidiaries for each area, we are expanding ourbusiness to maximize customer satisfaction.

Advertising Revenue Billing Revenue

Native Social Game

Free Content Model ‘Hybrid’Apps(Comic)

Free Native Apps(Casual Games)

Free Native Apps(Tool)

Free Native Apps(Communication)

ALTR THINK, Inc.

IGNIS AMERICA, INC.

ignition inc.

studioking inc.

swagApp inc.

swagApp inc.

IGNIS AMERICA, INC.

Page 22: Financial Results of Q3 FYE September 2015...Financial Results of Q3 FYE September 2015 Ⅰ. Q3 FYE Sep 2015 results IGNIS LTD. Overview of Q3 2 Sales of the native social game ‘BOKU

IGNIS LTD.

Product Launch in accordance with user needs

21

We provide valuable free native apps to our users, which generates ourmain source of revenue from advertising. We also provide billing-typenative social games .

Trend of Apps(Android)

Concentrating on the high customer

interest areas such as casual games and communications

Free Native Apps-Advertising Revenue (Some Billing Revenue)

Native Social Game-Billing Revenue

“BOKU & Dragons”

Feb 20th 2015, Android version releasedMar 12th 2015, iOS version releasedJun 25th 2015, 1million DL achieved0

20

40

60

80

100

120

140

De

c-1

1

Apr-

12

Aug-1

2

De

c-1

2

Apr-

13

Aug-1

3

De

c-1

3

Apr-

14

Aug-1

4

De

c-1

4

Apr-

15

Casual Games

Communication

Comics

Tools

Others

0

20

40

60

80

100

120

140

160

180

200

Jun-…

Sep…

Dec…

Mar…

Jun-…

Sep…

Dec…

Mar…

Jun-…

Sep…

Dec…

Mar…

Jun-…

Casual Games

Communication

Comics

Tools

Others

Trend of apps (iOS)

Page 23: Financial Results of Q3 FYE September 2015...Financial Results of Q3 FYE September 2015 Ⅰ. Q3 FYE Sep 2015 results IGNIS LTD. Overview of Q3 2 Sales of the native social game ‘BOKU

IGNIS LTD.

Trend of user downloads

22

The apps IGNIS has developed are appreciated by our users anddownloads have been steadily growing

(Unit: thousand DLs)

Reached 87million downloads

Page 24: Financial Results of Q3 FYE September 2015...Financial Results of Q3 FYE September 2015 Ⅰ. Q3 FYE Sep 2015 results IGNIS LTD. Overview of Q3 2 Sales of the native social game ‘BOKU

IGNIS LTD.

IGNIS’income structure

23

(Unit:million yen)

In addition to advertisement revenue from small-size free native apps, billing revenue from native social games have also grown as a pillar for our revenue

For our advertisement revenue, we will strive to further increase them by moving from developing small-sized apps to medium- and large size apps, and cultivating a new types of users

3 23

461 564 179

851

1,332

547

21

450

255

9

0

500

1,000

1,500

2,000

2,500

FYE Sep 2012 FYE Sep 2013 FYE Sep 2014 FYE Sep 2015

(Q3)

Others

Advertisement

Billing

Page 25: Financial Results of Q3 FYE September 2015...Financial Results of Q3 FYE September 2015 Ⅰ. Q3 FYE Sep 2015 results IGNIS LTD. Overview of Q3 2 Sales of the native social game ‘BOKU

IGNIS LTD.

* Disclaimer:

Warnings in relation to forward looking statements

The data included in this presentation includes what is known as

"forward-looking statements". These are based on estimates, forecasts and

assumptions about risk made at the present date which include a level of

uncertainty that means that actual future results may differ from the

contents of the “forward-looking statements".

These risks and uncertainties include the general economic situation in

Japan and overseas, including the market situation, interest rates, and

currency fluctuations affecting the industry as a whole.

IGNIS takes no responsibility for updating or revising these forward-

looking statements in response to any future events or other new

information that may emerge in the future.