Investor Relations

Oct, 2015

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Disclaimer

This presentation is for the convenience of investors and future prospects of the company and has been prepared as an informative guide that might assist interested parties in gaining an insight into the financial status of the company. In this context, any opinions expressed within this document, regarding the company's potential future performance, should be viewed as being accurate at the time of preparation. However, cognizance should be taken of the fact that uncertainty may dictate that actual performance differs substantially from any views articulated herein.

Danal Business

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• Simple and Fast

• Widely adoptable

• Universal payment flow

• 80+ Direct Connections to

major Mobile Operators

• Various carrier partnerships

• Global payments network

• Smart e-wallet solution

• Covers 12,000+ stores

• Compatible with various

platforms/POS

(Online) Mobile Payments

(Offline) Barcode Payments Global Business

IPN (International Payment Network)

Danal B

usin

ess

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Changes in the Domestic Mobile Payment Market

Dom

estic B

usin

ess

Danal’s Transaction Amount Breakdown Market Share by Payment Type

2,243

898

2,682

1,227

3,345

1,625

3,545

1,634

3,909

1,801

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Total Domestic Market Transaction Amount Danal's Domestic Market Transaction Amount

2000FY

2001FY

2002FY

2003FY

2004FY

2005FY

2006FY

2007FY

2008FY

2009FY

2010FY

2011FY

2012FY

2013FY

2014FY

2015FY(E)

(Units : USD Million, 1USD=1100 KRW)

632 647 681 769 590

421

148 252

549

857 1,043

855

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2010FY 2011FY 2012FY 2013FY 2014FY 2015 3Q

Digital contents Tangible goods

(Units : USD Million, 1USD=1100 KRW)

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* Domestic corporate communications services market and sector-specific market outlook (KRG, 2014)

64%

7%

29% Credit Card

Mobile Payment

Others

4

Danal’s Monthly Transaction Amount Danal's Transaction Amount per transaction (ARPU)

50

70

90

110

130

150

2015 FY 2014 FY 2013 FY

2012 FY 2011 FY 2010 FY

(Units : USD Million, 1USD=1100 KRW)

7.68 7.72 8.22

10.17 10.21 10.78

12.80 14.18

16.89 18.74 20.17 21.48

-

5.00

10.00

15.00

20.00

25.00

2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 3Q

Digital Tangible Goods

(Units : USD, 1USD=1100 KRW)

Dom

estic B

usin

ess

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Important Merchant

[Digital]

[Tangible]

Domestic Online Mobile Payments

[Basic]

1 Time

Registration

[Simple]

Onlin

e M

oblie

Paym

ent

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BarTong

Offlin

e B

arco

de P

aym

ent

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Account Setup Input PIN Select Payment Generate Barcode

“You can setup various payment backends to BarTong so that you

can customize the way you make payments”

Credit card Bank Transfer Mobile

Payment

■ BarTong is an offline mobile payment solution that utilizes barcode technology. With a simple barcode,

you can make payments at any of our preferred merchants and partners.

(BarTong utilizes the merchant’s existing barcode scanner. Even without a scanner, the barcode number

can be manually input into the POS to complete the purchase)

BarTong Partners & Services

Offlin

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arco

de P

aym

ent

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CU / 7-11 / BuyTheWay as well as over 18,000+ stores

Expansion into large department stores

and other tourist hotspots

Offline Payments (Barcode)

BarTong Bank Wallet Kakao

Jeju BarTong WeChat Pay

• Barcode Technology (incl. Carrier Billing, Credit Card, Bank)

• Simple and fast one-time barcode generation

• Topup your Kakao Bank Wallet account first (Prepaid)

• Through Android’s widgets, offline payments made possible

• Barcode payments made available at all tourist destinations

• Mobile discounts available at tourist destinations (Mobile,

Prepaid, Credit Card)

• Using Tencent’s WeChat barcode application, tourists can make

purchases at any of our BarTong partner’s locations including

convenient stores and tourist destinations

Offlin

e B

arco

de P

aym

ent

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Danal’s US Subsidiary (BilltoMobile)

Glo

bal B

usin

ess

Danal’s US Subsidiary Transaction Amount

Dec 2006

DANAL Inc

established

May 2009

Verizon launches

with BilltoMobile Oct 2010

AT&T launches

with BilltoMobile

Feb. 2011

Sprint launches with

BilltoMobile

Aug 2011

T-Mobile signs with

BilltoMobile

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Expansion Strategy

(Unit : USD)

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2015 FY

2014 FY

2013 FY

2012 FY

2011 FY

(Unit : USD)

-

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

80,000,000

90,000,000

2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 3Q

Global

TMO

SPR

AT&T

VRZ

10 10

Diversified Business & Product Portfolio

Glo

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1. Mobile Network Authentication 2. Subscriber Data Match 3. Device Account Attributes

4. Phone Location 5. Payments

6. Autofill

7. Offline Payment

2014 March - Partnership with Billeo

2014 August - Partnership with Locaid

2014 November - Partnership with Western Union

2015 May - Partnership with Level up (officially launches Mobile Authentication)

2015 Jun - Partnership with Orange Mobile

2015 Aug - Partnership with Equicax (consumer credit reporting agency in the United States)

11 11

Danal US’ Mobile Authentication and Autofill

Appendix

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Direct Mobile Billing Coverage

Reseller & End Merchant Regular Merchant

Glo

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ess

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Appendix

Appendix

Local Online Payment Services

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Local Offline/Store Payment Services

Overseas Online Payment Services Overseas Offline/Store Payment Services

*Direct Carrier Billing

Make purchases directly through your

mobile operator’s bill.

*Bank Wallet Kakao

Korea’s homegrown eWallet payment systems that allows P2P payment services locally.

*Smart Pay Services

Korea’s homegrown eWallet payment systems are now making payments more convenient.

*Alipay

Alipay is a third-party online payment solution in China. Alipay provides an escrow payment service that reduces transaction risk for online consumers.

*PayPal

PayPal is an online money transfers service that acts as an electronic alternative to traditional paper methods like checks and money orders.

*Tenpay

An integrated payment platform launched by Tencent to meet the needs of its 1.1 billion QQ users, is one of China’s leading online payment platform.

*LoopPay

LoopPay’s Magnetic Secure Transmission™ (MST) technology turns in-store payment terminals where you normally swipe a credit card into contactless readers.

*NFC Payments

NFC Card emulation mode enables NFC-enabled devices such as smartphones to act like smart cards, allowing users to perform transactions such as payments.

*Card Reader Payment Service

Companies like PayPal Here, Square, Intuit now make it possible to create a portable, mobile POS system for your business.

*NFC Payments

You can tap and pay with your

compatible NFC device at thousands of

merchants that accept contactless

payments.

*Barcode Payments

(Danal’s BarTong, Mobilians M-Tic)

By utilizing a merchant’s existing POS

system and barcode scanner, we can

make use of one-time barcodes to

make payments in stores.

New purchase flow requires less steps than conventional payment methods, providing a more convenient method of payment whilst retaining the same security as before

No separate application required / User is not required to input a PIN or Passcode

Subsequent Usage First time usage

SMS Authentication SMS Authentication

[Enter Info → Verify Info]

Minimal User Interaction

Input Info & Agree to T&C Verify Info & Agree to T&C

Com

ple

te

A New Convenient Online Mobile Payment Service

Appendix

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Com

ple

te

Biometric Authentication (bioMe)

- Confirmation of

purchase shown to user

with SMS and/or Email

confirmation depending

on setup.

- Review the product and

select BioMe as the payment

option.

- Within 30 seconds (default),

complete the next steps to

confirm your purchase.

830101 *******

**** ****

830101 *******

**** ****

830101 *******

**** ****

2. Check Details 3. Scan Finger 4. Complete Payment

- Authentication and authorize

payment by scanning your fingerprint

using the phone’s biometric

fingerprint scanner.

* Reinstallation required after 3 failed

login attempts.

1. Select Payment

[PC]

[Mobile]

Appendix

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17 17

Danal US Mobile Payment Service

415 - 123 - 4567 94410

2161

1. After selecting the product, enter your Mobile Number, Billing ZIP Code. 2. A random 4-6 digit PIN code will be sent to your mobile device. Enter the PIN code into the payment page. 3. After successfully completing the payment process, we will send a confirmation SMS confirming your purchase.

Appendix

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18.7%

4.0%

77.3%

Largest shareholder & Others

Foreigners

Others

Ownership Structure – Danal Co., Ltd Ownership Structure – Danal Inc.

* Based on 2014-12-31 information * Based on 2015-06-30 information

Appendix

60.20%

9.30%

11.94%

18.56%

Danal Co., Ltd

Morgenthaler Partners

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Danal Subsidiaries / Company Ownership

(Units : USD Thousand, 1USD=1100 KRW)

Company Name Ownership Core Business 2015. 2Q

(Sales / Operating Income) Notes

DANAL INC. 60.2% Danal US / Billtomobile 1,175 △2,692

Danal Information Technology Co.,Ltd.

DANAL LTD 100% Danal China Business 131 △276

DANAL CS&F BV 50% Danal Europe 226 △73

MPay 100% Danal (SPC) 380 371

Danal International 80% Clothing distribution, Retail 2,318 215

Appendix

Revenue (*2011FY-2014FY : K-IFRS)

Payment Revenue (*2011FY-2014FY : K-IFRS) Revenue & Profit (*2011FY-2014FY : K-IFRS)

* As of 2011-12-31, the content division has been spun-off * As of 2011-12-31, the content division has been spun-off

50 55 63

82 73

7 10

8

7

7

-

20

40

60

80

100

2010FY 2011FY 2012FY 2013FY 2014FY

Mobile ARS Prepaid/Gift Cards Others

60

68

77

93

84

8 8 8 9 8

0

20

40

60

80

100

2010FY 2011FY 2012FY 2013FY 2014FY

Revenue Profit

60 68

77 93

84

16 15 -

-

-

20

40

60

80

100

2010FY 2011FY 2012FY 2013FY 2014FY

Payment Revenue Contents Revenue

8 8 8 9

8

0.1

-1.4

-

-

(2)

-

2

4

6

8

10

2010FY 2011FY 2012FY 2013FY 2014FY

Payment Profit Content Profit

(Units : USD Million, 1USD=1100 KRW)

(Units : USD Million, 1USD=1100 KRW)

(Units : USD Million, 1USD=1100 KRW)

(Units : USD Million, 1USD=1100 KRW)

Profit (*2011FY-2014FY : K-IFRS)

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요약 재무제표(K-GAAP 기준) Financial Statement (K-IFRS Separate)

Separate Financial Statement 2013FY 2014FY 2015.2Q

Assets 110.885 120.524 185.145

Cash & Cashable Assets 40.904 27.204 39.366

Short-term Funds 19.181 9.453 28.905

Other Current Assets 50.801 83.867 116.874

Non-current Assets 41.135 44.336 46.275

Tangible Assets 1.239 1.029 1.040

Intangible Assets 5.362 3.956 3.905

Other Non-current Assets 34.534 39.351 41.329

Total Assets 152.020 164.860 231.420

Current Liabilities 68.055 74.729 120.805

Non-Current Liabilities 2.554 2.686 8.291

Total Liabilities 70.608 77.415 129.096

Capital 9.286 9.579 9.820

Paid-in Capital 66.513 70.219 73.271

Other Capital Components (0.623) (0.723) 12.212

Accumulated Earnings 6.235 8.369 7.021

Total Ownership Interest 81.412 87.445 102.324

Separate Income Statement 2013FY 2014FY 2015.2Q

Operating Revenue 93.361 83.971 42.283

Operating Costs 84.217 75.963 38.344

Operating Profit 9.144 8.008 3.939

Gain on sale of investments (4.730) (7.022) (3.705)

Investment Income 0.936 1.432 0.654

Investment Cost 0.467 0.247 0.634

Non-operating Revenue 2.218 7.942 1.962

Non-operating Costs 5.762 4.781 1.189

Income before Taxes 1.339 5.332 1.026

Income Tax Expense 2.408 3.051 1.481

Net Income (1.615) 2.282 (0.455)

Earnings Per Share (1USD) (0.055) 0.115 (0.022)

Appendix

(Units : USD Million, 1USD=1100 KRW)

(Units : USD Million, 1USD=1100 KRW)

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요약 재무제표(K-GAAP 기준) Financial Statement (K-IFRS Consolidated)

Consolidated Financial Statement 2013FY 2014FY 2015.2Q

Current Assets 209.375 189.609 191.057

Cash & Cashable Assets 46.210 30.227 41.605

Short-term Funds 19.181 9.457 28.911

Other Current Assets 143.985 149.925 120.542

Non-current Assets 50.318 54.583 59.633

Tangible Assets 1.573 1.206 1.157

Intangible Assets 28.173 25.866 25.459

Other Non-current Assets 20.573 27.510 33.016

Total Assets 259.694 244.192 250.690

Current Liabilities 171.274 149.577 136.035

Noncurrent Liabilities 11.765 13.205 18.713

Total Liabilities 183.039 162.783 154.747

Shared owned by Dominant Firm 81.770 88.160 103.709

Capital 9.286 9.579 9.820

Paid-in Capital 66.513 70.219 73.271

Other Capital Components 0.940 0.752 12.467

Accumulated Earnings 5.030 7.611 8.150

Non-Controlling Interests (5.115) (6.751) (7.765)

Total Shareholders' Equity 76.655 81.408 95.943

Consolidated Income Statement 2013FY 2014FY 2015.2Q

Operating Revenue 107.367 89.566 46.312

Operating Costs 103.235 85.849 45.754

Operating Profit 4.133 3.717 0.558

Gain on sale of investments (Subsidiary) 2.821 0.000 0.000

Loss on sale of investments in associates 0.054 0.000 0.000

Loss on valuation of equity method invest

ments 2.991 2.405 0.837

Investment Income 1.085 1.415 0.589

Investment Cost 5.291 3.523 1.255

Non-operating Income 5.725 7.039 2.112

Non-operating Costs 3.841 3.430 1.415

Income before Taxes 1.586 2.814 (0.247)

Income Tax Expense 1.404 2.505 1.194

Net Income 0.183 0.308 (1.441)

Equity holders of the Parent Company

profit and loss 2.705 2.567 (0.340)

Non-controlling interest in income (2.523) (2.258) (1.101)

Earnings Per Share (1USD) 0.140 0.128 (0.016)

Appendix

(Units : USD Million, 1USD=1100 KRW)

(Units : USD Million, 1USD=1100 KRW)

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