2018 Annual Results - IGG Inc. · 6 Global Ranking Top 3 Chinese Mobile Game Publishers with...

Annual

ResultsIGG INC March 2019

1

Disclaimer

This presentation and the accompanying slides (the “Presentation”) do not constitute any offer or

invitation to purchase or subscribe for any securities, and shall not form the basis for or be relied on in

connection with any contract or binding commitment whatsoever. This Presentation has been prepared

by the Group based on information and data which the Group considers reliable, but the Group makes

no representation or warranty, express or implied, whatsoever, on the truth, accuracy, completeness,

fairness and reasonableness of the contents of this Presentation. This Presentation may not be all-

inclusive and may not contain all of the information that you may consider material. Any liability in

respect of the contents of or any omission from this Presentation is expressly excluded.

Certain matters discussed in this presentation may contain statements regarding the Group’s market

opportunity and business prospects that are individually and collectively forward-looking statements.

Such forward-looking statements are not guarantees of future performance and are subject to known

and unknown risks, uncertainties and assumptions that are difficult to predict. The Group’s actual

results, levels of activity, performance or achievements could differ materially and adversely from

results expressed in or implied by this Presentation, including, amongst others: whether the Group can

successfully penetrate new markets and the degree to which the Group gains traction in these new

markets; the sustainability of recent growth rates; the anticipation of the growth of certain market

segments; the positioning of the Group’s products and services in those segments; the competitive

environment; and general market conditions. The Group is not responsible for any forward-looking

statements and projections made by third parties included in this Presentation. All references to “IGG”

and “the Group” used in this presentation refer to IGG INC and its subsidiaries.

Innovators at Work • Gamers at Heart

Innovators at Work • Gamers at Heart 2

Agenda

IGG Overview

2018 Annual Financial

Review

Prospects

1

2

3


IGG Overview

IGG Overview

Global

Market

• Games in 21 languages

• Users across 200+

countries & regions

• Registered users: 620mn

• MAU:19mn+

• R&D talents located in

~10 countries & regions

• 29 global R&D teams

Global

R&D

Global

Operation

• Operation teams located in

10+ countries & regions

• Long-term relationship with

100+ distribution platforms

& promotional partners

Note: Data as of 31 December 2018

Hit Titles

4Innovators at Work • Gamers at Heart

5

Global Branches

• The Group has 1,400+ employees in 2018. Establishing new branches in Brazil, Turkey and

Western Europe.

Note: Data as of 31 December 2018; setting-up new branches in Brazil, Turkey and Western Europe.

Mainland China/HK

IT, R&D and

operation support

The United Arab

Emirate (Dubai)

Localized R&D and

operation support

Korea

Localized operation

support

Japan

Localized R&D

and operation

support

Philippines

Customer

Service Center

Belarus

Localized R&D and

operation support

Singapore

Group headquarters;

R&D and operation

center

Thailand

Localized operation

support

Indonesia

Localized

operation support

Canada

Localized operation

support

USA

IT and localized

operation support

Brazil*

Localized

operation support

Turkey*

Localized

operation support


Europe*

Localized

operation support

6

Global Ranking

Top 3 Chinese Mobile Game Publishers with

overseas game revenue

“Best under a Billion 2018”

“Best Mobile Game Company 2018”

“Most Valuable Listed Company”

“Best Overseas Mobile Game Publisher”

No.1 war strategy games worldwide in terms of

revenue for 19 consecutive months

“Top 10 Most Popular Games Overseas”& “Top

10 Most Popular E-sports Games”

“Most Popular Game 2018”

“Best Mobile Game 2018”

No. 1 Chinese Mobile Game with overseas revenue


Annual Financial

Review


Historical Financial Performance

204.6 202.5

322.1

607.3

748.8

0

200

400

600

800

2014 2015 2016 2017 2018

Historical Performance of Revenue

66.441.2

71.6

155.1

189.3

0

50

100

150

200

2014 2015 2016 2017 2018

Historical Performance of Net Profit


(US$ million)

(US$ million)

9

Gross Billing

0

10

20

30

40

50

60

70

Jan-18 Mar-18 Jun-18 Sep-18 Dec-18

Lords Mobile Castle Clash Other Games

Monthly Gross Billing

$68M $10M$55M

Avg.

Monthly

Gross

Billing


(US$ million)

Castle Clash

Strategy Game

• Launched in Jul. 2013

• Available in 16

languages

• Registered users:

230mn

• MAU: 3.9mn

• 15% of IGG’s revenue

Lords Mobile

RTS/RPG Game

• Launched in Mar. 2016

• Available in 19

languages


180mn

• MAU: 13mn

• 80% of IGG’s revenue

Clash of Lords II

Strategy Game

• Launched in Dec. 2013

• Available in 12

languages


69mn

• MAU: 340k

• 1.3% of IGG’s revenue

Conquerors:

Clash of Crowns

Strategy Game

• Launched in Jul. 2017

• Available in 9

languages


8.9mn

• MAU: 320k

• 1.6% of IGG’s revenue

Note: data as of 31 December 2018

Operational Data


Mobile Royale

Note：Data as of 28 Feb. 2019. Global ranking from App Annie.

11

Global Ranking

Ranked among the top 20 strategy games in

terms of highest grossing in 52 countries on

Google Play, and 56 countries on iOS.

21 Languages

Available in 21 languages

Registered Users

Over 4 million within 2 months


Role Play

Top-notch

Strategy +

Innovative

features of

Global

Server

airship, guardian

clan trade

3D Graphics

dragon, and

12

Note: Data as of 31 December 2018

Revenue Distribution

By Platforms

By Regions

Steady

performance

across regions

Well balanced

revenue

contribution from

iOS and Android

Steady half-on-half

performance on iOS

and Android

iOS

48%

Android

48%

Others 4%

Lords MobileIGG

iOS

44%

Android

52%

Others 4%

Asia

52%N.A.

25%

Europe

19%

Others 4%

Asia

46%N.A.

27%

Europe

23%

Others 4%

• Steady growth across

regions

• Revenue structure in

line with global mobile

games market

distribution


13

(US$ million) 2017 2018 YoY (%) Remarks

Revenue 607.3 748.8 +23% Revenue increase from Lords Mobile

Lords Mobile 437.8 599.9 +37%

Castle Clash 124.2 110.2 -11%

Gross Profit 414.6 523.5 +26% Revenue increase from Lords Mobile

GP margin (%) 68% 70% +2ppts Addition of several new channels with lower channel costs

Selling & distribution exp. 159.0 186.6 +17% Increase in marketing expense for Lords Mobile

% of revenue 26% 25% -1ppts

Administrative exp. 33.4 44.7 +34%Increase in number of employees, wages, performance-

related bonus and benefits

% of revenue 6% 6% -

R&D costs 46.7 63.6 +36%Increase in number of employees, wages, performance-

related bonus and benefits

% of revenue 8% 8% -

Income tax 23.9 47.1 +97% Increase in profit before tax and tax provision

Net profit 155.1 189.3 +22%

NP margin (%) 26% 25% -1ppts Increase in R&D and income tax expenses

EPS (basic, US$) 0.117 0.147

2018 Financial Analysis


14

Capital Expenditures

221.9

287.5

0

100

200

300

2017 2018

Cash & Cash Equivalents

• Low capex

➢ 2017： 0.8% of total asset

2018： 1.3% of total asset

Strong Cash Position

• Dividend payment of US$52.1M, and spent

US$75.7M on share buyback.

• Dividend + share buyback total amount to

US$127.8M in 2018.


(US$ million) (US$ million)

2.4

5.1

0

2

4

6

2017 2018

Purchase of Intangible Assets

Purchase of PP&E

15

• Full year dividend declared plus share buy-back

accounted for 70% of annual net profit.

• The future dividend payout ratio will be formulated in

consideration of the Group’s profitability and funding need

for M&A.

Dividend Type

Dividend per

share

(HK, cents)

Total Amount

(HK$, million)

Dividend payout ratio

(% of the

corresponding period

net profit)

Payment Date

2018

1st interim dividend 17.7 230 30% Sep. 28, 2018

2nd interim dividend 16.7 214 30% Apr. 23, 2019

Dividend


16

Preferential Corporate Tax Rate

➢ IGG Singapore (Intellectual Property holding company) enjoys preferential tax

treatment, subject to requirements as specified by Singapore Economic

Development Board.

➢ The prevailing corporate tax rate: 17%

➢ The preferential corporate tax rate for IGG Singapore: 10%-10.5%

0%

2%

4%

6%

8%

10%

12%

2016 2017 2018 2019 2020 2021

10.5% 10.5%10%10%10%

5%

The

prevailing

corporate

tax rate

The

preferential

corporate

tax rate

17%

10%


17

•The global games market is expected to hit US$134.9 billion in 2018 and US$180.1 billion by 2021.

•By 2021, Mobile and PC games are expected to grow to US$106.3 billion and US$34 billion, respectively.

Source：Newzoo Global Games Market report, 2018

28% 24% 22% 22%

25% 22% 21% 19%

47%54%

57%59%

0

50

100

150

200

2018 2019 2020 2021

Global Games Market Overview

Console Games PC Games Mobile Games

Global Games Market Trend

（US$ billion）

Asia Pacific

52%N.A.

23%

Europe, Middle East

& Africa

21%

4%

Latin

Global Games Market (by Region)

$134.9 Bn

$151.9 Bn$165.9 Bn

$180.1 Bn


18

Prospects


Prospects

19

Operation and

Marketing

• Continue to set up more local

operation teams.

➢ Set up local teams in Brazil,

Turkey and Western Europe.

• Continue to implement the

“Inter-G Talent Program” to

cultivate new operation talents

for the future.

• Seek for partnership to operate

high-quality licensed games.

• Tap into global potential to

reach new heights.


R&D Plans

• Continue to focus on quality,

innovation, and excellence.

➢ Continue to implement the “G-Star

Incubation Program” to recruit

R&D talents globally and

strengthen R&D capability.

➢ Build and implement a series of

new polices to encourage the

pursuit of excellence in all aspects.

➢ Release sandbox and casual

games to diversify games portfolio.

New Title – Project COG

20

Strategy + Tower Defense



沙盒遊戲策略+塔防遊戲基於《城堡爭霸》的延伸與創新




New Title – Project CL

23

Sandbox Game


24



25



New Title – Project BC

26

Strategy Game




28



29

沙盒遊戲


New Title – Project SF

Strategy Game





Thanks

IR Contact

[email protected]


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