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Financial Results FY2013
(For the year Ended September, 2013)
November 5th 2013 AXEL MARK INC.
Ⅰ．Financial Results
3
4Q Summary
Social Game Business
We started to operate 3 Mtles on 4Q. Ciel Ark ranked No.2 of total downloads Revenue from Alliance partners
３
１
Content Business
・We conMnued to focus on comic service for smartphone, but the revenue decreased QoQ.
２
Adver5sement Business
・Sales of AD network for smartphone is increasing. ・56% of the revenue is for smartphone.
4
FY2013 （Oct.2012-‐Sep.2013）
Results Forecasts Change
Total Revenue 3,523 3,567 ▲44
Opera5ng Profit 69 68 ＋1
4Q（3 months） （Jul.2013-‐Sep.2013）
Results Forecasts Change
Total Revenue 950 994 ▲44
Opera5ng Profit 48 48 ＋0
Differences btw Forecasts and Results SG Delayed launching 2 games for one month AD Controlled low-‐margin sales
Revenue
OP OperaMng Profit As reduced SGA costs, OP results reached the forecast.
5
YoY sales increasing: Social Game, AD business YoY sales decreasing: Content business
Financial Results (Yearly)
6
Revenue by segments (YoY)
Focusing on smartphone business Building a new development team of naMve apps
Mil yen FY2012 FY2013 changes
Social Game 1,700 1,847 ＋147 hold stable sales of exisMng Mtles
AdverMsement Business 845 954 ＋109
revenue for smartphone is increasing ・revenue for feature phone is decreasing
Content Business 1,343 721 ▲622 ・revenue for feature phone is
decreasing
total 3,888 3,523 ▲365
7
RaMo of revenue for smartphone（Monthly）
8
Topics
FY2012 21％ → FY2013 47％
For promoMng rapid decision-‐making Sebng up ‘Axel Game Studio Inc.’(former ‘Indi Soeware co.,ltd’)
Change of organizaMon
LiquidaMon of AXELBEAT INC.
RaMo of revenue for smartphone
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Topics of financial posiMon
keeping the healthy cash posiMon. Financial posiMon is becoming more stable.
As of Sep. 30th 2013
As of Sep. 31st 2012
Cash posiMon 968mil yen 729mil yen
◇ Increased by good business performance and goodwill amorMzaMon
Intangible assets 373mil yen 518mil yen
◇ Steadily amorMzing goodwill related to merger and acuisiMon
Capital raMo 79.9％ 75.7％
◇ Increased by good business performance and decreasing debt loan
10
Mil yen FY2013
4Q (3months) FY2013
3Q (3months) QoQ amounts % amounts %
Total Revenue 950 100.0 847 100.0 12.1%
COGS 621 65.4 517 61.0 20.2%
Gross margin 328 34.6 330 39.0 ▲0.5%
SGA 279 29.4 302 35.7 ▲7.4%
(marke5ng cost) （13） 1.4 （20） 2.4 ▲35.1%
Opera5onal Profit 48 5.1 28 3.3 73.7%
non-‐opera5onal profit 0 0.1 11 1.4 ▲95.1%
non-‐opera5onal cost 1 0.1 1 0.2 ▲38.0%
Ordinary Profit 48 5.1 38 4.5 27.1%
Net profit 48 5.1 36 4.3 31.7%
Overview of PL (Q on Q)
11
Million yen FY2013 Ended of Sep. 30th
FY2012 Ended Sep.30th Million yen FY2013
Ended of Sep. 30th FY2012
Ended Sep.30th
Current Assets 1,492 1,332 Current liabili5es 392 451 Cash 968 729 Accounts payable-‐trade 210 190 Accounts receivable 497 555 Current loan 9 10 Others 40 60 Others 172 250 Allowance for doubZul accounts ▲13 ▲ 13 Non current liabili5es 0 27 Non current Assets 465 642 Total Liabili5es 393 479 Property, plant and equipments 23 32 Capital 563 563 Intangible assets 373 518 Capital surplus 1,116 1,164 Investments and other assets 68 92 Retained earnings ▲116 ▲ 185 Lease and guarantee deposits
68 89 Treasury Stock － ▲47
Others 0 2 Total shareholders equity 1,564 1,494 Allowance for doubZul accounts 1,957 1,974 Total liabili5es and
net assets 1,957 1,974 Capital Ra5o 79.9% 75.7%
Overview of Balance Sheet
12
FY2012 FY2013
Mil yen 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Total Revenue
924 983 969 1,010 896 829 847 950
OperaMng Profit
74 84 71 ▲4 ▲28 20 28 48
Profit RaMo 8.1% 8.5% 7.3% ▲0.4% ▲3.2% 2.5% 3.3% 5.1%
EBITDA 102 109 94 3 10 58 75 85
Quarterly Results
13
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
259 408 471
562 475 423 413 534
448 362 280
251 217
188 165
150
217 212 218
197
203 217 268
265
AdverMsement Content Social Game
924 983 969 1,010
ソーシャルゲーム事業の売上が前四半期比29％増 コンテンツ事業および広告事業の売上がQonQで微減
896
FY2012 FY2013
829
Mil yen
847 950
<QoQ growth> Up: Social Game, an increase 29% Down: AdverMsement and Content Business
Quarterly Results by segments
14
Million yen Social Game Content
Adver5sement
Head Quarters Total
Revenue 1,847 721 965 ▲10 3,523
Opera5ng Profit 136 66 103 ▲238 69
Profit Ra5o 7.4% 9.3% 10.8% -‐ 2.0%
OperaMng Profit by segments
FY2013 (Oct.2012-‐Sep.2013)
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Total number of Downloads
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4Q Topics
ADroute was selected as Yahoo Display AD Network (YDN) on September.
AdverMsement Business
Social Game Business
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The number of media registered in ADroute
Ⅱ．Forecast FY2014
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FY2014 1Q forecast
・1Q: Preliminary period for developing new gaming Mtles and new service on 2Q
Mil yen FY2014 1Q Fo FY2013 1Q Fo FY2013 4Q
Total Revenue 842 896 950
Opera5ng Profit ▲6 ▲28 48
Ordinary Profit ▲8 ▲27 48
Net Profit ▲8 ▲30 48
Ⅲ．Business Strategies for FY2014
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AXM Group Strategy
Focus on service for Smartphone
Mobile Game Business （Past: Social Game Business）
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FY2014 Strategies
Focus on developing na5ve apps
Strengthening the coopera5on with partners
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Axel Game Studio Inc. #1
Company name Address President Directors Business
AEXL Game Studio Inc. 1-‐32-‐2, Honcho, Nakano-‐ku, Tokyo 164-‐0012 Junji Oshita Koji Notsu (responsible for business alliance) Atsushi Kogure (responsible for game producing) Development mobile gaming contents
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Axel Game Studio Inc. #2
FormulaMng alliances with adopMng on our business
Expanding partnership with other companies
Searching for opportuniMes of publishing Mtles globally and markeMng foreign Mtles to Japanese market
OperaMonal skill of social game Technologies and experiences of developing consumer games
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Strategies with adopMng for technology advance
We mainly will launch naMve apps on FY2014. Market share of NaMve apps will exceed web games for smartphone.
Web games
NaMve apps (rich web applicaMons)
NaMve apps
Our Mtles
Web games
NaMve apps
Market opportunity
FY2013 FY2014
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Strategies for Alliances
AXM Developing
Original Mtles IP・Alliance Mtles
UMlize our resources of planning, developing and operaMng games Maximize revenue and profit by mulMple alliance strategies
PromoMon By partners
Developing By partners
Licensing Publishing
AXM PromoMon
(C)LOTTE/Bikkuriman project (C)AXELMARK/Nippon Ichi Soewware/DeNA
Region of the sky
戦律のヴァルキリー
Bikkuriman collectors baple
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MulM-‐plaqorm
Mobage mixi d-‐game (docomo)
App Store
Google Play ConMnuaMon of the story
Kingdom chronicle ○ ○ -‐ -‐ -‐ ‘Cristal Saga’
Region of the sky ○ 1Q -‐ -‐ -‐
Osama game –team baple ○ ○ ○ -‐ -‐
Traitorous Ciel Ark -‐ -‐ -‐ ○ 1Q
○: on sales
AdverMsement Business Content Business
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AdverMsement Business, Content Business
Adver5sement Business
Establishment AdverMsement Business Head Quarter Appointment the head of the HQ à OrganizaMon reinforcement ・Focusing on AD network business for smartphone ・Expanding the sales of YDN ・Launching new service ‘ADroute Clip’ in October ・Developing next service by the end of this year
Content Business
Developing new applicaMon for App Store and Google play
31
New service ‘ADroute Clip’
「ADroute Clip」 Click guaranteed adverMsement
-‐contents related-‐ (launched in October)
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lll. Appendix
33
Company Overview
Company Name
Business
Capital
President
Head Count
Subsidiaries
Stock code
AXEL MARK INC.
Social Game, Content distribuMon, Mobile AdverMsement
563 million yen (As of Sep. 30th 2013)
Junji Oshita
Address Harmony Tower, 1-‐32-‐2 Honcho, Nakano-‐ku, Tokyo, Japan
107 (consolidated, as of Sep. 30th 2013)
Axel Game Studio Inc. (Mobile game)
3624 (Tokyo Stock Exchange Mothers SecMon)
President: Junji Oshita
Junji Joined in 2011 when AXEL MARK merged Froute CorporaMon, a Japanese venture company. He was former CEO of Froute. Previously he worked at Japanese VC firm, IT venture company and KDDI CorporaMon, one of the biggest telecommunicaMon company in Japan. He graduated from Kobe University.
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Corporate Mission
We are a service provider for mobile phone. ・Social Game ・e-‐books and other contents ・AdverMsement service
Connec5ng the world with “Joy”
35
Company History
2008 March Listed on TSE Mothers (3/18/2008) Business lines：Content business and AdverMsement business
Aug.-‐Nov. Launched some mobile sites of movies and arMsts
2009 Sep. Sold adverMsement business
Sep. Large amount of extraordinary losses caused by failure of investments
2010 July Launched “AXELBOOK”, distribuMon e-‐Books for smartphone
2011 Oct. Merger with Froute Business lines：Social game, Content and AdverMsement business
2012 March The number of social game subscribers exceeded 1 million
June Acquired INDI soeware co.,ltd.
Aug. Strategic Allance with DeNA
Sep. The number of social game subscribers exceeded 2 million
2013 May The number of social game subscribers exceeded 3 million
June The monthly sales of AD Biz exceeded 100 million yen
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Carrier SNS Mobile media
Business Model
Client Company, Partner
Content Business
Social Game Business
AdverMsement Business
Rights holder AdverMser
Users
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Mobile games
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Market environments
■ The number of Smartphone Subscribers※1
FY2014 56,270k → FY2018 89,240k
Source: Mobile contents forum
■Smartphone game market FY2012 26.07mil yen （FY2011 4.81mil yen）
■Market Size of adver5sement for smartphone※2
FY2011 2.49mil yen → FY2017 22.13mil yen
※1 Source：MM Research InsMtute
5,627 6,636
7,493 8,246
8,924 47% 54%
59% 64%
68%
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2014 2015 2016 2017 2018
Subscribers ratio
249
856
1,166
1,526
1,842 2,056
2,213
0
500
1,000
1,500
2,000
2,500
2011 2012 2013 2014 2015 2016 2017
※2 Source: CyberZ
0
500
1000
1500
2000
2500
3000
2011 2012
481
2,607
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May 2012～ “Region of the sky”
Sep. 2011～ “Kingdom Chronicle”
Our first card-‐baple-‐game with the original “dice” baple system launched in September 2011.
Our first real-‐Mme baple-‐game with the original beauMful and graceful cards launched in May 2012.
LongMme Seller Mtles
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Affiliated Mobile media
AdverMsement Business
AdverMser
AD Agency
・最適な広告配信手法の選定 ・最適な広告配信先の選定
AD network for smartphone
Impressions
5bil/month
AdverMsement
Users
rewards
Providing AD space
AdverMsement as content provider
AdverMsement
<Our service> Support in efficient adverMsing and Create banner ads
ConnecMng AdverMsers with Users
※As of Sep. 2013
41
Content business
Rights holder
DistribuMon for smart phone and feature phone
USER
carriers Other plaqorm
42
ConnecMng the world with “Joy”
