Nexon Q1 2019 Investor Presentation

Key insights

7 takeaways

01
Nexon achieved record-breaking Q1 2019 financial results, with year-over-year revenue growth across all geographic regions driven primarily by Korea and China.See it on page 7
02
The company’s revenue remains heavily concentrated in the Chinese market, which accounted for 52% of total revenue in 2018.See it on page 28
03
Nexon’s business model is predominantly reliant on PC-based titles, which comprised 78% of the platform mix in 2018.See it on page 33
04
Financial performance is anchored by core franchises including Dungeon&Fighter, MapleStory, and FIFA ONLINE 4, alongside a resurgence in the KartRider brand.See it on page 4
05
While Q2 2019 revenue is projected to grow through new mobile launches, operating income is expected to face downward pressure from rising variable costs, increased human resource expenditures, and lower non-operating income.See it on page 12
06
Revenue from Dungeon&Fighter in China is expected to remain flat in Q2 2019 due to a high comparative baseline from the previous year.See it on page 13
07
Historical performance from 2013 to 2018 showed a revenue recovery to ¥7.02 billion by 2018, though net income and operating profit experienced significant volatility during this period.See it on page 26

Summary

Nexon achieved record-breaking financial results in the first quarter of 2019, surpassing performance benchmarks across revenue, operating income, and net income. This growth was underpinned by the sustained stability of core franchises, specifically Dungeon&Fighter, MapleStory, and FIFA ONLINE 4, complemented by a notable resurgence in the KartRider brand. On a constant-currency basis, the company realized year-over-year revenue expansion across all geographic regions, with Korea and China serving as the primary drivers of this momentum.

Historical data from 2013 to 2018 reveals a period of revenue recovery, culminating in ¥7.02 billion in 2018, although net income and operating profit exhibited significant volatility throughout this timeframe. The company’s business model remains heavily concentrated in the Chinese market, which generated 52% of total revenue in 2018, and continues to rely predominantly on PC-based titles, which account for 78% of the platform mix. This reliance on established PC franchises remains the central pillar of the company’s financial structure.

Looking toward the second quarter of 2019, the company anticipates continued year-over-year growth, supported by a robust mobile pipeline and the ongoing performance of key titles. While revenue from Dungeon&Fighter in China is expected to remain flat due to a high comparative baseline from the previous year, overall gains are projected through new mobile launches and strategic service transitions. However, operating income is expected to face downward pressure due to rising variable costs, increased human resource expenditures, and a projected decline in non-operating income compared to the prior year.