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Annual
Results
IGG INC Mar. 2020
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 HeartAnnual Results
Annual Financial
Review
Prospects
IGG Overview
Agenda
2Innovators at Work • Gamers at HeartAnnual Results
與時俱進 • 不忘初心 3Innovators at Work • Gamers at HeartAnnual Results
IGG Overview
4
IGG Overview
Innovators at Work • Gamers at HeartAnnual Results
Global Market Global R&D
Global Operation Global Investment
A leading global developer and publisher of mobile games
• R&D talents & technical partners
located in 30+ countries & regions
• Strategic investments in the mobile
internet and gaming industries
• Operation teams located in 15 countries
• Long-term relationship with 100+
distribution platforms & promotional
partners
• Games in 24 languages
• Users across 200+ countries & regions
• Registered users: 740mn, MAU:14.6mn+
Global
Market
Global
Investment
Global
R&D
Global Operation
Hit Titles
Innovators at Work • Gamers at HeartAnnual Results
Global Branches
• In 2019, IGG sets up subsidiaries in Brazil, Turkey, Italy and Spain, to strengthen its regional foothold in South
America and Western Europe.
• IGG continues to improve its competitiveness by recruiting talents on R&D and operation. The Group has nearly
1,600 employees, and R&D accounts for over 50% of headcount.
Note: Data as at 31 December 2019
United Arab Emirates (Dubai)
Localized operation supportTurkey
Localized operation support
China
IT, R&D and operation support
South Korea
Localized operation support
Japan
Localized R&D and operation support
Philippines
Customer service center
Thailand
Localized operation support
Indonesia
Localized operation support
Canada
Localized operation support
USA
IT and localized operation support
Brazil
Localized operation support
Italy
Localized R&D training and operation support
Spain
Localized operation support
SingaporeGroup headquarters; R&D and operation center
Belarus
Localized operation support
5
6
Global Ranking
Listed as one of the “Top 52 Publishers” for
five consecutive years.
Selected as one of the “Top 50 Chinese Global
Brand Builders” for three consecutive years,
ranked 16th in 2019.
Listed as one of the “Top 50 Mobile Game
Makers” for five consecutive years, ranked
30th in 2019.
Selected as one of the “Best Under A Billion”
companies for two consecutive years.
Innovators at Work • Gamers at HeartAnnual Results
與時俱進 • 不忘初心 7
Annual Financial Review
Innovators at Work • Gamers at HeartAnnual Results
Innovators at Work • Gamers at HeartAnnual Results
Historical Financial Performance
204.6 202.5
322.1
607.3
748.8667.6
66.4 41.2 71.6155.1 189.3 164.8
0
200
400
600
800
2014 2015 2016 2017 2018 2019
Historical Performance of Revenue and Net Profit
Revenue
Net Profit
(US$ million)
98.4 90.970.7
94.1
0
50
100
150
1H18 2H18 1H19 2H19
2019 Net Profit
(US$ million)
388.5 360.3 354.7312.9
0
200
400
600
1H18 2H18 1H19 2H19
2019 Revenue(US$ million)
Revenue in 2H19 decreased 12% HoH. Net profit in 2H19 increased 33% HoH.
8
$61MConsolidated
avg. monthly
gross billing
$49MLords
Mobile
$12MCastle
Clash &
Other
Games
9Innovators at Work • Gamers at HeartAnnual Results
Gross Billing
0
10
20
30
40
50
60
70
80
IGG Lords Mobile Castle Clash & Other Games
(US$ million)
Monthly Gross Billing of the Group and Hit Titles in 2019
Innovators at Work • Gamers at HeartAnnual Results
Lords Mobile
RTS/RPG Game
• Launched in Mar. 2016
• Available in 20
languages
• Registered users:
270mn
• MAU: 8.2mn
• 81% of IGG’s revenue
• Launched in Jul. 2013
• Available in 16
languages
• Registered users:
250mn
• MAU: 3.4mn
• 11% of IGG’s revenue
Castle Clash
Strategy Game
• Launched in Dec. 2018
• Available in 21
languages
• Registered users:
6.9mn
• MAU: 180k
• 3% of IGG’s revenue
Mobile Royale
Strategy Game
10
Operational Data
Note: Data as at 31 December 2019
“Conquerors: Golden Age” previously known as “Conquerors: Clash of Crowns”
• Launched in Jul. 2017
• Available in 9
languages
• Registered users:
12mn
• MAU: 400k
• 2% of IGG’s revenue
Conquerors:
Golden Age
Strategy Game
IGG revenue by platforms
Revenue Distribution
Revenue
distribution across
platforms in 2H19
remains stable
compared to 1H19
11Innovators at Work • Gamers at HeartAnnual Results
Note: Data of 2019
iOS38%
Others 4%
Android58%
iOS41%
Others 4%
Android55%
Revenue
distribution across
platforms in 2H19
remains stable
compared to 1H19
Lords Mobile revenue by platforms
(US$ million) 2018 2019 YoY (%) Notes
Revenue 748.8 667.6 -11%
Natural drop in revenue from Lords MobileLords Mobile 599.9 539.0 -10%
Castle Clash & Other games 148.9 128.6 -14%
Gross Profit 523.5 462.8 -12% 1. Gross profit declines as revenue of core titles declines
2. Rise in labor cost and server cost as new business expandsGP margin (%) 70% 69% -1ppt
Other net income 9.1 32.6 +258%Fair value gain from the Group’s investments in the mobile internet
and gaming related companies
Selling & distribution exp. 186.6 164.9 -12% Continuous budget control of marketing expenses
% of revenue 25% 25% -
Administrative exp. 44.7 45.5 +2% Increased expense for global expansion
% of revenue 6% 7% +1ppt
R&D exp. 63.6 92.5 +45% Increased investments in new R&D projects
% of revenue 8% 14% +6ppts
Income tax exp. 47.1 25.2 -46% Decrease in profit before taxation
Net profit 189.3 164.8 -13%
Revenue and net profit decreased YoY.
Led by remarkable performance of the Group’s investments, net profit
in 2H19 increased 3% YoY, and increased 33% HoH.
NP margin (%) 25% 25% -
EPS (basic, US$) 0.147 0.132
2019 Financial Analysis
12Innovators at Work • Gamers at HeartAnnual Results
Capital Expenditures Cash & Cash Equivalents
Strong Cash Position
13Innovators at Work • Gamers at HeartAnnual Results
(US$ million) (US$ million)
5.1
27.2
0
10
20
30
2018 2019
Purchase of Intangible Assets
Purchase of PP&E
287.5 307.1
0
100
200
300
400
Dec. 2018 Dec. 2019
• Capex
2018: 1.3% of total assets
2019: 5.7% of total assets
• Dividend payment of US$47.4M, and spent
US$27.0M on share buyback.
• Dividend + share buyback total amount to
US$74.4M in 2019.
Innovators at Work • Gamers at HeartAnnual Results
399.4
476.5
318.5
243.4220.1
0
100
200
300
400
500
600
Dec. 2015 Dec. 2016 Dec. 2017 Dec. 2018 Dec. 2019
Non-current assets
Current assets
Total Assets
• As at 31 December 2019, the Group’s total assets amounted to nearly US$480M
The Group’s property, plant and equipment increased to US$43.3M in 2019, including the
acquired property in Italy.
The Group’s other financial assets increased to US$71.4M, including investments in XD Inc. as
well as other mobile internet and gaming related companies.
14
Total Assets
(US$ million)
Dividend
Dividend Type
Dividend per
share
(HK, cents)
Total Amount
(HK$, million)
Dividend payout ratio
(% of the corresponding
period net profit)
Payment Date
2019
1st interim dividend 13.0 166 30% Sep. 4, 2019
2nd interim dividend 17.6 220 30% Apr. 6, 2020
15Innovators at Work • Gamers at HeartAnnual Results
• Full year dividend declared plus share buy-back
accounted for 46% 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.
Preferential Corporate Tax Rate
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
The
preferential
corporate
tax
17%
10%
16Innovators at Work • Gamers at HeartAnnual Results
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%
Innovators at Work • Gamers at HeartAnnual Results
31% 32% 31% 31% 31%
25% 23% 23% 21% 20%
44%45%
46%48%
49%
0
50
100
150
200
250
2018 2019 2020 2021 2022
Global Games Market Overview
Console Games PC Games Mobile Games
Global Games Market Trend
Asia Pacific47%
North America
26%
Europe, Middle East
& Africa23%
Latin
America
4%
Global Games Market (by Regions)
$138.7Bn$152.1Bn
$164.6Bn$178.2Bn
$196.0Bn
17
• The global games market is expected to hit US$152.1 billion in 2019 and US$196.0 billion by 2022.
• By 2022, Mobile and PC games are expected to grow to US$96.0 billion and US$39.2 billion, respectively.
(US$ billion)
Source:Newzoo Global Games Market report, 2019
與時俱進 • 不忘初心
Prospects
18Innovators at Work • Gamers at HeartAnnual Results
Strive for excellenceStrengthen
competitiveness
R&D Outlook
19
• Seek out strong R&D teams
with innovative, high-quality
products worldwide.
• Explore strategic investment
opportunities globally.
Seek out global investment
opportunities
Innovators at Work • Gamers at HeartAnnual Results
Operation Outlook
20
Globalization Diversification Localization
• Expand the scale and width
of its marketing initiatives
across the globe
Strengthen competitive edge
• Tap into diversified marketing
strategies to drive games to new
heights
Localized Marketing CampaignsDiversified Marketing Strategies
• Establish local teams and release
localized marketing campaigns
Innovators at Work • Gamers at HeartAnnual Results
New Title – Project FF
Tower Defense Game
21Innovators at Work • Gamers at HeartAnnual Results
22
MOBA Game
Innovators at Work • Gamers at HeartAnnual Results
New Title – Project DB
23Innovators at Work • Gamers at HeartAnnual Results
New Title – Project DB
24Innovators at Work • Gamers at HeartAnnual Results
New Title – Project DB
New Title – Project Princess
與時俱進 • 不忘初心
Female
Oriented
Game
25Innovators at Work • Gamers at HeartAnnual Results
26Innovators at Work • Gamers at HeartAnnual Results
New Title – Project Princess
與時俱進 • 不忘初心 27Innovators at Work • Gamers at HeartAnnual Results
New Title – Project Princess
與時俱進 • 不忘初心
New Title – Project HF
Simulation Game
28Innovators at Work • Gamers at HeartAnnual Results
與時俱進 • 不忘初心 29Innovators at Work • Gamers at HeartAnnual Results
New Title – Project HF
與時俱進 • 不忘初心 30Innovators at Work • Gamers at HeartAnnual Results
New Title – Project HF
與時俱進 • 不忘初心
New Title – Project MF
Casual Game
31Innovators at Work • Gamers at HeartAnnual Results
與時俱進 • 不忘初心 32Innovators at Work • Gamers at HeartAnnual Results
New Title – Project MF
與時俱進 • 不忘初心 33Innovators at Work • Gamers at HeartAnnual Results
New Title – Project MF
與時俱進 • 不忘初心
Thanks!
34Innovators at Work • Gamers at HeartAnnual Results
IR Contact
ir@igg.com
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