2Q 2014 Earnings Release

August 14, 2014

NCSOFT Corporation
12 Daewangpangyo-ro 644beon-gil, Bundang-gu, Seongnam-si, Gyeonggi-do, Korea
Tel: +82-2-2186-3300 Fax : +82-2-6201-7787
Copyright NCSOFT Corporation. All Rights Reserved
WWW.NCSOFT.COM

Global Online Game Publisher NCsoft

Disclaimer

The financial results for 2Q 2014 have been prepared on an un-audited basis,
and may be subject to change during independent auditing process.
Please note that NCSOFT will not be responsible for individual investment decisions
solely based on this material.
Consolidated subsidiaries (K-IFRS based) :
NC West Holdings(100%, US), NC Europe(100%, UK),
NC Japan(60%, JP), NC Taiwan(85%, TW), NCSOFT Corporation(HQ, KR),
NCSOFT Service(100%, KR), NC Dinos Baseball Club(100%, KR),
Hotdog Studio(58%, KR), Oraion Soft(100%, KR), Ntreev Soft(76%, KR)

Global Online Game Publisher NCsoft

Contents

I. Consolidated Earnings
1. Financial highlights
2. Sales Breakdown
3. Costs Breakdown

II. Appendix
4. Parent Earnings
5. Summarized Financial Statements

Global Online Game Publisher NCsoft

1. Financial Highlights
Revenues and profits increased thanks to new launches
such as Wildstar in US/EU and Guild Wars 2 in China.
Sales

Operating Profit

300,000
250,000
200,000

210,026

192,014
169,740

213,811
178,147

100,000
80,000

150,000

62,248

20% QoQ
11% YoY

50,000

64,948

56,746

60,000

100,000

44,520

40,000

30,730

46% QoQ
4% YoY

20,000

0
2Q 13

3Q 13

4Q 13

1Q 14

Pre-tax Income

70,000
60,000

(Unit : KRW in MN)

120,000

61,248

2Q 14

64,353

3Q 13

4Q 13

1Q 14

2Q 14

Net Income

120,000
100,000

58,677

50,000

44,436

40,000

2Q 13

80,000

31,026
45% QoQ
10% YoY

30,000
20,000

40,000

10,000

20,000

52,938

60,000

45,850

36,539
26,297

45% QoQ
55% YoY

34,218

0
2Q 13

3Q 13

4Q 13

1Q 14

2Q 14

2Q 13

3Q 13

4Q 13

1Q 14

2Q 14
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Global Online Game Publisher NCsoft

2. Sales Breakdown
The contribution of overseas sales expanded thanks to Wildstar.
Lineage1 recovered meaningfully on the back of solid user base.

Sales by Region

Sales by Games
(excluding royalty)
(Unit : KRW in MN)

200,000
213,811
192,014

180,000
178,147

178,987

176,244

13,591

160,000
28,899
140,000
14,152
120,000
23,257
100,000

14,298

133,582
14,369
25,142

80,000

19,234

60,000

22,225

40,000

84,791

Others

28,048

WS

22,214

GW2

19,132

B&S

18,347
13,573

11,593
41,019

20,000

18,044

AION
L2

56,885

L1

2Q 13

1Q 14

2Q 14

L1 : Lineage 1

GW2 : Guild Wars 2

B&S : Blade and Soul

WS : Wildstar

Global Online Game Publisher NCsoft

3. Costs Breakdown

Labor costs remained flat QoQ as there was no change in headcount

Variable expense went up reflecting Wildstar
Marketing expense also rose due to increased marketing campaigns for Wildstar
No meaningful changes in D&A and Others
(Unit : KRW in MN)

* 2Q14 Others: Bandwidth costs(5,030), Rent(2,046), Wage for outsourced staff(4,682), Outsourced R&D(3,024) etc.

Global Online Game Publisher NCsoft

4-1. Financial Highlights (Parent)

Operating Profit

Sales

140,000

(Unit : KRW in MN)

151,210

160,000
136,685

133,939

136,190

54,234

53,970

50,000

100,000

41,031

40,000

80,000
2% QoQ

60,000
40,000
20,000

10,000

27,664

30,000
20,000

32% QoQ
17% YoY

2Q 13

3Q 13

4Q 13

1Q 14

2Q 14

58,950

57,370

50,000

53,885
41,067

40,000
27,434

30,000

31% QoQ
9% YoY

20,000
10,000
0
2Q 13

3Q 13

4Q 13

1Q 14

2Q 13

3Q 13

4Q 13

1Q 14

2Q 14

Net Income

Pre-tax Income

70,000
60,000

65,317

60,000

117,771

120,000

70,000

2Q 14

50,000
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0

44,522

44,558

38,122
32,631
24,614
36% QoQ
17% YoY

2Q 13

3Q 13

4Q 13

1Q 14

2Q 14
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Global Online Game Publisher NCsoft

4-2. Sales Breakdown (Parent)

Sales by Games

Quarterly Royalty
(Unit : KRW in MN)

160,000
136,685
140,000

120,000
100,000
80,000

19,633
1,161
14,152
15,288
5,169

133,939

50,000
48,993

4,177
19,234

60,000
17,518
40,000

81,283

48,993

39,630
Royalty
4,713
16,632
14,624
5,816

40,000

AION

30,000

20,000

L2

5,406
38,611

L1

39,630

38,007

Others
B&S

54,774

20,000

60,000

136,190

19,633
14,898

10,000

2Q 13
L1 : Lineage 1

1Q 14

2Q 14

2Q 13

3Q 13

4Q 13

1Q 14

2Q 14

B&S : Blade and Soul

L2 : Lineage 2

Global Online Game Publisher NCsoft

4-3. Costs Breakdown (Parent)

(Unit : KRW in MN)

Global Online Game Publisher NCsoft

5-1. Summarized B/S

Consolidated

2013
Current Assets

Parent

(Unit : KRW in MN)

1H 2014

2013

785,505

861,988

Cash & cash equivalents

123,331

137,635

Cash & cash equivalents

Short-term financial instruments

378,576

401,387

Short-term financial instruments

Account receivables

81,390

88,294

202,207

234,673

694,017

687,255

Investment assets

292,078

288,577

Tangible assets

248,310

247,331

Intangible assets

112,105

109,623

41,524

41,724

1,479,522

1,549,243

251,845

235,135

3,430

Payables

22,559

25,258

Current tax liabilities

40,042

10,442

38

185,808

199,397

68,913

78,541

45,945

48,176

Others
Non-current Assets

Others
Total Assets
Current Liabilities
Borrowings

Other provisions
Others
Non-current Liabilities
Defined benefit obligations
Long-term employee benefits
Others
Total Liabilities
Capital Stock
Other Paid-up Capital
Other Components of Equity
Retained Earnings

4,873

4,319

18,096

26,045

320,759

313,676

10,957

10,965

119,618

120,916

(6,122)

(8,143)

1,016,785

1,096,072

Non-Controlling Interests

17,524

15,758

Total Stockholders Equity

1,158,763

Total Liabilities
and Stockholders Equity

1,479,522

(Unit : KRW in MN)

Current Assets

1H 2014

650,203

703,161

23,984

18,330

362,000

384,179

58,938

69,102

205,280

231,549

739,985

730,121

Investment assets

463,146

457,637

Tangible assets

230,439

226,218

26,564

25,770

Account receivables
Others
Non-current Assets

Intangible assets
Others
Total Assets
Current Liabilities
Payables
Current tax liabilities
Others
Other Provisions
Non-current Liabilities
Defined benefit obligations
Long-term employee benefits
Derivatives Liabilities
Other Account Payble
Total Liabilities
Capital Stock
Other Paid-up Capital
Other Components of Equity

19,836

20,497

1,390,188

1,433,282

165,476

135,209

7,740

8,896

35,061

10,205

122,675

116,109

55,386

62,908

39,945

42,957

4,650

4,104

115

115

10,676

15,732

220,862

198,117

10,957

10,965

129,955

131,253

1,144

545

Retained Earnings

1,027,269

1,092,403

1,235,567

Total Stockholders Equity

1,169,326

1,235,165

1,549,243

Total Liabilities
and Stockholders Equity

1,390,188

1,433,282

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Global Online Game Publisher NCsoft

5-2. Summarized P/L

Parent

Consolidated
(Unit : KRW in MN)

2013

(Unit : KRW in MN)

1H 2014

2013

1H 2014

Sales

756,656

391,958

Sales

530,440

270,130

Cost of Sales

220,452

117,790

Cost of Sales

108,916

46,703

Gross Profit

536,204

274,168

Gross Profit

421,523

223,426

Selling & Administrative Expense

330,969

164,699

Selling & Administrative Expense

237,432

128,161

Operating Income

205,235

109,469

Operating Income

184,091

95,266

Other Income

41,417

13,492

Other Income

32,370

11,969

Other Expense

30,430

14,172

Other Expense

26,983

12,284

216,222

108,789

189,478

94,951

57,527

19,312

Income Tax Expenses

46,909

17,798

158,696

89,477

Net Income

142,569

77,153

Income before Income Tax Expense

Income Tax Expenses
Net income
Non-Controlling Interests
Equity Attributable to the owners
of the Parent Company

(60)
158,756

Income before Income Tax Expense

(1,599)
91,076

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Global Online Game Publisher NCsoft

Thank you

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