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Nexon Announces Third Quarter 2013 Results

  Nexon Announces Third Quarter 2013 Results

      New and Existing Titles on PC and Mobile Drive 64% Revenue Growth

    Investments in World-Class Developers Mark Significant Progress Toward
                            Strategic Initiatives

Business Wire

TOKYO -- November 8, 2013

NEXON Co., Ltd. (“Nexon”) (3659.TO), a worldwide leader in free-to-play online
games, today announced financial results for its third quarter ended September
30, 2013. Revenues grew 64% year-over-year, operating income increased 53% and
net income increased 10%.

“We are pleased with our solid third quarter results, driven by the strong
performance of new and existing titles. We exceeded the high end of our
outlook for the fourth consecutive quarter, with Korea growth accelerating and
stable performance in China,” said Seungwoo Choi, President and Chief
Executive Officer of Nexon. “We continue to make excellent progress on our
long-term strategic initiatives, making several investments in studios headed
by world-class developers, which enables us to secure AAA content,
particularly in the US and European markets. The platform transition toward
synchronous online game play and free-to-play monetization shows no signs of
slowing, and – as pioneers of the free-to-play model – we are well-positioned
to capitalize on this industry momentum.”

                                              
Third Quarter Fiscal 2013 Financial Highlights (IFRS) (1)
(Millions of yen, except per share data)
                                                    
                              Q3 2012     Q3 2013   YoY%
Revenues                      ¥24,256     ¥39,883   64%
PC                            23,567      32,995    40%
Mobile                        690         6,887     10.0x
Operating income              10,602      16,237    53%
Net income ^2                 7,352       8,054     10%
                                                    
Earnings per share:           16.94       18.35     8%
                                                    

Footnotes:
^1 Nexon voluntarily adopted IFRS beginning in the first quarter of 2013.
^2 Net income refers to net income attributable to owners of the parent, as
stated in Nexon’s consolidated financial results.

Additional information regarding Nexon’s third quarter financial results is
available at Nexon’s IR website “IR Library” at
https://ir.nexon.co.jp/en/library/index.html.

                                                 
Revenue Breakdown (IFRS)
(Millions of yen)
                                                        
                              Q3 2013     Q3 2013       YoY % Change
Revenue by
Region ^1           Q3 2012   (As-        (Constant     As-        Constant
                                                                  Currency ^3
                              Reported)   Currency)^3   Reported
China               ¥11,404   ¥15,962     ¥12,464       40%        9%
Korea               6,579     12,151      9,488         85%        44%
Japan               3,232     8,755       8,754         171%       171%
North America       1,341     1,364       1,093         2%         -18%
Europe and          1,701     1,651       1,290         -3%        -24%
Others ^2
Nexon Total         24,256    39,883      33,089        64%        36%
                                                                   

Footnotes:
^1 Based on the region in which revenues originate; not a representation of
our revenues according to Nexon entities.
^2 Others: Other Asian countries and South American countries.
^3 On a constant currency basis (using Q3 2012 currency exchange rates).

Regional Highlights

Korea growth accelerated, driven by FIFA Online 3 and well-received
Dungeon&Fighter updates. Stable growth continued in China, reinforced by a
tier one update to Dungeon&Fighter. Japan grew year-over-year due to the
consolidation of gloops.

China

Revenues were up 40% year-over-year, or 9% on a constant currency basis.
Dungeon&Fighter performance was in-line with expectations, supported by a
popular tier one content update. Counter-Strike Online also continued to show
year-over-year growth.

Korea

Revenues were up 85% year-over-year, or 44% on a constant currency basis. This
accelerating growth was driven by existing titles such as FIFA Online 3,
Sudden Attack, Dungeon&Fighter and Mabinogi. MapleStory continues to perform
below expectations. New mobile game Fantasy Runners for Kakao achieved nearly
3 million downloads during the quarter.

Japan

Revenues were up 171% year-over-year due the consolidation of gloops. Dragon
Eclipse, the first collaboration between gloops and DeNA, launched in
September, with a native app released the following month. Existing mobile
titles including Three Kingdoms Guild Battle continue to show stable
performance.

North America

Revenues were up 2% year-over-year, or down 18% on a constant currency basis.
Nexon announced several key investments in high-profile US-based developers
including Shiver Entertainment, headed by industry veteran John Schappert.
Nexon also announced a publishing agreement with UK developer Splash Damage
for the title Extraction.

Europe and Others

Revenues were down 3% year-over-year, or 24% on a constant currency basis.
Nexon announced a publishing agreement with Gamania for Warface in Taiwan.

Fourth Quarter 2013 Business Outlook

The following table presents Nexon’s outlook for the fourth quarter of fiscal
2013.

                              
(Millions of yen)        Q4 2012   Q4 2013
                         (IFRS)    (IFRS)
                                   
Revenues                 ¥30,882   ¥31,775~¥33,606
PC                       23,813    25,916~27,198
Mobile                   7,070     5,860~6,408
Operating income         8,793     6,748~7,921
Net income               552       4,814~5,730
                                   
Earnings per share       1.27      10.96~13.05
                                   

The Company also expects a weaker Japanese yen to continue to contribute to
year-over-year growth based on its ¥98.95 per US$1 and ¥8.94 per 100KRW
currency exchange assumptions.

About NEXON Co., Ltd. http://company.nexon.co.jp/

NEXON Co., Ltd. (“Nexon”) (3659.TO) is a worldwide leader in free-to-play
online games. Founded in Korea in 1994, Nexon developed one of the world's
first graphics-based massively multiplayer online games. Nexon also pioneered
the concept of microtransactions and the free-to-play business model, setting
a new standard in which play is free, and users have the option to purchase
in-game items to enhance their experience. Nexon currently services nearly 60
online games in more than 100 countries and since its founding, Nexon has
generated more than 1.4 billion player registrations. The Company is
headquartered in Tokyo, Japan and its shares are listed on the Tokyo Stock
Exchange.

Contact:

NEXON Co., Ltd.
Owen Mahoney, +81-3-3523-7910
Chief Financial Officer
or
Greg Melchior, +81-3-3523-7919
Corporate Public Relations
 
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