【IR】GMO Internet Group Strategy 2014 Q2 Summary

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The following is an overview of our second quarter. For more details please refer to the following.

Results presentation materials here
Results presentation video here

◇(IR) Masatoshi Kumagai talks about GMO Internet Group Strategy in 2014

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■Financial Overview
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●Significant Quarter-on-Quarter increase in earnings in April quarter. Sharp improvement in financial condition in the game business.
Mainly due to one-time costs incurred in the first quarter.

● In the first half we achieved double-digit growth in net sales and profit. Operating and ordinary profits were down due to temporary costs incurred.

● This image shows progress against full year forecasts. There is no change to forecasts in the current quarter.

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■Internet Infrastructure
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●In the Infrastructure segment, growth exceeded 20% for the 20th consecutive quarter. Profit rose 2.9% after JPY170 million was spent on television commercials.

●Contracts in the Infrastructure segment reached 5.36 million. In addition, we have another 26,000 contracts in the provider business. That is a total of over 5.6 million, and is growing at around 600,000 contracts a year. The majority of contracts in this segment represent recurring revenue, the foundation for stable, long-term growth.

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■Online Advertising & Media
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●Net sales grew 3.2% to JPY 8.2 billion, while profit fell 32.5% due to a lagging media rep and agency business.

●One of the products driving growth in this segment is reward advertising, a product for boosting smartphone app downloads. Going forward we aim to continuing growing.

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■Internet Securities
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● Market activity in FX was at a 19-year low, but despite this we were able to maintain profits at a level similar to last year. In this segment we continue to expand market share, leveraging our strength in technology and pursuing a cost leadership strategy.

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■Mobile Entertainment
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●Unfortunately we were not able to achieve a quarterly profit in the second quarter, losses in the segment improved JPY 570 million over Q1, and on a monthly basis we had just about reached breakeven. We now expect the segment to begin making a profit contribution after Q3.

●The slide below shows our game pipeline. We are leveraging popular titles in new markets and continue to release new titles cost effectively.

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■ .tokyo Promotion
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●.tokyo was launched to the general public on July 22, and in the first 24 hours reached over 10,000 registrations. A media campaign including television commercials and advertising on public transport featuring pop group AKB48, was launched to coincide with the opening of the domain.

●The objective of this marketing campaign is to strengthen the Group’s Internet infrastructure services, and to make our brand synonymous with domain registration in Japan. This is about shoring up long term growth.

Internet for everyone.

◇(IR) Masatoshi Kumagai talks about GMO Internet Group Strategy in 2014

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