Transcription
February 2021 Kakao Investor Relations
DisclaimerFinancial information contained in this document is based on consolidated K-IFRS that have notbeen audited by an independent auditor.Therefore, the information and financial data of Kakao and its subsidiaries (the “Company”, or“Kakao”) contained in this document are subject to change upon an independent auditor’s audit.The Company does not make any representation or accept liability, as to the accuracy orcompleteness of the information contained in this material.The format and contents of this document are subject to change for future filings and reports.Kakao is not liable for providing future updates on all figures included in this document.Therefore, this presentation contained herein should not be utilized for any legal purposes inregards to investors’ investment results. The Company hereby expressly disclaims any and allliability for any loss or damage resulting from the investors’ reliance on the information containedherein.Copyright Kakao Corp.
Table of ContentsKakao Ecosystem4Kakao Business11Talk Biz - Ad12Talk Biz – 2B Business19Music20Game21Paid Content22IP Business(M)23Kakao Entertainment24Financial Overview25
Kakao EcosystemKakao BusinessFinancial Overview4
MissionMaking a Better Worldwith People and Technology
History Interactive Business PlatformMay 2019KakaoBizboard2014Kakao & ayKakao KakaoTaxi Bank20172017CarveoutSep. 2020KakaoWork2006KaKao(I.W.I dsKakaoPage Content Ecosystem & Global Expansion20162016Kakao & LOENMergerLOENKakao JapanAcquisitionPiccoma2021Sep. 2020Kakao TVPage & MMergerMar. 2021KakaoEntertainmentKakao MEstablished
Undisputed Market LeaderMonthly Active Users in Korea grew by 1.1M YoY, 190K QoQKakaoTalk Monthly Active Users(in 852,13352,29952,223Average of monthly MAUs. Global includes domestic MAUs.7
Repeatable Success FormulaUnique Success Factors for New Businesses:#1 Consumer Satisfaction#1 Internet-Only Bank Large User Base Encompassing an EntireNation#1 MaaS Platform Kakao’s Nationwide Following EnsuringSuccess of New Service Launches#1 Digital Comic Platform#1 Korean Paid Content Platform Unrivaled Access and Insight to UserData#1 Mobile Game Platform#1 Most Likeable Characters Minimal User Acquisition Costs8
Global Strategic PartnershipsKakao’sStake1)Kakao MobilityKakao PageKakao PayKakao GamesKakao M69.3%63.5%56.1%45.8%77.3%0(KRW tn)InvestmentAmounts(KRW onKakao BankSKYblueLuxuryMar. 2021 (E)Jul. 2019Jul. 2020Sep. 2020Mar. 2020Dec. 20203.291.21.14.61.68.8500125230Jun. 2017Dec. 2016Feb. 2017219.924115Mar. 2021Jul. 2019Jul. 20201) Latest filings, Kakao’s stake for Mobility will change on Mar 31st to 64.6% from 69.3%Market Cap2)250210Nov. 2020750Dec. 20202) Market cap at close of listing date9
Company ManagementKakao Founder & ChairmanKakao CEOBrian Kim“Korean Web Pioneer”By Forbes AsiaMason YeoSean JohKey Subsidiaries1998Founder & CEOKakaoKakao GamesGamesKakao MobilityKakao PayAlex RyuAlex RyuOne of the first online game portals globally* Merged with NAVER (in 2000)2001CEO#1 Search portal in Korea2009Nkay NamkoongLeo ChoKakao PageKakaoPageKakao JapanKakao MKakaoEnterpriseFounder & Chairman#1 Mobile messaging app company in Korea*Merged with Daum (in 2014)Joy LeeJay KimStephan KimAndrew Beak10
Kakao EcosystemKakao BusinessFinancial Overview11
Paradigm Shift in Advertising IndustrySignificant Growth Opportunity in Kakao Talk as a Biz PlatformAd Market Size (2020)(in KRW tn)Talk Biz RevenueGuidance 50% YoY(in KRW bn)Total Ad. Market14.5650 72% YoYDigital Ad7.3Digital Penetration 50%421258Kakao Ad1.1Digital Ad M/S 15%2018201920202021(E)1) Kakao Ad includes Talk biz advertising and Portal Biz Revenue in FY201912
Talk Biz Advertising(Kakao Bizboard)New Innovative Way to Connect 46 million Mega TrafficChat list tab is whereusers spend the most timeUsers can get recommendationsof their interestsUsers may fulfill any actionsthat wish to on#DISCOVERTalk TalkStoreSurveyKakaoPayCustomer Service 13
Evolution of Kakao BizboardMid-to-long Term Growth Driver with Bizboard Inventory ExpansionExpanding Bizboard intoother Kakao servicesDaumKakao PageDaum WebtoonLandings within Kakao services# TabTalk GiftKakao TV Official AccountAcquired3mn SubscribersDAUMKAKAO PAGE14
Talk biz CommerceFrom Leveraging the Social Graph to any Talk-based TransactionsKey indices10.21mn21.73mn64% YoYMonthlyBuyersTalk GiftMAUCommerceFY2020 GMV292% YoYTalk StoreFY2020 GMVAs of December 2020GiftTalk Store Talk DealTalk Store Live CommerceMakers (Made-to-order Platform)RYANRYANRYAN1) Key indices as of 4Q2015
MobilityMaaS Platform with All-Inclusive Transportation NeedsKakao T Key Indices27mn13.64mn16,000RegisteredUsersCredit CardRegistrantsKakao T BuleFleetRevenue GrowthLargest # of UsersReady to Pay UsersDecember 2020FY2020 Kakao corpconsolidated revenueKakao T ApplicationTaxi Service Option169% YoYRevolutionizing into a ServiceMeeting All Types of Mobility DemandsKakao T BluePremium Paying Service Option1) Key indices as of 4Q20Kakao T Venti16
Techfin(Pay)No.1 All-Encompassing Daily Financial PlatformKakao Pay Key Indices35mnAccumulatedMembers3.2mn 20mn W67tnBrokerageAccountsMAUFY2020 GMV9.6mn fund investmentsmade in DecemberPay Money UpgradePrepaidTop-up BM3.2mn Real-name BasedBrokerage Accounts OpenedReal NameAccount4Q20 19.9trn 47.3% YoYTransformation into TailoredWealth Management Platform3,200,0002,500,000Non-Benefitfor DepositInterest BenefitLimit on BalanceEquivalent toBrokerage AccountLimited Scope ofFinancial ServiceDiversified 0Mar.May.Jun.Jul.Oct.Dec.17
Techfin(Bank)No.1 Internet-Only Bank with InnovationKakao Bank Key Indices13mn W23.5tnW20.3 tnDepositsCredit LoansMAU 10mn No.1 Mobile Banking APPPlatform Business ExpansionW113.6bnFY 2020Net ProfitFY2019 Net ProfitW13.7bnPioneering a New Market FrontierHigherLoan LimitLow-limitExclusiveProductMortgage-free credit loanLoan product only for mid-to-low credit profilers- Partnership with 4 credit card companies, 26 Weeks Saving with E-Mart & Market Kurly1) Capital as of latest filings 2) Key indices excepting capital as of 4Q20Proprietary credit scoring model to assessmid-to-low credit profilers more closelyby utilizing financial and non-financial data18
B2B BusinessB2B Business Expansion with Differentiated AI TechnologyWorkBusinessKakao WorkKakao i ConnectTech& HomeIntegrated EnterprisePlatformBusiness ServicePlatformKakao i EngineKakao i HomeCloudDataKakao i CloudKakao i Insight10 Years ofAccumulatedKnow-howsIndustry Insightbased DataIntegrated Business Platform ‘Kakao Work’Pre-launch Sep. 16th 2020 Paid Membership Launch in 2021Core StrengthCombination of Brand Powerand ExpertiseIntegrated Biz Platformbased on Messenger ServiceIntegration of AI andSearch TechnologySecure Cloud Environment19
Music# 1 Digital Music Platform with Unparalleled Market PresenceMelon Key Indices5.13mn PayingSubscribersDominant Traffic‘Melon Station’Offering Trendy Audio Contents40mn 110mn Song LibraryPlaylistsMore Personalized &Customized FunctionsLargest Music ContentSynergy with KakaoTalk Plus- Marketing with Talk DrawerIncreased Streaming Trendthrough Talk Music# of Streaming(Apr 2019 )Profile MusicRevampApr1) Key indices as of 4Q20JulDec20
GameMulti-Platform Game Company Encompassing PC and mobileGame Key Indices1,100 No.1PublishingPublisherNo.1 Mobile GamePlatform16mn Monthly UsersDevelopmentCapabilityGlobalPotentialIn-house game developmentfrom casual tohard-core genre (XL Games)Going GlobalLeveraging Proven IPsPublishing Game Line-upFY2021 Game nTalesODIN(2021 1H)2QPOEELYON3QTitleGenreAlice ClosetFashionCoordinationOdin: Valhalla RisingMMORPGMoonlight Sculptor(Global)MMORPGWorld FlipperPinball ActionFriends Party GolfCasualBlack Survival: EternalReturnBattle Royale MOBAKakaopage PlayStoryElyon (Global)MMORPGOdin: Valhalla Rising(Global)MMORPGSoul ArtifactCollectible RPGTerra FireSurvival FPSGoddess’ Order2D RPGProject KingPuzzle21
Paid Content (Web Literature)Growth through Innovative Business Model and Original IPsPaid Content Key IndicesW769.4bnW528.5bnGlobal PlatformGMVKakao PageTotal GMVPage Piccoma Page GlobalGMV includingIP distributionComic AppFY2021 GMV TargetPage GMV includingIP distributionIn revenue sizefor PiccomaPiccoma’s accelerating growthfrom proven story IPs and unique business modelAugmented IP value of Kakao Pagewith virtuous cycle of contentsWebtoon(Unit: mn JPY)37,601YoY GrowthPiccoma 1tnPage 0.7tnGlobal No.1 201720182019Piccoma GMV Trend2020Globally popular webtoon Only I Level Up GameMovieDrama based onDaum Webtoon Itaewon Class 22
IP Business(M)Transforming into a Leading Global Content ProviderKakao M Key IndicesNo.126mn MusicDistribution1theKSubscriberStable Cash FlowNo.1 K-popYouTube ChannelMusic Business rPerformingConcert/Musical150 240 MusicianActors &ActressesDigitalContents4 Music LabelsKorea’s LargestTalent PoolAccumulated original titlesin 3 years90 Content Production CapabilityTalent PoolProductionCompetitivecasting powerMega Monster,in-houseproduction studioStory IPKey CreatorOriginal IPs fromKakao Page andPiccomaTop-notchproducers withthe expertiseKakao TV Original ContentsLeveragingKakao’s Talk channel,Notification talk, #tab24 Titles300 Episodes70 mins of Daily ContentMusician ProductionMgmt1theKDigitalContentMarketer Production23
Kakao Entertainment Big Bang of gDomesticPlatformNetwork(13)Kakao PageDaum eTaiwanIP Asset, Production CompanyNovelComicsCIC1)DaumWebtoonCIC10 in-house studio /network of subsidiaries &6 affiliates8,500 Webtoon / Web Novel original o TV8 Multi-Labels1,300 new albums annually(33 teams & 4 subsidiaries)(KRW 200B annual na JVRadish(NorthAmerica)1theKInvested / Affiliates Network (53)OriginalStory XKPKakaoJapanStarshipToyou’sDreamTapasMediaPlay MRadishMediaEDAM NeoBazar 62,000 music distribution libraryNo. 1 K-pop distributor (M/S 26%)Media80 Top mediaDigitalized150Top-tier actors creative talentscreative network( 6 Management (Producers/Writers (Youtube creator./Directors)CMM2))agencies)6 movieproductionnetwork in-house TVshow studioFrom 2021 to 2023, 250 original video titles, 15 movie /TV soap operas, 240 digital originals, 70 minutes dailynew episodes1) CIC : Company in Company2) CMM : Celebrity-owned Media ManagementCeleb. ArtistAgencyBHSoop Story &PicturesMediaMegaMonster (8)Media(7)IP Expansion (7) Commerce (2)24
Kakao EcosystemKakao BusinessFinancial Overview25
RevenueQ4 Revenue YoY 46% / QoQ 12%Mix – Platform 53% : Content 47%PlatformRevenue BreakdownContent(in billion KRW)Talk Biz1,235.11,100.4Platform952.9847.6Portal Biz868.4657.0554.4492.7444.1(52%)441.8(53%)New 02Q20546.0578.1(50%)(47%)3Q204Q20Talk Commerce (Talk Gift Shop,Talk Store, Makers, etc.)Daum PC Daum MobileKakao Story/Style/PageOther Subsidiaries’ AdMobility Pay EnterpriseMisc. (Other Subsidiaries)GameMobile PC Kakao VXMusicMelon Digital music distributionKakao Music Ticket(51%)ContentKakaoTalk Ad (Bizboard,Talk Channel, Emoticon, etc.)PaidContentKakao PagePiccomaDaum WebtoonKakao FriendsIP BusinessKakao M (Excluding digital musicand Othersdistribution)26
Platform / ContentPlatform YoY 48% / QoQ 19%Content YoY 43% / QoQ 6%Platform(in billion KRW)Talk BizPortal BizNew Biz657.0ContentGame(in billion KRW)MusicPaid ContentIP Business and 04Q2026%35%33%26%23%23%4Q191Q202Q2051%3Q204Q2027
Platform Talk Biz Portal Biz New BizTalk Biz YoY 63% / QoQ 27%High revenue growth thanks to peak seasonality and solid growth ofBizboard, overall GMV increase of Commerce platformPortal Biz YoY -9% / QoQ 1%YoY revenue decline due to prolonged COVID19 impactNew Biz YoY 97% / QoQ 17%Continued rapid top-line growth thank to T-blue franchise expansion ofMobility, and growth of payment and financial service segments of PayTalk Biz(in billion KRW)Portal Biz(in billion KRW)New Biz(in billion Q204Q19148.8174.0100.51Q202Q203Q204Q2028
Content Game MusicYoY growth led by new launch effect of ‘Guardian Tales’ in Q3, and ‘Elyon’in Q4 Mobile 20%(y)/-22%(q), PC 45%(y)/ 18%(q), Kakao VX 62%(y)/ 15%(q)Game YoY 33% / QoQ -6%Music YoY 1.2% / QoQ -0.4%GameSteady revenue trend with solid paying user base of more than 5 million(in billion KRW)MobilePCMusic(in billion KRW)Kakao %61%51%56%4Q1946%44%1Q202Q203Q204Q2029
Content Paid Content IP Business and OthersPaid Content YoY 233% / QoQ 10%Huge YoY growth with low base effect of Q4 2019 Kakao Page 31% (y) / 8% (q), Piccoma 12% (q)IP Biz and Others YoY 25% / QoQ 30%Paid Content(in billion KRW)Kakao PageRevenue growth from sales increase of video productionand solid album salesIP Business and Others(in billion KRW)Piccoma163.6148.449%119.048%103.6 1)97.041%AnnualAdjustment .71Q202Q2091.549.24Q194Q191) By implementing K-IFRS to Kakao Japan in 4Q19, the total annual adjustment for FY2019 (W54.4bn) were reflected into Piccoma's 4Q19 revenue.3Q204Q2030
(in billion KRW)4Q193Q20Change4Q20YoYTotal k Biz221.6248.4360.3Portal 9.4%10.3%12.1%Net Profit-441.9145.2-201.8Controlling Interests-423.0139.8-195.1-18.95.5-6.6New BizPaid ContentIP Business and OthersOperating ExpensesOperating ProfitMargin (%)Non-controlling 6%1%-0%233%10%25%30%41%11%88%25%2.7%pt1.2%pt- Turn-to-Loss- Turn-to-Loss- Turn-to-Loss31
(in billion KRW)201820192020YoYTotal 2,145.9Talk Biz421.1649.81,117.8Portal Biz495.4523.6477.9New 7.4495.5Music532.9586.6612.6Paid 73,700.772.9206.8456.03.0%6.7%11.0%Net Profit15.9-341.9Controlling Interests47.9-301.0167.1 Turn-to-Profit149.6 Turn-to-Profit-32.0-40.917.5 Turn-to-ProfitContentIP Business and OthersOperating ExpensesOperating ProfitMargin (%)Non-controlling Interests 35% 50% 72%-9%111%23%25%4%78%6%29%121% 4.3%pt32
(in billion %Labor Cost205.0239.3265.530%11%Cost of Revenue340.4463.7491.644%6%Outsourcing /Infrastructure106.6113.9145.136%27%Marketing Expense41.576.387.5111%15%Depreciation andAmortization ating Expenses33
(in billion 1.5919.931%1,079.51,368.01,746.428%Outsourcing /Infrastructure314.4360.1457.727%Marketing Expense187.3151.2232.354%Depreciation andAmortization Cost138.1220.6265.320%82.961.879.128%Operating ExpensesLabor CostCost of RevenueMisc.34
ProfitsOperating Profit YoY 88% / QoQ 25%OP growth led by solid top-line growth of core biz andbottom-line improvement of new bizNet LossNet loss booked, despite substantial OP improvement,due to KRW 454B of impairment loss on intangible assetsOperating Profit(M)(in billion KRW)Net Profit(M)(in billion 9.2%12.1%9.4%10.2%10.3%10.9%Q4 Impairment Losson Intangible Q191Q202Q203Q204Q204Q191Q202Q203Q204Q2035
CapEx / EmployeesCapEx YoY 1% / QoQ -20%Employees YoY 2,043 / QoQ 819CapEx(in billion KRW)EmployeesIntangible(# of people)KakaoSubsidiariesProperty and Equipment10,644CapEx to 732,3282,6344Q204Q191Q202Q203Q204Q2036
Financial Statements Summary - ConsolidatedConsolidated Income Statement(in billion KRW)Total RevenuePlatformTalk BizPortal BizNew BizContentGameMusicPaid ContentIP Business and OthersConsolidated Statement of Financial 8.761.666.878.218.119.122.320.317.4Operating Profit79.688.297.8120.2149.8Margin (%)9.4%10.2%10.3%10.9%12.1%Operating ExpensesLabor CostCost of RevenueOutsourcing / InfrastructureMarketing ExpenseDepreciation andAmortization CostMisc.Other Non-OperatingIncomeOther Non-OperatingExpensesFinancial IncomeFinancial ExpensesEquity-method -2.3Profit before Income TaxIncome 0Net ProfitControlling InterestsNon-controlling 226.3EBITDAR1)1) EBITDAR: Rental expenses are included in lease amortization from Q1 2019 (EBITDA till FY2018)(in billion KRW)Current AssetsCash and Cash EquivalentsS-T Financial InstrumentsAccount ReceivableOther Current Financial AssetsOther Current Non-Current AssetsInvestments in Associates andJoint VenturesTangible AssetsIntangible AssetsOther Non-current -503.7Total Assets7,959.58,737.311,911.6Current LiabilitiesAccount Payable and OtherpayableShort-term BorrowingsIncome Tax PayableOther Current ce AssetsNon-Current LiabilitiesNon-Current Finance LeaseObligationsDeferred Income Tax LiabilitiesOther Non-Current LiabilitiesFinance AssetsTotal LiabilitiesPaid-in CapitalCapital SurplusOther Accumulated EarningsAccumulated OtherComprehensive IncomeRetained EarningsMinority InterestTotal EquityTotal Liabilities & Equity2019.12.312020. 7.3252.5227.6294.0419.57,413.811,911.6 37
Financial Statements Summary - ParentIncome Statement(in billion KRW)4Q191Q202Q203Q204Q20Total Revenue431.5406.6415.1449.5508.0Operating 5.8188.7191.8200.2211.3210.2Outsourcing /Infrastructure43.042.750.043.155.8Marketing Expense14.33.14.05.07.5Depreciation andAmortization Cost29.130.828.530.837.64.84.24.85.34.7Labor CostCost of RevenueMisc.Operating ProfitMargin (%)Other Non-OperatingIncomeOther Non-OperatingExpensesFinancial IncomeFinancial ExpensesProfit before Income TaxIncome TaxNet 327.716.312.927.5-373.255.734.177.1-281.8(in billion KRW)Current AssetsCash and Cash EquivalentsS-T Financial InstrumentsAccount ReceivableOther Current 311,014.0647.115.695.0256.32020. 12.311,782.41,356.965.5120.5239.5Non-Current AssetsInvestments in Associates,Subsidiaries and Joint VenturesTangible AssetsIntangible AssetsOther Non-current otal Assets6,202.86,484.47,320.3Current LiabilitiesAccount Payable and OtherpayableShort-term BorrowingsIncome Tax PayableOther Current ,858.36,484.45,317.17,320.3Non-Current LiabilitiesNon-Current Finance LeaseObligationsDeferred Income Tax LiabilitiesOther Non-Current LiabilitiesTotal LiabilitiesPaid-in CapitalCapital SurplusOther Accumulated EarningsAccumulated OtherComprehensive IncomeRetained EarningsTotal EquityTotal Liabilities & EquityEBITDAR1)97.497.184.4103.11) EBITDAR: Rental expenses are included in lease amortization from 1Q 2019 (EBITDA till FY2018)144.538
Download Registration Customer Service . Mortgage-free credit loan Loan product only for mid-to-low credit profilers Proprietary credit scoring model to assess . Comics CIC1) 8,500 Webtoon / Web Novel original IPs Daum Webtoon CIC 10 in-house studio / network of subsidiaries &
