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1

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


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


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


Japan

Localized R&D and operation support

Philippines

Customer service center

Thailand


Indonesia


Canada


USA

IT and localized operation support

Brazil


Italy

Localized R&D training and operation support

Spain


SingaporeGroup headquarters; R&D and operation center

Belarus


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.


與時俱進 • 不忘初心 7

Annual Financial Review



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


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


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


250mn

• MAU: 3.4mn


Castle Clash

Strategy Game

• Launched in Dec. 2018

• Available in 21

languages


6.9mn

• MAU: 180k


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


12mn

• MAU: 400k


Conquerors:

Golden Age

Strategy Game

IGG revenue by platforms

Revenue Distribution

Revenue

distribution across

platforms in 2H19

remains stable

compared to 1H19


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


Capital Expenditures Cash & Cash Equivalents

Strong Cash Position


(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.


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


• 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%


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%


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


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


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


New Title – Project FF

Tower Defense Game


22

MOBA Game


New Title – Project DB

New Title – Project Princess


Female

Oriented

Game



New Title – Project HF

Simulation Game



New Title – Project MF

Casual Game



Thanks！


IR Contact

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