DeNA : FY2021Q3 Consolidated Financial Results

The following information was originally prepared and published by the Company in Japanese as it contains timely disclosure materials to be submitted to the Tokyo Stock Exchange. This English translation is for your convenience only. To the extent there is any discrepancy between this English translation and the original Japanese version, please refer to the Japanese version.

Consolidated Financial Results

for the Nine Months Ended December 31, 2021

[IFRS]

February 8, 2022

Company name: DeNA Co., Ltd.

Stock exchange listing: Tokyo Stock Exchange

Code number: 2432

URL: https://dena.com/intl/

Representative: Shingo Okamura, President & CEO

Contact: Jun Oi, Member of the Board (CFO), Head of the Corporate Unit

Phone: [phone]

Scheduled date of filing quarterly securities report: February 9, 2022

Scheduled date of commencing dividend payments: ―

Availability of supplementary briefing material on quarterly financial results: Yes

Schedule of quarterly financial results briefing session: Yes (for institutional investors, analysts and the press)

(Amounts are rounded to the nearest million yen.)

1. Consolidated Financial Results for the Nine Months Ended December 31, 2021 (from April 1, 2021 to December 31, 2021)

(1) Consolidated Operating Results			(% changes from the previous corresponding period)
		Revenue	Operating profit	Profit before tax	Profit for the period
		Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
	Nine months ended	99,130	(3.7)	15,565	(38.5)	32,566	6.7	26,940	17.9
	December 31, 2021
	Nine months ended	102,924	12.9	25,320	-	30,513	-	22,847	-
	December 31, 2020
		Profit for the period	Total comprehensive	Basic earnings	Diluted earnings
		attributable to
		income for the period	per share	per share
		owners of the parent
		Millions of yen	%	Millions of yen	%		Yen		Yen
	Nine months ended	26,666	21.6	16,987	(67.8)		223.69		223.45
	December 31, 2021
	Nine months ended	21,937	―	52,779	―		177.35		177.11
	December 31, 2020
(2) Consolidated Financial Position
						Total equity	Ratio of equity
		Total assets	Total equity	attributable to owners	attributable to
						of the parent	owners of the parent
		Millions of yen	Millions of yen	Millions of yen		%
	As of December 31,		321,379		232,913		228,383		71.1
	2021
	As of March 31,		327,121		228,659		223,711		68.4
	2021

2. Dividends

Dividends per share

End of 1st

End of 2nd

End of 3rd

End of

Total

quarter

quarter

quarter

year

Yen

Yen

Yen

Yen

Yen

Fiscal year ended

―

0.00

―

32.00

32.00

March 31, 2021

Fiscal year ending

―

0.00

―

March 31, 2022

Fiscal year ending

March 31, 2022

―

―

(Forecast)

(Notes) 1. Revisions to recently announced dividend forecast: No

2.The dividend forecast for the fiscal year ending March 31, 2022 has not been determined at this time.

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2022 (from April 1, 2021 to March 31, 2022)

The consolidated financial results forecast for the fiscal year ending March 31, 2022 cannot be provided due to the difficulty of reasonably and accurately estimating the figures, but the Company expects its operating profit to decline.

* Notes

1. Changes in Significant Subsidiaries during the Period under Review (changes in specified subsidiaries accompanying changes in scope of consolidation): No
2. Changes in Accounting Policies and Changes in Accounting Estimates
3. 1. Changes in accounting policies required by IFRS: No
   2. Changes in accounting policies other than 1) above: No
   3. Changes in accounting estimates: No
4. Number of Shares Issued (common stock)
5. 1. Total number of shares issued at the end of the period (including treasury stock):

As of December 31, 2021	130,210,945 shares
As of March 31, 2021	130,210,945 shares

2) Total number of shares of treasury stock at the end of the period:

	As of December 31, 2021	11,674,919 shares
	As of March 31, 2021	8,152,593 shares
3) Average number of shares during the period:
	Nine months ended December 31, 2021	119,210,503 shares
	Nine months ended December 31, 2020	123,694,535 shares

(Note) The 191,158 shares of the Company's stock owned by the Stock Grant ESOP Trust account are included in the "Total number of shares of treasury stock at the end of the period" as of December 31, 2021, and the 199,619 shares of the Company's stock owned by the same trust account are included in the "Total number of shares of treasury stock at the end of the period" as of March 31, 2021.

• This report of quarterly consolidated financial results is outside the scope of quarterly review by a certified public accountant or accounting auditor.

• Explanation of the Proper Use of Financial Results Forecast and Other Notes
  (1) Consolidated Financial Results Forecast
  The forward-looking statements herein are based on information available to the Company and certain assumptions deemed reasonable as of the date of publication of this document. They are not intended as the Company's commitment to achieve such forecasts, and actual results may differ significantly from these forecasts due to a wide range of factors.

(2) Dividend Forecast

The Company plans to set the cash dividend forecast for the fiscal year ending March 31, 2022 considering the overall progress in performance and other factors, and promptly announce said expected dividend amount.

(3) Method of Obtaining Supplementary Briefing Material on Financial Results

The Company is planning to hold a briefing session for institutional investors, analysts and the press on February 8, 2022. The briefing materials for this session are scheduled to be posted on the Company's website at the appropriate time for disclosure. In addition, videos and primary Q&A of the briefing session are scheduled to be posted on the Company's website at a later date shortly thereafter.

Appendix
1. Overview of Operating Results and Financial Position	2
(1)	Overview of Operating Results	2
(2)	Overview of Financial Position and Cash Flows	3
(3)	Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information	4
2. Condensed Consolidated Financial Statements and Principal Notes	5
(1)	Condensed Consolidated Statement of Financial Position	5
(2)	Condensed Consolidated Income Statement	7
(3)	Condensed Consolidated Statement of Comprehensive Income	8
(4)	Condensed Consolidated Statement of Changes in Equity	9
(5)	Condensed Consolidated Statement of Cash Flows	10
(6)	Notes on Going Concern Assumption	11
(7)	Notes to Condensed Consolidated Financial Statements	11
	1.	Additional information	11
	2.	Segment information	11
	3.	Earnings per share	14
	4.	Other income	14
	5.	Investments accounted for using the equity method	14
	6.	Significant subsequent events	14

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1. Overview of Operating Results and Financial Position

(1) Overview of Operating Results

The Group has made efforts to enhance corporate value over the mid to long term by working to form an earnings base on the two approaches of working to entertain and to serve and by evolving into a new, unique kind of tech company, encouraging synergy between the two approaches. The Group has also challenged itself to achieve leaps in growth to establish an even stronger business portfolio.

During the nine months ended December 31, 2021 (from April 1, 2021 to December 31, 2021), revenue decreased year-on-year mainly due to the decrease in revenue in the Game Business, despite the growth of the Live Streaming Business and the recovery of the Sports Business compared to the same period of the previous year.

Cost of sales increased year-on-year due to the increase in commission fees, etc., which fluctuate in line with the performance of the Live Streaming Business and the Game Business and primarily increased in line with the growth of the Live Streaming Business.

Selling, general and administrative expenses were unchanged from the same period of the previous fiscal year. Other income, net was ¥6,585 million, decreasing from ¥10,000 million in the same period of the previous fiscal

year. For the nine months ended December 31, 2021, the Company recorded a gain on step acquisitions of ¥2,273 million as a result of the acquisition of all the shares of IRIAM Inc. and compensation of ¥2,090 million for loss on suspension of operations of the Yokohama DeNA BayStars Baseball Club, and included them in other income. In the same period of the previous fiscal year, the Company recorded a gain on transfer in the amount of ¥2,045 million due to an absorption-type company split of businesses related to taxi dispatch apps, etc., and a gain on sales of shares of subsidiaries of ¥7,889 million following the transfer of a portion of the Company's shares in SHOWROOM Inc.

Share of profit of associates accounted for using the equity method was ¥13,098 million, up 1,032.4% year-on- year. This was due to the performance trends of Cygames, Inc. and Mobility Technologies Co., Ltd., the major associates accounted for using the equity method during the nine months ended December 31, 2021, as well as the recording of a one-time gain from the capital increase of Mobility Technologies Co., Ltd. through a third-party allotment, which was conducted during this period.

As a result, revenue of the DeNA Group was ¥99,130 million, down 3.7% year-on-year, operating profit was ¥15,565 million, down 38.5% year-on-year, profit before tax was ¥32,566 million, up 6.7% year-on-year, and profit for the period attributable to owners of the parent was ¥26,666 million, up 21.6% year-on-year.

Business performance by segment is as follows.

1. Game Business
   Revenue of the Game Business was ¥56,003 million, down 18.1% year-on-year, and segment profit was ¥8,531 million, down 41.4% year-on-year.
   During the nine months ended December 31, 2021, both revenue and profit decreased as operations became centered on existing titles and virtual currency consumption decreased year-on-year. To strengthen the earnings base, the Company released new titles and continued to strive to make the cost structure more robust and optimize fixed costs.
2. Sports Business
   Revenue of the Sports Business was ¥12,264 million, up 12.9% year-on-year, and segment loss was ¥579 million, compared with segment loss of ¥1,495 million for the same period of the previous fiscal year.
   Due to the spread of COVID-19, the official professional baseball games in the 2020 season commenced on June 19, 2020, later than a normal season, and first games were held without spectators. The 2021 season, however, began on March 26, 2021 as in a normal year. While some measures still needed to be taken to prevent the spread of COVID-19, such as restrictions on the number of spectators allowed, the performance of the Sports Business recovered from the same period of the previous fiscal year.
3. Live Streaming Business

Revenue of the Live Streaming Business was ¥25,689 million, up 46.8% year-on-year, and segment profit was ¥3,472 million, down 9.4% year-on-year.

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