FY2021Q2 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 Six Months Ended September 30, 2021

[IFRS]

November 9, 2021

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: November 10, 2021

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 Six Months Ended September 30, 2021 (from April 1, 2021 to September 30, 2021)

(1) Consolidated Operating Results				(% changes from the previous corresponding period)
			Revenue	Operating profit		Profit before tax		Profit for the period
	Six months ended	Millions of yen	%		Millions of yen	%		Millions of yen	%		Millions of yen	%
	68,085	(1.0)	13,345	(36.2)	27,834	6.7		22,997	15.5
	September 30, 2021
	Six months ended	68,796	5.4		20,919	314.7	26,097	246.7		19,908	304.6
	September 30, 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
	Six months ended	Millions of yen	%		Millions of yen	%			Yen			Yen
	22,684	18.4		14,144	(66.6)			189.82			189.59
	September 30, 2021
	Six months ended	19,154	299.2		42,356	178.5			154.75			154.54
	September 30, 2020
(2) Consolidated Financial Position
			Total assets		Total equity			Total equity			Ratio of equity
						attributable to			attributable to
									owners of the parent		owners of the parent
	As of September 30,		Millions of yen		Millions of yen			Millions of yen				%
			323,893		230,617		225,479				69.6
	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

Fiscal year ended

Yen

Yen

Yen

Yen

Yen

―

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 treasurystock):

As of September 30, 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 September 30, 2021	11,681,476 shares
3)	As of March 31, 2021	8,152,593 shares
Average number of shares during the period:
	Six months ended September 30, 2021	119,500,509 shares
	Six months ended September 30, 2020	123,778,764 shares

(Note) The 197,771 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 September 30, 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 November 9, 2021. 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

During the six months ended September 30, 2021 (from April 1, 2021 to September 30, 2021), the Group 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 also challenged itself to achieve leaps in growth to establish an even stronger business portfolio.

During the six months ended September 30, 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.

Changes in selling, general and administrative expenses were limited compared to the same period of the previous fiscal year.

Other income, net was ¥5,605 million, decreasing from ¥10,058 million in the same period of the previous fiscal year. For the six months ended September 30, 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 ¥12,303 million, up 397.7% 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 six months ended September 30, 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 ¥68,085 million, down 1.0% year-on-year, operating profit was ¥13,345 million, down 36.2% year-on-year, profit before tax was ¥27,834 million, up 6.7% year-on-year, and profit for the period attributable to owners of the parent was ¥22,684 million, up 18.4% year-on-year.

Business performance by segment is as follows.

1. Game Business
   Revenue of the Game Business was ¥38,808 million, down 16.8% year-on-year, and segment profit was ¥6,398 million, down 42.1% year-on-year.
   During the six months ended September 30, 2021, both revenue and profit decreased as operations became centered on existing titles and virtual currency consumption decreased year-on-year. However, during the second quarter ended September 30, 2021, we made progress in the releases of new titles to strengthen the earnings base.
2. Sports Business

Revenue of the Sports Business was ¥9,439 million, up 41.6% year-on-year, and segment profit was ¥700 million, compared with segment loss of ¥1,024 million for the same period of the previous fiscal year.

The current official professional baseball season began on March 26, 2021. However, games are being played with various measures to prevent the spread of COVID-19, including restrictions on the number of spectators. Since Tokyo 2020 was held during the second quarter ended September 30, 2021, the number of official professional baseball games hosted and held in Yokohama Stadium was fewer than that during this time in an average year.

In the previous season, the official professional baseball games commenced on June 19, 2020, later than a normal season, and at first games were held without spectators due to the spread of COVID-19.

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