fy 2016 earnings result - innocean worldwide · the financial statements on this presentation is...

FY 2016 Earnings Result

The Financial statements on this presentation is prepared in accordance with Korean International Financial Reporting

Standards(“K-IFRS”). And for the purpose of comparison, the accompanying consolidated financial statements as of FY 2016 are

prepared and presented by reflecting the K-IFRS transition adjustments.

This document is prepared with unaudited financials for investors’ information. Therefore, some numbers may be revised upon

the review of independent auditors of INNOCEAN Worldwide.

Disclaimer

INNOCEAN Investor Relations 2017

Table of Contents

1. 4Q 16 / FY2016 Earnings Summary

2. 4Q 16 / FY2016 Earnings Analysis

3. FY 2016 Key Achievement

4. FY 2016 Business Update

5. 2017 Market Outlook

6. 2017 Growth Strategy

Appendix. Summary Financial

4INNOCEAN Investor Relations 2017

1. 4Q 2016 / FY 2016 Earnings Summary

“ Earnings growth through business coverage expansion and new client development”

Gross Profit 108.9 (+12.3%)CANVAS 20.3

381.3 (+20.0%)CANVAS 50.8

Operating Profit 31.4 (△11.7%)CANVAS 6.6

99.4 (+7.0%)CANVAS 5.5

Non-OperatingIncome 1.2 (△64.4%) 10.0 (△30.9%)

Earnings Before

Tax32.6 (△ 16.2%) 109.5 (+1.9%)

Net Income 21.2 (△26.6%) 78.0 (0.0%)

4Q 2016 FY 2016

*Net Income to Parent CompanyKRW 16.1 bn (△ 39.9%)

*Net Income to Parent Company: KRW 65.3 bn (△ 6.7%)

(Unit: KRW billion) (Unit: KRW billion)


132.5 129.2

252.1

2015 2016

HQ Overseas Column1

185.2

+ 20.0%(Canvas +16.0%)

47.0

50.0 71.1

4Q 2015 4Q 2016

HQ Overseas

37.8

4Q 2016

HQ : Decrease of captive / non-captive volume due to economic downturn

Overseas : YoY +42% lead by Genesis effect, Canvas profit contribution, non-captive volume expansion

FY 2016

HQ : YoY Δ2.5% due to 2H economic downturn

Overseas : YoY +36% lead by Genesis effect, Canvas contribution, non-captive volume

97.0

108.9+12.3%(Canvas +20.9%)

2. 4Q 2016 / FY 2016 Earnings Analysis- Gross Profit

Gross Profit

4Q 2016 FY 2016 (Unit: KRW billion)(Unit: KRW billion)

317.7

381.3


Europe

• 4Q KRW 10.4bn(△6.4%)

• 2016 KRW47.0bn(+10.2%)

EM

• 4Q KRW7.3bn(+9.5%)

• FY2016 KRW26.5bn(+14.3%)

China

• 4Q KRW 3.4bn(△41.4%)

• FY2016 KRW 14.6bn(△16.8%)

Americas

• FY2016 KRW165.2bn(+61.1%)

※ Excluding CANVAS KRW 114.4bn(+11.5%)

HQ

• 4Q KRW 37.8bn(△19.7%)

• FY2016 KRW129.2bn(△2.5%)

• 4Q KRW50.4bn(+85.3%)

※ Excluding CANVAS KRW30.0bn(+10.5%)

2. 4Q 2016 / FY 2016 Earnings Analysis - Regional

• HQ : 129.2(△2.5%)

• Overseas : 253.3* (+36.2%)

33%

42%

12%

7%

7%HQ

Americas

Europe

China

EM

*

*Including China JV(Equity Method)

※ Overseas Entities

AmericasUSA (IWA, Canvas) / Canada / Brazil / Mexico

Europe UK / Germany / Italy / Spain / France

ChinaBeijing/ Shanghai (2), Innocean CBAC in Beijing (equity method)

EmergingMarkets

Russia /Turkey / India / Australia / Dubai

※ Gross Profit Contribution by Region

※ Before eliminating intercompany transaction


78 78

2015 2016

2. FY2016 Earnings Analysis- Profit & Loss

162.8 203.9

61.9

78.0

2015 2016

Labor Cost Other Expenses

281.9

224.7

SG&A

• SG&A : KRW281.9bn (+25.4%)

※ Excluding Canvas: +5.2%

• Labor Cost : KRW 203.9bn (+25.3%)

• ※ Excluding Canvas +8.7%

• Other Expenses : KRW 78bn (+25.8%)

Net IncomeOperating Income

• Operating Income : KRW 99.4bn (+7.0%)

Canvas: KRW 5.5bn

• Net Income : KRW78.0bn (+0.0%)

Non-operating income: KRW 10 bn(△30.9%)※ IW Beijing – Amortization of Goodwill △KRW 3.7bn

Net Income to Parent Company:

KRW 65.3 bn (△6.7%)

+25.4%

92.9

99.4

2015 2016

Canvas5.5+7.0% 0.0%

(Unit: KRW billion)


3. FY2016 Key Achievements

1) Media planning & buying for HMG & Genesis client

Canvas Worldwide: Integrated media service in U.S.

1) #1, #5, #6 place in the 2016 Super Bowl Ad Meter

Building Reputation&Non-captive development Digital Business Expansion

■ Employees Status- FY2015 : 1,509 (Domestic: 652, Overseas:857) → FY2016: 1,799 (Domestic: 667, Overseas:1,132)

1) Programmatic Buying - Korea/Canada/Australia

2) New client development in overseas

2) Successful first year result- GP KRW 50.8bn, OP/GP 10.8%

2) Data Analytics - IWA Data Science

- HQ Digital Command Center


4. FY2016 Business Update: Non-Captive

FY 2016 New Client

New Client of Canvas

■ HQ: 33% of GP

■ Overseas: 6% of GP

Emerging MarketAmericas Europe China

zz

zz

zz

Food/Pharmaceutical

Construction/ Shipbuilding

Financials

Retail

Internet/ e-commerce/Game

Fashion/ Cosmetics/ Furniture

Auto/ Auto Parts

Electronics/ Security

67%94%

33%6%

HQ Overseas

http://www.hillshome.com.au/

http://www.hillshome.com.au/


10%

15%

26%

29%

2013 2014 2015 2016

Enhanced shareholder-friendly dividend policy in 2016

Dividend Trend

2016

4. 2016 Business Update: 2016 Dividend


5. 2017 Market Outlook

■ Korea - Expected to grow around 2%, similar level to that of 2017 Korea GDP annual growth rate*- Acceleration of digital growth lead by mobile channel

■ Global- Expected to grow around 4.5%, forecasted by Zenithoptimedia

- Substantial acceleration towards Programmatic Buying

[2017 Ad Industry]

■ HMG Emerging market turnaround, new plant full year effect

■ Hyundai Genesis / KIA premium/ SUV/ Green car effect

[Opportunity]

■ Continuation of global / domestic economic uncertainty

■ Possibility of marketing budget decrease of captive client

[Threat]

*[Source: Korea Economic Research Institute, 2017]


6. 2017 Growth Strategy

■ Business Coverage Expansion

■ Increase of GP/OP contribution from Canvas

■ Scale growth through M&A

■ Expanding Digital - Holistic Digital Service

■ Diversifying Contents- Space Experience Marketing- Contents Development(Sports, culture, entertainment)

[ Sustainable Organic Business & Inorganic Growth ]

[Acceleration of Global Business]

[Non-Captive] [New Business]

■ Organic growth

■ Canvas platform

■ Client Acquisition throughM&A


1,430.5 1,673.9

1,319.7 1,549.9

586.6 668.6

700.8 847.0

32.3 34.3

110.8 126.1

806.9 995.7

789.1 975.3

739.4 931.2

49.7 44.1

17.8 20.3

13.6 16.8

4.2 3.5

623.6 678.3

■ Balance Sheet (K-IFRS)



■ Income Statement (K-IFRS)

2015 2016 2015.4Q 2016.4QYoY

317.7 381.3 97.0 108.9 +12.3%

Gross Profit

excluding Canvas317.7 330.5 97.0 88.6 △8.7%

224.7 281.9 61.4 77.5 +26.2%

92.9 99.4 35.6 31.4 △11.7%OP/ GP 29.3% 26.1% 36.7% 28.9% -

Operating Profitexcluding Canvas

92.9 94.0 35.6 24.9 △30.1%

OP/GP 29.3% 28.4% 36.7% 28.1% -

14.6 10.0 3.3 1.2 △64.4%

107.5 109.5 38.9 32.6 △16.2%

29.4 31.5 9.9 11.4 +14.1%

78.0 78.0 29.0 21.2 △26.6%

Net Income to Parent 70.0 65.3 26.7 16.1 △39.9%



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