Slide 1: Trend Micro FY2013.3Q Results
Trend Micro FY2013.3Q Results Mahendra Negi COO/CFO, Representative Director November 12, 2013 11/11/201 Copyright © 2013 Trend Micro Incorporated. All rights reserved. 3 1
Slide 2: Forward Looking Statements
Forward Looking Statements Certain Statements that we make in this presentation are forward-looking statements. These forward- looking statements are based upon management’s current assumptions and beliefs in light of the information currently available to it, but involve known and unknown risks and
Slide 3: FY2013. 3Q Financial Highlight
FY2013. 3Q Financial Highlight （Third quarter ended September 30, 2013） 11/11/2013 Copyright © 2013 Trend Micro Incorporated. All rights reserved. 3
Slide 4: Q3 Consolidated Results
Q3 Consolidated Results (in million Yen) Three months YoY ended Sep 30, 3Q2012 3Q2013 growth Net sales 23,836 27,069 + 14% Cost of sales 4,390 4,890 + 11% Operating expenses 13,337 14,161 + 6% Operating income 6,108 8,017 + 31% (Margin) （ 26%） （ 30%） Ordinary income 6,233 8,064 + 29% Net income 4,19
Slide 5: Progress (6 months)
Progress （6months） (in million Yen) Revenue Operating Income 120,000 30,000 (forecast) 107,200 (forecast) 26,400 100,000 25,000 93,839 21,786 22,407 80,000 79,885 20,000 69,526 16,611 60,000 15,000 13,769 52,815 45,689 40,000 10,000 10,503 25,783 7,338 20,000 22,630 5,000 5,568 FY2012 FY2013 FY2012
Slide 6: Q3 USD based Results (Non-GAAP)
Q3 USD based Results (Non-GAAP) (unaudited) Three months (in thousand USD) ended Sep 30, 3Q2012 3Q2013 YoY change Net sales 303,188 273,540 - 10% Cost of sales 55,846 49,421 - 12% Operating expenses 169,643 143,106 - 16% Operating income 77,698 81,012 + 4% Ordinary income 79,284 81,492 + 3% Net Inco
Slide 7: Net Sales Growth by Region
Net Sales Growth by Region (in million Yen) (unaudited) 13,000 12,109 12,196 + 1% 12,000 3Q2012 11,000 3Q2013 10,000 9,000 8,000 + 26% 7,000 6,000 6,001 + 31% 5,138 5,000 4,765 + 21% 4,000 3,916 3,083 3,000 2,555 + 33% 2,000 1,000 489 649 0 Japan North America Europe Asia Pacific Latin America (In a
Slide 8: Net Sales Growth by Region (constant currency)
Net Sales Growth by Region If currency exchange rates used for 3Q2012 were used for 3Q2013: (in million Yen) (unaudited) 13,000 + 1% 12,109 12,196 (0) * ( ) : difference from GAAP base 12,000 11,000 3Q2012 10,000 3Q2013 9,000 + 0% 8,000 (-1,231) - 2% 7,000 (-1,281) + 2% 6,000 (-484) 5,000 4,765 4,76
Slide 9: Decomposition of Revenue (vs. last year)
Decomposition of Revenue (vs. last year） (unaudited) Exchange impact + 3,102M North America Asia Pacific Europe 2013Ｑ3 Latin America Japan + 43M + 4M - 59M Net + 55M sales + 86M 27,069M 2012Ｑ3 Net sales 23,836M (Non-GAAP) Confidential | Copyright 2012 Trend Micro Inc. 9 9
Slide 10: Constant currency Revenue growth
Constant currency Revenue growth (YoY) (unaudited) 20% 15% 10% 5% 0% 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 20 20 20 20 20 20 20 20 20 20 20 20 20 20
Slide 11: Sales by Segment
(in million Yen) Sales by Segment 13,000 12,000 Growth rate (YoY) - 2% 11,000 Consumer + 4% 10,000 All Enterprise + 20% 9,000 6,123 8,000 7,000 6,000 + 4% + 18% 359 5,000 2,414 + 30% 4,000 + 31% + 5% 3,000 786 6,072 4,779 + 32% 2,000 3,587 + 27% + 510% 1,000 2,297 23 0 626 + 29% Japan North America
Slide 12: Cloud related Gross sales
“Cloud related” Gross sales Revenue Deep Security / Hosted / CPVM / IDF 3,000 2,500 2,000 JPY'M 1,500 1,000 500 - 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 (Non-GAAP) “Notice” As above numbe
Slide 13: % share by region
% share by region 3Q2012 3Q2013 23,836 million Yen 27,069 million Yen Latin Latin Asia America Asia America Pacific Pacific 2% 2% 11% 11% Europe Europe Japan Japan 16% 19% 51% 45% North North America America 20% 22% (In accordance with Japan GAAP) Confidential | Copyright 2012 Trend Micro Inc. 13
Slide 14: For reference: Pre-GAAP
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) (in million Yen) (unaudited) + 2% 12,712 12,923 3Q2012 3Q2013 + 19% + 44% 5,535 + 26% 4,640 4,274 2,965 3,152 + 30% 2,502 482 625 Japan North America Europe Asia Pacific Latin America (Non-GAAP) “Notice” Pre-GAAP means Revenue befo
Slide 15: For reference: Pre-GAAP (constant currency)
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) If currency exchange rates used for 3Q2012 were used for 3Q2013: (unaudited) (in million Yen) + 2% 12,712 12,923 3Q2012 3Q2013 - 5% + 9% 4,640 4,396 + 7% 3,217 2,965 2,687 2,502 + 9% 482 524 Japan North America Europe Asia Pacific
Slide 16: Deferred Revenue
Deferred Revenue (in million Yen) 94,000 * Total of current and long term 90,000 88,904 88,360 87,381 86,000 83,751 82,000 78,547 79,744 78,832 78,000 75,456 74,599 74,000 70,000 66,000 62,000 58,000 54,000 50,000 Sep-'11 Dec-'11 Mar-'12 Jun-'12 Sep-'12 Dec-'12 Mar-'13 Jun-'13 Sep-'13 (In accordance
Slide 17: Deferred Revenue by Region
Deferred Revenue by Region (in million Yen) (unaudited) 55,000 50,706 51,258 1% * Total of current and long term 50,000 45,000 June-13 40,000 Sep-13 35,000 30,000 25,000 -3% -4% 20,000 15,000 15,429 14,903 13,368 12,796 1% 10,000 8,113 8,173 -5% 5,000 1,286 1,227 0 Japan North America Europe Asia Pa
Slide 18: Deferred Revenue by Region (constant currency)
Deferred Revenue by Region If currency exchange rates used as of the end of 2Q2013 were used as of the end of 3Q2013: (in million Yen) (unaudited) 55,000 50,706 51,258 1% * ( ) : difference from GAAP base * Total of current and long term 50,000 (0) 45,000 June-13 40,000 Sep-13 35,000 30,000 -3% -7%
Slide 19: Cost
Cost (in million Yen) Stock options / Acquisition related costs Salary & Benefit (unaudited) Office overhead Outside service 22,000 Administration Selling & Marketing Goods / Softw are Amortization & Capitalization 217 20,000 2,917 476 18,000 528 713 562 2,829 16,000 3,137 2,688 2,812 3,051 14,000 2
Slide 20: Pre-GAAP vs Total Costs
Pre-GAAPⅴs Total Costs (unaudited) (in million Yen) Pre-GAAP Total Costs Pre-GAAP Margin 30,000 35% 28,000 31% 29% 26,000 30% 28% 24,000 26,112 27,144 26,511 22,000 24% 26,774 24% 25% 20,000 23,304 18,000 20% 16,000 14,000 15% 12,000 20,601 10,000 18,517 19,052 18,444 17,728 10% 8,000 6,000 4,000 5%
Slide 21: Cash flows
Cash flows (unaudited) (in million Yen) 項目 3Q2012 3Q2013 YoY growth Cash flows from operating activities 4,398 4,627 + 5% Cash flows from investing activities - 15,744 - 4,650 － Cash flows from financing activities - 168 3,662 － Effect of exchange rate changes 58 99 + 70% on cash and cash equivalent
Slide 22: Headcount
Headcount Sep - 2013 Jun - 2013 5,110 5,137 Admin, Admin, Business Process Business Process Sales, Sales, 829 Marketing 804 Marketing Technical 1,381 Technical 1,370 Support Support Research, Research, 1,275 1,294 Development Development 1,625 + 27 1,669 (+ 1%) Latin 67 Latin 67 EMEA EMEA 554 554 Ja
Slide 23: Non-operating & Extra-ordinary Items
Non-operating & Extra-ordinary Items (unaudited) Other income Other expense Exchange loss Interest income 28M -166M Interest expense Gain on reversal of stock option 327M -140M -1M 6M Income Ordinary Income before income taxes 8,064M 8,071M Operating Income 8,017M (Non-GAAP) Confidential | Copyright
Slide 24: Balance Sheet
Balance Sheet (unaudited) (in million Yen) Jun-2013 change Sep-2013 Assets Cash & cash equivalents 65,793 + 4,210 70,003 Account receivable (less allowance for doubtful accounts) 21,110 - 320 20,790 Marketable securities & Securities investments 104,963 + 2,701 107,664 Liabilities Deferred revenue (
Slide 25: Q3 Highlights
Q3Highlights • Recovery in European Enterprise business • Improvement in operating margin Confidential | Copyright 2012 Trend Micro Inc. 25
Slide 26: Q3 Lowlights
Q3 Lowlights • Consumer business remains weak, especially in the US • Pricing pressure on traditional products continues • Sales cycle for strategic products remains long Confidential | Copyright 2012 Trend Micro Inc. 26
Slide 27: FY2013 9months Financial Highlight
FY2013 9months Financial Highlight （January ~ September, 2013） 11/11/201 Copyright © 2013 Trend Micro Incorporated. All rights reserved. 3 27
Slide 28: Consolidated Results (9 months)
Consolidated Results (9 months) (in million Yen) (Progress vs. (Progress vs. Nine months last year’s YoY current year’s ended Sep 30, 2012(Q1-Q3)annual result)2013(Q1-Q3) growth annual forecast) Net sales 69,526 (74%) 79,885 + 15% (75%) Cost of sales 12,936 14,736 + 14% Operating expenses 39,977 43,
Slide 29: Net Sales Growth by Region
Net Sales Growth by Region (in million Yen) (unaudited) 40,000 + 5% FY2012 Q1-Q3 35,000 34,146 35,905 FY2013 Q1-Q3 30,000 25,000 + 26% 20,000 17,567 + 23% 15,000 13,893 14,940 12,114 + 22% 9,509 10,000 7,811 + 26% 5,000 1,559 1,962 0 Japan US Europe Asia Pacific Latin America (In accordance with Jap
Slide 30: Net Sales Growth by Region (constant currency)
Net Sales Growth by Region If currency exchange rates used for 2012（Q1-Q3） were used for 2013（Q1-Q3）: (in million Yen) (unaudited) 40,000 + 5% * ( ) : difference from GAAP base 35,905 FY2012 Q1-Q3 (0) 35,000 34,146 FY2013 Q1-Q3 30,000 + 4% - 1% 25,000 (-3,154) (-3,001) 20,000 15,000 13,893 14,413 +
Slide 31: For reference: Pre-GAAP
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) (in million Yen) (unaudited) + 1% FY2012 Q1-Q3 38,211 38,739 FY2013 Q1-Q3 + 22% 16,862 + 21% + 22% 13,850 13,566 11,182 9,325 7,622 + 21% 1,598 1,936 Japan US Europe Asia Pacific Latin America (Non-GAAP) “Notice” Pre-GAAP means Rev
Slide 32: For reference: Pre-GAAP (constant currency)
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) If currency exchange rates used for 2012(Q1-Q3) were used for 2013(Q1-Q3): (in million Yen) (unaudited) + 1% FY2012 Q1-Q3 38,739 38,211 FY2013 Q1-Q3 + 0% - 3% 13,850 13,858 + 4% 11,182 10,871 7,622 7,898 + 3% 1,598 1,650 Japan Nort
Slide 33: FY2013 Cost (9 months)
FY2013 Cost (9 months) (in million Yen) (unaudited) YoY Growth 70,000 Goods / Software & Capitalization - 35% 60,000 Selling & Marketing 1,406 - 5% 2,177 8,436 50,000 Administration + 17% 8,882 8,336 40,000 Outside service + 8% 7,147 5,439 5,052 4,147 30,000 Office overhead + 10% 3,755 Salary & Bene
Slide 34: Projection for FY2013 Annual (Unchanged)
Projection for FY2013 Annual （Unchanged） (unaudited) For FY2013 Expected (in million Yen) Jan - Dec, 2013 YoY growth Net Sales 107,200 + 14% Operating Income 26,400 + 18% Ordinary Income 28,100 + 24% Net Income 17,100 + 27% (In accordance with Japan GAAP) In case of excluding a foreign exchange impa
Slide 35: Thank You
Thank You 35
Slide 36: Appendix: Quarterly Chart (1)
Appendix (unaudited) Quarterly Chart (1) (in million Yen) FY2012 FY2013 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Ｎｅｔ sale s 22,630 23,058 23,836 24,313 25,783 27,032 27,069 Co st o f sale s 4,058 4,488 4,390 4,574 5,048 4,796 4,890 O pe r atin g e xpe n se s 13,003 13,636 13,337 13,943 13,396 15,804 14,161 O pe r at
Slide 37: Appendix: Quarterly Chart (2)
Appendix Quarterly Chart (2) (unaudited) (in million Yen) FY2012 FY2012 （ S ale s by r e gio n ） Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Japan 10,874 11,162 12,109 11,656 11,742 11,966 12,196 US 4,369 4,758 4,765 4,975 5,480 6,085 6,001 Eu r o pe 4,193 4,003 3,916 4,282 4,779 5,022 5,138 Asia P ac ific 2,615 2,640