Internet Initiative Japan Inc. · TSE:3774
Internet Initiative Japan — Q1 FY2004 Earnings Presentation
17 slides from Internet Initiative Japan's earnings presentation, Aug 10, 2004
Slide 1: First Quarter Results for the Year Ending March 31, 2005
Internet Initiative Japan Inc. First Quarter Results for the Year Ending March 31, 2005 August 10, 2004 Statements made in this material regarding IIJ's or management's intentions, beliefs, expectations, or predictions for the future are forward-looking statements that are based on IIJ's and managem
Slide 2: Highlights, By Service, Future Prospects
Highlights By Service Future Prospects © 2
Slide 3: Summary of 1Q04 Results
Highlights Summary of 1Q04 Results (JPY millions) 1Q04 1Q03 YoY 4Q03 QoQ % change % change Total Revenues 8,675 8,344 4.0% 11,617 (25.3%) Total Costs 7,443 7,868 (5.4%) 9,915 (24.9%) SG & A Expenses 1,284 1,585 (19.0%) 1,274 0.8% Operating income (100) (1,206) (91.7%) 350 (128.7%) (loss) Net income
Slide 4: Revenues, Costs and Gross Margin
Highlights Revenues, Costs and Gross Margin (JPY million) (%) Connectivity and VAS revenues have 15,000 Total Revenues 30 been stable. Decrease of Connectivity Connectivity and Value-added Services (VAS) Gross Margin revenues is largely covered by growth 23.9 23.7 SI Gross Margin in VAS revenues. 20
Slide 5: Operating and Net Income (Loss)
Highlights Operating and Net Income (Loss) Operating Income (Loss) Net Income (Loss) (JPY millions) (JPY millions) 2000 0 -2000 -4000 -6000 -8000 FY2002 FY2003 FY2004 -10000 FY2002 FY2003 FY2004 Minimized 1Q operating loss, which is typically the lowest Significant bottom line improvement since FY20
Slide 6: Outlook for 2Q04 and FY2004
Highlights Outlook for 2Q04 and FY2004 Differentiating itself from the competition through its advanced technology, IIJ is expanding its business and strengthening its market presence by providing reliable network connectivity solutions, including SI and VAS solutions such as internet security, mail
Slide 7: Developments
Developments July 23, 2004: filed annual report on Form 20-F for the year ended March 31, 2004 with the US SEC. It includes an unqualified audit opinion with respect to its financial statements for the year ended March 31, 2004. On July 29, 2004: IIJ’s ticker symbol restored to its original symbol “
Slide 8: By Service
Highlights By Service Future Prospects © 8
Slide 9: Connectivity Services
By Service Connectivity Services Connectivity service revenues decreased by 10.2% YoY and 4.9% Revenues QoQ. The trend of declining unit prices for connectivity services (JPY millions) and the shift to lower-cost broadband circuits has continued. 5000 The number of connectivity contracts has steadil
Slide 10: Value-added Services
By Service Value-added Services VAS revenues increased by 20.2% YoY and 7.5% QoQ. Revenues (JPY millions) Steadily increasing revenues, from services such as security, 2000 network outsourcing, server outsourcing, data centers etc. 1800 592 536 525 537 Security service base of approximately 1,200 cu
Slide 11: IIJ's Value-added Services
By Service IIJ’s Value-added Services [Security] [Network Outsourcing] [Server Outsourcing] Protection of system against inappropriate Provision of equipment to connect Providing mail and mail distribution and, Internet originated access or attacks to the Internet with configuration, other web serve
Slide 12: Focusing on Multi-site Connectivity (Network Integration)
Focusing on Multi-site Connectivity By Service (Network Integration) IIJ Group Data Center/Customer Retail Stores etc. (50-over 1000) Equipment Sales/VAS revenues Headquarter VAS/SI revenues (SMF) (Sale or rental of SEIL) Original technology (patent pending) Originally developed/highly profitable SM
Slide 13: Examples of multi-site connectivity
By Service Examples of multi-site connectivity An Oil Company A Financial Institution • Ongoing project to expand client’s information management systems to better manage gas stations and customer Integration and operation of internet based network with network for over 4,000 retail outlets througho
Slide 14: Systems Integration
By Service Systems Integration Although IIJ’s first quarter SI revenues tend to be low, Revenues the revenues from operational outsource service increased (by 15.8% QoQ, 38.3% YoY) and contributed to the gross margin improvement. 6000 IIJ received several orders for the reconstruction of high 5000 3
Slide 15: Cross-selling Rates
By Service 1Q04 1Q03 4Q03 VAS Cross-selling Rate *1 82.3% 82.3% 79.5% SI Cross-selling Rate *2 66.0% 75.0% 66.0% *1 Percentage of customers to use both connectivity services and value-added services. Largest 1,000 customers only *2 Percentage of SI customers to use connectivity services in largest 1
Slide 16: Future Prospects
Highlights By Service Future Prospects © 16
Slide 17: Future Prospect
Future Prospect Business Environment Increased Use Corporate Trend Requirement of Japan’s economy is recovering Increasing corporate broadband use higher reliability of the Internet Corporate IT investment is showing Increasing demand for operational outsource the sign of this recovery of services d
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