Slide 1: Trend Micro FY2013.1Q Results
Trend Micro FY2013.1Q Results Mahendra Negi COO/CFO, Representative Director May 9, 2013 Confidential | Copyright 2012 Trend Micro Inc. 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. 1Q Financial Highlight
FY2013. 1Q Financial Highlight （First quarter ended March 31, 2013） Confidential | Copyright 2012 Trend Micro Inc. 3
Slide 4: Consolidated Results
Consolidated Results (unaudited) (in million Yen) Three months YoY +/- ended Mar 31, 1Q2012 (Forecast) 1Q2013 growth Forecast Net sales 22,630 (24,700) 25,783 + 14% (+ 1,083) Cost of sales 4,058 5,048 + 24% Operating expenses 13,003 13,396 + 3% Operating income 5,568 (5,600) 7,338 + 32% (+ 1,738) (M
Slide 5: USD based Results (Non-GAAP)
USD based Results (Non-GAAP) (unaudited) Three months (in thousand USD) ended Mar 31, 1Q2012 1Q2013 YoY change Net sales 284,915 278,829 - 2% Cost of sales 51,091 54,594 + 7% Operating expenses 163,713 144,872 - 12% Operating income 70,110 79,362 + 13% Ordinary income 73,077 82,694 + 13% Net Income
Slide 6: Vs. Projection analysis (Operating income)
Vs. Projection analysis（Operating income） (unaudited) Cost side Sales side - 655M •Marketing cost ↓ 2013Ｑ1 + 1,083M •Stock option cost ↓ Actual •Japan ↑ 2013Ｑ1 •US ↑ 7,338M Projection •EMEA ↓ 5,600 M (Non-GAAP) Confidential | Copyright 2012 Trend Micro Inc. 6 6
Slide 7: Net Sales Growth by Region
Net Sales Growth by Region (in million Yen) (unaudited) 13,000 + 8% 12,000 11,742 11,000 10,874 1Q2012 10,000 1Q2013 9,000 8,000 + 25% 7,000 + 14% 6,000 5,480 5,000 4,779 4,369 4,193 + 20% 4,000 3,143 3,000 2,615 + 10% 2,000 1,000 577 637 0 Japan North America Europe Asia Pacific Latin America (In a
Slide 8: Net Sales Growth by Region
Net Sales Growth by Region If currency exchange rates used for 1Q2012 were used for 1Q2013: (in million Yen) (unaudited) 13,000 + 8% (0) * ( ) : difference from GAAP base 12,000 11,742 11,000 10,874 1Q2012 10,000 1Q2013 9,000 + 8% 8,000 (-772) - 3% 7,000 (-702) + 3% 6,000 (-443) 5,000 4,708 4,369 4,
Slide 9: Decomposition of Revenue (vs. last year)
Decomposition of Revenue (vs. last year） Exchange impact (unaudited) + 1,976M Latin America Europe Asia Pacific North America + 83M + 3M - 117M 2013Ｑ1 Japan + 338M Net sales + 867M 25,783M 2012Ｑ1 Net sales 22,630M (Non-GAAP) Confidential | Copyright 2012 Trend Micro Inc. 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 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 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20
Slide 11: Sales by Segment
Sales by Segment (in million Yen) 13,000 12,000 Growth rate (YoY) + 14% 11,000 Consumer + 24% 10,000 All Enterprise + 9% 9,000 5,758 8,000 7,000 6,000 + 3% + 63% 5,000 303 + 41% 2,360 4,000 + 12% + 11% 3,000 953 5,984 + 7% 4,475 2,000 3,119 + 25% + 4% 1,000 2,190 23 0 613 + 11% Japan North America E
Slide 12: % share by region
% share by region 1Q2012 1Q2013 22,630 million Yen 25,783 million Yen Latin Latin Asia America Asia America Pacific Pacific 3% 2% 12% 12% Europe Japan Europe Japan 19% 48% 19% 46% North North America America 19% 21% (In accordance with Japan GAAP) Confidential | Copyright 2012 Trend Micro Inc. 12
Slide 13: For reference: Pre-GAAP
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) (in million Yen) (unaudited) + 3% 12,628 13,004 1Q2012 1Q2013 + 14% 5,694 + 10% 4,981 + 21% 4,434 4,013 3,016 2,488 + 1% 618 625 Japan North America Europe Asia Pacific Latin America (Non-GAAP) “Notice” Pre-GAAP means Revenue befor
Slide 14: For reference: Pre-GAAP
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) If currency exchange rates used for 1Q2012 were used for 1Q2013: (unaudited) (in million Yen) + 3% 12,628 13,004 1Q2012 1Q2013 - 2% - 5% 4,981 4,884 + 5% 4,013 3,816 2,622 - 7% 2,488 618 573 Japan North America Europe Asia Pacific
Slide 15: Deferred Revenue
Deferred Revenue (in million Yen) (unaudited) 90,000 * Total of current and long term 87,381 86,000 83,751 82,000 77,928 77,771 79,744 78,832 78,547 78,000 75,456 74,599 74,000 70,000 66,000 62,000 58,000 54,000 50,000 Mar-'11 Jun-'11 Sep-'11 Dec-'11 Mar-'12 Jun-'12 Sep-'12 Dec-'12 Mar-'13 (In accor
Slide 16: Deferred Revenue by Region
Deferred Revenue by Region (in million Yen) (unaudited) 55,000 2% * Total of current and long term 50,000 48,893 49,976 45,000 Dec-12 40,000 Mar-13 35,000 30,000 25,000 10% 4% 20,000 15,061 15,000 13,636 12,154 12,700 6% 10,000 7,889 8,346 10% 5,000 1,176 1,297 0 Japan North America Europe Asia Paci
Slide 17: Deferred Revenue by Region
Deferred Revenue by Region If currency exchange rates used as of the end of 4Q2012 were used as of the end of 1Q2013: (in million Yen) (unaudited) 55,000 2% 48,893 49,976 * ( ) : difference from GAAP base * Total of current and long term 50,000 (0) 45,000 Dec-12 40,000 Mar-13 35,000 30,000 25,000 2%
Slide 18: Cost
Cost (in million Yen) Stock options / Acquisition related costs Salary & Benefit (unaudited) Office overhead Outside service 20,000 Administration Selling & Marketing Goods / Softw are Amortization & Capitalization 18,000 528 713 1,004 562 610 3,137 16,000 2,688 3,051 3,051 2,779 14,000 2,700 2,844
Slide 19: 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% 31% 26,000 29% 30% 24,000 26% 22,000 24% 26,774 24,730 24,430 26,112 25% 20,000 23,304 18,000 20% 16,000 14,000 15% 12,000 10,000 18,517 18,124 18,444 17,728 10% 8,000 17,061 6,000 4,000 5%
Slide 20: Cash flows
Cash flows (unaudited) (in million Yen) 項目 1Q2012 1Q2013 YoY growth Cash flows from operating activities 7,564 4,269 - 44% Cash flows from investing activities - 5,782 8,353 － Cash flows from financing activities - 10,508 - 8,969 － Effect of exchange rate changes 2,984 3,238 + 9% on cash and cash eq
Slide 21: Q1 Highlights
Q1Highlights • Improvement in profitability by controlling costs • Improvement in strategic product deal volume Confidential | Copyright 2012 Trend Micro Inc. 21
Slide 22: Q1 Lowlights
Q1 Lowlights • EMEA macro issues affecting sales cycles • Consumer business in North America remains weak • Pricing pressure on traditional products continues Confidential | Copyright 2012 Trend Micro Inc. 22
Slide 23: Headcount
Headcount Dec - 2012 Mar - 2013 5,137 5,094 Admin, Admin, Business Process Sales, Business Process Marketing Sales, 818 802 Marketing Technical 1,352 Technical 1,386 Support Support Research, Research, 1,345 Development 1,292 Development 1,622 1,614 - 43 Latin 66 (- 1%) Latin 63 EMEA EMEA 556 559 Ja
Slide 24: Non-operating & Extra-ordinary Items
Non-operating & Extra-ordinary Items (unaudited) Exchange loss Other income Other expense Gain on sales of marketable securities Interest expense Gain on reversal of 34M stock option -122M Equity in losses of Interest income 90M affiliated companies -32M -3M 46M -1M 342M Income before income taxes O
Slide 25: Balance Sheet
Balance Sheet (unaudited) (in million Yen) Dec-2012 change Mar-2013 Assets Cash & cash equivalents 54,732 + 8,689 63,421 Account receivable (less allowance for doubtful accounts) 20,895 + 1,079 21,974 Marketable securities & Securities investments 99,402 - 9,802 89,600 Liabilities Deferred revenue (
Slide 26: FY2013 annual forecast assumptions
FY2013 annual forecast assumptions •Japan increases by around 5%, US and Europe increase by around 20% respectively •Non operating income will be 1.6Bn yen and there will be no Extra-ordinary items •Estimated exchange rate: 1USD = 97 yen ( last year: 80 yen) 1EUR = 127 yen ( last year: 103 yen) Conf
Slide 27: Projection for FY2013 Annual
Projection for FY2013 Annual (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 impact (a rule o
Slide 28: Thank you!
Thank you! Confidential | Copyright 2012 Trend Micro Inc. 28
Slide 29: 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 Co st o f sale s 4,058 4,488 4,390 4,574 5,048 O pe r atin g e xpe n se s 13,003 13,636 13,337 13,943 13,396 O pe r atin g in c o me 5,568 4,934 6,108 5,795 7
Slide 30: 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 US 4,369 4,758 4,765 4,975 5,480 Eu r o pe 4,193 4,003 3,916 4,282 4,779 Asia P ac ific 2,615 2,640 2,555 2,864 3,143 Lat in Ame r ic a 57