Internet Initiative Japan Inc. · TSE:3774

Internet Initiative Japan — H1 FY2009 Earnings Presentation

24 slides from Internet Initiative Japan's earnings presentation, Nov 13, 2009

  1. Slide 1: 1H FY2009 Consolidated Financial Results

    1H FY2009 Consolidated Financial Results Internet Initiative Japan Inc. 2009.11.13

  2. Slide 2: Agenda

    Agenda Ⅰ. Summary of 1H FY2009 Financial Results Ⅱ. Consolidated Financial Results for 1H FY2009 Ⅲ. Reference Materials 1

  3. Slide 3: I. Summary of 1H FY2009 Financial Results

    I. Summary of 1H FY2009 Financial Results ≪ 1H FY2009 Financial Results ≫  Revenue JPY32,275 million (down 2.9% YoY)  Operating Income JPY 1,166 million (up 16.0% YoY)  Income before Income Tax Expense JPY 1,026 million (up 33.9% YoY)  Net Income Attributable to IIJ JPY 715 million (up 94.6% YoY

  4. Slide 4: II-1. Consolidated Financial Results for 1H FY2009

    II-1. Consolidated Financial Results for 1H FY2009 Unit: JPY billion % of Revenues % of Revenues 1H09 1H08 YoY （09/04～09/09） （08/04～08/09）  Recurring revenue increased YOY Total  Systems construction revenue Revenues 32.3 33.3 (2.9%) decreased affected by the economy 80.7% 81.4% Total Costs 26.0 2

  5. Slide 5: II-2. Revenues

    II-2. Revenues Internet Connectivity Services Unit: JPY million One-time Systems Construction Recurring Outsourcing Services Revenues Equipment Saleｓ Revenues Systems Operation and Maintenance ATM Operation Business 18,486 18,942 18,359 17,535 7,535 259 6 399 234 4 16,328 16,926 202 6 16,441 16,294

  6. Slide 6: II-3. Cost of Revenues and Gross Margin Ratio

    II-3. Cost of Revenues and Gross Margin Ratio Cost of Revenues Connectivity and Outsourcing Services SI Equipment Sales ATM Operation Gross Margin Ratio Business Connectivity and Outsourcing Services SI Total Gross Margin Ratio Unit: JPY million 28.9% 26.7% 25.5% 26.2% 25.7% 24.6% 23.5% 23.3% 21.6%

  7. Slide 7: II-4. Connectivity and Outsourcing Services (1) Revenues

    II-4. Connectivity and Outsourcing Services (1) Revenues Outsourcing Services Unit: JPY million Connectivity Services for Home Use Connectivity Services for Corporate Use Total Contracted Bandwidth (Gbps) 619.8 584.7 530.5 449.1 476.6 392.4 422.1 330.3 334.9 346.0 35,076 9,135 9,126 9,178 9,178 31,3

  8. Slide 8: II-4. Connectivity and Outsourcing Services (2) Cost of Revenues

    II-4. Connectivity and Outsourcing Services (2) Cost of Revenues Unit: JPY million Purchasing Costs 8 7,651 9 7,661 7,065 1 7,276 526 529 Others 12 518 514 Outsourcing Costs 1,262 1,270 1,192 1,181 Personnel Related 888 931 921 Costs 859 Network Operation 1,771 1,751 Related Costs 1,517 1,633 Circui

  9. Slide 9: II-5. Systems Integration (1) Revenues

    YoY = 2Q09 compared to 2Q08 II-5. Systems Integration (1) Revenues Unit: JPY million QoQ = 2Q09 compared to 1Q09 (Systems construction) Systems Construction Revenues 9,234 Systems Operation and Maintenance Revenues 7,717 Order Backlog 7,409 Include equipment sales JPY million Order Received 5,500 4,

  10. Slide 10: II-5. Systems Integration (2) Cost of Revenues

    II-5. Systems Integration (2) Cost of Revenues Unit: JPY million 6,024 6,154 Purchasing Costs 1,627 5,174 1,619 4,876 Outsourcing Costs 1,412 1,235 Others 2,175 2,250 Network Operation 1,541 1,610 Related Costs Personnel Related 351 374 304 312 Costs 1,174 1,206 1,078 1,119 704 696 718 740 1Q08 2Q08

  11. Slide 11: II-6. ATM Operation Business

    II-6. ATM Operation Business Unit: JPY million (Operating cost and expenses) SG&A Expenses 265 Cost of Revenues 244 239 240 50 166 83 78 49 72 81 215 161 161 192 58 85 Established July 2007 15 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 •Consolidated subsidiary •Ownership: 71.2% (as of October 2009) Places and

  12. Slide 12: II-7. SG&A Expenses/R&D

    II-7. SG&A Expenses/R&D Unit: JPY million Sales and Marketing Expenses Research and Development General and Administrative Expenses ( ) % of Revenues 9,193 10,668 2,978 （15.7%） 2,614 2,647 2,647 （16.0%） 2,550 2,526 199 2,372 2,458 （15.1%） （14.4%） （16.7%） （13.3%） 2,426 2,30 2,301 1 （12.9%） 59 77 （14.

  13. Slide 13: II-8. Number of Employees

    II-8. Number of Employees Number of Employees (total of full time and contract worker) [Employee Distribution] 1,800 1,673 1,700 Contract worker 1,602 Administration 1,600 Full time worker 228 255 14.6% 1,373 229 1,400 Sales 1,155 173 18.5% 1,200 Engineers 987 129 1,000 66.9% 127 800 1,373 1,445 1,4

  14. Slide 14: II-9. Operating Income and Net Income

    II-9. Operating Income and Net Income Unit: JPY million Operating Income Net Income Operating Margin Ratio Operating Income: 9.8% 2Q09: up 37.2% YoY, up 132.3% QoQ 1H09: JPY1,166 million 6.9% 6.2% 5.7% exceeded target by 45.8% due to 5.0% 4.8% 5.0% increased gross margin and decreased 2,907 3.5% 2.

  15. Slide 15: II-10. Connectivity and Outsourcing Service and SI

    II-10. Connectivity and Outsourcing Service and SI Unit: JPY million [Gross margin and gross margin ratio] Gross Margin Gross Margin Ratio 22.2% Operating Income Operating margin Ratio 20.9% 20.1% 20.1% Profitability of Connectivity and 19.1% outsourcing service and SI 18.6% 6 .3% YoY 2Q09 UP  2Q09

  16. Slide 16: II-11. Operating Income YoY Change

    II-11. Operating Income YoY Change Unit: JPY million ATM Gross margin of Gross margin of SG&A expenses Gross margin of Si Operation connectivity and equipment sales (excluding ATM) outsourcing Business service +35 (19) +52 +333 (up 1.0%) (down 32.0%) (up 1.0%) ・Gross Loss: 1H09 (up 12.5%) (279) Oper

  17. Slide 17: II-12. Consolidated Balance Sheets

    II-12. Consolidated Balance Sheets Unit: JPY million September 30, March 31, Changes 2009 2009 Cash and Cash Equivalents 10,789 10,188 +601 Decreased correspondingly to the decreases in SI Projects Accounts Receivable 8,727 10,257 (1,530) Inventories 728 530 +198 Maintenance expenses related to SI

  18. Slide 18: II-13. Consolidated Cash Flows

    II-13. Consolidated Cash Flows Unit: JPY million Net cash provided by (used in) operating activities Net cash provided by operating 4,538 8,631 activities: JPY2,628 million 4,083 Increase in accounts receivable: JPY199 3,280 2,164 2,628 million 2,018 1,987 1,444 1,346 Decrease in inventories, prep

  19. Slide 19: II-14. Other Financial Data (CAPEX etc.)

    II-14. Other Financial Data (CAPEX etc.) Unit: JPY million CAPEX (Include Capital Lease) 6,078 7,006  CAPEX related to ATM operation 2,685 business: JPY93 million 2,232 1,831 1,832 1,546 1,489 Adjusted EBITDA 1,242 1,058 1,124 9,534 9,534 8,177 8,177 658 3,101 2,550 2,316 2,379 2,193 2,099 1Q07 2Q0

  20. Slide 20: II-15. Topics

    II-15. Topics Cheap Launched “IIJ GIO” Shared (several hundred yen) Server Service a new cloud computing service IIJ GIO Service Positioning Places cloud computing platform in a DC directly connected to IIJ’s backbone network. Provides a cost VPS Server Service efficient service. IIJ will provide a

  21. Slide 21: III-1. Reference: Forecast for FY2009 (Announced May 15, 2009)

    III-1. Reference: Forecast for FY2009 (Announced May 15, 2009) Unit: JPY billion (except for Net Income and Cash Dividend per Share) FY09 Target FY08 Actual YoY （09/4～10/3） （08/4～09/3） Total Revenues 73.0 69.7 +3.3 4.7% Operating Income 3.3 2.9 +0.4 13.1% Income before Income Tax 2.7 2.0 +0.7 32.7%

  22. Slide 22: III-2. Reference: IIJ Group Companies

    III-2. Reference: IIJ Group Companies （As of October 31, 2009) Company Name Ownership Main Business Offers a comprehensive suite of systems integration services from IIJ Technology Inc. design, physical installation, operation, and maintenance to monitoring for our customers' diverse network systems

  23. Slide 23: III-3. Reference: Press Release

    III-3. Reference: Press Release Date Press Releases 7/1 IIJ Group to Strengthen R&D Organization 7/1 IIJ Launches LaIT for SMEs IIJ to Distribute Live HD Video for the First Time Using Live Smooth Streaming Technology and 7/8 Silverlight 7/9 IIJ to Provide Internet Connectivity Service in AT TOKYO D

  24. Slide 24: Forward-looking Statements

    ※ Forward-looking Statements Statements made in this presentation 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 managements’ current expectations, assumptions, estimates and projections abou

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