Slide 1: Trend Micro FY2010.2Q Results
Trend Micro FY2010.2Q Results Mahendra Negi COO/CFO, Representative Director August 11,2010
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: FY2010. 2Q Financial Highlight
FY2010. 2Q Financial Highlight （Second quarter ended June 30, 2010） 3 Copyright © 2010 Trend Micro Incorporated. All rights reserved.
Slide 4: Consolidated Results
Consolidated Results Three months (in million Yen) (unaudited) ended Jun 30, 2Q2009 2Q2010 YoY growth Net sales 24,244 23,493 - 3% Cost of sales 3,511 4,025 + 15% Operating expenses 13,503 13,900 + 3% Operating income (Margin) 7,229 (30%) 5,567 (24%) - 23% Ordinary income 7,522 5,744 - 24% Net incom
Slide 5: USD based Results (Non-GAAP)
USD based Results (Non-GAAP) (unaudited) Three months (in thousand USD) ended Jun 30, 2Q2009 2Q2010 YoY change Net sales 249,373 255,532 2% Cost of sales 36,115 43,788 21% Operating expenses 138,900 151,189 9% Operating income 74,358 60,554 -19% Ordinary income 77,372 62,477 -19% Net Income 41,433 3
Slide 6: Vs. Projection analysis (Operating income)
Vs. Projection analysis（Operating income） (unaudited) Sales side - 507M Cost side 2010Ｑ2 ・Japan ↓ - 226M Projection ・EMEA ↓ ・Software Depreciation ↑ 2010Ｑ2 ・Administration ↓ Actual 6,300 M 5,567M (Non-GAAP) 6 Copyright © 2010 Trend Micro Incorporated. All rights reserved.
Slide 7: Net Sales Growth by Region
Net Sales Growth by Region (in million Yen) (unaudited) 11,000 9,990 + 4% 10,000 9,631 2Q2009 9,000 2Q2010 8,000 6,729 - 9% 7,000 6,118 - 14% 6,000 5,100 5,000 4,408 4,000 + 9% 3,000 2,314 2,124 2,000 + 1% 1,000 658 662 0 Japan North America Europe Asia Pacific Latin America (In accordance with Japa
Slide 8: Net Sales Growth by Region
Net Sales Growth by Region If currency exchange rates used for 2Q2009 were used for 2Q2010: (in million Yen) (unaudited) * ( ) : difference from GAAP base 11,000 + 4% 9,990 10,000 9,631 (0) 9,000 2Q2009 8,000 - 4% 2Q2010 7,000 6,7296,467 (+349) - 2% 6,000 (+599) 5,100 5,008 5,000 + 7% 4,000 (-51) 3,
Slide 9: Decomposition of Revenue (vs Last year)
Decomposition of Revenue （ｖｓ Ｌａｓｔ year） Asia Pacific (unaudited) North America Japan + 139M - 261M Europe Latin America + 358M - 91M - 25M Exchange impact - 869M 2009Ｑ2 Net 2010Ｑ2 sales Net sales 24,244 M 23,493 M (Non-GAAP) 9 Copyright © 2010 Trend Micro Incorporated. All rights reserved.
Slide 10: Sales by Segment
Sales by Segment (in million Yen) 11,000 Growth rate 10,000 9,000 Consumer + 3% All Enterprise - 6% 8,000 4,442 7,000 6,000 5,000 2,998 188 4,000 3,000 5,547 4,219 2,000 648 3,119 1,000 1,666 46 0 615 Japan North Europe APAC Latin America America 10 Copyright © 2010 Trend Micro Incorporated. All rig
Slide 11: % share by region
% share by region (unaudited) 2Q2009 2Q2010 24,244 million Yen 23,493 million Yen Latin Latin Asia America Asia America Pacific 3% Pacific 3% 9% 10% Europe Japan Europe Japan 21% 40% 19% 43% North America North 28% America 26% (In accordance with Japan GAAP) 11 Copyright © 2010 Trend Micro Incorpora
Slide 12: Bookings (Amount of contracts concluded)
Bookings (Amount of contracts concluded) (in million Yen) (unaudited) + 2% 10,918 11,175 2Q2009 2Q2010 6,352 - 23% 5,471 4,916 - 49% 2,817 - 25% 2,792 2,106 - 39% 753 461 Japan North America Europe Asia Pacific Latin America (Non-GAAP) * Bookings = Net sales + Deferred revenue balance as of this Q –
Slide 13: Local currency based Bookings (US, Europe)
Local currency based Bookings (US, Europe) North America (*excluding Canada entity) Bookings in $ and EMEA Bookings in € (unaudited) 2Q2009 2Q2009 ($ in thousands) 2Q2010 (€ in thousands) 2Q2010 80,000 40,000 - 10% 37,242 37,956 + 2% 70,000 67,243 35,000 60,821 60,000 30,000 50,000 25,000 40,000 20,
Slide 14: Deferred Revenue
Deferred Revenue (in million Yen) (unaudited) 78,000 * Total of current and long term 75,956 73,940 74,000 73,562 71,751 70,832 69,817 69,707 70,000 67,516 66,000 65,166 62,000 58,000 54,000 50,000 Jun-'08 Sep-'08 Dec-'08 Mar-'09 Jun-'09 Sep-'09 Dec-'09 Mar-'10 Jun-'10 (In accordance with Japan GAAP
Slide 15: Deferred Revenue by Region
Deferred Revenue by Region (in million Yen) (unaudited) 50,000 3% 45,000 * Total of current and long term 41,995 43,179 40,000 Mar-10 35,000 Jun-10 30,000 25,000 -8% 20,000 -14% 15,000 14,689 13,488 11,779 10,188 -3% 10,000 6,002 5,793 -13% 5,000 1,490 1,289 0 Japan North America Europe Asia Pacific
Slide 16: Deferred Revenue by Region
Deferred Revenue by Region If currency exchange rates used as of the end of 1Q2010 were used as of the end of 2Q2010: (in million Yen) (unaudited) 50,000 * ( ) : difference from GAAP base 3% (0) * Total of current and long term 45,000 43,179 41,995 40,000 Mar-10 35,000 Jun-10 30,000 25,000 -3% (+693
Slide 17: Cost
Cost (in million Yen) (unaudited) SO & Acquisition related costs Salary & Benefit Office overhead Outside service Administration Selling & Marketing Goods / Material 20,000 18,000 881 987 669 456 384 16,000 3,201 3,575 3,973 3,966 14,000 3,157 12,000 2,052 2,047 2,411 2,225 1,888 10,000 2,075 1,837
Slide 18: Bookings vs Total costs
Bookings vs Total costs (in million Yen) (unaudited) Bookings Total Costs 30,000 28,000 26,000 27,068 26,288 26,122 24,000 23,928 22,000 20,000 21,477 18,000 17,685 17,926 16,000 17,014 16,859 16,448 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 (Non-GAAP) * “Tota
Slide 19: Cash flows
Cash flows (unaudited) (in million Yen) 項目 2Q2009 2Q2010 YoY growth Cash flows from operating activities 11,981 10,413 - 13% Cash flows from investing activities 1,708 - 4,793 － Cash flows from financing activities - 1,483 - 227 － Effect of exchange rate changes 528 - 2,512 － on cash and cash equiva
Slide 20: Q2 Highlights
Q2 Highlights • First wins in virtualization security market • In traditional products, Endpoint revenues start to grow, showing SPN differentiation 20 Copyright © 2010 Trend Micro Incorporated. All rights reserved.
Slide 21: Q2 Lowlights
Q2 Lowlights • ENT sales cycle remains long, unable to close all the deals in the quarter • EMEA performance remains weak • OEM deals with Dell and Asus yet to deliver 21 Copyright © 2010 Trend Micro Incorporated. All rights reserved.
Slide 22: Headcount
Headcount Mar - 2010 Jun - 2010 4,575 4,727 ADM, ADM, Business Process Business Process Sales, Sales, 698 Marketing Marketing 723 Technical 1,269 + 152 1,314 Technical Support (+ 3%) Support Research, Research, 1,334 Development 1,336 Development 1,274 1,354 22 Copyright © 2010 Trend Micro Incorpora
Slide 23: Non-operating & Extra-ordinary Items
Non-operating & Extra-ordinary Items (unaudited) Equity in gains of affiliated companies Exchange loss Other income Interest income 9M Other expense 29M 195M Interest expense 58M Legal settlement 392M 1M 77M Ordinary Income Operating income Income before income taxes 5,744M 5,567M 5,666 M (In accord
Slide 24: Balance Sheet
Balance Sheet (unaudited) (in million Yen) Mar-2010 change Jun-2010 Assets Cash & cash equivalents 70,372 + 3,625 73,997 Account receivable (less allowance for doubtful accounts) 22,353 - 2,711 19,642 Marketable securities & Securities investments 60,633 - 931 59,702 Liabilities Deferred revenue (to
Slide 25: Snapshot of our CDO investments (Update)
Snapshot of our CDO investments （Update） # Exposure as a % of our “Marketable securities & Securities investments” : 2% # Exposure as a % of our “Cash + Marketable securities & Securities investments” : 1% (in million Yen) Ｂｅｇｉｎｎｉｎｇ Market value Maturity Name Vendor Write-down Unrealized P/L Loss ra
Slide 26: FY2010 Semi Annual Financial Highlight
FY2010 Semi Annual Financial Highlight 26 Copyright © 2010 Trend Micro Incorporated. All rights reserved.
Slide 27: Consolidated Results (Annual)
Consolidated Results (Annual) (unaudited) (in million Yen) Six months ended Jun 30, 1H2009 1H2010 YoY growth Net sales 47,159 47,221 0% Cost of sales 7,108 8,058 13% Operating expenses 25,793 27,553 7% Operating income (Margin) 14,257 (30%) 11,609 (25%) - 19% Ordinary income 15,458 11,951 - 23% Net
Slide 28: Net Sales Growth by Region
Net Sales Growth by Region (in million Yen) (unaudited) 20,000 19,416 19,773 + 2% 18,000 1H2009 16,000 1H2010 14,000 12,683 - 4% 12,117 12,000 10,000 9,849 9,413 - 4% 8,000 + 15% 6,000 4,569 3,966 4,000 + 8% 2,000 1,243 1,347 0 Japan US Europe Asia Pacific Latin America (In accordance with Japan GAA
Slide 29: Net Sales Growth by Region
Net Sales Growth by Region If currency exchange rates used for 1H2009 were used for 1H2010: (in million Yen) (unaudited) * ( ) : difference from GAAP base 20,000 19,416 19,773 + 2% (0) 18,000 - 0% 1H2009 16,000 (+556) 1H2010 14,000 + 0% 12,683 12,673 (+461) 12,000 9,849 9,874 10,000 8,000 +7% 6,000
Slide 30: Q3 forecast assumptions
Q3 forecast assumptions •Japan increases by single digit, US and Europe decrease by mid-teen percentage respectively •Stock option expenses will be 0.7Bn yen •Estimated exchange rate: 1USD = 86 yen ( last year: 94 yen) 1EUR = 113 yen ( last year: 134 yen) 30 Copyright © 2010 Trend Micro Incorporated
Slide 31: Projection for 3Q2010
Projection for 3Q2010 (unaudited) For 3Q2010 Expected (in million Yen) Jul - Sep, 2010 YoY growth Net Sales 23,900 - 4% Operating Income 5,900 - 30% Ordinary Income 6,100 - 29% Net Income 3,500 - 33% (In accordance with Japan GAAP) • Including both stock option expenses and acquisition related costs
Slide 32: Thank you!
Thank you! 32 Copyright © 2010 Trend Micro Incorporated. All rights reserved.
Slide 33: Appendix: Quarterly Chart (1)
Appendix (unaudited) Quarterly Chart (1) (in million Yen) FY2009 FY2010 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Ｎｅｔ sale s 22,915 24,244 24,848 24,339 23,728 23,493 Co st o f sale s 3,597 3,511 3,618 4,263 4,032 4,025 O pe r atin g e xpe n se s 12,289 13,503 12,829 12,595 13,653 13,900 O pe r atin g in c o me 7,028
Slide 34: Appendix: Quarterly Chart (2)
Appendix Quarterly Chart (2) (unaudited) (in million Yen) FY2009 FY2010 （ S ale s by r e gio n ） Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Japan 9,784 9,631 10,435 9,887 9,782 9,990 US 5,953 6,729 6,571 6,084 5,999 6,118 Eu r o pe 4,748 5,100 5,092 5,232 5,005 4,408 Asia P ac ific 1,842 2,124 2,019 2,390 2,254 2,314