Advanced Media, Inc. · TSE:3773
Advanced Media — FY2007 Earnings Presentation
52 slides from Advanced Media's earnings presentation, Nov 8, 2007
Slide 1: Representative Director & CEO Kiyoyuki Suzuki
Representative Director & CEO Kiyoyuki Suzuki 1
Slide 2: Agenda and note on forward-looking statements
I. Consolidated Financial Performance for the Year Ended March 2007 (10th Fiscal Term) and Consolidated Financial Outlook for the Year Ending March 2008 (11th Fiscal Term) II. Direction for the Future Businesses Reference Materials Note The views, projections, forecasts, etc., described in these mat
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Slide 4: Highlight of Consolidated Financial Performance for the Year Ended March 2007
Highlight of Consolidated Financial Performance for the Year Ended March 2007 Net Sales: In the speech recognition business, sales [Sales Status] Ended March Ended 2007 March 2006 in the medical sector exceeded market forecast, though other business sectors fell below forecasts Net Sales : 3,111 2,5
Slide 5: Sales Growth and Cost Reduction Initiatives for Fiscal Year Ending March 2008
Revenue Improving Initiative for the Current Fiscal Year (Ending March 2008) zSales Growth Initiative Concentrate management resources on the promising markets (particularly in the medical, financial, public service, entertainment & educational sectors) Propose the speech recognition products meetin
Slide 6: Consolidated Outlook for Year Ending March 2008
[Sales Status] Ending Ended Net Sales: Integrate R&D and Marketing in the speech March 2008 March 2007 recognition business to fully implement solution Net Sales marketing approach. Sales expected to rise 40% for the (Millions of Yen) year in the medical, financial and public service sectors. Telema
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Slide 8: Speech Recognition Business: Performance and Outlook
Ended March Ending March Ended March 2007 2008 2006 Performance Outlook Net Sales 1,946 1,539 1,840 Operating 1,830 2,582 2,460 Expenses Operating 116 1,043 620 Profit Note: Advanced Media Parent only Sales declined for the following reasons: sluggish sales of the Sales declined for the following re
Slide 9: Marketing and R&D Integrated in Speech Recognition Business
Marketing and R/D having been integrated in the Speech Recognition Business since March 2007 with Speech Recognition Solutions individually offered by the four domains Offer/sell customized speech Continue to develop and market recognition solutions other systems using speech recognition, than the m
Slide 10: Speech Recognition Business: Medical Sector Application
Speech Recognition Business: Medical Sector Application Offer/sell Offer/sellcustomized customizedspeech speech recognition recognition solutions otherthan solutions other thanthe the medical institution packages on medical institution packages on the the basis basisofofmedical medicalinstitutions i
Slide 11: Medical Sector Performance
Speech Recognition Business: Medical Sector Performance zPerformance for the year ended March 2007 Sales targeted at hospitals remain strong throughout the year. Version was upgraded on the AmiVoice® Ex (July). Speech recognition software for electronic medical charts offered to clinics & hospitals
Slide 12: Outlook for Medical Sector
Speech Recognition Business: Outlook for Medical Sector zOutlook for the year ending March 2008 Conventionally, sales activities were conducted on the basis of the package product Offer/sell various types of speech recognition solutions customized to individual medical institutions Offer to nursing
Slide 13: Education and games speech recognition systems
Continue Continuetotodevelop developspeech speech recognition recognition systems appliedtotothe systems applied the education-related education-relatedsoftware, software,home-use home-use games, games,on-line on-linegames, games,portable portablegame game consoles and karaoke games consoles and kar
Slide 14: Games/Entertainment and Education Performance
zPerformance for the year ended March 2007 Games/Entertainment Sector -Developed on-line games; offer license sales of robots and game software -Offered license sales of karaoke games by Sega Music Networks Application such as “Fun Brain Training Game-Supervised Version” written by Professor Ryuta K
Slide 15: Games/Entertainment and Education Outlook
zOutlook for the year ending March 2008 Games/Entertainment Sector -Develop systems using speech recognition applied to home-use games; on-line games; portable game console; and karaoke games Education Sector -Strengthen sales of English Pronunciation Correction System for college & high school stud
Slide 16: Financials / Public Service Sector
Speech Recognition: Financials ( ) Public Service Sector Offer Offerspeech speechrecognition recognitionsolutions solutions applied appliedtotoCTI CTIand andminutes-writing minutes-writing support supportsystems systemscentered centeredon onfinancial financial institution institutionusers usersfor f
Slide 17: Financials/Public Service Performance (CTI)
Speech Recognition Business: Financials( ) Public Service Performance zFinancials CTI(Computer Telephony Integration) Performance for the year ended March 2007 Introduced by the financial institutions, securities firms and life insurers Mitsubishi Tokyo UFJ adopted as a strategic IT tool in “Custome
Slide 18: Public Service Performance (Minutes writing for local bodies)
Speech Recognition Business: Financials/Public Service Performance (Minutes writing) zMinutes<for local autonomous bodies> performance for the year ended March 2007 Offer assistance systems for writing minutes for local assemblies, private sector businesses and hospitals: Major Results/ Local Autono
Slide 19: Public Service Performance (Minutes, private sector)
Speech Recognition Business: Financials Public Service Performance (Minutes) zMinutes<Private Sector Businesses> performance for the year ended March 2007 Major Results /Private Sector Businesses Minutes Writing of Management System Structure (License Number) Meetings Formal Date Objectives Introduc
Slide 20: Financials/Public Service Sector Outlook
Speech Recognition Business: Financials/Public Service Sector Outlook zOutlook for the year ending March 2008 Financials( , etc.) -Offer primarily to banks, securities firms and life insurers AmiVoice CallScriber Compliance requirement strengthened involving the enforcement of the Law on Sales of Fi
Slide 21: Business Sector
Business Sector Offer Offerspeech speechrecognition recognition solutions/voice solutions/voiceverification verificationas asaa means meanstotoenter enterdata data 21
Slide 22: Business Sector Performance
Business Sector Performance zPerformance for the year ended March 2007 Concentrated marketing resources on taking orders for the customized speech recognition solutions that meet users’ specific needs rather than sales of the conventional package products. Voice Verification: Built condominium entry
Slide 23: Business Sector Outlook
Business Sector Outlook zOutlook for the year ending March 2008 Modify the AmiReception, AmiVoice Dialer, AmiVoice SceneDirector to meet with needs of firms in general in pursuit of volume growth (including equipping them with functions offered by other firms and also review in pricing structure) Sp
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Slide 25: Performance and Outlook of the Telemarketing Business
Performance and Outlook of the Telemarketing Business Earnings performance and outlook Net Sales Trend Millions of Yen Millions of Yen Ended Ending Ended March 2007 March 2008 March 2006 Results Outlook Net Sales 673 1,610 2,317 Operating Expenses 707 1,841 - Operating Profit 34 230 - (only five mon
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Slide 27: Performance and Outlook of Other Businesses
Performance and Outlook of Other Businesses Earning Performance and Outlook Net Sales Trend Millions of Yen Millions of Yen Ended March Ending March Ended March 2007 2008 2006 Performance Outlook Net Sales 1 16 89 Operating Expenses 35 90 - Operating Profit 34 74 - Delayed Delayedstart-up start-upof
Slide 28: II. Future Direction of Businesses
II. Future Direction of Businesses 28
Slide 29: Overview of Company's Businesses (Consolidated)
Overview of Company s Businesses(Consolidated) Segment Name Business Contents [Business with the Company’s strengths since the start of Speech Recognition Business operation] Software favored by end-users is made into products and marketed License sale of speech recognition solution centered on the
Slide 30: Panoramic View of Business Strategy By Segment
Panoramic View of Business Strategy By Segment In the speech recognition business, the Company raises its market power by injecting management resources. Furthermore, centered on the speech recognition business, it will aim to conquer peripheral businesses in the telemarketing sector. Specifically,
Slide 31: Growth Scenario for the Next Three Years (08/3 – 10/3)
Growth Scenario for the Next Three Years (08/3 – 10/3) By the 10/3 FY, we will establish a three-pillar business model (speech recognition business, telemarketing business, and voice domain business). 09/3 -10/3FY: The three-pillar structure comprising the speech recognition ar i o business, the sc
Slide 32: Annual growth rate projected for speech recognition market in Japan
Annual Annualgrowth growthrate rateprojected projectedfor forthe thespeech speechrecognition recognitionmarket marketininJapan Japanisisatat14.4-20.4%, 14.4-20.4%,which whichisisaa growth growthmarket. market.This Thissegment segmentisisexpected expectedtotogrow growatataahigh highrate rateofof32.8%
Slide 33: II. Direction of Future Businesses
II. Direction of Future Businesses 33
Slide 34: Personnel Deployment Based on the Business Domain
Personnel Deployment Based on the Business Domain Total President CEO 101 Full-time Auditors 1 Operation 49 Engineering 21 Administration 20 Project Division Division Division Teams 9 Medical Solution Basic Technology Administration 10 Development Department 14 Department 8 Department Financials/Pub
Slide 35: Marketing & R&D integrated; active investment in mobile sector
Marketing & R/D integrated since March 2007 in the Speech Recognition Business with speech recognition solutions offered by four business domains Continue active investment in mobile sector Offering of service Working on carriers 35
Slide 36: Performance and Outlook in the Mobile Sector
Performance and Outlook in the Mobile Sector zPerformance in the year ended March 2007 A new interface using the speech recognition has been introduced into NTT DoCoMo’s FOMA® M1000 Released business integrated tool “AmiVoice® Mobile Tools - Biz Pack for M1000” (August) Developed and marketed “custo
Slide 37: Mobile phones with DSR software; NTT DoCoMo FOMA M1000 tool
Mobile phones that DSR software installation is possible Business unification tool for NTT DoCoMo FOMA M1000 37
Slide 38: AmiVoice DSR: Higher quality speech data
AmiVoice DSR Higher quality speech data through DSR The Distributed Speech Recognition (DSR) solution is a speech recognition system that is distributed between the device and the server. Before transporting the speech signals, they are converted into feature data at the client device and then sent
Slide 39: Reference Information
Reference Information *Cash Flow information is not available for parent only 39
Slide 40: Consolidated (P/L) Comparison
Consolidated(P/L)Comparison (Million of Yen) Ended March Ended March Increase/ 2006 2007 Decrease Speech recognition business suffered loss Net Sales 2,566 3,111 545 year on year, while telemarketing business stayed Cost of sales 1,321 2,065 744 strong. Operating expense (including Gross Profit 1,24
Slide 41: Consolidated Balance Sheet
(Millions of Yen) Ended March Ended March Increase/ ource code 2006 2007 Decrease access right from MTI and application development Fixed Asset costs were capitalized. Accounts receivable Current Asset decreased Cash and deposit decreased (because Total Assets operating loss incurred and investment
Slide 42: Consolidated Cash Flow
(Millions of Yen) Ended March Ended March Increase/ 2006 2007 Decrease Cash flow from Cash flow from operations operations decreased due to current net loss Cash flow used in investments Cash flow from financing Cash from financing activities activities decreased. Fund was raised Effect of translati
Slide 43: Parent-only P/L Comparison
(Millions of Yen) Ended March Ended March Increase/ 2006 2007 Decrease Speech recognition business fell below Net Sales projection, marking loss year on year. Cost of sales Operating expenses (including development costs) rose due to increase in winning orders Gross Profit providing after-sales supp
Slide 44: Parent-only Balance Sheet
(Millions of Yen) Ended March Ended March Increase/ Purchase of source code 2006 2007 Decrease access right from MTI and application development were Fixed Asset capitalized. Current Asset Accounts receivable decreased Cash & deposits decreased Total Assets (because operating loss was posted) Fixed
Slide 45: Reference Information
Reference Information *Cash flow information is not available for parent only. 45
Slide 46: Corporate Profile
Corporate Profile • Company name: Advanced Media, Inc. • Established: December 1997 • Paid-in capital: 3,520,125,000 yen (as of 2007, April) • Address: 48F Sunshine 60 Building, 3-1-1 Higashi Ikebukuro,Toshima-ku, Tokyo 170- 6048 • Tel: 03-5958-1031 • Alliance Partner: Multimodal Technologies, Inc.
Slide 47: Corporate History
Corporate History • Dec. ’97 Established Advanced Media, Inc. • Jan. ’98 Started development of Japanese ASR technology “AmiVoice” . • May,’01 Released AmiVoice for Telephony. • Oct.’01 Released AmiVoice for PS2. • Mar. ’02 AmiVoice for XBOX, AmiVoice for PS2 (English), AmiVoice/DSR(Distributed Spee
Slide 48: Schematic Diagram of Business Operations
Schematic Diagram of Business Operations Consolidated Subsidiary MC2, Ltd. Operation contracted and sales Operation Operation consigned contracted Marketing, Sales Consolidated Subsidiary consigned Operation consigned and sales LS (Private Limited Company) Customers License provided for products and
Slide 49: Introduction to Business Segments
Introduction to Business Segments Game software, robots, educational software AmiVoice CALL Games / entertainment X-ray/medical imaging reports, & education electronic medical records (large hospitals, clinic, dental clinics), Conference proceedings pharmacies, etc. Medical AmiVoice Rewriter AmiVoic
Slide 50: Structure of the AmiVoice Engine
Structure of the AmiVoice Engine Analog sound AmiVoice Engine Output Feature data Acoustical Recognition Speech analysis decoder Text (FE) (DC) Sound Language model model (AM) (LM or RG) Application Dictionary (DT) 50
Slide 51: Speech Recognition Technology Roadmap
Speech Recognition Technology Roadmap 1G: Single-word recognition (1960~) Regarding generations: 3G: Capable of working with unspecified speaker, speed changes, different intonations and accents 4G: Recognition at a distance of 2-3 2G: LVCSR (1991~) meters 5G: Spontaneous speech, intelligent inferen
Slide 52: Thank you for kind attention
Thank you for kind attention 52