Internet Initiative Japan Inc. · TSE:3774

Internet Initiative Japan — FY2010 1Q-3Q Earnings Presentation

22 slides from Internet Initiative Japan's earnings presentation, Feb 10, 2011

  1. Slide 1: FY2010/1Q-3Q (cumulative) Consolidated Financial Results

    FY2010/1Q-3Q (cumulative) Consolidated Financial Results Internet Initiative Japan Inc. 2011.2.10

  2. Slide 2: Agenda

    Agenda Ⅰ. Summary of FY2010/1Q-3Q (cumulative) Financial Results Ⅱ. Consolidated Financial Results for FY2010/1Q-3Q (cumulative) Ⅲ. Reference Materials 1

  3. Slide 3: Summary of FY2010/1Q-3Q (cumulative) Financial Results

    I. Summary of FY2010/1Q-3Q (cumulative) Financial Results ≪FY2010/1Q-3Q (cumulative) Financial Results ≫  Revenue JPY56,797 million (up17.6% YoY)  Gross margin JPY11,540 million (up 20.0% YoY)  Operating Income JPY2,430 million (up 21.1% YoY)  Income before Income Tax Expense JPY2,175 million (u

  4. Slide 4: Consolidated Results for FY2010/1Q-3Q (cumulative)

    II-1. Consolidated Results for FY2010/1Q-3Q (cumulative) Unit: JPY billion % of Revenues % of Revenues 3Q10 3Q09 YoY （10/4～10/12） （09/4～09/12） Total Revenues 56.8 48.3 17.6% 79.7% 80.1% Total Costs 45.3 38.7 17.0% 20.3% 19.9% Gross Margin 11.5 9.6 20.0% 16.0% 15.8% SG&A/R&D 9.1 7.6 19.7% 4.3% 4.2% O

  5. Slide 5: Revenues

    YoY = 3Q10 compared to 3Q09 II-2. Revenues QoQ = 3Q10 compared to 2Q10 Internet Connectivity Services Systems Construction Unit: JPY million One-time Recurring Outsourcing Services Revenues Equipment Sales Revenues WAN Services ATM Operation Business Systems Operation and Maintenance FY08: 69,731 FY

  6. Slide 6: Cost of Revenues and Gross Margin Ratio

    YoY = 3Q10 compared to 3Q09 II-3. Cost of Revenues and Gross Margin Ratio QoQ = 3Q10 compared to 2Q10 Cost of Revenues Network Services SI Equipment Sales ATM Operation Gross Margin Ratio Total Gross Margin Ratio Business Network Services SI 28.1% 27.8% 26.2% 26.7% 26.2% Unit: JPY million 25.7% 24.6

  7. Slide 7: Network Services (1) Revenues

    YoY = 3Q10 compared to 3Q09 II-4. Network Services (1) Revenues QoQ = 3Q10 compared to 2Q10 Internet Connectivity Services for Home Use Outsourcing Services Internet Connectivity Services for Corporate Use Total Contracted Bandwidth (Gbps) WAN Services 702.5 702.0 647.2 650.4 660.9 619.8 584.7 530.5

  8. Slide 8: Network Services (2) Cost of Revenues

    YoY = 3Q10 compared to 3Q09 II-4. Network Services (2) Cost of Revenues QoQ = 3Q10 compared to 2Q10 Purchasing Costs Personnel Related Costs Unit: JPY million Others Network Operation Related Costs Outsourcing Costs Circuit Related Costs FY09: 30,534 12,402 0 616 7,650 7,661 7,567 7,655 7,647 9,156

  9. Slide 9: Systems Integration (1) Revenues

    YoY = 3Q10 compared to 3Q09 II-5. Systems Integration (1) Revenues Unit: JPY million QoQ = 3Q10 compared to 2Q10 (Systems construction) Systems Construction Revenues 5,928 Systems Operation and Maintenance Revenues 5,500 5,297 5,344 5,081 Order Backlog System construction’s order 4,236 4,428 4,580 b

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

    YoY = 3Q10 compared to 3Q09 II-5. Systems Integration (2) Cost of Revenues QoQ = 3Q10 compared to 2Q10 Purchasing Costs Unit: JPY million Outsourcing Costs Others Network Operation Related Costs Personnel Related Costs FY09: 21,904 7,152 4,876 5,174 4,702 4,793 5,066 5,017 2,705 1,412 972 987 1,235

  11. Slide 11: Number of Employees

    YoY = 3Q10 compared to 3Q09 II-6. Number of Employees With the acquisition QoQ = 3Q10 compared to 2Q10 Contract worker of IIJ-GS +245 employees Full time worker （number of employees） 1,968 1,962 2,000 1,687 1,740 1,602 267 269 [Employee Distribution] 265 1,500 1,373 229 263 Administration 12% 173 Sa

  12. Slide 12: SG&A Expenses/R&D

    YoY = 3Q10 compared to 3Q09 II-7. SG&A Expenses/R&D QoQ = 3Q10 compared to 2Q10 Sales and Marketing Expenses Research and Development Unit: JPY million General and Administrative Expenses ( ) % of Revenues （unit: JPY million) FY08 : 10,668 FY09 : 10,544 3,469 IIJ-GS 2Q10 3Q10 (15.4%) SG&A 224 777 2,

  13. Slide 13: Operating Income and Net Income

    YoY = 3Q10 compared to 3Q09 II-7. Operating Income and Net Income QoQ = 3Q10 compared to 2Q10 Operating Income Net Income Operating Margin Ratio Unit: JPY million 3Q10 Operating Income: JPY1,229 million(3Q09:JPY841 million, Operating income ： 2,917 Operating income ： 3,412 2Q10:JPY935 million) In

  14. Slide 14: Consolidated Balance Sheets

    II-9. Consolidated Balance Sheets Unit: JPY million December 31, March 31, Changes 2010 2010 Increased mainly due to IIJ-GS Cash and Cash Equivalents 10,800 8,764 +2,035 Accounts Receivable 16,132 11,397 +4,735 Nonmarketable equity securities: JPY1,843 million Inventories 903 808 +95 Available fo

  15. Slide 15: Consolidated Cash Flows

    II-10. Consolidated Cash Flows Unit: JPY million Net cash provided by operating activities <3Q10> FY09 : 9,621 Increase in operating income FY08 : 8,631 3,280 3,360 3,279 Increase in accounts payable: JPY4,127 2,628 2,835 2,018 1,987 2,164 2,274 million 1,346 1,468 Decrease in accrued expenses, o

  16. Slide 16: Other Financial Data (CAPEX etc.)

    II-11. Other Financial Data (CAPEX etc.) Unit: JPY million CAPEX (Include Capital Lease) FY08 : 7,006 FY09 : 5,584 2,685 1,831 1,832 1,752 1,804 1,489 1,515 Adjusted EBITDA 1,124 1,218 1,221 658 FY08 : 8,348 FY09 : 8,718 2,777 2,747 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 2,550 2,403

  17. Slide 17: Emergence of Cloud Computing Services

    Ⅲ-1. Emergence of Cloud Computing Services ・Introduced to over 300 projects during 9 months FY2010 ・IIJ GIO component (custom-made) and IIJ GIO hosting package (ready-made) are both selling equally well. The two services are well marketed to coverage various market needs for cloud services ・IIJ GIO

  18. Slide 18: Revised FY2010 Year-end Dividends

    Ⅲ-2. Revised FY2010 Year-end Dividends In regard with our nine months ended FY2010 income level, we revised our year-end dividend forecast from JPY1,250 to JPY1,500 per share of common stock JPY2,750 Interim Dividend Year-end Dividend Y 500 P + J ll year \1,500 JPY2,250 /Fu JPY2,000 \1,250 JPY1,750

  19. Slide 19: Reference: FY2010 Financial Target (Remain Unchanged)

    III-3. Reference: FY2010 Financial Target (Remain Unchanged) Unit: JPY billion (except for Net Income and Cash Dividend per Share) FY10 Initial Target Revised FY10 Target FY09 Actual YoY （10/4～11/3） （10/4～11/3） （09/4～10/3） (Revised FY10 to FY09 Acutal) Total Revenues 71.0 84.5 68.0 +16.5 24.3% Opera

  20. Slide 20: Reference: IIJ Group Companies

    III-4. Reference: IIJ Group Companies （As of Jan. 31, 2011) Company Name Ownership Main Business Provides a full range of network operation and management services, Net Care, Inc. from customer support, end-user help desks, monitoring and troubleshooting to integrated management services. Provides n

  21. Slide 21: Reference: IIJ Press Releases

    III-4. Reference: IIJ Press Releases Date Press Releases FY10 10/14 IIJ and IRRIC Begin Cloud-based BCP Consulting Services 11/01 IIJ Launches ASP FX system, IIJ Raptor Service 10/10 IIJ to Launch "IIJ Mobile Biz+ Service" 11/11 IIJ to Provide IIJ Raptor Service to Mizuho Securities 3Q 11/12 IIJ to

  22. Slide 22: 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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