Cyberagent Incorporated · TSE:4751
Cyberagent — FY2006 Earnings Presentation
60 slides from Cyberagent's earnings presentation, November 2006
Slide 1: Results Briefing for the Financial Year Ending September 2006
CyberAgent, Inc Results Briefing for the Financial Year Ending September 2006 (October 2005 – September 2006) http://www.cyberagent.co.jp/ Tokyo Stock Exchange Mothers: 4751 The opinions and forecasts contained within this document are based on the judgments of CyberAgent, Inc., at the time the docu
Slide 2: Table of Contents
Table of Contents Overview of Consolidated Financial Results Business Forecast for the Year Ending September 2007 Media Business Advertising Agency Business Investment Development Business Medium-to Long-Term Outlook Reference Material (1) Reference Material (2) 1
Slide 3: Overview of Consolidated Financial Results
Overview of Consolidated Financial Results Overview of Consolidated Financial Results for the FY2006 (October 2005 – September 2006) 2
Slide 4: Highlights of the Year Ending September 2006
Overview of Consolidated Financial Results Highlights of the Year Ending September 2006 (October 2005 – September 2006) Advertising Agency Business: 29.2 billion yen Net Sales: 60.1 billion yen Increased by 48.6% over the previous year. Increased by 38.9% Media Business: EC 20.9 billion yen over the
Slide 5: Overview of Consolidated Financial Results
Overview of Consolidated Financial Results Overview of Consolidated Financial Results Unit: million yen Yr to Sep 2006 7,000 6,503 Net Sales 3,235 Operating Income 5,000 Investment Development Business 60,115 60,000 3,000 Existing Business 10,000 3,268 Yr to Sep 2006 Unit: million yen Yr to Sep 2005
Slide 6: Results for Financial Year Ending September 2006: PL
Overview of Consolidated Financial Results Results for Financial Year Ending September 2006: PL Yr to Sep 2006 Yr to Sep 2005 Change Net Sales 60,115 43,273 38.9% Gross Income from Sales 23,600 18,039 30.8% Gross Margin 39.3 % 41.7% -2.4points SG&A 19,257 15,387 25.2% SG&A Ratio 32.0 % 35.6% -3.6poi
Slide 7: Financial Year Ending September 2006: BS
Overview of Consolidated Financial Results Financial Year Ending September 2006: BS Yr to Sep 2006 Yr to Sep 2005 Change Current Assets 50,483 22,075 128.7 % (cash + marketable securities, etc.) 20,170 11,354 77.6 % Fixed Assets 8,928 9,755 -8.5 % Total Assets 59,411 31,830 86.7 % Current Liabilitie
Slide 8: Quarterly Consolidated Net Sales
Overview of Consolidated Financial Results Quarterly Consolidated Net Sales Led by the Investment Development Business and Advertising Agency Business, an excellent condition was actualized with a 39.3% increase over the same period of the previous year. Unit: million yen 20,000 18,402 Increased by
Slide 9: Quarterly Consolidated Operating Income
Overview of Consolidated Financial Results Quarterly Consolidated Operating Income Centered on Web2.0 companies, the Investment Development Business performed favorably. Mail media (PC/mobile) is currently being transferred to Web2.0 media. Unit: million yen 1Q Unit: million yen 2Q Unit: million yen
Slide 10: Quarterly Consolidated Net Sales/Gross Margin Rate
Overview of Consolidated Financial Results Quarterly Consolidated Net Sales/Gross Margin Rate Net sales grew steadily. Investment Development Business contributed to an increase in the gross margin rate. Unit: million yen Unit: % 20,000 70.0 18,402 3,093 60.0 15,000 14,580 13,857 327 50.0 13,213 13,
Slide 11: Fourth Quarter of the Year Ending September 2006: PL
Overview of Consolidated Financial Results Fourth Quarter of the Year Ending September 2006: PL (year-on-year) Jul – Sep 2006 Jul – Sep 2005 Change Net Sales 18,402 13,213 39.3% Gross Income from Sales 7,776 5,579 39.4% Gross Margin 42.3 % 42.2% 0.1points SG&A 5,265 4,309 22.2% SG&A Ratio 28.6 % 32.
Slide 12: Fourth Quarter of the Year Ending September 2006: CF
Overview of Consolidated Financial Results Fourth Quarter of the Year Ending September 2006: CF (year-on-year) Jul – Sep 2006 Apr – Jun 2006 CF from Operating Activities 1,646 883 CF from Investing Activities - 155 - 1,347 CF from Financing Activities 503 187 Change in Cash and Cash Equivalents 2,01
Slide 13: Consolidated SG&A Expenses
Overview of Consolidated Financial Results Consolidated SG&A Expenses Unit: % Unit: million yen 50.0 6,000 5,265 5,000 4,622 4,889 4,309 4,479 4,090 40.0 38.7 4,000 38.4 37.4 36.5 3,695 35.8 36.0 36.0 2,875 3,292 36.5 34.8 3,000 2,558 32.6 32.3 33.5 2,026 2,266 30.0 1,834 28.6 2,000 1,000 20.0 0 03/
Slide 14: Number of Employees in Consolidated Companies
Overview of Consolidated Financial Results Number of Employees in Consolidated Companies Increase of 333 in the year ending September 2006. Scheduled increase of 300 in the year ending September 2007. Media Business: increase of 206; Advertising Agency Business: increase of 110; Investment Developme
Slide 15: Business Forecast for the Year Ending September 2007
Business Forecast for the Year Ending September 2007 Business Forecast for the Year Ending September 2007 14
Slide 16: Business Forecast for the Year Ending September 2007
Business Forecast for the Year Ending September 2007 Business Forecast for the Year Ending September 2007 Business Forecast for the Year Ending September 2007 Unit: hundred million yen Net Sales Operating Income Ordinary Income Net Income Business Forecast for the Year Ending September 2007 750 50 5
Slide 17: Business Forecast for the Year Ending September 2007
Business Forecast for the Year Ending September 2007 Business Forecast for the Year Ending September 2007 Net Sales Operating Income 80,000 75,000 10,000 Business Forecast for the Year Ending September 2007 Net Sales: 75 billion yen (increased by 24.8% over the previous year) Operating Income: 5 bil
Slide 18: Revenue from Sales/Component Ratio by Segment
Business Forecast for the Year Ending September 2007 Revenue from Sales/ Component Ratio by Segment Media Business Own/ Media Business Commissions/ Partner Media Charged Services 11.5 billion yen 14.5 billion yen 11% 15% Commissions/ Own/ Charged Services Media Business Partner Media Ameba Business
Slide 19: Internet Media Business
Media Business Internet Media Business 18
Slide 20: Consolidated Subsidiaries and Divisions that Constitute the Media Business
Media Business Consolidated Subsidiaries and Divisions that Constitute the Media Business Media Business EC EC Advertising (product sales) (charged services) Other Ameba Headquarters Agency Business Advertising MicroAd Company Media Headquarters All Navi Company CA Guide Company Blog Accessory Group
Slide 21: Internet Media Business (net sales)
Media Business Internet Media Business (net sales) Unit: million yen 10,000 Increased by 12.1% 8,728 8,139 8,266 8,206 7,784 8,000 7,085 6,719 6,000 Increased by 20.7% 5,596 5,238 4,713 4,300 4,000 3,896 Decreased by 1.3% 2,000 0 2004 2005 2006 2004 2005 2006 2004 2005 2006 2004 2005 2006 1Q (Octobe
Slide 22: EC (e-commerce) Net Sales
Media Business EC (e-commerce) Net Sales Mobile Commerce and Commissions/Charged Services (online games) performed well. Unit: million yen 6,000 5,735 5,173 Increased by 20.7% 5,004 5,085 4,752 4,500 4,242 Increased by 18.3% 3,556 3,142 3,009 3,000 2,638 2,289 1,994 Increased by 13.6% 1,500 Increase
Slide 23: Advertising Sales
Media Business Advertising Sales Effects of Advitisers who refrains to place ads(cosumer finance industry and others) Shift from e-mail advertising to Web advertising. Unit: million yen 4,000 3,163 3,135 3,181 Decreased by 1.3% 3,033 3,032 2,993 3,000 2,843 2,453 2,229 2,011 2,075 2,000 1,901 1,000
Slide 24: The Road to Overwhelming Top Domestic Blog Media
Media Business The Road to Overwhelming Top Domestic Blog Media Aiming for one billion PV by December 31, 2006. Unit: million PV “Ameba Blog” PV 800 4Q, 2006 654 1.47 billion PV (increased by 30.6% over the previous quarter) 600 3Q, 2006 536 1.13 billion PV 502 (increased by 17.7% over the previous
Slide 25: Monthly Sales of the Ameba Blog
Media Business The Road to Overwhelming Top Domestic Blog Media 4Q, 2006: 330 million yen Unit: thousand yen Monthly Sales of the “Ameba Blog” (increased by 2.5% over the previous quarter) 140,000 3Q, 2006: 322 million yen (increased by 54.2% over the previous quarter) 122,884 124,142 120,000 114,74
Slide 26: Internet Advertising Agency Business
Advertising Agency Business Internet Advertising Agency Business 25
Slide 27: Consolidated Subsidiaries and Divisions that Constitute the Advertising Business
Advertising Agency Business Consolidated Subsidiaries and Divisions that Constitute the Advertising Business Advertising Agency Others Internet Advertising Headquarters Agency Business Advertising CA Search, Ltd. Fraudia Communications, Inc. CA/H, Inc. Adplayin’ , Inc. (established 9/1) Business Dev
Slide 28: Internet Advertising Agency Business (net sales)
Advertising Agency Business Internet Advertising Agency Business (net sales) Unit: million yen 10,000 8,180 8,000 7,756 7,134 Increased by 39.1% 6,151 5,882 6,000 5,001 4,783 4,002 4,000 3,579 3,220 2,916 2,263 2,000 0 2004 2005 2006 2004 2005 2006 2004 2005 2006 2004 2005 2006 1Q (October – Decembe
Slide 29: Internet Advertising Headquarters Net Sales
Advertising Agency Business Internet Advertising Headquarters Net Sales Led by Yahoo! and Paid Search Advertising, revenues increased. Unit: million yen 8,000 7,120 6,894 6,512 Increased by 32.1% 6,000 5,531 5,389 4,556 4,730 4,000 3,806 3,414 3,083 2,815 2,209 2,000 0 2004 2005 2006 2004 2005 2006
Slide 30: Quarterly Net Sales Productivity per Sales Employee
Advertising Agency Business Quarterly Net Sales Productivity per Sales Employee Quarterly productivity per employee is on an upward trend. Unit: million yen Unit: people 60 180 166 166 145 145 50.9 50 150 136 42.2 128 41.5 42.9 40.5 40.7 40 37.1 37.9 108 37.2 120 31.5 98 94 32.6 30.2 90 29.5 30 90 7
Slide 31: Investment Development Business
Investment Development Business Investment Development Business 30 28
Slide 32: Consolidated Subsidiaries and Divisions of the Investment Development Business
Investment Development Business Consolidated Subsidiaries and Divisions that Constitute the Investment Development Business Agency Business Advertising Media Business Investment Development Investment Development Business Development Business Investment VC Business Division CyberAgent Investment, In
Slide 33: Actual Investment Performance in Web2.0 companies
Investment Development Business Actual Investment Performance in Web2.0 companies. Investment will be made up to no more than 20% Unit: million yen Operational Investment Securities 18,000 of consolidated total assets. 15,881 Companies invested in as of September 30: 44 Invested Companies List (as o
Slide 34: Investment Development Business (net sales)
Investment Development Business Investment Development Business (net sales) Sold off a portion of mixi, Inc. shares and Drecom Co., Ltd. shares. Unit: million yen 3,500 3,232 1,127 1,000 543 500 333 336 47 31 11 0 04/10-12 05/1-3 05/4-6 05/7-9 05/10-12 06/1-3 06/4-6 06/7-9 Yr to Sep 2005 Yr to Sep 2
Slide 35: Medium- to Long-Term Outlook
Medium- to Long-Term Outlook Medium- to Long-Term Outlook Blog Media “Ameba Blog” 34 36
Slide 36: Web2.0 Media Expectations
Medium- to Long-Term Outlook Web2.0 Media Expectations What is Web2.0 Media? This is a concept which encompasses all of the rising trends in net services, and includes CGMs etc. created in conjunction with service users. Portal Blog Reach Number of Users Net Sales Magnitude of Needs Web2.0 Media Lon
Slide 37: Web2.0-induced Changes
Medium- to Long-Term Outlook Web2.0 Media Expectations – Web2.0-induced Changes – 1 Increase of blog use and page view hours. 2 Development of word-of-mouth marketing through blogging. 3 Blogs turn into individual incomes (advertising income, EC, affiliates, etc.). 36 44
Slide 38: Service Expansion and PV of Ameba Blog
Medium- to Long-Term Outlook Service Expansion and PV of “Ameba Blog” Challenge Unit: million PV “Ameba Blog” PV 1,000 1,000 Number of Blog Writers exceeded 1.34 million. ・【Profile Function】added 700 ・【Access Analysis】started 654 ・【Affiliate】started 600 ・Mobile【Initial Registration/Login Function】ad
Slide 39: Ameba Blog Services
Medium- to Long-Term Outlook “Ameba Blog” Services AmebaVision [Video Sharing Service] Service Start: July 2006 This is a video sharing service in which users post their videos. Point Affiliate Function Start: August 2006 This is a function which lets users introduce products on their blogs and coll
Slide 40: Ameba Blog Services
Medium- to Long-Term Outlook “Ameba Blog” Services AmebaVision Video Sharing Service AmebaVision Top Page Creators Collection As of October 31, 2006 Approximately 37,000 videos posted. Approximately 150,000 streamings per day. Profile Function Message Function Communication Tool Communication Promot
Slide 41: Ameba Blog Services
Medium- to Long-Term Outlook “Ameba Blog” Services Point Affiliate Function Return Advertisement Posting Fee to Bloggers Return of advertisement fee to users started from Affiliate Start: September 20, 2006 August 22, 2006 (10% - 20%). Search Window Search Result Window Blog which Utilizes this Serv
Slide 42: Celebrities' Blogs that Lead PV Increase
Medium- to Long-Term Outlook Celebrities’ Blogs that Lead PV Increase As of October 31: 451 celebrities Eriko Sato Tetsuo Nakanishi and Associates Yakkun Sakurazuka Hidekazu Nagai SATOERI TMES CHEERS! KIDS SPORTS Sakurazuka Yakkun no Minaito Gakkaridayo Ore no Omoikomi Tokyo Philharmonic Orchestra M
Slide 43: Mobile Function Expansion
Medium- to Long-Term Outlook Mobile Function Expansion “Ameba Blog” Mobile Top Image Unit: thousand PV Mobile Service PV 180,000 Advertisement Frame 4Q, 2006 270 million PV (increased by 149.6% over 150,000 the previous quarter) Advertisement Frame 【Initial Registration/Login Function】added 120,000
Slide 44: Install Unique Functions
Medium- to Long-Term Outlook Install Unique Functions PC Mobile Mid-Nov “Peta” (footmark) Function Mid-Nov Make the profile function into a PC-like service. Blog Entry Import Function Messaging Function; Send/Receive Continue adding affiliate partners. “Peta” (footmark) Function End of Nov Ameba’s O
Slide 45: The Road to Overwhelming Top Domestic Blog Media
Medium- to Long-Term Outlook The Road to Overwhelming Top Domestic Blog Media Yr to Sep 2006 By positioning this term as a time for investing, expand services focusing on the user viewpoint. September 2005 October 2006 Number of Blog Owners 510,000 1,340,000 Increased by 163% Number of Monthly PV 26
Slide 46: General Overview of the Year Ending September 2006
Medium- to Long-Term Outlook General Overview of the Year Ending September 2006 Media Business: PV increase due to “Ameba Blog” service expansion. Advertising Agency Business: Strong showing in a slowing market. Investment Development Business: Actual investment performance in Web2.0 companies. 45 4
Slide 47: Establish a High Revenue Business Model through the Growth of Ameba Blog
Medium- to Long-Term Outlook Year Ending September 2008 Aiming for Consolidated Net Sales of 10 Billion Yen Establish a High Revenue Business Model through the Growth of “Ameba Blog” 46 44
Slide 48: Vision: To become a company that is the hallmark of the 21st Century
Medium- to Long-Term Outlook VISION To become a company that is the hallmark of the 21st Century. 47
Slide 49: To become a company that is the hallmark of the 21st Century
Medium- to Long-Term Outlook To become a company that is the hallmark of the 21st Century. We must not allow ourselves to slip away from the growing internet industry. Conversely, we must continue to actively participate in a variety of related fields. We must not forget the “Team CyberAgent” spirit
Slide 50: Reference Material (1)
Reference Material (1) Reference Material(1) Overview of Consolidated Financial Results 49
Slide 51: Fourth Quarter FY2006: PL (over the previous quarter)
Reference Material (1) Fourth Quarter of the Year Ending September 2006: PL (over the previous quarter) Jul – Sep 2006 Apr – Jun 2006 Change Net Sales 18,402 14,580 26.2% Gross Income from Sales 7,776 5,504 41.3% Gross Margin 42.3 % 37.8 % 4.5points SG&A 5,265 4,889 7.7% SG&A Ratio 28.6 % 33.5 % -4.
Slide 52: Fourth Quarter FY2006: BS (over the previous quarter)
Reference Material (1) Fourth Quarter of the Year Ending September 2006: BS (over the previous quarter) Unit: million yen Sep 30, 2006 Jun 30, 2006 Change Current Assets 50,483 34,448 46.5 % (cash + marketable securities, etc.) 20,170 18,713 7.8 % Fixed Assets 8,928 10,327 -13.5 % Total Assets 59,41
Slide 53: Reference Material (2)
Reference Material (2) Reference Material(2) CAJJ Program Company Overview Business Model 52
Slide 54: CAJJ Program Model Diagram
Reference Material (2) CAJJ Program Model Diagram CyberAgent Business and Personnel Development Program CAJJ Program Model Diagram (CyberAgent Business and Personnel Development Program) J1 Promotion Standard As of June 2006 (Period: 3 to 6 months) ⇒Gross profit of 15 million yen/month J1 Lower limi
Slide 55: CAJJ Businesses
Reference Material (2) CAJJ Businesses Name of Business or Affiliated Company Service Contents Focused Ameba Headquarters Web2.0 Media – Using Blogs as Platforms, where Users Play the Leading Part Business J1 1 Internet Advertising Headquarters Internet advertising business 2 MicroAd Company Blog ne
Slide 56: Example of Blog Media Service (1)
Reference Material (2) Example of Blog Media Service (1) Video Sharing Service with 250,000 PV/Day Service Start: July 13, 2005. Ameba Headquarters Users can paste videos to their blogs with ease, and these can be played directly on the blog articles. AmebaVision Group http://vision.ameba.jp/ Unit:
Slide 57: Example of Blog Media Service (2)
Reference Material (2) Example of Blog Media Service (2) Word-of-Mouth Marketing Support Business Established on April 3, 2006 Consolidated Subsidiary: CyberBuzz, Inc. By grouping carefully selected popular bloggers who are influential, word-of-mouth information of products/services requested from a
Slide 58: Company Overview
Reference Material (2) Company Overview Company Name CyberAgent, Inc. (securities code: 4751) Head Office Shibuya Mark City West 21F, 1-12-1 Dogenzaka, Shibuya-ku, Tokyo West Japan Division Meiji Yasuda Life Osaka Umeda Bldg. 14F, 3-3-20 Umeda, Kita-ku, Osaka Osaka Office West Japan Division Nishiki
Slide 59: Business Model
Reference Material (2) Business Model Client Users (Individuals/Consumers) Internet Media Internet Media Business Internet Advertisement Planning, Proposal and Effectiveness Verification Clients (Advertisers) Information Provision through Internet Media Charged Services/Product Sales Investment Subs
Slide 60: Internet Advertising Industry Map
Reference Material (2) Internet Advertising Industry Map Media Reps Ad Agencies Users (Individuals/Consumers) Clients (Advertisers) Yahoo(4689) CCI(4788) 4324 Google DAC(4281) 2433 Overture 2389 Rakuten(4755) 4293 59