Slide 1: FY2009 1Q Results
Trend Micro FY2009. 1Q Results Mahendra Negi COO / CFO , Representative Director May 12, 2009
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: FY2009 1Q Financial Highlight
FY2009. 1Q Financial Highlight （First quarter ended March 31, 2009） 3 Copyright 2009 - Trend Micro Inc.
Slide 4: Consolidated Results
Consolidated Results Three months (in million Yen) (unaudited) ended Mar 31, 1Q2008 1Q2009 YoY growth Net sales 25,604 22,915 - 11% Cost of sales 4,054 3,597 - 11% Operating expenses 13,211 12,289 - 7% Operating income (Margin) 8,338 (33%) 7,028 (31%) - 16% Ordinary income 7,517 7,936 6% Net income
Slide 5: USD based Results (Non-GAAP)
USD based Results (Non-GAAP) (unaudited) Three months (in thousand USD) ended Mar 31, 1Q2008 1Q2009 YoY change Net sales 244,128 244,324 0% Cost of sales 38,661 38,352 - 1% Operating expenses 125,967 131,033 4% Operating income 79,500 74,938 - 6% Ordinary income 71,678 84,615 18% Net Income 43,802 5
Slide 6: Net Sales Growth by Region
Net Sales Growth by Region (in million Yen) (unaudited) 10,000 9,823 9,784 - 0% 9,000 1Q2008 8,000 - 4% 1Q2009 7,000 6,178 5,953 6,185 - 23% 6,000 5,000 4,748 4,000 - 31% 3,000 2,680 2,000 1,842 - 20% 1,000 735 585 0 Japan US Europe Asia Pacific Latin America (In accordance with Japan GAAP) 6 Copyri
Slide 7: Net Sales Growth by Region (constant currency)
Net Sales Growth by Region If currency exchange rates used for 1Q2008 were used for 1Q2009: (in million Yen) (unaudited) * ( ) : difference from GAAP base 10,000 9,823 9,784 - 0% (0) 9,000 + 8% (+704) 1Q2008 8,000 - 1% (+1,384) 1Q2009 7,000 6,657 6,178 6,185 6,133 6,000 5,000 - 10% 4,000 (+578) 3,00
Slide 8: Decomposition of Revenue (vs Last year)
Decomposition of Revenue （ｖｓ Ｌａｓｔ year） Japan (unaudited) Europe Asia Pacific - 39M - 52M US + 138M - 259M + 479M Exchange impact - 2,956M 2008Ｑ1 Net sales 2009Ｑ1 Net sales 25,604 M 22,915 M (Non-GAAP) 8 Copyright 2009 - Trend Micro Inc.
Slide 9: Sales by Segment
Sales by Segment 10,000 Growth rate 9,000 Consumer + 5% 8,000 All Enterprise 4,570 - 17% 7,000 6,000 5,000 2,564 277 4,000 3,000 5,213 4,471 2,000 3,389 386 1,000 18 1,456 566 0 Japan US Europe APAC Latin America (Non-GAAP) 9 Copyright 2009 - Trend Micro Inc.
Slide 10: % share by region
% share by region (unaudited) 1Q2008 1Q2009 25,604 million Yen 22,915 million Yen Latin Latin America America Asia Asia Pacific 3% Pacific 3% 8% 10% Japan Europe Japan Europe 38% 21% 43% 24% US US 24% 26% (In accordance with Japan GAAP) 10 Copyright 2009 - Trend Micro Inc.
Slide 11: Bookings (Amount of contracts concluded)
Bookings (Amount of contracts concluded) (in million Yen) (unaudited) + 8% 12,628 11,696 1Q2008 1Q2009 + 41% 7,358 - 1% 5,226 4,608 4,584 + 6% 2,153 2,040 + 0% 730 730 Japan US Europe Asia Pacific Latin Am erica (Non-GAAP) * Bookings = Net sales + Deferred revenue balance as of this Q – Deferred rev
Slide 12: Local currency based Bookings (US, Europe)
Local currency based Bookings (US, Europe) US Bookings in $ and EMEA Bookings in € (unaudited) 1Q2008 1Q2008 ($ in thousands) 1Q2009 (€ in thousands) 1Q2009 80,000 40,000 71,682 - 10% 36,421 + 6% 70,000 35,000 34,384 64,358 60,000 30,000 50,000 25,000 40,000 20,000 30,000 15,000 20,000 10,000 10,000
Slide 13: Deferred Revenue
Deferred Revenue (unaudited) (in million Yen) * Total of current and long term 70,000 68,000 69,817 66,000 67,516 69,707 64,000 66,152 65,166 62,000 60,000 58,000 56,000 54,000 52,000 50,000 Mar-'08 Jun-'08 Sep-'08 Dec-'08 Mar-'09 (In accordance with Japan GAAP) 13 Copyright 2009 - Trend Micro Inc.
Slide 14: Deferred Revenue by Region
Deferred Revenue by Region (in million Yen) (unaudited) 40,000 9% * Total of current and long term 34,367 35,000 31,523 Dec-08 30,000 Mar-09 25,000 9% 20,000 17,340 -1% 15,935 15,000 12,359 12,195 10,000 7% 14% 5,000 4,326 4,637 1,021 1,167 0 Japan US Europe Asia Pacific Latin America (In accordance
Slide 15: Deferred Revenue by Region (constant currency)
Deferred Revenue by Region If currency exchange rates used as of the end of 4Q2008 were used as of the end of 1Q2009: (in million Yen) (unaudited) * ( ) : difference from GAAP base 40,000 9% * Total of current and long term (0) 35,000 34,367 31,523 Dec-08 30,000 Mar-09 25,000 (-1,325) 0% 20,000 (-15
Slide 16: Cost
Cost (in million Yen) (unaudited) Stock option & Goodwill Salary & Benefit Office overhead Outside service Administration Selling & Marketing Goods 20,000 18,000 603 470 451 16,000 3,198 519 2,886 3,342 743 2,954 14,000 2,411 2,647 2,696 2,474 12,000 2,791 2,252 2,388 10,000 1,968 2,086 2,356 1,896
Slide 17: Bookings vs Total costs
Bookings vs Total costs (in million Yen) (unaudited) Bookings Total Costs 32,000 30,000 29,769 28,000 26,000 27,456 24,000 22,000 24,302 23,667 20,000 21,680 18,000 18,385 16,000 17,266 17,552 16,699 14,000 15,886 12,000 10,000 8,000 6,000 4,000 2,000 0 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 (Non-GAAP)
Slide 18: Q1 Highlights
Q1 Highlights • Operating margins maintained at 31% despite tough economic environment • EMEA business improves • New technology (hosted services, TMS, encryption…) start showing results • Acquired Third Brigade 18 Copyright 2009 - Trend Micro Inc.
Slide 19: Q1 Lowlights
Q1 Lowlights • New business growth still below plan • Weak performance of Enterprise business 19 Copyright 2009 - Trend Micro Inc.
Slide 20: Third Brigade acquisition
Third Brigade acquisition • Announced 29th April • Provides Trend with IDS/IPS technology, as well as web application protection, application control, integrity monitoring and log inspection, extending the level of protection on the server, whether physical, virtual or in the cloud • Already had suc
Slide 21: Headcount
Headcount Dec - 2008 Mar - 2008 4,120 4,239 ADM, Business Process ADM, Sales, Business Process 616 Marketing Sales, 618 Marketing 1,087 + 119 1,154 Technical (+ 3%) Support Technical Research, Support 1,309 Development Research, 1,341 Development 1,108 1,126 21 Copyright 2009 - Trend Micro Inc.
Slide 22: Net sales vs Headcount
Net sales vs Headcount Leveraging the global market for human talent – Development / support teams in four continents 100% 90% LA 80% APAC EMEA 70% USA 60% Japan 50% 40% 30% 20% 10% 0% Revenues Head count 22 Copyright 2009 - Trend Micro Inc.
Slide 23: Non-operating & Extra-ordinary Items
Non-operating & Extra-ordinary Items Other income (unaudited) Interest expense Equity in gains of affiliated companies 33 M 1M Loss on sales of marketable securities Exchange gain 8M 328M Other expense 62M 814 M Interest income 443M Ordinary Income Income before income taxes Operating income 7,936 M
Slide 24: Balance Sheet
Balance Sheet (unaudited) (in million Yen) Dec-2008 change Mar-2009 Assets Cash & cash equivalents 60,861 + 7,008 67,869 Account receivable (less allowance for doubtful accounts) 21,728 + 47 21,775 Marketable securities & Securities investments 59,415 - 6,567 52,848 Liabilities Deferred revenue (tot
Slide 25: Snapshot of our CDO investments (Update)
Snapshot of our CDO investments （Update） # We don’t have any CDOs related to RMBS (e.g. Subprime mortgages). # Since the underlying cash flow is intact, we intend to hold till maturity. # Exposure as a % of our “Marketable securities & Securities investments” : 2% # Exposure as a % of our “Cash + Ma
Slide 26: Q2 forecast assumptions
Q2 forecast assumptions • Japan increases by low single digits, while US decreases by single digit and Europe decreases by double digits due to forex headwind • Stock option expenses will be 0.5Bn yen • Estimated exchange rate: 1USD = 95 yen ( last year: 105 yen) 1EUR = 125 yen ( last year: 164 yen)
Slide 27: Projection for 2Q2009
Projection for 2Q2009 (unaudited) For 2Q2009 Expected (in million Yen) Apr - Jun, 2009 YoY growth Net Sales 23,800 - 9% Operating Income 7,200 - 16% Ordinary Income 7,500 - 20% Net Income 4,600 + 17% (In accordance with Japan GAAP) • Including both stock option expenses and amortization of goodwill
Slide 28: Appendix
Appendix 28 Copyright 2009 - Trend Micro Inc.
Slide 29: Quarterly Chart (1)
Appendix Quarterly Chart (1) (unaudited) (in million Yen) FY2008 FY2009 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Ｎｅｔ sale s 25,604 26,105 25,968 24,030 22,915 Co st o f sale s 4,054 3,859 4,188 3,646 3,597 O pe r atin g e xpe n se s 13,211 13,693 14,197 13,053 12,289 O pe r atin g in c o me 8,338 8,552 7,582 7,330 7
Slide 30: Quarterly Chart (2)
Appendix Quarterly Chart (2) (unaudited) (in million Yen) FY2008 FY2009 （ S ale s by r e gio n ） Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Japan 9,823 9,885 9,405 9,987 9,784 US 6,178 6,570 7,098 6,344 5,953 Eu r o pe 6,185 6,551 6,137 5,016 4,748 Asia P ac ific 2,680 2,325 2,530 2,060 1,842 Lat in Ame r ic a 735 772
Slide 31: Thank You
Thank You 31 Copyright 2009 - Trend Micro Inc.