Slide 1: Trend Micro FY2011.1Q Results
Trend Micro FY2011.1Q Results Mahendra Negi COO/CFO, Representative Director May 11,2011 Copyright 2011 Trend Micro Inc. 1
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: FY2011. 1Q Financial Highlight
FY2011. 1Q Financial Highlight （First quarter ended March 31, 2011） Copyright 2011 Trend Micro Inc. 3
Slide 4: Consolidated Results
Consolidated Results Three months (in million Yen) (unaudited) ended Mar 31, 1Q2010 1Q2011 YoY growth Net sales 23,728 23,980 + 1% Cost of sales 4,032 4,412 + 9% Operating expenses 13,653 13,046 - 4% Operating income (Margin) 6,042 (25%) 6,520 (27%) + 8% Ordinary income 6,207 6,260 + 1% Net income 3
Slide 5: USD based Results (Non-GAAP)
USD based Results (Non-GAAP) (unaudited) Three months (in thousand USD) ended Mar 31, 1Q2010 1Q2011 YoY change Net sales 261,523 291,338 11% Cost of sales 44,443 53,610 21% Operating expenses 150,484 158,508 5% Operating income 66,595 79,219 19% Ordinary income 68,418 76,058 11% Net Income 38,897 48
Slide 6: Vs. Projection analysis (Operating income)
Vs. Projection analysis（Operating income） Sales side Cost side (unaudited) - 140M •Marketing cost ↓ + 480M •US ↑ 2011Ｑ1 •APAC ↑ Actual 2011Ｑ1 •Japan ↓ Projection 6,520M 5,900 M (Non-GAAP) Copyright 2011 Trend Micro Inc. 6 6
Slide 7: Net Sales Growth by Region
Net Sales Growth by Region (in million Yen) (unaudited) 12,000 11,023 + 13% 11,000 10,000 9,782 1Q2010 9,000 1Q2011 8,000 - 11% 7,000 5,999 - 11% 6,000 5,315 5,005 5,000 4,435 + 14% 4,000 3,000 2,570 2,254 - 7% 2,000 1,000 685 635 0 Japan North America Europe Asia Pacific Latin America (In accordanc
Slide 8: Net Sales Growth by Region (constant currency)
Net Sales Growth by Region If currency exchange rates used for 1Q2010 were used for 1Q2011: (in million Yen) (unaudited) * ( ) : difference from GAAP base 12,000 11,023 + 13% 11,000 (0) 10,000 9,782 1Q2010 9,000 1Q2011 - 2% 8,000 (+542) - 1% 7,000 5,9995,857 (+518) 6,000 5,005 4,953 + 15% 5,000 (+32
Slide 9: Decomposition of Revenue (vs. last year)
Decomposition of Revenue (vs. last year） (unaudited) Asia Pacific North America Europe Latin America - 142M Japan + 347M - 51M - 31M Exchange impact + 1,240M - 1,111M 2010Ｑ1 2011Ｑ1 Net Net sales sales 23,980M 23,728M (Non-GAAP) Copyright 2011 Trend Micro Inc. 9
Slide 10: Constant currency Revenue growth
Constant currency Revenue growth (YoY) (unaudited) 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 • Each growth rate shown above is based on a
Slide 11: Sales by Segment
Sales by Segment (in million Yen) 12,000 Growth rate 11,000 10,000 Consumer + 8% 9,000 All Enterprise - 3% 5,320 8,000 7,000 6,000 5,000 2,444 180 4,000 3,000 5,703 4,255 767 2,000 2,870 1,000 1,802 16 0 619 Japan North Europe APAC Latin America America (Non-GAAP) Copyright 2011 Trend Micro Inc. 11
Slide 12: % share by region
% share by region (unaudited) 1Q2010 1Q2011 23,728 million Yen 23,980 million Yen Latin Latin Asia America Asia America Pacific Pacific 3% 3% 10% 11% Europe Japan Europe Japan 21% 41% 18% 46% North North America America 25% 22% (In accordance with Japan GAAP) Copyright 2011 Trend Micro Inc. 12
Slide 13: Bookings (Amount of contracts concluded)
Bookings (Amount of contracts concluded) (in million Yen) (unaudited) 13,078 - 14% 11,204 1Q2010 1Q2011 + 0% + 33% 5,850 5,877 5,040 + 6% 3,787 2,683 - 25% 2,520 886 668 Japan North America Europe Asia Pacific Latin America (Non-GAAP) * Bookings = Net sales + Deferred revenue balance as of this Q –
Slide 14: Local currency based Bookings (US, Europe)
Local currency based Bookings (US, Europe) North America (*excluding Canada entity) Bookings in $ and EMEA Bookings in € (unaudited) 2010Q1 2010Q1 ($ in thousands) (€ in thousands) 2011Q1 2011Q1 80,000 40,000 35,452 35,892 + 1% 68,282 + 11% 70,000 35,000 61,607 60,000 30,000 50,000 25,000 40,000 20,
Slide 15: Deferred Revenue
Deferred Revenue (in million Yen) (unaudited) 82,000 * Total of current and long term 77,928 78,000 75,102 76,434 75,956 73,940 74,000 73,562 69,707 71,751 70,832 70,000 66,000 62,000 58,000 54,000 50,000 Mar-'09 Jun-'09 Sep-'09 Dec-'09 Mar-'10 Jun-'10 Sep-'10 Dec-'10 Mar-'11 (In accordance with Jap
Slide 16: Deferred Revenue by Region
Deferred Revenue by Region (in million Yen) (unaudited) 50,000 0% * Total of current and long term 45,000 44,526 44,707 40,000 Dec-10 35,000 Mar-11 30,000 25,000 4% 20,000 5% 15,000 12,775 13,337 2% 11,315 11,920 10,000 6,580 6,694 3% 5,000 1,236 1,268 0 Japan North America Europe Asia Pacific Latin
Slide 17: Deferred Revenue by Region (constant currency)
Deferred Revenue by Region If currency exchange rates used as of the end of 4Q2010 were used as of the end of 1Q2011: (in million Yen) (unaudited) 50,000 0% * ( ) : difference from GAAP base * Total of current and long term (0) 45,000 44,526 44,707 40,000 Dec-10 35,000 Mar-11 30,000 25,000 3% -3% (-
Slide 18: Cost
Cost Stock options / Acquisition related costs Salary & Benefit (in million Yen) Office overhead Outside service (unaudited) Administration Selling & Marketing 20,000 Goods / Softw are Amortization & Capitalization 18,000 383 545 498 611 779 16,000 3,966 3,998 3,542 3,973 2,964 14,000 2,492 2,429 2,
Slide 19: Bookings vs Total costs
Bookings vs Total costs (in million Yen) (unaudited) Bookings Total Costs 30,000 28,000 26,000 26,122 25,550 25,474 24,000 25,113 22,000 20,000 21,477 18,000 17,926 18,106 17,919 17,459 16,000 17,685 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 (Non-GAAP) * “Tota
Slide 20: Cash flows
Cash flows (unaudited) (in million Yen) 項目 1Q2010 1Q2011 YoY growth Cash flows from operating activities 6,217 4,514 - 27% Cash flows from investing activities 3,473 - 1,021 － Cash flows from financing activities - 11,192 - 12,033 － Effect of exchange rate changes 560 877 + 57% on cash and cash equi
Slide 21: Q1 Highlights
Q1 Highlights • Growth in both revenues and operating earnings • Double digit Bookings growth continues in North America • Continuing success with Strategic products, especially Deep Security Copyright 2011 Trend Micro Inc. 21
Slide 22: Q1 Lowlights
Q1 Lowlights • Impact of the earthquake on Japan Bookings • Continued pricing pressure on AV products • Forex losses on Euro MMF Copyright 2011 Trend Micro Inc. 22
Slide 23: Impact of earthquake disaster in Japan
Impact of earthquake disaster in Japan • The impact of our facilities and business sustainability → None, since we are globally distributed and major services are delivered from outside Japan • Negative business impact during Short term → Consumer business (Retail shop), Renewal contract delay for E
Slide 24: Headcount
Headcount Dec - 2010 Mar - 2011 4,846 4,848 ADM, ADM, Business Process Sales, Business Process Sales, 747 Marketing 746 Marketing Technical 1,304 +2 Technical 1,332 Support (+ 0%) Support 1,337 Research, 1,310 Research, Development Development 1,458 1,460 Copyright 2011 Trend Micro Inc. 24
Slide 25: Non-operating & Extra-ordinary Items
Non-operating & Extra-ordinary Items (unaudited) Other income Loss on sales of Gain on redemption of marketable securities marketable securities Exchange gain 16M Interest income 16M 535M Other expense 610M 321M Equity in losses of 56M affiliated companies 22M Income before income taxes Operating In
Slide 26: Balance Sheet
Balance Sheet (unaudited) (in million Yen) Dec-2010 change Mar-2011 Assets Cash & cash equivalents 73,960 - 6,300 67,660 Account receivable (less allowance for doubtful accounts) 22,033 - 1,026 21,007 Marketable securities & Securities investments 60,083 - 3,603 56,480 Liabilities Deferred revenue (
Slide 27: Q2 forecast assumptions
Q2 forecast assumptions •Japan increases by single digit, US and Europe decrease by single digit respectively •Stock option expenses will be 0.7Bn yen •Estimated exchange rate: 1USD = 81 yen ( last year: 92 yen) 1EUR = 115 yen ( last year: 117 yen) Copyright 2011 Trend Micro Inc. 27
Slide 28: Projection for 2Q2011
Projection for 2Q2011 (unaudited) For 2Q2011 Expected (in million Yen) Apr - Jun, 2011 YoY growth Net Sales 23,800 + 1% Operating Income 6,000 + 8% Ordinary Income 6,000 + 4% Net Income 3,400 + 5% (In accordance with Japan GAAP) • Including both stock option expenses and amortization of goodwill （ab
Slide 29: THANK YOU!
THANK YOU! Classification 5/10/2011 Copyright 2011 Trend Micro Inc. 29
Slide 30: Appendix: Quarterly Chart (1)
Appendix (unaudited) Quarterly Chart (1) (in million Yen) FY2010 FY2011 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Ｎｅｔ sale s 23,728 23,493 23,950 24,218 23,980 Co st o f sale s 4,032 4,025 4,446 4,222 4,412 O pe r at in g e xpe n se s 13,653 13,900 13,660 13,697 13,046 O pe r at in g in c o me 6,042 5,567 5,843 6,298
Slide 31: Appendix: Quarterly Chart (2)
Appendix Quarterly Chart (2) (unaudited) (in million Yen) FY2010 FY2010 （ S ale s by r e gio n ） Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Japan 9,782 9,990 11,451 11,100 11,023 US 5,999 6,118 5,485 5,124 5,315 Eu r o pe 5,005 4,408 4,173 4,671 4,435 Asia P ac ific 2,254 2,314 2,202 2,684 2,570 Lat in Ame r ic a 685