Slide 1: Trend Micro FY2013.2Q Results
Trend Micro FY2013.2Q Results Mahendra Negi COO/CFO, Representative Director August 8, 2013 8/7/2013 Copyright © 2013 Trend Micro Incorporated. All rights reserved. 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: FY2013.2Q Financial Highlight
FY2013. 2Q Financial Highlight （Second quarter ended June 30, 2013） 8/7/2013 Copyright © 2013 Trend Micro Incorporated. All rights reserved. 3
Slide 4: Q2 Consolidated Results
Q2 Consolidated Results (in million Yen) Three months YoY ended Jun 30, 2Q2012 2Q2013 growth Net sales 23,058 27,032 + 17% Cost of sales 4,488 4,796 + 7% Operating expenses 13,636 15,804 + 16% Operating income 4,934 6,430 + 30% (Margin) （ 21%） （ 24%） Ordinary income 5,043 8,031 + 59% Net income 3,28
Slide 5: Progress (6 months)
Progress （6months） (in million Yen) Revenue Operating Income 120,000 30,000 (forecast) 107,200 (forecast) 26,400 100,000 25,000 93,839 22,407 80,000 20,000 69,526 16,611 60,000 15,000 13,769 52,815 45,689 40,000 10,000 10,503 25,783 7,338 20,000 22,630 5,568 5,000 FY2012 FY2013 FY2012 FY2013 0 0 Q1
Slide 6: Q2 USD based Results (Non-GAAP)
Q2 USD based Results (Non-GAAP) (unaudited) Three months (in thousand USD) ended Jun 30, 2Q2012 2Q2013 YoY change Net sales 287,871 273,747 - 5% Cost of sales 56,030 48,577 - 13% Operating expenses 170,240 160,047 - 6% Operating income 61,600 65,123 + 6% Ordinary income 62,966 81,333 + 29% Net Incom
Slide 7: Net Sales Growth by Region
Net Sales Growth by Region (in million Yen) (unaudited) 13,000 11,966 + 7% 12,000 2Q2012 11,000 11,162 2Q2013 10,000 9,000 8,000 + 28% 7,000 6,085 + 25% 6,000 5,022 5,000 4,758 + 24% 4,000 4,003 3,282 3,000 2,640 + 37% 2,000 1,000 493 675 0 Japan North America Europe Asia Pacific Latin America (In a
Slide 8: Net Sales Growth by Region (constant currency)
Net Sales Growth by Region If currency exchange rates used for 2Q2012 were used for 2Q2013: (in million Yen) (unaudited) 13,000 + 7% 12,000 11,966 (0) * ( ) : difference from GAAP base 11,162 11,000 2Q2012 10,000 2Q2013 9,000 + 4% 8,000 (-1,148) + 0% 7,000 (-1,017) 6,000 + 2% (-591) 5,000 4,758 4,93
Slide 9: Decomposition of Revenue (vs. last year)
Decomposition of Revenue (vs. last year） (unaudited) Exchange impact + 2,887M Asia Pacific Europe Latin America North America + 50M + 0M 2013Ｑ2 + 52M Japan + 178M Net sales + 804M 27,032M 2012Ｑ2 Net sales 23,058M (Non-GAAP) Confidential | Copyright 2012 Trend Micro Inc. 9 9
Slide 10: Constant currency Revenue growth
Constant currency Revenue growth (YoY) (unaudited) 20% 15% 10% 5% 0% 3 1 2 1 2 3 4 1 2 4 1 2 3 4 4 1 2 3 4 2 3 1 2 3 4 1 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q 12 11 11 11 12 12 12 13 13 09 09 09 10 10 10 10 11 07 08 08 09 07 07 07 08 08 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 2
Slide 11: Sales by Segment
(in million Yen) Sales by Segment 13,000 12,000 Growth rate (YoY) + 12% 11,000 Consumer + 14% 10,000 All Enterprise + 19% 9,000 6,024 8,000 7,000 6,000 + 3% 5,000 2,571 + 14% 366 + 32% 4,000 + 25% + 14% 3,000 1,004 5,942 + 40% 4,655 2,000 3,514 + 30% - 820% 1,000 2,277 24 0 651 + 31% Japan North Ame
Slide 12: % share by region
% share by region 2Q2012 2Q2013 23,058 million Yen 27,032 million Yen Latin Latin Asia America Asia America Pacific Pacific 2% 2% 11% 12% Europe Japan Europe Japan 17% 48% 19% 44% North North America America 21% 23% (In accordance with Japan GAAP) Confidential | Copyright 2012 Trend Micro Inc. 12
Slide 13: For reference Pre-GAAP
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) (in million Yen) (unaudited) 12,870 12,811 - 0% 2Q2012 2Q2013 + 33% + 16% 5,632 4,857 + 20% 4,228 4,203 3,157 2,630 + 38% 497 685 Japan North America Europe Asia Pacific Latin America (Non-GAAP) “Notice” Pre-GAAP means Revenue befo
Slide 14: For reference Pre-GAAP (constant currency)
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) If currency exchange rates used for 2Q2012 were used for 2Q2013: (unaudited) (in million Yen) - 0% 12,870 12,811 2Q2012 2Q2013 + 8% - 9% - 2% 4,577 4,228 4,203 3,837 + 11% 2,630 2,588 497 552 Japan North America Europe Asia Pacific
Slide 15: Deferred Revenue
Deferred Revenue (in million Yen) 94,000 * Total of current and long term 88,904 90,000 87,381 86,000 83,751 77,771 82,000 74,599 79,744 78,832 78,547 78,000 75,456 74,000 70,000 66,000 62,000 58,000 54,000 50,000 Jun-'11 Sep-'11 Dec-'11 Mar-'12 Jun-'12 Sep-'12 Dec-'12 Mar-'13 Jun-'13 (In accordance
Slide 16: Deferred Revenue by Region
Deferred Revenue by Region (in million Yen) (unaudited) 55,000 50,706 1% * Total of current and long term 50,000 49,976 45,000 Mar-13 40,000 June-13 35,000 30,000 25,000 2% 5% 20,000 15,000 15,061 15,429 12,700 13,368 -3% 10,000 8,346 8,113 -1% 5,000 1,297 1,286 0 Japan North America Europe Asia Pac
Slide 17: Deferred Revenue by Region (constant currency)
Deferred Revenue by Region If currency exchange rates used as of the end of 1Q2013 were used as of the end of 2Q2013: (in million Yen) (unaudited) 55,000 1% 49,976 50,706 * ( ) : difference from GAAP base * Total of current and long term 50,000 (0) 45,000 Mar-13 40,000 June-13 35,000 30,000 -2% -1%
Slide 18: Cost
Cost (in million Yen) Stock options / Acquisition related costs Salary & Benefit (unaudited) Office overhead Outside service 22,000 Administration Selling & Marketing Goods / Softw are Amortization & Capitalization 217 20,000 2,917 18,000 528 713 1,004 562 16,000 3,137 2,688 2,812 3,051 3,051 14,000
Slide 19: Pre-GAAP vs Total Costs
Pre-GAAPⅴs Total Costs (unaudited) (in million Yen) Pre-GAAP Total Costs Pre-GAAP Margin 30,000 35% 28,000 31% 29% 26,000 30% 24,000 26% 27,144 22,000 24% 26,112 26,774 24% 25% 24,430 20,000 23,304 18,000 20% 16,000 14,000 15% 12,000 20,601 10,000 18,517 18,444 18,124 17,728 10% 8,000 6,000 4,000 5%
Slide 20: Cash flows
Cash flows (unaudited) (in million Yen) 項目 2Q2012 2Q2013 YoY growth Cash flows from operating activities 10,167 10,929 + 7% Cash flows from investing activities - 5,058 - 12,314 － Cash flows from financing activities - 274 3,628 － Effect of exchange rate changes - 3,199 1,527 － on cash and cash equi
Slide 21: Headcount
Mar - 2013 Headcount Jun - 2013 5,094 5,110 Admin, Admin, Business Process Business Process Sales, Sales, 802 Marketing 829 Marketing Technical 1,386 Technical 1,381 Support Support Research, Research, 1,292 1,275 Development Development 1,614 1,625 + 16 (+ 0%) Latin 63 Latin 67 EMEA EMEA 559 554 Ja
Slide 22: Non-operating & Extra-ordinary Items
Non-operating & Extra-ordinary Items (unaudited) Gain on sales of affiliated company’s securities Gain on reversal of stock option 22M Other income Other expense 403M Exchange gain 25M -34M Interest income 124M 393M Gain on sales of marketable securities 1,093M Income before income taxes Ordinary In
Slide 23: Balance Sheet
Balance Sheet (unaudited) (in million Yen) Mar-2013 change Jun-2013 Assets Cash & cash equivalents 63,421 + 2,372 65,793 Account receivable (less allowance for doubtful accounts) 21,974 - 864 21,110 Marketable securities & Securities investments 89,600 + 15,363 104,963 Liabilities Deferred revenue (
Slide 24: Q2 Highlights
Q2Highlights • N America Enterprise business shows signs of improvement • The number of Deep Security transactions grows Confidential | Copyright 2012 Trend Micro Inc. 24
Slide 25: Q2 Lowlights
Q2 Lowlights • European business weaker than expected • US Consumer business continues to decline (due to reduction in rebate payments) • Pricing pressure on traditional products continues Confidential | Copyright 2012 Trend Micro Inc. 25
Slide 26: FY2013 6months Financial Highlight
FY2013 6months Financial Highlight （January ~ June, 2013） 8/7/2013 Copyright © 2013 Trend Micro Incorporated. All rights reserved. 26
Slide 27: Consolidated Results (6 months)
Consolidated Results (6 months) (in million Yen) (Progress vs. (Progress vs. Six months last year’s YoY current year’s ended Jun 30, 2012(Q1-Q2)annual result)2013(Q1-Q2) growth annual forecast) Net sales 45,689 (49％) 52,815 + 16% (49％) Cost of sales 8,546 9,845 + 15% Operating expenses 26,640 29,201
Slide 28: Net Sales Growth by Region
Net Sales Growth by Region (in million Yen) (unaudited) 25,000 23,709 + 8% 22,037 FY2012 Q1-Q2 FY2013 Q1-Q2 20,000 15,000 + 27% 11,566 + 20% 10,000 9,128 9,801 8,197 + 22% 6,425 5,256 5,000 + 23% 1,070 1,313 0 Japan US Europe Asia Pacific Latin America (In accordance with Japan GAAP) 28
Slide 29: Net Sales Growth by Region (constant currency)
Net Sales Growth by Region If currency exchange rates used for 2012（Q1-Q2） were used for 2013（Q1-Q2）: (in million Yen) (unaudited) 25,000 23,709 + 8% * ( ) : difference from GAAP base FY2012 Q1-Q2 22,037 (0) FY2013 Q1-Q2 20,000 + 6% - 1% 15,000 (-1,919) (-1,719) 9,646 + 3% 10,000 9,128 8,197 8,081 (
Slide 30: For reference Pre-GAAP
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) (in million Yen) (unaudited) + 1% FY2012 Q1-Q2 25,49825,815 FY2013 Q1-Q2 + 23% 11,327 + 13% + 21% 9,210 9,291 8,217 6,173 + 17% 5,119 1,115 1,310 Japan US Europe Asia Pacific Latin America (Non-GAAP) “Notice” Pre-GAAP means Revenue
Slide 31: For reference Pre-GAAP (constant currency)
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) If currency exchange rates used for 2012(Q1-Q2) were used for 2013(Q1-Q2): (in million Yen) (unaudited) + 1% FY2012 Q1-Q2 25,815 25,498 FY2013 Q1-Q2 + 3% - 7% + 2% 9,210 9,461 8,217 7,653 5,119 5,211 + 1% 1,115 1,126 Japan North Am
Slide 32: FY2013 Cost (6 months)
FY2013 Cost (6 months) (in million Yen) (unaudited) YoY Growth 45,000 Goods / Software & Capitalization - 42% 40,000 930 Selling & Marketing - 4% 35,000 5,606 1,614 Administration + 18% 30,000 5,831 5,656 25,000 4,777 3,702 Outside service + 13% 3,267 2,784 20,000 + 10% 2,523 Office overhead 15,000
Slide 33: Projection for FY2013 Annual (Unchanged)
Projection for FY2013 Annual （Unchanged） (unaudited) For FY2013 Expected (in million Yen) Jan - Dec, 2013 YoY growth Net Sales 107,200 + 14% Operating Income 26,400 + 18% Ordinary Income 28,100 + 24% Net Income 17,100 + 27% (In accordance with Japan GAAP) In case of excluding a foreign exchange impa
Slide 34: Thank You
Thank You 34
Slide 35: Appendix: Quarterly Chart (1)
Appendix (unaudited) Quarterly Chart (1) (in million Yen) FY2012 FY2013 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Ｎｅｔ sale s 22,630 23,058 23,836 24,313 25,783 27,032 Co st o f sale s 4,058 4,488 4,390 4,574 5,048 4,796 O pe r at in g e xpe n se s 13,003 13,636 13,337 13,943 13,396 15,804 O pe r at in g in c o me 5,5
Slide 36: Appendix: Quarterly Chart (2)
Appendix Quarterly Chart (2) (unaudited) (in million Yen) FY2012 FY2012 （ S ale s by r e gio n ） Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Japan 10,874 11,162 12,109 11,656 11,742 11,966 US 4,369 4,758 4,765 4,975 5,480 6,085 Eu r o pe 4,193 4,003 3,916 4,282 4,779 5,022 Asia P ac ific 2,615 2,640 2,555 2,864 3,143 3