Slide 1: Trend Micro FY2010.1Q Results
Trend Micro FY2010.1Q Results Mahendra Negi COO/CFO, Representative Director May 11,2010
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: FY2010. 1Q Financial Highlight
FY2010. 1Q Financial Highlight （First quarter ended March 31, 2010） 3 Copyright © 2010 Trend Micro Incorporated. All rights reserved.
Slide 4: Consolidated Results
Consolidated Results Three months (in million Yen) (unaudited) ended Mar 31, 1Q2009 1Q2010 YoY growth Net sales 22,915 23,728 + 4% Cost of sales 3,597 4,032 + 12% Operating expenses 12,289 13,653 + 11% Operating income (Margin) 7,028 (31%) 6,042 (25%) - 14% Ordinary income 7,936 6,207 - 22% Net inco
Slide 5: USD based Results (Non-GAAP)
USD based Results (Non-GAAP) (unaudited) Three months (in thousand USD) ended Mar 31, 1Q2009 1Q2010 YoY change Net sales 244,324 261,523 7% Cost of sales 38,352 44,443 16% Operating expenses 131,033 150,484 15% Operating income 74,938 66,595 -11% Ordinary income 84,615 68,418 -19% Net Income 51,408
Slide 6: Vs. Projection analysis (Operating income)
Vs. Projection analysis（Operating income） (unaudited) Cost side Sales side + 14M + 328M ・EMEA ↑ ・APAC ↑ 2010Ｑ1 2010Ｑ1 ・US ↓ Actual Projection 6,042M 5,700 M (Non-GAAP) 6 Copyright © 2010 Trend Micro Incorporated. All rights reserved.
Slide 7: Net Sales Growth by Region
Net Sales Growth by Region (in million Yen) (unaudited) 11,000 - 0% 10,000 9,784 9,782 1Q2009 9,000 1Q2010 8,000 + 1% 7,000 + 5% 5,953 5,999 6,000 5,005 5,000 4,748 4,000 + 22% 3,000 2,254 2,000 1,842 + 17% 1,000 585 685 0 Japan North America Europe Asia Pacific Latin America (In accordance with Jap
Slide 8: Net Sales Growth by Region (constant currency)
Net Sales Growth by Region If currency exchange rates used for 1Q2009 were used for 1Q2010: (in million Yen) (unaudited) * ( ) : difference from GAAP base 11,000 - 0% 10,000 9,784 9,782 (0) 9,000 1Q2009 8,000 + 4% 1Q2010 (+200) 7,000 5,9536,199 + 2% 6,000 (-146) 5,000 4,748 4,858 + 7% 4,000 (-275) +
Slide 9: Decomposition of Revenue (vs Last year)
Decomposition of Revenue （ｖｓ Ｌａｓｔ year） Exchange impact (unaudited) Latin America Japan Europe + 319M Asia Pacific + 2M - 1M + 109M North America + 136M + 246M 2010Ｑ1 Net sales 2009Ｑ1 Net sales 23,728 M 22,915 M (Non-GAAP) 9 Copyright © 2010 Trend Micro Incorporated. All rights reserved.
Slide 10: Sales by Segment
Sales by Segment (in million Yen) 11,000 Growth rate 10,000 9,000 Consumer + 3% All Enterprise + 4% 8,000 4,318 7,000 6,000 5,000 2,762 285 4,000 3,000 4,719 5,464 2,000 647 3,237 1,000 1,607 34 651 0 Japan North Europe APAC Latin America America (Non-GAAP) 10 Copyright © 2010 Trend Micro Incorporat
Slide 11: % share by region
% share by region (unaudited) 1Q2009 1Q2010 22,915 million Yen 23,728 million Yen Latin America Latin Asia Asia America Pacific 3% Pacific 3% 8% 10% Europe Japan Japan Europe 21% 41% 43% 21% US North America 26% 25% (In accordance with Japan GAAP) 11 Copyright © 2010 Trend Micro Incorporated. All ri
Slide 12: Bookings (Amount of contracts concluded)
Bookings (Amount of contracts concluded) (in million Yen) (unaudited) + 4% 12,628 13,078 1Q2009 1Q2010 7,358 - 20% 5,850 - 17% 4,584 3,787 + 17% 2,520 + 21% 2,153 730 886 Japan North America Europe Asia Pacific Latin America (Non-GAAP) * Bookings = Net sales + Deferred revenue balance as of this Q –
Slide 13: Local currency based Bookings (US, Europe)
Local currency based Bookings (US, Europe) North America (*excluding Canada) Bookings in $ and EMEA Bookings in € (unaudited) 1Q2009 1Q2009 ($ in thousands) 1Q2010 (€ in thousands) 1Q2010 70,000 64,358 61,607 - 4% 40,000 36,421 35,452 - 3% 60,000 35,000 30,000 50,000 25,000 40,000 20,000 30,000 15,0
Slide 14: Deferred Revenue
Deferred Revenue (in million Yen) (unaudited) 78,000 * Total of current and long term 75,956 74,000 73,562 70,000 71,751 70,832 69,707 66,000 62,000 58,000 54,000 50,000 Mar-'09 Jun-'09 Sep-'09 Dec-'09 Mar-'10 (In accordance with Japan GAAP) 14 Copyright © 2010 Trend Micro Incorporated. All rights r
Slide 15: Deferred Revenue by Region
Deferred Revenue by Region (in million Yen) (unaudited) 45,000 41,995 9% * Total of current and long term 40,000 38,699 35,000 Dec-09 Mar-10 30,000 25,000 20,000 -1% -9% 15,000 14,838 14,689 12,997 11,779 5% 10,000 5,737 6,002 16% 5,000 1,289 1,490 0 Japan North America Europe Asia Pacific Latin Ame
Slide 16: Deferred Revenue by Region (constant currency)
Deferred Revenue by Region If currency exchange rates used as of the end of 4Q2009 were used as of the end of 1Q2010: (in million Yen) (unaudited) 45,000 * ( ) : difference from GAAP base 41,995 9% (0) * Total of current and long term 40,000 38,699 35,000 Dec-09 Mar-10 30,000 25,000 -2% 20,000 (-213
Slide 17: Cost
Cost (in million Yen) (unaudited) Stock option & Goodwill Salary & Benefit Office overhead Outside service Administration Selling & Marketing Goods / Material 20,000 18,000 942 688 511 455 16,000 743 3,201 3,157 3,575 3,973 14,000 2,411 12,000 2,052 2,047 2,225 2,252 2,411 10,000 2,075 1,837 1,797 1
Slide 18: Bookings vs Total costs
Bookings vs Total costs (in million Yen) (unaudited) Bookings Total Costs 30,000 28,000 26,000 27,456 27,068 26,288 26,122 24,000 22,000 23,928 20,000 18,000 16,000 17,685 17,014 16,859 16,448 14,000 15,886 12,000 10,000 8,000 6,000 4,000 2,000 0 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 (Non-GAAP) * “Tota
Slide 19: Cash flows
Cash flows (unaudited) (in million Yen) 項目 1Q2009 1Q2010 YoY growth Cash flows from operating activities 10,113 6,217 - 39% Cash flows from investing activities - 11,229 3,473 － Cash flows from financing activities - 11,998 - 11,192 － Effect of exchange rate changes 2,158 560 － on cash and cash equi
Slide 20: Q1 Highlights
Q1 Highlights • Improving pipeline of strategic products • New business revenues in Enterprise market start growing 20 Copyright © 2010 Trend Micro Incorporated. All rights reserved.
Slide 21: Q1 Lowlights
Q1 Lowlights • Weak consumer business in N America • Sales cycle continues to be long • Pricing environment getting worse 21 Copyright © 2010 Trend Micro Incorporated. All rights reserved.
Slide 22: Headcount
Headcount Dec - 2009 Mar - 2010 4,434 4,575 ADM, ADM, Business Process Business Process Sales, Sales, Marketing 698 Marketing 682 Technical 1,208 + 141 Technical 1,269 Support (+ 3%) Support Research, Research, 1,338 Development 1,334 Development 1,206 1,274 22 Copyright © 2010 Trend Micro Incorpora
Slide 23: Non-operating & Extra-ordinary Items
Non-operating & Extra-ordinary Items (unaudited) Exchange loss Refundment of placement fee Other income Equity in losses of Impairment loss on marketable securities affiliated companies Interest income 29M 109M Other expense 226M 202M 2M 11M 260M Ordinary Income Income before income taxes Operating
Slide 24: Balance Sheet
Balance Sheet (unaudited) (in million Yen) Dec-2009 change Mar-2010 Assets Cash & cash equivalents 74,271 - 3,899 70,372 Account receivable (less allowance for doubtful accounts) 22,983 - 630 22,353 Marketable securities & Securities investments 65,112 - 4,479 60,633 Liabilities Deferred revenue (to
Slide 25: Snapshot of our CDO investments (Update)
Snapshot of our CDO investments （Update） # Exposure as a % of our “Marketable securities & Securities investments” : 2% # Exposure as a % of our “Cash + Marketable securities & Securities investments” : 1% (in million Yen) Ｂｅｇｉｎｎｉｎｇ Market value Maturity Name Vendor Write-down Unrealized P/L Loss ra
Slide 26: Q2 forecast assumptions
Q2 forecast assumptions •Japan increases by high single digit, US and Europe decrease by around 10% respectively •Stock option expenses will be 0.6Bn yen •Estimated exchange rate: 1USD = 90 yen ( last year: 97 yen) 1EUR = 120 yen ( last year: 132 yen) 26 Copyright © 2010 Trend Micro Incorporated. Al
Slide 27: Projection for 2Q2010
Projection for 2Q2010 (unaudited) For 2Q2010 Expected (in million Yen) Apr - Jun, 2010 YoY growth Net Sales 24,000 - 1% Operating Income 6,300 - 13% Ordinary Income 6,500 - 14% Net Income 3,900 - 3% (In accordance with Japan GAAP) • Including both stock option expenses and amortization of goodwill （
Slide 28: Thank you!
Thank you! 28 Copyright © 2010 Trend Micro Incorporated. All rights reserved.
Slide 29: Appendix: Quarterly Chart (1)
Appendix (unaudited) Quarterly Chart (1) (in million Yen) FY2009 FY2010 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Ｎｅｔ sale s 22,915 24,244 24,848 24,339 23,728 Co st o f sale s 3,597 3,511 3,618 4,263 4,032 O pe r atin g e xpe n se s 12,289 13,503 12,829 12,595 13,653 O pe r atin g in c o me 7,028 7,229 8,399 7,479 6
Slide 30: Appendix: Quarterly Chart (2)
Appendix Quarterly Chart (2) (unaudited) (in million Yen) FY2009 FY2010 （ S ale s by r e gio n ） Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Japan 9,784 9,631 10,435 9,887 9,782 US 5,953 6,729 6,571 6,084 5,999 Eu r o pe 4,748 5,100 5,092 5,232 5,005 Asia P ac ific 1,842 2,124 2,019 2,390 2,254 Lat in Ame r ic a 585 65