Slide 1: Trend Micro FY2012.1Q Results
Trend Micro FY2012.1Q Results Mahendra Negi COO/CFO, Representative Director Ｍａy 10,2012 Confidential | Copyright 2012 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: FY2012. 1Q Financial Highlight
FY2012. 1Q Financial Highlight （First quarter ended March 31, 2012） Confidential | Copyright 2012 Trend Micro Inc. 3
Slide 4: Consolidated Results
Consolidated Results Three months (in million Yen) (unaudited) ended Mar 31, 1Q2011 1Q2012 YoY growth Net sales 23,980 22,630 - 6% Cost of sales 4,412 4,058 - 8% Operating expenses 13,046 13,003 - 0% Operating income (Margin) 6,520 (27%) 5,568 (25%) - 15% Ordinary income 6,260 5,804 - 7% Net income
Slide 5: USD based Results (Non-GAAP)
USD based Results (Non-GAAP) (unaudited) Three months (in thousand USD) ended Ｍａｒ 31, 1Q2011 1Q2012 YoY change Net sales 291,338 284,915 - 2% Cost of sales 53,610 51,091 - 5% Operating expenses 158,508 163,713 3% Operating income 79,219 70,110 - 11% Ordinary income 76,058 73,077 - 4% Net Income 48,5
Slide 6: Vs. Projection analysis (Operating income)
Vs. Projection analysis（Operating income） Cost side + 838M Sales side + 130M •Marketing cost ↓ •Japan ↑ •Outside service cost ↓ 2012Ｑ1 •US ↓ Actual 2012Ｑ1 Projection 5,568M 4,600 M (Non-GAAP) Confidential | Copyright 2012 Trend Micro Inc. 6 6
Slide 7: Net Sales Growth by Region
Net Sales Growth by Region (in million Yen) (unaudited) 13,000 - 1% 12,000 11,000 11,023 10,874 1Q2011 10,000 1Q2012 9,000 8,000 - 18% 7,000 - 5% 6,000 5,315 5,000 4,369 4,435 4,193 + 2% 4,000 3,000 2,570 2,615 - 9% 2,000 1,000 635 577 0 Japan North America Europe Asia Pacific Latin America (In acco
Slide 8: Net Sales Growth by Region (constant currency)
Net Sales Growth by Region If currency exchange rates used for 1Q2011 were used for 1Q2012: (in million Yen) (unaudited) * ( ) : difference from GAAP base 13,000 - 1% 12,000 11,023 10,874 (0) 11,000 1Q2011 10,000 1Q2012 9,000 8,000 - 15% (+158) 7,000 + 2% 6,000 5,315 (+344) + 3% 5,000 4,527 4,435 4,
Slide 9: Decomposition of Revenue (vs. last year)
Decomposition of Revenue (vs. last year） (unaudited) Latin America Asia Pacific North America Europe + 1M + 84M + 103M - 787M Japan Exchange - 148M impact 2011Ｑ1 Net - 602M sales 2012Ｑ1 Net 23,980M sales 22,630 M (Non-GAAP) Confidential | Copyright 2012 Trend Micro Inc. 9
Slide 10: Constant currency Revenue growth
Constant currency Revenue growth (YoY) (unaudited) 20% 15% 10% 5% 0% 1 2 3 4 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 Q Q Q Q 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 -5% • Each growth rat
Slide 11: Sales by Segment
Sales by Segment (in million Yen) 13,000 12,000 Growth rate 11,000 Consumer - 13% 10,000 All Enterprise - 1% 9,000 5,061 8,000 7,000 6,000 5,000 4,000 1,446 214 3,000 5,813 3,979 860 2,000 2,923 1,000 1,755 22 0 554 Japan North Europe APAC Latin America America (Non-GAAP) (Non-GAAP) Confidential | C
Slide 12: % share by region
% share by region (unaudited) 1Q2011 1Q2012 23,980 million Yen 22,630 million Yen Latin Latin Asia America America Pacific 3% Asia Pacific 3% 11% 12% Europe Japan Europe 18% 46% 19% Japan 48% North North America America 22% 19% (In accordance with Japan GAAP) Confidential | Copyright 2012 Trend Micr
Slide 13: For reference: Pre-GAAP
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) (in million Yen) (unaudited) + 10% 12,628 1Q2011 11,494 1Q2012 - 13% - 1% 5,714 4,981 4,060 4,013 - 1% + 2% 2,525 2,488 608 618 Japan North America Europe Asia Pacific Latin America (Non-GAAP) “Notice” Pre-GAAP means Revenue before
Slide 14: For reference: Pre-GAAP (constant currency)
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) If currency exchange rates used for 1Q2011 were used for 1Q2012: (unaudited) (in million Yen) + 10% 12,628 1Q2011 11,494 1Q2012 - 11% 5,714 + 6% 5,092 4,306 4,060 - 2% 2,525 2,484 + 11% 608 678 Japan North America Europe Asia Pacif
Slide 15: Deferred Revenue
Deferred Revenue (in million Yen) (unaudited) 82,000 * Total of current and long term 79,744 77,928 77,771 78,000 75,456 75,956 76,434 73,940 75,102 74,599 74,000 70,000 66,000 62,000 58,000 54,000 50,000 Mar-'10 Jun-'10 Sep-'10 Dec-'10 Mar-'11 Jun-'11 Sep-'11 Dec-'11 Mar-'12 (In accordance with Jap
Slide 16: Deferred Revenue by Region
Deferred Revenue by Region (in million Yen) (unaudited) 50,000 46,024 4% * Total of current and long term 45,000 44,392 40,000 Dec-11 35,000 Mar-12 30,000 25,000 9% 20,000 9% 15,000 13,658 12,496 5% 10,000 10,61511,592 6,963 7,328 15% 5,000 988 1,140 0 Japan North America Europe Asia Pacific Latin A
Slide 17: Deferred Revenue by Region (constant currency)
Deferred Revenue by Region If currency exchange rates used as of the end of 4Q2011 were used as of the end of 1Q2012: (in million Yen) (unaudited) 50,000 4% 46,024 (0) * ( ) : difference from GAAP base * Total of current and long term 45,000 44,392 40,000 Dec-11 35,000 Mar-12 30,000 25,000 4% 0% (-6
Slide 18: Cost
Cost (in million Yen) (unaudited) Stock options / Acquisition related costs Salary & Benefit 20,000 Office overhead Outside service Administration Selling & Marketing Goods / Software Amortization & Capitalization 18,000 779 511 828 787 610 16,000 2,964 3,216 3,056 3,040 2,779 14,000 2,275 2,461 2,7
Slide 19: Pre-GAAP vs Total Costs
Pre-GAAPⅴs Total Costs (未監査) (in million Yen) Pre-GAAP Total Costs Pre-GAAP Margin 28,000 33% 32% 26,000 32% 24,000 26,246 31% 22,000 24,725 31% 24,402 24,730 20,000 23,529 30% 18,000 16,000 29% 29% 28% 14,000 12,000 27% 28% 10,000 17,677 17,757 17,459 27% 17,133 8,000 17,061 6,000 26% 4,000 25% 2,0
Slide 20: Cash flows
Cash flows (unaudited) (in million Yen) 項目 1Q2011 1Q2012 YoY growth Cash flows from operating activities 4,514 7,564 + 68% Cash flows from investing activities - 1,021 - 5,782 － Cash flows from financing activities - 12,033 - 10,508 － Effect of exchange rate changes 877 2,984 + 240% on cash and cash
Slide 21: Q1 Highlights
Q1 Highlights • Continued growth in Strategic products • European growth continues, Japan also showing good recovery post earthquake Confidential | Copyright 2012 Trend Micro Inc. 21
Slide 22: Q1 Lowlights
Q1 Lowlights • Poor performance of consumer business in N America, especially due to impact of auto renewal law suit. • Economic uncertainty keeping sales cycle long for strategic products • Traditional AV products remain under pricing pressure Confidential | Copyright 2012 Trend Micro Inc. 22
Slide 23: Headcount
Headcount Dec - 2011 Mar - 2012 4,942 4,913 ADM, ADM, Business Process Business Process Sales, Sales, 778 Marketing Marketing 751 Technical 1,350 - 29 Technical 1,379 Support (- 1%) Support Research, Research, 1,322 1,283 Development Development 1,492 1,500 Confidential | Copyright 2012 Trend Micro
Slide 24: Non-operating & Extra-ordinary Items
Non-operating & Extra-ordinary Items (unaudited) Equity in gains of affiliated companies Other income Exchange loss Gain on sales of 1M Loss on sales of marketable securities marketable securities 33M 230M Devaluation loss on marketable securities Interest income 254M 78M 51M Other expense 49M 356M
Slide 25: Balance Sheet
Balance Sheet (unaudited) (in million Yen) Dec-2011 change Mar-2012 Assets Cash & cash equivalents 71,883 - 5,185 66,698 Account receivable (less allowance for doubtful accounts) 20,961 + 330 21,291 Marketable securities & Securities investments 60,972 + 4,789 65,761 Liabilities Deferred revenue (to
Slide 26: Q2 forecast assumptions
Q2 forecast assumptions •Japan and Europe decreases by low single digit respectively, US decreases by around 10% •Stock option expenses will be 0.7Bn yen •Estimated exchange rate: 1USD = 80 yen ( last year: 82 yen) 1EUR = 105 yen ( last year: 117 yen) Confidential | Copyright 2012 Trend Micro Inc. 2
Slide 27: Projection for 2Q2012
Projection for 2Q2012 (unaudited) For 2Q2012 Expected (in million Yen) Mar - Jun, 2012 YoY growth Net Sales 23,300 - 4% Operating Income 5,700 - 14% Ordinary Income 6,000 - 13% Net Income 3,300 - 16% (In accordance with Japan GAAP) In case of excluding a foreign exchange impact (a rule of thumb) Net
Slide 28: Trend Micro #1: Securing Your Journey to the Cloud
Trend Micro #1: Securing Your Journey to the Cloud Trend Micro 13–17% Trend Source: 2012 Technavio – Global Cloud Security Software Market Micro Trend Micro 23.7% 13% Worldwide Endpoint Security Revenue Share by Vendor, 2010 Source: IDC, 2011 Source: 2011 Technavio – Global Virtualization Security M
Slide 29: Thank you!
Thank you! Confidential | Copyright 2012 Trend Micro Inc. 29
Slide 30: Appendix: Quarterly Chart (1)
Appendix (unaudited) Quarterly Chart (1) (in million Yen) FY2011 FY2012 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Ｎｅｔ sale s 23,980 24,333 24,015 24,064 22,630 Co st o f sale s 4,412 4,343 4,620 4,519 4,058 O pe r atin g e xpe n se s 13,046 13,334 12,513 13,237 13,003 O pe r atin g in c o me 6,520 6,655 6,881 6,306 5
Slide 31: Appendix: Quarterly Chart (2)
Appendix Quarterly Chart (2) (unaudited) (in million Yen) FY2011 FY2012 （ S ale s by r e gio n ） Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Japan 11,023 11,296 11,722 12,028 10,874 US 5,315 5,365 4,968 4,803 4,369 Eu r o pe 4,435 4,354 4,206 4,151 4,193 Asia P ac ific 2,570 2,691 2,528 2,540 2,615 Lat in Ame r ic a 63