Slide 1: Trend Micro FY2007 1Q Results
Trend Micro FY2007. 1Q Results Mahendra Negi COO / CFO , Representative Director Ａｐｒｉｌ 26, 2007 TRENDMICRO、AppletTrap、eDoctor、INTERSCAN VIRUSWALL、Trend Virus Control System、VSAPI、ウイルスバスター、eManager、PC-cillin、Interscan eManager、MacroTrap、 ISVW、TVCS、InterScan、ウイルスバスター On-Line Scan、GateLock、ISWM、 InterS
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: FY2007 1Q Financial Highlight
FY2007 1Q Financial Highlight Copyright © 2006 Trend Micro Incorporated. All Rights Reserved. 3
Slide 4: Consolidated Results
Consolidated Results Three months (in million Yen) (unaudited) ended Mar 31, 1Q2006 1Q2007 YoY growth Net sales 20,778 23,252 12% Cost of sales 3,679 4,429 20% Operating expenses 8,570 12,195 42% Operating income (Margin) 8,529 (41%) 6,628 (29%) - 22% Income before taxes 8,877 7,511 - 15% Net Income
Slide 5: Comparison of Consolidated results before / after Amendment
Comparison of Consolidated results before / after Amendment ※ In spite of restating Q1 and Q3 in 2006, There is No impact to both Annual results and Semi-Annual results (restated) we had announced in February 2006. Comparison of Consolidated results before / after change for each quarter in FY 2006
Slide 6: Delisting from NASDAQ in the U.S.
Delisting from NASDAQ in the U.S. We’re planning to delist our ADR from NADAQ on May 31, 2007 (local time) (Reason) z The benefit of dual listing is minimal (low volume of trading, no research coverage, no need to access US capital market, etc.) z Costs to maintain NASDAQ listing is increasing (The
Slide 7: USD based Results (Non-GAAP)
USD based Results (Non-GAAP) (unaudited) Three months (in thousand USD) ended Mar 31, 1Q2006 1Q2007 YoY change Net sales 181,215 194,954 8% Cost of sales 32,090 37,137 16% Operating expenses 74,740 102,244 37% Operating income 74,386 55,573 - 25% Income before taxes 77,424 62,974 - 19% Net Income 44
Slide 8: Net Sales Growth by Region
Net Sales Growth by Region (in million Yen) (unaudited) 10,000 + 6% 9,000 8,538 8,028 1Q2006 8,000 1Q2007 7,000 + 20% + 14% 5,788 5,825 6,000 4,819 5,124 5,000 4,000 + 10% 3,000 2,378 2,166 2,000 + 12% 1,000 642 722 0 Japan US Europe Asia Pacific Latin America (In accordance with US GAAP) Copyright
Slide 9: Net Sales Growth by Region (constant currency)
Net Sales Growth by Region If currency exchange rates used for 1Q2006 were used for 1Q2007: (unaudited) (in million Yen) * ( ) : difference from GAAP base 10,000 + 6% 9,000 8,538 (0) 8,028 1Q2006 8,000 1Q2007 7,000 + 15% + 3% (-224) (-541) 6,000 5,565 5,285 5,124 5,000 4,819 4,000 + 6% (-88) 3,000 2
Slide 10: % share by region
% share by region (unaudited) 1Q2006 1Q2007 20,778 million Yen 23,252 million Yen Latin Latin Asia America America Pacific 3% Asia Pacific 3% 10% 10% Japan Japan Europe 39% 39% Europe 37% 25% 25% US US 23% 25% (In accordance with US GAAP) Copyright © 2006 Trend Micro Incorporated. All Rights Reserve
Slide 11: Sales by Segment
Sales by Segment (unaudited) (in million Yen) YoY growth 24,000 Large Enterprise + 29% 20,000 6,943 5,395 16,000 Small & Medium + 9% 12,000 10,656 9,772 8,000 Consumer + 1% 4,000 5,611 5,653 0 1Q2006 1Q2007 (Non-GAAP) Copyright © 2006 Trend Micro Incorporated. All Rights Reserved. 11
Slide 12: Bookings (Amount of contracts concluded)
Bookings (Amount of contracts concluded) (in million Yen) (unaudited) 12,000 11,259+ 20% 11,000 10,000 9,391 1Q2006 9,000 1Q2007 8,000 + 31% 7,039 7,000 6,057 + 18% 6,000 5,389 5,139 5,000 4,000 + 18% 3,000 2,609 2,219 2,000 - 10% 1,000 777 699 0 Japan US Europe Asia Pacific Latin America * “Booking
Slide 13: Cost of sales & Operating expenses
Cost of sales & Operating expenses (excluding stock option expenses effects) (in million Yen) (unaudited) Cost of sales (old)※ Amortization of capitalized software, and Material 18,000 Maintenance Support Sales, Marketing 16,000 R&D Administrative 1,277 1,231 14,000 753 741 903 1,065 12,000 893 920
Slide 14: Bookings vs Total costs
Bookings vs Total costs (in million Yen) (unaudited) 30,000 Bookings Total Costs 30,117 27,663 25,000 24,517 23,742 22,915 22,296 20,000 19,527 18,346 17,906 15,000 16,664 16,624 14,717 14,908 12,626 12,249 10,000 11,719 11,113 9,999 5,000 0 2005Q1 2005Q2 2005Q3 2005Q4 2006Q1 2006Q2 2006Q3 2006Q4 20
Slide 15: Q1 Highlights
Q1 Highlights z Good growth in North America, increasing market share z Good growth in Large Enterprise segment Copyright © 2006 Trend Micro Incorporated. All Rights Reserved. 15
Slide 16: Q1 Lowlights
Q1 Lowlights z Lower than expected growth in SMB z Lower than expected growth in EMEA Copyright © 2006 Trend Micro Incorporated. All Rights Reserved. 16
Slide 17: Headcount
Headcount Dec - 2006 Mar - 2007 3,229 3,336 ADM, ADM, Business Process Sales, Business Process 490 Sales, Marketing 513 Marketing 943 + 107 975 Technical (+ 3%) Technical Support Support Research, 934 Research, Development 978 Development 862 870 Copyright © 2006 Trend Micro Incorporated. All Rights
Slide 18: Non-operating Items
Non-operating Items (unaudited) unaudited) Other income Interest expense Gain on sales of marketable securities Exchange loss 4M 1M 307 M 31 M Interest income 605 M Income before taxes Operating income 7,511M 6,628 M (In accordance with US GAAP) Copyright © 2006 Trend Micro Incorporated. All Rights
Slide 19: Balance Sheet
Balance Sheet (unaudited) (in million Yen) Dec-2006 change Mar-2007 Assets Cash & cash equivalents 76,197 - 8,978 67,219 Account receivable (less allowance for doubtful accounts and 19,924 + 481 20,405 sales returns) Marketable securities & Securities investments 42,154 + 1,338 43,492 Liabilities De
Slide 20: Q2 forecast assumptions
Q2 forecast assumptions z North America to grow higher than average, Japan and EMEA growth rate same. z SMB business growth to recover z Stock option expenses will be 1.2Bn yen z Estimated exchange rate: 1USD = 117yen 1EUR = 159yen Copyright © 2006 Trend Micro Incorporated. All Rights Reserved. 20
Slide 21: Projection for 2Q2007
Projection for 2Q2007 (unaudited) For 2Q2007 Expected (in million Yen) Apr - Jun, 2007 YoY growth Net Sales 22,500 10% Operating Income 5,300 - 8% Net Income 3,000 - 7% • Including stock option expense （about 1,176M Yen） (In accordance with US GAAP) Amount of contracts concluded Bookings 26,000 17%
Slide 22: Thank you!
Thank you! Copyright © 2006 Trend Micro Incorporated. All Rights Reserved. 22
Slide 23: Appendix: Quarterly Chart (1)
Appendix Quarterly Chart (1) (unaudited) (in million Yen) FY2006 FY2006 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Ｎｅｔ sales 20,778 20,447 21,156 23,232 23,252 Cost of sales 3,679 3,826 3,886 4,503 4,429 Operating expenses 8,570 10,891 11,022 12,161 12,195 Operating incom e 8,529 5,730 6,249 6,568 6,628 Net incom e 5,
Slide 24: Appendix: Quarterly Chart (2)
Appendix Quarterly Chart (2) (unaudited) (in million Yen) FY2006 FY2007 （ Sales by region ） 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Japan 8,028 8,128 8,315 8,777 8,538 US 4,819 4,249 4,897 5,330 5,788 Europe 5,124 5,134 5,119 5,774 5,825 Asia Pacific 2,166 2,270 2,178 2,535 2,378 Latin Am erica 642 667 647 816 722