Slide 1: Trend Micro FY2011.3Q Results
Trend Micro FY2011.3Q Results Mahendra Negi COO/CFO, Representative Director November 9,2011 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. 3Q Financial Highlight
FY2011. 3Q Financial Highlight （Third quarter ended September 30, 2011） Copyright 2011 Trend Micro Inc. 3
Slide 4: Consolidated Results
Consolidated Results Three months (in million Yen) (unaudited) ended Sep 30, 3Q2010 3Q2011 YoY growth Net sales 23,950 24,015 + 0% Cost of sales 4,446 4,620 + 4% Operating expenses 13,660 12,513 - 8% Operating income (Margin) 5,843 (24%) 6,881 (29%) + 18% Ordinary income 5,859 8,705 + 49% Net income
Slide 5: USD based Results (Non-GAAP)
USD based Results (Non-GAAP) (unaudited) Three months (in thousand USD) ended Sep 30, 3Q2010 3Q2011 YoY change Net sales 279,208 308,599 11% Cost of sales 51,832 59,378 15% Operating expenses 159,250 160,794 1% Operating income 68,125 88,431 30% Ordinary income 68,310 111,861 64% Net Income 32,424 7
Slide 6: Vs. Projection analysis (Operating income)
Vs. Projection analysis（Operating income） Cost side Sales side - 585M -667M 2011Ｑ3 2011Ｑ3 •Japan ↓ Actual ・Marketing cost ↓ Projection •US ↓ •Outside service ↓ 6,881M 6,800 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 11,451 11,722 + 2% 11,000 3Q2010 10,000 3Q2011 9,000 8,000 -9% 7,000 + 1% 6,000 5,485 4,968 5,000 4,173 4,206 + 15% 4,000 3,000 2,528 - 7% 2,202 2,000 1,000 637 590 0 Japan North America Europe Asia Pacific Latin America (In accordance w
Slide 8: Net Sales Growth by Region (constant currency)
Net Sales Growth by Region If currency exchange rates used for 3Q2010 were used for 3Q2011: (in million Yen) (unaudited) * ( ) : difference from GAAP base 12,000 11,451 11,722 + 2% 11,000 (0) 10,000 3Q2010 9,000 3Q2011 - 0% 8,000 (+507) + 1% 7,000 (+26) 6,000 5,485 5,475 + 13% 5,000 4,173 4,232 (-45
Slide 9: Decomposition of Revenue (vs. last year)
Decomposition of Revenue (vs. last year） (unaudited) Latin America Europe North America Japan - 19M + 59M - 9M + 270M Exchange Asia Pacific impact - 515M + 279M 2011Ｑ3 2010Ｑ3 Net Net sales sales 24,015M 23,950M (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 2 3 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 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 • Each growth rate shown
Slide 11: Sales by Segment
Sales by Segment (in million Yen) (unaudited) 12,000 Growth rate 11,000 10,000 Consumer + 3% 9,000 5,987 All Enterprise - 2% 8,000 7,000 6,000 5,000 4,000 2,252 151 3,000 5,735 4,054 790 2,000 2,715 1,000 1,737 18 0 571 Japan North Europe APAC Latin America America (Non-GAAP) Copyright 2011 Trend Mi
Slide 12: % share by region
% share by region (unaudited) 3Q2010 3Q2011 23,950 million Yen 24,015 million Yen Latin Latin Asia America Asia America Pacific Pacific 3% 2% 9% 11% Europe Japan Europe Japan 17% 48% 18% 49% North North America America 23% 21% (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) - 5% 12,564 11,877 3Q2010 3Q2011 - 8% - 50% 4,735 4,376 4,549 - 25% 2,293 2,679 2,006 - 51% 584 289 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) 2010Q3 2010Q3 ($ in thousands) (€ in thousands) 2011Q3 2011Q3 70,000 40,000 63,309 63,805 + 1% 35,684 - 9% 60,000 35,000 32,578 30,000 50,000 25,000 40,000 20,000 30,0
Slide 15: Deferred Revenue
Deferred Revenue (in million Yen) (unaudited) 82,000 * Total of current and long term 77,928 77,771 78,000 76,434 75,956 74,599 73,562 73,940 75,102 74,000 70,832 70,000 66,000 62,000 58,000 54,000 50,000 Sep-'09 Dec-'09 Mar-'10 Jun-'10 Sep-'10 Dec-'10 Mar-'11 Jun-'11 Sep-'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 44,557 44,712 40,000 Jun-11 35,000 Sep-11 30,000 25,000 -5% 20,000 -16% 15,000 12,81012,217 12,120 -7% 10,000 10,207 7,036 6,514 -24% 5,000 1,248 946 0 Japan North America Europe Asia Pacific La
Slide 17: Deferred Revenue by Region (constant currency)
Deferred Revenue by Region If currency exchange rates used as of the end of 2Q2011 were used as of the end of 3Q2011: (in million Yen) (unaudited) 50,000 0% * ( ) : difference from GAAP base 45,000 44,557 44,712 (0) * Total of current and long term 40,000 Jun-11 35,000 Sep-11 30,000 25,000 1% -5% 20
Slide 18: Cost
Cost (in million Yen) Stock options / Acquisition related costs Salary & Benefit (unaudited) Office overhead Outside service Administration Selling & Marketing 20,000 Goods / Software Amortization & Capitalization 18,000 545 498 779 511 787 16,000 3,542 3,998 2,964 3,216 3,040 14,000 2,429 2,752 2,2
Slide 19: Bookings vs Total costs
Bookings vs Total costs (in million Yen) Bookings Total Costs (unaudited) 28,000 26,000 25,550 24,000 25,474 25,113 24,176 22,000 20,000 20,843 18,000 18,106 17,919 17,677 16,000 17,459 17,133 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 (Non-GAAP) * “Total costs
Slide 20: Cash flows
Cash flows (unaudited) (in million Yen) YoY 項目 3Q2010 3Q2011 growth + Cash flows from operating activities 22 2,660 11498% Cash flows from investing activities 393 - 2,894 － Cash flows from financing activities -3 0 － Effect of exchange rate changes - 623 - 3,375 － on cash and cash equivalents Net i
Slide 21: Q3 Highlights
Q3 Highlights • Continued strong growth of strategic products • Recovery in operating margins Copyright 2011 Trend Micro Inc. 21
Slide 22: Q3 Lowlights
Q3 Lowlights • Slippage of some large ENT deals in EMEA • Weakness in consumer and small company business • Overall macro Economic situation is worsening Copyright 2011 Trend Micro Inc. 22
Slide 23: Headcount
Headcount Jun - 2011 Sep - 2011 4,882 4,954 ADM, ADM, Business Process Business Process Sales, Sales, 758 Marketing Marketing 767 Technical 1,332 + 72 Technical 1,359 Support (+ 1%) Support Research, 1,318 1,333 Research, Development Development 1,474 1,495 Copyright 2011 Trend Micro Inc. 23
Slide 24: Non-operating & Extra-ordinary Items
Non-operating & Extra-ordinary Items (unaudited) Gain on reversal of stock option Loss on sales of 3,633M marketable securities Loss on sales of marketable securities 4,629M Other expense Exchange loss Equity in gains of 37M affiliated companies 33M - 1,451M Other income Interest income 8M 9M 424M O
Slide 25: Balance Sheet
Balance Sheet (unaudited) (in million Yen) Jun-2011 change Sep-2011 Assets Cash & cash equivalents 73,772 - 5,256 68,516 Account receivable (less allowance for doubtful accounts) 19,876 + 38 19,914 Marketable securities & Securities investments 55,880 - 803 55,077 Liabilities Deferred revenue (total
Slide 26: Q4 forecast assumptions
Q4 forecast assumptions •Japan increases by lower single digit, Europe decreases by lower single digit and US down by around 10% •Stock option expenses will be 0.6Bn yen •Estimated exchange rate: 1USD = 75 yen ( last year: 83 yen) 1EUR = 108 yen ( last year: 112 yen) Copyright 2011 Trend Micro Inc.
Slide 27: Projection for 4Q2011
Projection for 4Q2011 (unaudited) For 4Q2011 Expected (in million Yen) Oct - Dec, 2011 YoY growth Net Sales 23,600 - 3% Operating Income 6,200 - 2% Ordinary Income 6,500 + 8% Net Income 3,400 + 7% (In accordance with Japan GAAP) • Including both stock option expenses and amortization of goodwill （ab
Slide 28: THANK YOU!
THANK YOU! Classification 11/8/2011 Copyright 2011 Trend Micro Inc. 28
Slide 29: 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 24,333 24,015 Co st o f sale s 4,032 4,025 4,446 4,222 4,412 4,343 4,620 O pe r at in g e xpe n se s 13,653 13,900 13,660 13,697 13,046 13,334 12,513 O pe r a
Slide 30: 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 11,296 11,722 US 5,999 6,118 5,485 5,124 5,315 5,365 4,968 Eu r o pe 5,005 4,408 4,173 4,671 4,435 4,354 4,206 Asia P ac ific 2,254 2,314 2,