Internet Initiative Japan Inc. · TSE:3774
Internet Initiative Japan — FY2016 Earnings Presentation
23 slides from Internet Initiative Japan's earnings presentation, May 15, 2017
Slide 1: FY2016 Consolidated Financial Results
FY2016 Consolidated Financial Results Internet Initiative Japan Inc. TSE1(3774), NASDAQ(IIJI) May 15, 2017 © 2017 Internet Initiative Japan Inc.
Slide 2: Agenda
Agenda Ⅰ. Summary of FY2016 Financial Results Ⅱ. FY2017 Business Plan Ⅲ. Consolidated Financial Results for FY2016 Ⅳ. Reference Materials © 2017 Internet Initiative Japan Inc. 1
Slide 3: Summary of FY2016 Financial Results
Ⅰ. Summary of FY2016 Financial Results Strong revenue growth continued with aggressive business investment Income decreased due to heavy investment and SI deterioration Revenues JPY157.8 billion up 12.2% EBITDA JPY16.1 billion Gross margin JPY25.2 billion up 2.4% ROE 4.8% Operating income JPY5.1 bil
Slide 4: FY2017 Business Plan
Ⅱ. FY2017 Business Plan Continuous strong revenue growth just as the the middle term plan’s second year Operating income to largely improve with strong revenue absorbing cost increase Unit: JPY billion, YoY＝FY target compared with FY16 results, *Net income attributable to IIJ GIO P2 flagship proje
Slide 5: Consolidated Financial Results for FY2016 (1)
Ⅲ- 1. Consolidated Financial Results for FY2016 (1) Unit: JPY billion *Net income attributable to IIJ © 2017 Internet Initiative Japan Inc. 4
Slide 6: Consolidated Financial Results for FY2016 (2)
Ⅲ- 1. Consolidated Financial Results for FY2016 (2) Operating Income Unit: JPY billion YoY change in NW services gross margin YoY change in SI gross margin (incl. equipment sales) Factors affected SI gross margin YoY decrease YoY change in ATM operation business gross margin Profitability decrease
Slide 7: Revenues
Ⅲ- 2. Revenues Unit: JPY million NW Services Systems Integration (SI) Systems Construction [ ] , YoY = compared to the same period in a previous year Internet Connectivity Services (Enterprise) Internet Connectivity Services (Consumer) Systems Operation and Maintenance Outsourcing Service Equipment
Slide 8: Cost of Revenues and Gross Margin Ratio
Ⅲ- 3. Cost of Revenues and Gross Margin Ratio Cost of revenues: NW Services SI ATM Operation Business Unit: JPY million Equipment Sales [ ] , YoY = compared to the same period in a previous year Gross margin ratio: NW Services SI Total Revenues Gross Margin Total FY16: JPY25,247 million (up 2.4% Yo
Slide 9: Network Services: Revenues
Ⅲ- 4. Network Services (1)Revenues WAN Services Unit: JPY million Outsourcing Services [ ] , YoY = compared to the same period in a previous year QoQ = 4Q16 compared to 3Q16 Internet Connectivity Services (Consumer) Total Contracted Internet Connectivity (Enterprise) Internet Connectivity Services
Slide 10: Network Services: Cost of Revenues
Ⅲ- 4. Network Services (2)Cost of Revenues Others Unit: JPY million [ ] , YoY = compared to the same period in a previous year Outsourcing-related costs Personnel-related costs Network operation-related costs Cost of NW services Circuit-related costs FY16: up JPY12,147 million, up 18.9% YoY Alo
Slide 11: Systems Integration (SI): Revenues
Ⅲ- 5. Systems Integration (SI) (1)Revenues Unit: JPY million Systems Construction [ ] , YoY = compared to the same period in a previous year QoQ = 4Q16 compared to 3Q16 Systems Construction Revenues Systems Operation and Maintenance Revenues Order backlog *Systems construction’s order backlog and Or
Slide 12: Systems Integration (SI): Cost of Revenues
Ⅲ- 5. Systems Integration (SI) (2)Cost of Revenues Unit: JPY million Purchasing costs Outsourcing-related costs [ ] , YoY = compared the same period in a previous year QoQ: 4Q16 compared to 3Q16 Others Network operation-related costs Personnel-related costs ( ) Gross margin ratio FY15: 46,226 [+11.2
Slide 13: Number of Employees
Ⅲ- 6. Number of Employees Contract worker Unit: JPY million Full time worker YoY = compared to the same period in a previous year 2,975 2,981 2,977 2,980 3,110 3,124 3,108 3,104 Employee Distribution Administration 11% Sales 17% Engineers 72% 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 5,266 5,297 5,271
Slide 14: SG&A Expenses/R&D
Ⅲ- 7. SG&A Expenses/R&D Research & development expenses Unit: JPY million General & administrative expenses YoY = compared to the same period in a previous year Sales & marketing expenses ( ) % of total revenues FY15: 18,515 (13.2%) FY16: 20,113 (12.7%) 4,517 4,627 4,576 4,795 4,946 4,955 4,774 5,43
Slide 15: Operating Income and Net Income
Ⅲ- 8. Operating Income and Net Income Operating Income Net Income Attributable to IIJ Operating Margin Ratio Unit: JPY million YoY = FY16 compared to FY15 FY15 Operating income: 6,140 FY16 Operating income: 5,134 Income before income tax expense: FY15 Net income attributable to IIJ: FY16 Net income
Slide 16: Consolidated Balance Sheets (Summary)
Ⅲ- 9. Consolidated Balance Sheets (Summary) Unit: JPY million Total IIJ Shareholders’ Equity to Total Assets: 55.0% as of Mar. 31, 2016, 48.6% as of Mar. 2017 © 2017 Internet Initiative Japan Inc. 15
Slide 17: Consolidated Cash Flows
Ⅲ- 10. Consolidated Cash Flows Unit: JPY million Operating Activities YoY = compared to the same period in a previous year FY15: 12,052 FY16： 7,368 FY16 Operating Activities Major YoY Breakdown Change Net income 3,332 (858) Depreciation and amortization 10,894 +972 Fluctuations of operating assets
Slide 18: Other Financial Data (CAPEX etc.)
Ⅲ- 11. Other Financial Data (CAPEX etc.) Unit: JPY million CAPEX Cash CAPEX Capital Lease < Breakdown of CAPEX (unit: JPY billion) > FY15: 14,812 FY16: 16,531 FY15 FY16 Network update, Major YoY change: - Back office-related (up 0.7) back office investment 10.2 12.6 - Security-related (up 0.3) and o
Slide 19: Cloud Business Developments
Ⅳ- 1. Cloud Business Developments Cloud-related revenue (Unit: JPY billion) 4Q16 revenue (Unit: JPY billion) Large game customers General purpose SaaS 0.09 (groupware etc.) Business enterprise customers Task-specific SaaS 0.44 FY15：14.09 FY16: 15.66 (FX, POS etc.) Public 0.56 4Q16 cloud-related reve
Slide 20: Mobile Business Developments
Ⅳ- 2. Mobile Business Developments Total subscription & revenue IIJmio Mobile (consumer) & IIJ Mobile (enterprise) Total subscription (thousand) Subscription (thousand): Total revenue (JPY billion) IIJmio Mobile IIJ Mobile ( ) MVNE Revenue (JPY billion): IIJ Mobile IIJmio Mobile < > MVNE FY15: 15.59
Slide 21: FY2017 Financial Target (1)
Ⅳ- 3. FY2017 Financial Target (1) Unit: JPY billion Revenue growth to accelerate with large-scale Information Security Cloud project (MRC over JPY100 million), outsourcing and Internet connectivity services FY17 mobile net addition target to be greater than NW service FY16 along with market expa
Slide 22: FY2017 Financial Target (2)
Ⅳ- 3. FY2017 Financial Target (2) Operating Income Unit: JPY billion YoY change in NW services gross margin YoY change in SI gross margin (incl. equipment sales) YoY change in ATM operation business gross margin NW service Greater gross margin than FY16 with continuously acquiring mobile YoY change
Slide 23: Forward-looking statements; Contact Information
※ Forward-looking statements Statements made in this presentation regarding IIJ’s or managements’ intentions, beliefs, expectations, or predictions for the future are forward-looking statements that are based on IIJ’s and managements’ current expectations, assumptions, estimates and projections abou
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