Internet Initiative Japan Inc. · TSE:3774
Internet Initiative Japan — Q2 FY2004 Earnings Presentation
20 slides from Internet Initiative Japan's earnings presentation, Nov 11, 2004
Slide 1: Second Quarter Results for the Year Ending March 31, 2005
Internet Initiative Japan Inc. Second Quarter Results for the Year Ending March 31, 2005 November 11, 2004 Statements made in this material regarding IIJ's or management's intentions, beliefs, expectations, or predictions for the future are forward-looking statements that are based on IIJ's and mana
Slide 2: Highlights
Highlights 9 Revenue substantially increased and operating income turned positive in 2Q04 Total Revenue: JPY 10,512 million (An increase of 14.4% from 2Q03 and an increase from 21.2% to 1Q04) Operating income: JPY 282 million (An operating loss of JPY 830 million in 2Q03 and JPY 100 million in 1Q04)
Slide 3: Highlights
Network | Initiative Highlights ) ( By Service )
Slide 4: Summary of 2Q04/1H04 Results
Highlights Summary of 2Q04/1H04 Results Second Quarter of FY2004 First Half of FY2004 (JPY millions) (JPY millions) YoY % QoQ % YoY % 2Q04 2Q03 1Q04 1H04 1H03 Change Change Change Total Total Revenues 10,512 9,185 14.4% 8,675 21.2% Re ve nue s 19,187 17,529 9.5% Total Costs 8,854 8,337 6.2% 7,443 18
Slide 5: Revenues, Costs and Gross Margin
Highlights Revenues, Costs and Gross Margin (JPY million) Total Revenues (%) Connectivity and VAS gross 15,000 30 Connectivity and VAS margin ratio was 13.2%, showing Gross Margin Ratio 23.9% 23.7% a stable movement since 2H03 SI Gross Margin Ratio 22.3% 20.0% - Revenue from VAS is steadily 10,000 2
Slide 6: Operating and Net Income (Loss)
Highlights Operating and Net Income (Loss) Operating Income (Loss) Net Income (Loss) (JPY millions) (JPY millions) 8000 6000 4000 2000 0 -2000 -4000 -6000 -8000 -10000 FY2002 FY2003 FY2004 -12000 FY2002 FY2003 FY2004 Achieved positive operating income in the first half of the fiscal The improvement
Slide 7: Outlook for FY2004
Highlights Outlook for FY2004 - Our business environment is continuously improving. We are seeing increased demand for more reliable, high quality networks for critical usage by corporate customers and more network usage by governmental organizations and private companies - By differentiating IIJ fr
Slide 8: Establishment of a New Company
Highlights Establishment of a New Company The security system business of Yamatane Co. Ltd. was transferred to newly established IIJ Financial Systems Inc. Overview of business transferred Allows IIJ to provide total security system solutions by integrating IIJ Group’s know- Details of business: Dev
Slide 9: By Service
Network | Initiative ( Highlights ) ( By Service )
Slide 10: Connectivity Services
By Service Connectivity Services Expected slowdown in the trend of cancellations of certain IP Revenues Service contracts and/or the shifting of contracts to lower-priced broadband services. Decrease of dedicated access service (JPY millions) (Gbps) revenue expected to bottom out sometime in 2H04. 5
Slide 11: Value-added Services
By Service Value-added Services VAS revenues continued to improve, increasing 12.9% YoY and Revenues 2.8% QoQ, and becoming one of the major revenue sources Continuously increasing revenues from security, server (JPY millions) 2500 outsourcing and data centers. Increased revenues from network outsou
Slide 12: Systems Integration
By Service Systems Integration Revenues increased substantially by 50.5% compared to Revenues 2Q03 and by 42.4% compared to 1Q04. Revenues from SI development increased toward the end of September. 6000 Revenues increased primarily in Network design and in the configuration and installation of equip
Slide 13: Cross-selling
By Service Cross-selling 9 Usage (%) of VAS by Connectivity service customers continues to stay at a high level 9 Usage (%) of Connectivity service by SI customers also increased 2Q04 1Q04 VAS Cross-selling Ratio *1 86.9% 86.8% SI Cross-selling Ratio *2 80.0% 66.0% *1 Percentage of the largest 1,000
Slide 14: Ratio of Usage of IIJ Services by Large Enterprises
Ratio of Usage of IIJ Services by By Service Large Enterprises IIJ’s reliable service quality is being supported by many corporations where advanced network usage is being expanded Ratio of usage of IIJ services by major enterprises listed in the markets Electronic Appliances Information/ Telecommun
Slide 15: Model of Network Integration Cases
Model of By Service Network Integration Cases Network design & Consulting Provisioning of SMF Customer Site or Shops Upgrade of OS or (Recurring/non-recurring) (Recurring/non-recurring) automatic data backup Wire for PCs in offices IIJ Group Data Center/Customer HQ Implementation and less (recurring
Slide 16: Examples of Multi-site Connectivity
Examples of By Service Multi-site Connectivity Weathernews Inc. A Beverage Company The world’s largest weather information company with Building large-scale main business network connecting branches in 36 cities in 15 countries. Broadcasts approximately 30 sites including 15 manufacturing informatio
Slide 17: Expansion of SEIL and SMF
By Service Expansion of SEIL and SMF Many telecommunications carriers are choosing SEIL and SMF as one of core features of their Internet VPN services Starting to be chosen as a standard feature for the carriers’ Internet VPN and managed services for corporate customers IIJ will pursue a model of pr
Slide 18: Reference
<Reference> - Future Prospect - IIJ’s Value-added Services © 18
Slide 19: Future Prospect
Future Prospect Business Environment Increased Use Corporate Trend Requirement of Japan’s economy is recovering Increasing corporate broadband use higher reliability of the Internet Corporate IT investment is showing Increasing demand for operational outsource the sign of this recovery of services d
Slide 20: IIJ's Value-added Services
IIJ’s Value-added Services [Security] [Network Outsourcing] [Server Outsourcing] Protection of system against inappropriate Provision of equipment to connect Providing mail and mail distribution and, Internet originated access or attacks to the Internet with configuration, other web servers on behal
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