Cyberagent Incorporated · TSE:4751
Cyberagent — Q4 FY2005 Earnings Presentation
52 slides from Cyberagent's earnings presentation, Nov 14, 2005
Slide 1: Results Briefing for the Fourth Quarter and Fiscal Year Ending September 30, 2005
Results Briefing for the Fourth Quarter and Fiscal Year Ending September 30, 2005 November 14, 2005 CyberAgent, Ltd. http://www.cyberagent.co.jp/ The opinions and forecasts contained within this document are the decisions of CyberAgent Ltd. at the time the document was prepared and do not guarantee
Slide 2: Table of Contents
Table of Contents zOverview of Fourth Quarter Consolidated Financial Results zBusiness Model zInternet Media Business zInternet Advertising Agency Business zInvestment Development Business zOverview of Full Year Consolidated Financial Results zCAJJ Program zReturn to Shareholders Plan zOutlook for F
Slide 3: Results Briefing for the Fourth Quarter of the Year Ending September 30, 2005
Results Briefing for the Fourth Quarter of the Year Ending September 30, 2005 (July-September 2005) 3
Slide 4: Highlights for the Fourth Quarter 2005
Highlights for the Fourth Quarter 2005 Achieve record sales of 13,213 million yen 16.3 increase from third quarter Achieve operating income of 1,270 million yen 102.2 increase from third quarter - Owing to Investment Development Business - 1,228 employees, an increase of 57 on the third quarter CAJJ
Slide 5: Consolidated Results Summary for the Fourth Quarter 2005: Profit and Loss Statement
Consolidated Results Summary for the Fourth Quarter 2005: Profit and Loss Statement July-Sept. 2005 April-June 2005 Change July-Sept. 2004 Change Net sales 13,213 11,360 16.3% 7,873 67.8% Gross income from sales 5,579 4,718 18.2% 3,284 69.9% Gross margin (%) 42.2 41.5 0.7pt 41.7 0.5pt SG&A 4,309 4,0
Slide 6: Sales, Operating Income and Gross Margin Rate
Consolidated Results Summary for the Fourth Quarter 2005: Sales, Operating Income and Gross Margin Rate - Consolidated net sales increase 16.3% over the third quarter - Yen Millions 13,213 13,000 60 11,360 11,000 42.7 43.4 42.7 10,118 50 43.1 41.8 44.1 43.4 41.4 41.2 39.2 39.6 41.7 41.3 41.5 41.5 42
Slide 7: Net Sales Results by Business: Media / Advertising Agency Businesses
Net Sales Results by Business: Media / Advertising Agency Businesses Internet Advertising Agency Internet Media Business Business 5,882 9,000 6,000 Millions of yen Millions of yen 8,000 7,784 5,500 7,085 5,000 5,001 4,783 7,000 6,719 4,500 6,000 5,595 4,000 4,002 5,238 3,579 5,000 4,713 3,500 3,220
Slide 8: Net Sales Results by Business: Investment Development Business
Net Sales Results by Business: Investment Development Business Investment Development Business 1,200 Yen Millions Starting from October-December 2004, the 1,000 Company started Investment Development Business with the establishment of funds 800 at consolidated subsidiary CA Capital, Ltd. 600 Continu
Slide 9: Consolidated Selling, General and Administrative Expenses
Consolidated Selling, General and Administrative Expenses Millions of yen - SG&A ratio is steadily decreasing - 5,000 60.0% 4,500 4,309 4,090 4,000 3,695 50.0% 3,500 3,292 3,000 2,875 2,026 2,266 2,558 40.0% 2,500 2,000 1,834 1,656 1,707 1,662 1,500 1,318 30.0% 1,000 500 0 20.0% 9
Slide 10: Number of Employees in Consolidated Companies
Number of Employees in Consolidated Companies - 57 new employees in the quarter, 52 in Media Business, 7 in Advertising - 1,228 1,200 1,171 1,040 1,000 900 799 800 734 609 548 600 495 484 391 414 400 360 200 0 *These figures do not include temporary and 02/1 03/1 04/1 02/9 03/3 03/6 03/9 04/3 04/6 0
Slide 11: Consolidated Results Summary for the Fourth Quarter 2005: Balance Sheet
Consolidated Results Summary for the Fourth Quarter 2005: Balance Sheet Sept. 30, 2005 June 30, 2005 Change Spt.30, 2004 Change Current assets 22,075 20,331 8.6 18,199 21.3% Cash + marketable securities 0.0 12,872 -11.8 11,354 11,354 Fixed assets 9,755 9,266 5.3 8,573 13.8 Total assets 31,830 29,598
Slide 12: Consolidated Results Summary for the Fourth Quarter 2005: Cash Flows
Consolidated Results Summary for the Fourth Quarter 2005: Cash Flows July-Sept. 2005 Apr-June. 2005 July-Sept. 2004 CF from operating activities 1,289 261 200 CF from investing activities -1,677 -1,730 -745 CF from financing activities 300 -160 1,199 Change in cash & cash equivalents -85 -1,629 657
Slide 13: Business Model
tp_ Business Model i CyberAgent
Slide 14: Business Model
Business Model Advertising Agencies Reps Media Dentsu, CCI Hakuhodo, Clients and advertisers Users and consumers etc. DAC Opt Septeni, etc. etc. Cyber Agent Group Media etc. 14
Slide 15: Media Business
tp_ Media Business Ameba by CyberAgent
Slide 16: Media Business: Advertising Sales
Media Business: Advertising Sales - Advertising-related net sales increased 6.6% on the third quarter, 36% year-on-year - - PC (web) advertising, including Ameba Blog, post 63.4% increase on third quarter - yen millions 3,163 3,032 3,000 2,843 660 2,453 626 616 2,229 356 212 2,011 2,075 475 1,901 20
Slide 17: Media Business: PC (WEB) Advertising Sales
Media Business: PC (WEB) Advertising Sales - Driven by Ameba Blog user numbers, CyberAgent Group media user numbers increase by 109.3% - September 2005 year-on-year user increase patterns CyberAgent Group Media users increase 109.3%, vs. average increase of 8.2%! General Internet use: 8.2% increase
Slide 18: Reference: Ameba Blog
Reference: Ameba Blog - Sharp increase in Ameba Blog PV, numbers of new accounts - - Ameba, blog media's new integrated site, attracting customers - Transition of Ameba Blog PV numbers Cumulative new Ameba Blog accounts (‘000 PV (‘000 people An increase of 29 times in As of October 2005, less than a
Slide 19: Reference: Ameba media's future development plans
Reference: Ameba media's future development plans The Ameba Genre: Launch "Ameba Scrap Book" Service November 2005 Consolidation and organization of existing content Launch Ameba Auction January 2006 blog-based auction business service Launch “My Page” Service including ID integration February 2006
Slide 20: Media Business: EC (E-Commerce) Sales
Media Business: EC (E-Commerce) Sales - EC net sales post 4,752 million yen, 12.0% increase on third quarter - - Net sales from Commissions, Fee Collection etc., post 937 million yen, 16.8% over the third quarter - - Net sales from mobile phone & PC commerce post 3,815 million yen, 10.9% over the th
Slide 21: Media Business: Fourth Quarter Summary
Media Business: Fourth Quarter Summary Advertising-related sales: Shift from email medium to web medium EC sales: Net sales of commission, fee collection, including online shopping, online games, and other item fee, remains strong 21
Slide 22: Advertising Agency Business
Advertising Agency Business 22
Slide 23: Media Business: Future Strategies
Media Business: Future Strategies “Ameba by CyberAgent” brand building: Focus on development of blog media “Ameba”service expansion Improvement in Productivity: Adjustments of costs due to improvement in profitability as a result of cultivation and optimization of personnel 23
Slide 24: Advertising Agency Business: Internet Advertising HQ Sales
Advertising Agency Business: Internet Advertising HQ Sales - Sales of Advertising Headquarters increase 13.9% on third quarter - 5,389 Millions of yen 5,000 4,730 4,556 37 4,000 3,806 34 3,414 35 3,083 3,000 2,815 36 39 31 2,083 2,209 39 33 27 2,000 42 29 51 26 55 26 22 1,000 7 15 35 38 33 32 35 35
Slide 25: Number of Clients and Sales
Number of Clients and - Thanks to blog advertising, consumables makers and other major clients increase - -Companies clients increased by 185 in the quarter - Growth in number of dealings companies 1,500 1,318 Top 5 client lines of business by sales ratio 1,133 Finance, Insurance, 1,049 1 Securities
Slide 26: Quarterly Productivity per Sales Employee
Quarterly Productivity per Sales Employee - Growth in number of employees in operations was flat, new employees from 2005 gradually changed into a workforce - -The Company to focus on increasing per employee productivity - 60 160 50 140 44.4 145 145 42.2 40.5 120 40 38.7 37.1 37.2 34.3 98 32.6 30.2
Slide 27: Summary of the Advertising Business for the Fourth Quarter
Summary of the Advertising Business for the Forth Quarter Other company media, such as Yahoo!, were strong Thanks to blogs, direct trade with national clients (major consumables makers) increased. 27
Slide 28: Advertising Business: Future Strategies
Advertising Business: Future Strategies Shift to gross profit as the main indicator Strengthen business education and personnel development systems, aim to acquire 15% market share by 2008 28
Slide 29: Investment Development Business
Investment Development Business 29
Slide 30: Investment Development Business
Investment Development Business -Taking advantage of the Company's strengths in discovering & developing internet industries to further develop our Investment Development Business - Outlineof Outline ofFund Fund Establishing a finance business headquarters in July 2005 Name CA-I investing business l
Slide 31: Overview of Consolidated FY2005 Financial Results
Overview of Consolidated FY2005 Financial Results 31
Slide 32: Highlights From the Fiscal Year 2005
Highlights From the Fiscal Year 2005 Media business: 48.6% year on year increase in net sales Agency business: 64.3% year on year increase in net sales Continue developing Investment Development Business 429 year-on-year increase in employees 81 new graduates, 348 were mid-career hires Blog service
Slide 33: Consolidated Financial Summary for the Fiscal Year 2005
Consolidated Financial Summary for the Fiscal Year 2005 Sept. 2005 Sept. 2004 Sept. 2003 04/10 – 05/9 03/10 – 04/9 Change 02/10 – 03/9 Net sales 43,273 26,728 61.9% 16,202 Gross income from sales 18,039 11,453 57.5% 6,718 Gross margin (%) 41.7 42.9 -1.2point 41.5 SG&A 15,387 9,726 58.2% 6,860 SG&A r
Slide 34: Consolidated Business Results Year-on-Year Progress
Consolidated Business Results Year-on-Year Progress Net Sales - Net Sales 43.2 billion yen (61.9 Y/Y increase) - - Operating Income 2.6 billion yen (53.6 Y/Y increase) - 50,000 Operating 43,273 Income 40,000 5,000 30,000 26,728 4,000 20,000 3,000 16,202 2,651 10,824 2,000 10,000 1,726 6,392 3,276 1,
Slide 35: Full Year Composition of Sales: 43.2 billion yen
Full Year Composition of Sales : 43.2 billion yen 1.6bl Units: billions of yen Investment Development Business 4% Comm/Fees 4% 2.9bl Own/Partners Medium 7% 13bl EC E-comm. Selling FY2005 ending 30 goods 30% Advertising September 2005 15.6 12.7bl 26bl bn Net Sales 43.2 bn yen 36% 29% 7bl 60% Other Pa
Slide 36: Consolidated Full Year Balance Sheet
Consolidated Full Year Balance Sheet Sept. 30, 2005 Sept. 30 2004 Change Sept. 30 2003 Current assets 22,075 18,199 21.3 11,741 (Cash + marketable securities, etc.) 11,354 12,872 -11.8 8,846 Fixed assets 9,755 8,573 13.8 5,895 Total assets 31,830 26,772 18.9 17,636 Current liabilities 9,574 4,935 94
Slide 37: Consolidated Full Year Cash Flows
Consolidated Full Year Cash Flows Sept. 2005 Sept. 2004 Sept. 2003 04/10 – 05/9 03/10 – 04/9 02/10 – 03/9 CF from operating activities 1,612 1,460 366 CF from investing activities -2,689 578 164 CF from financing activities 19 1,574 202 Change in cash and cash equivalents -1,061 3,617 733 Term-end b
Slide 38: CAJJ Program
CAJJ Program September 2005 GCREST CO., Ltd. In-house J1 promotion poster September 2005 CA Guide Company In-house J1 promotion poster 38
Slide 39: New Business Start-up Program: CAJJ Program
New Business Start-up Program: CAJJ Program - CYBERAGENT Jigyo & Jinzai Ikusei Program - J2 Promotion Standard (Period: 3 – 6 months) J1 Promotion Standard (Period: 6 – 12 months) Gross profit of 5 million yen /month Average quarterly gross profit of 15 million yen / month Lower limit on losses: 30
Slide 40: CAJJ Program History
CAJJ Program History May 2004 CAJJ Program began 2H 2004/9 Start up 13 Businesses New business start-up phase 1Q 2005/9 All Navi Project promoted to J2 Real Estate Project promoted to J2 Wedding Park, Ltd. promoted to J2 GCREST Co. Ltd. promoted to J2 Growth towards business expansion phase 2Q 2005/
Slide 41: CAJJ Program
CAJJ Program As of October 2004 As of October 2005 Division Name or Affiliate CAJJ Division Name or Affiliate Name CAJJ Name 1 CA Mobile, Ltd. EC Navi Formerly axiv. Com Inc. 2 EC Navi Formerly axiv. Com Inc. Internet Advertising Headquarters 3 Internet Advertising Headquarters netprice, ltd. 4 netp
Slide 42: Business Outlook
tp_ Business Outlook R CyberAgent
Slide 43: Outlook for the Year Ending 09/2006 Medium- to Long-Term Outlook
Outlook for the Year Ending 09/2006 Medium- to Long-Term Outlook 43
Slide 44: Outlook for FY 2006
Outlook for FY 2006 60,000 Net Sales Consolidated Forecasts for FY 2006 50,000 Consolidated Net Sales 60 Bn yen 43,273 40,000 Operating Income 4 Bn yen Ordinary Income: 4 Bn yen 5,000 30,000 Net Income 2 Bn yen 26,728 4,000 4,000 Dividend per Share 1,800 yen 3,000 20,000 16,202 2,651 10,824 2,000 1,
Slide 45: FY2006 Composition of Sales
FY2006 Composition of Sales: 60 billion yen FY 2006iIncome increase 39 Investment Development Business Advertising sales increase 42 1.0 EC sales increase 41 Billions of yen Commission/Fee Collection Units: millions Sept. Sept. Sept. 4.0 of yen 2004 2005 2006 EC EC Sales E-commerce 84 127 180 Own/pa
Slide 46: Important Measures for FY2006
Important Measures for FY2006 Improvement in productivity Optimization of personnel and shift to gross profit indicator Emphasis on attracting customers and expanding services for Ameba blog media 46
Slide 47: Returns to Shareholders Plan
Returns to Shareholders Plan Mid- to long- term share price and dividend increase Focus on significantly increasing business value Principle: Our policy is to generate a cash dividend every year Use profits from mainstream consolidated businesses to calculate dividend amount 47
Slide 48: Looking to Sales of 100 Billion yen in the Year Ending September 2008
Looking to Sales of 100 Billion yen in the Year Ending September 2008 Millions of yen Growth in mobile advertising & e-commerce Development of broadband for mobile devices Growth in PC advertising and e-commerce Development of broadband for PCs 20,000 1,726 2,651 4,000 -106 -278 -142 -2 -34 -1,636 S
Slide 49: Looking Towards Sales of 100 Billion Yen in FY2008
Looking Towards Sales of 100 Billion Yen in FY2008 “Ameba by CyberAgent” Expansion of Media Improvement in Productivity 49
Slide 50: Growing Into a Representative 21st Century Company
The CyberAgent Vision Growing Into a Representative 21st Century Company 50
Slide 51: Reference Materials
Ea Reference Materials a: CyberAgent
Slide 52: Company Overview
Company Overview Company Name: CYBER AGENT, LTD. (securities code: 4751) Head Office: Shibuya Mark City West 21F, 1-12-1 Dogenzaka, Shibuya-ku, Tokyo Osaka office: Meiji Yasuda Life Osaka Umeda Bldg. 14F, 3-3-20 Umeda, Kita-ku, Osaka Nagoya office: Nishiki Park Bldg. 12F, 2-4-3 Nishiki, Naka-ku, Nag