Internet Initiative Japan Inc. · TSE:3774

Internet Initiative Japan — FY2009 1Q-3Q Earnings Presentation

24 slides from Internet Initiative Japan's earnings presentation, Feb 12, 2010

  1. Slide 1: FY2009/1Q-3Q (cumulative) Consolidated Financial Results

    FY2009/1Q-3Q (cumulative) Consolidated Financial Results Internet Initiative Japan Inc. 2010.2.12

  2. Slide 2: Agenda

    Agenda Ⅰ. Summary of FY2009/1Q-3Q (cumulative) Financial Results Ⅱ. FY2009/1Q-3Q (cumulative) Consolidated Financial Results Ⅲ. Reference Materials 1

  3. Slide 3: Summary of FY2009/1Q-3Q (cumulative) Financial Results

    I. Summary of FY2009/1Q-3Q (cumulative) Financial Results ≪ Nine Months Ended December 31, 2009 Financial Results ≫  Revenue JPY48,313 million (down 4.9% YoY)  Operating Income JPY 2,007 million (up 8.8% YoY)  Income before Income Tax Expense JPY 1,783 million (up 43.6% YoY)  Net Income Attribut

  4. Slide 4: Consolidated Results for FY2009/1Q-3Q (cumulative)

    II-1. Consolidated Results for FY2009/1Q-3Q (cumulative) Unit: JPY million % of Revenues % of Revenues 3Q09 3Q08 YoY  Connectivity and outsourcing service （09/04～09/12） （08/04～08/12） revenue increased 6.4% YoY  SI revenue decreased affected by the Total weak economy Revenues 48.3 50.8 (4.9%) 80.1%

  5. Slide 5: Revenues

    II-2. Revenues Internet Connectivity Services Unit: JPY million One-time Systems Construction Recurring Outsourcing Services Revenues Equipment Saleｓ Revenues Systems Operation and Maintenance ATM Operation Business 66,835 69,731 18,942 18,486 6 18,359 4 259 234 17,535 399 16,926 16,294 16,328 202 6

  6. Slide 6: Cost of Revenues and Gross Margin Ratio

    II-3. Cost of Revenues and Gross Margin Ratio Cost of Revenues Connectivity and Outsourcing Services SI Equipment Sales ATM Operation Gross Margin Ratio Business Connectivity and Outsourcing Services SI Total Gross Margin Ratio 28.9% 28.1% Unit: JPY million 26.7% 25.5% 26.2% 25.7% 24.6% 23.5% 23.3%

  7. Slide 7: Connectivity and Outsourcing Services (1) Revenues

    II-4. Connectivity and Outsourcing Services (1) Revenues Unit: JPY million Connectivity Services for Home Use Outsourcing Services Connectivity Services for Corporate Use Total Contracted Bandwidth (Gbps) 619.8 647.2 584.7 530.5 449.1 476.6 392.4 422.1 330.3 334.9 346.0 35,076 9,297 9,135 9,126 9,17

  8. Slide 8: Connectivity and Outsourcing Services (2) Cost of Revenues

    II-4. Connectivity and Outsourcing Services (2) Cost of Revenues Purchasing Costs Unit: JPY million Others Outsourcing Costs Personnel Related Costs Network Operation Related Costs Circuit Related Costs 22,878 21,851 7,651 7,661 7,567 7,510 8 9 7 7,065 12 7,276 18 1 526 529 481 530 518 514 1,215 1,2

  9. Slide 9: Systems Integration (1) Revenues

    YoY = 3Q09 compared to 3Q08 II-5. Systems Integration (1) Revenues Unit: JPY million QoQ = 3Q09 compared to 2Q09 (Systems construction) Systems Construction Revenues 9,234 Systems Operation and Maintenance Revenues 7,717 7,409 Order Backlog Include equipment sales JPY million Order Received 5,500 4,

  10. Slide 10: Systems Integration (2) Cost of Revenues

    II-5. Systems Integration (2) Cost of Revenues Unit: JPY million Purchasing Costs Outsourcing Costs Others Network Operation Related Costs 18,504 Personnel Related Costs 6,154 6,326 6,024 14,751 1,627 2,086 5,174 1,619 4,876 4,702 1,412 1,235 985 2,175 2,250 1,984 1,541 1,591 1,543 351 374 335 304 3

  11. Slide 11: SG&A Expenses/R&D

    II-6. SG&A Expenses/R&D Unit: JPY million Sales and Marketing Expenses Research and Development General and Administrative Expenses ( ) % of Revenues 10,668 2,978 9,193 （15.7%） 2,614 2,550 199 2,647 2,540 2,458 （16.0%） 2,526 （16.7%） 2,372 （15.1%） （14.4%） 2,426 （15.8%） 2,301 （13.3%） 59 77 （14.8%） （12

  12. Slide 12: Number of Employees

    II-7. Number of Employees （number of employees） [Employee Distribution] 1,800 1,700 1,699 Contract worker 1,673 1,602 1,600 Full time worker 228 255 266 Administration 229 15% 1,400 1,373 173 Sales 1,200 1,155 18% 129 Engineers 987 1,000 67% 127 800 1,373 1,445 1,445 1,433 600 1,200 1,026 400 860 20

  13. Slide 13: Operating Income and Net Income

    II-8. Operating Income and Net Income Unit: JPY million Operating Income Net Income Operating Margin Ratio YoY = 3Q09 compared to 3Q08 QoQ = 3Q09 compared to 2Q09 Operating income ： 4,759 Operating income ： 2,917 Net income attributable 9.8% Net income attributable 3Q09 Operating Income: up 0.3% to

  14. Slide 14: Connectivity and Outsourcing Service and SI

    II-9. Connectivity and Outsourcing Service and SI Unit: JPY million [Gross margin and gross margin ratio] Gross Margin Gross Margin Ratio Operating Income Operating margin Ratio 9,777 22.2% 22.5% 20.9% Connectivity and Outsourcing Service 20.1% 20.1% and SI YoY = 3Q09 compared to 3Q08 19.1% QoQ = 3Q

  15. Slide 15: Operating Income YoY Change

    YoY = 3Q09 compared to 3Q08 II-10. Operating Income YoY Change QoQ = 3Q09 compared to 2Q09 Gross margin of Gross margin of SG&A expenses Unit: JPY million connectivity and equipment sales (excluding ATM) outsourcing Gross margin of SI ATM Operation service +633 ▲187 ▲28 +10 Business (+15.5%) (▲3.3%)

  16. Slide 16: Revised Revenue Target for FY2009

    II-11. Revised Revenue Target for FY2009 Unit: JPY billion (except for Net Income and Cash Dividend per Share) FY09 Revised FY08 Actual YoY Target （08/4～09/3） （09/4～10/3） Total Revenues 68.0 69.7 (1.7) (2.5%) Operating Income 3.3 2.9 +0.4 13.1% Income before Income Tax 2.7 2.0 +0.7 32.7% Expense (Be

  17. Slide 17: Consolidated Balance Sheets

    II-12. Consolidated Balance Sheets Unit: JPY million December 31, March 31, Changes 2009 2009 Decreased correspondingly to the Cash and Cash Equivalents 8,466 10,188 (1,722) decreases in SI Projects Accounts Receivable 8,575 10,257 (1,682) Increased correspondingly to the increase in on-going SI P

  18. Slide 18: Consolidated Cash Flows

    II-13. Consolidated Cash Flows Unit: JPY million Net cash provided by (used in) operating activities 3Q09 Net cash provided by operating 4,538 8,631 activities: JPY1,468 million 4,083 Operating income 3,280 2,164 2,628 Increase in inventories, prepaid expenses 2,018 1,987 1,444 1,346 1,468 338 and

  19. Slide 19: Other Financial Data (CAPEX etc.)

    II-14. Other Financial Data (CAPEX etc.) Unit: JPY million CAPEX (Include Capital Lease) 7,006  CAPEX related to ATM operation 6,078 business: JPY350 million 2,685 2,232 1,831 1,832 1,546 1,489 1,574 Adjusted EBITDA 1,242 1,058 1,124 9,534 8,177 658 3,101 2,550 2,316 2,379 2,193 2,099 2,132 1Q07 2Q

  20. Slide 20: Merger of the Two 100% Consolidated Subsidiaries

    III-1. Merger of the Two 100% Consolidated Subsidiaries Merger Effective Date April 1, 2010 (No impact on FY2009 Consolidated Financial Target) (100% Owned) (100%Owned) Internet Initiative Japan Inc. IIJ Technology Inc. IIJ Financial Systems Inc. Established: Dec 1992 Established: Nov 1996 Establish

  21. Slide 21: Topics

    III-2. Topics Launched the new IIJ cloud computing service “IIJ GIO”  This new cloud computing platform is built in data centers connected directly through IIJ's high-volume backbone  IIJ has been providing IIJ GIO to companies and public sectors from Oct 2009 ◆To enhance sales with partner compan

  22. Slide 22: Reference: IIJ Group Companies

    III-3. Reference: IIJ Group Companies （As of January 31, 2010) Company Name Ownership Main Business Offers a comprehensive suite of systems integration services from IIJ Technology Inc. Merger design, physical installation, operation, and maintenance to monitoring scheduled for our customers' divers

  23. Slide 23: Reference: Press Release

    III-4. Reference: Press Release Date Press Releases 10/1 IIJ Makes the IIJ Managed Firewall Service IPv6 Compatible 10/5 IIJ Group Announces the Latest Cloud Services for IIJ GIO 10/8 IIJ and Cybozu Research Form Alliance to Promote Cloud Services 10/13 IIJ Strengthens Compliance Function of IIJ Sec

  24. Slide 24: Forward-looking Statements

    ※ Forward-looking Statements Statements made in this presentation 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 managements’ current expectations, assumptions, estimates and projections abou

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