Cyberagent Incorporated · TSE:4751
Cyberagent — Q3 FY2006 Earnings Presentation
54 slides from Cyberagent's earnings presentation, August 2006
Slide 1: Results Briefing for the Third Quarter Year Ending September 2006
CyberAgent, Inc. Results Briefing for the Third Quarter Year Ending September 2006 (April – June 2006) http://www.cyberagent.co.jp/ Tokyo Stock Exchange Mothers: 4751 The opinions and forecasts contained within this document are based on the judgments of CyberAgent, Inc., at the time the document wa
Slide 2: Table of Contents
Table of Contents Overview of Consolidated Financial Results Investment Development Business Advertising Agency Business Media Business Medium- to Long-Term Outlook Blog Media "Ameba" Reference Material (1) Overview of Consolidated Financial Results PL (over the previous quarter) CAJJ Program Compan
Slide 3: Overview of Consolidated Financial Results
Overview of Consolidated Financial Results Overview of Third Quarter Consolidated Financial Results April – June 2006 2
Slide 4: Third Quarter Highlights (April – June 2006)
Overview of Consolidated Financial Results Third Quarter Highlights (April – June 2006) Advertising Agency Business and mobile advertising Net Sales led the way to steady growth, resulting in an increase of 28% over the same quarter of the previous year. Investment Development Business performed wel
Slide 5: Consolidated Net Sales
Overview of Consolidated Financial Results Consolidated Net Sales Advertising Agency Business and mobile advertising were solid, leading the way to an increase of 28.3% over the same quarter of the previous year. Unit: million yen 15,000 14,580 13,857 13,275 Increased 28.3% 13,213 12,000 11,360 10,1
Slide 6: Consolidated Operating Income
Overview of Consolidated Financial Results Consolidated Operating Income Investment Development Business performed well, continued aggressive investment in blog media "Ameba" Unit: million yen 1Q Unit: million yen 2Q Unit: million yen 3Q Unit: million yen 1,500 1,500 1,500 1,500 1,108 1,077 1,170 In
Slide 7: Consolidated Net Sales and Gross Margin Rate
Overview of Consolidated Financial Results Consolidated Net Sales and Gross Margin Rate Net sales grew steadily. Investment Development Business contributed to an increase in the gross margin rate. Unit: million yen Unit: % 15,000 14,580 13,857 327 13,213 13,275 28 314 60.0 1,053 12,000 11,360 547 5
Slide 8: Consolidated SG&A Expenses
Overview of Consolidated Financial Results Consolidated SG&A Expenses Unit: % Unit: million yen 60.0 4,889 5,000 4,622 4,309 4,479 4,090 4,000 3,695 50.0 3,292 2,875 3,000 2,558 2,266 2,026 1,662 1,834 2,000 40.0 38.4 39.8 38.7 36.5 36.0 37.4 1,000 35.8 36.0 36.5 34.8 32.3 33.5 32.6 30.0 0 03/ 03/ 0
Slide 9: Number of Employees in Consolidated Companies
Overview of Consolidated Financial Results Number of Employees in Consolidated Companies Employment offers made to 23 technicians, and with the hiring of 135 new graduates, there was an increase in personnel of 229 over the previous quarter. Media Business: increase of 154; Advertising Agency Busine
Slide 10: Q3, Year to Sep 2006: PL (Year-on-Year)
Overview of Consolidated Financial Results Q3, Year to Sep 2006: PL (Year-on-Year) Unit: million yen Apr-Jun 2006 Apr-Jun 2005 Change Net Sales 14,580 11,360 28.3% Gross Income from Sales 5,504 4,718 16.7% Gross Margin 37.8 % 41.5% -3.7points SG&A 4,889 4,090 19.5% SG&A Ratio 33.5 % 36.0% -2.5points
Slide 11: Q3, Year to Sep 2006: BS (over the previous quarter)
Overview of Consolidated Financial Results Q3, Year to Sep 2006: BS (over the previous quarter) Unit: million yen End of June 2006 End of March 2006 Change Current Assets 34,448 34,327 0.4 % (cash + marketable securities, etc.) 18,713 18,208 2.8 % Fixed Assets 10,327 9,112 13.3 % Total Assets 44,776
Slide 12: Q3, Year to Sep 2006: CF (over the previous quarter)
Overview of Consolidated Financial Results Q3, Year to Sep 2006: CF (over the previous quarter) Unit: million yen Apr-Jun 2006 Apr-Jun 2005 CF from Operating Activitie 883 571 CF from Investing Activities - 1,347 - 647 CF from Financing Activities 187 4,963 Change in Cash and Cash Equivalents -153 4
Slide 13: Consolidated Results Forecast for the Year Ending September 2006
Overview of Consolidated Financial Results Consolidated Results Forecast for the Year Ending September 2006 (October 2005 - September 2006) Consolidated Results(Revised up on January 19, 2006.) Unit: million yen Net Sales Operating Income Ordinary Income Current Net Income January 19, 2006 upward re
Slide 14: Investment Development Business
Investment Development Business Investment Development Business 28 37 13
Slide 15: Subsidiaries and Divisions of the Investment Development Business
Investment Development Business Consolidated Subsidiaries and Divisions that Constitute the Investment Development Business Agency Business Advertising Media Business Investment Development Investment Development Business Development Business Investment VC Business Division CyberAgent Investment, In
Slide 16: Investment Development Business (Net Sales)
Investment Development Business Investment Development Business (Net Sales) Sales of Operational Investment Securities 1,200 1,127 800 543 400 333 336 47 31 11 0 04/10-12 05/1-3 05/4-6 05/7-9 05/10-12 06/1-3 06/4-6 Yr to Sep 2005 Yr to Sep 2006 Net Sales from Sales of 532 1,088 308 0 316 Operational
Slide 17: CyberAgent Group Investment Amounts
Investment Development Business CyberAgent Group Investment Amounts Unit: million yen Operational Investment Securities Balance Investment will be made up to 4,000 no more than 20% of consolidated total assets. 3,796 2,041 3,568 Companies invested in as of June 30: 34 1,912 3,000 Invested Companies
Slide 18: Internet Advertising Agency Business
Advertising Agency Business Internet Advertising Agency Business 27 17
Slide 19: Subsidiaries and Divisions of the Advertising Agency Business
Advertising Agency Business Consolidated Subsidiaries and Divisions that Constitute the Advertising Agency Business Advertising Agency Others Internet Advertising Headquarters Agency Business Advertising CA Search, Ltd. Fraudia Communications, Inc. CA/H, Inc. (established on 4/17) New Division: Deve
Slide 20: Internet Advertising Agency Business (Net Sales)
Advertising Agency Business Internet Advertising Agency Business (Net Sales) Major Company Composition Ratio: 23.5% (05/3Q) → 29.8% (06/3Q) Definition of major company: The top 500 companies in yearly advertising outlay for FY2004 according to a study by the Nikkei Advertising Research Institute Uni
Slide 21: Internet Advertising Headquarters Net Sales
Advertising Agency Business Internet Advertising Headquarters Net Sales Yahoo! took the lead in the “Other Company Media” , and as for ” Own/Partner Media” , mobile advertising performed well. Unit: million yen 8,000 6,894 6,512 Increased 45.8% 6,000 5,531 5,389 4,556 4,730 4,000 3,806 3,414 3,083 2
Slide 22: Quarterly Net Sales Productivity per Sales Employee
Advertising Agency Business Quarterly Net Sales Productivity per Sales Employee Productivity dropped temporarily due to the hiring of 32 new graduates. Per capita productivity has increased each year. 60 180 166 145 145 50.9 50 150 136 42.2 128 40.5 41.5 40.7 40 37.1 37.9 108 37.2 120 31.5 98 94 32.
Slide 23: Internet Media Business
Media Business Internet Media Business 22
Slide 24: Subsidiaries and Divisions of the Media Business
Media Business Consolidated Subsidiaries and Divisions that Constitute the Media Business Media Business EC EC Advertising (product sales) (charged services) Other Ameba Headquarters Agency Business Advertising MicroAd Company Media Headquarters All Navi Company CA Guide Company Blog Accessory Group
Slide 25: Internet Media Business (Net Sales)
Media Business Internet Media Business (Net Sales) Unit: million yen 10,000 Increased 16.7% 8,139 8,266 8,206 7,784 8,000 7,085 6,719 Increased 19.9%. 6,000 5,596 5,238 4,713 4,300 4,000 3,896 2,000 Increased 11.9% 0 2004 2005 2006 2004 2005 2006 2004 2005 2006 2004 2005 2006 1Q (Oct - Dec) 2Q (Jan-
Slide 26: Media Business EC Net Sales
Media Business EC (Electronic Commerce) Net Sales An increase of 19.9% year-on-year to 5,085 million yen Internal, brokers, charged service, etc., net sales increased 48.3% year-on-year to 1,189 million yen. 6,000 Increased 19.9% 5,173 5,004 5,085 4,752 4,500 4,242 3,556 3,142 3,009 3,000 2,638 2,28
Slide 27: GCREST Led EC Net Sales
Media Business Consolidated Subsidiary that Led EC (Brokered, Charged Services) Net Sales: GCREST, Inc. Provides online games through charging for individual items. Unit: million yen GCREST, Inc. Net Sales by Quarter Current Free Games 350 Unit: 100 million yen 334 Flash games: 10 O nl i ne G am e M
Slide 28: Media Business Advertising Sales
Media Business Advertising Sales Blog advertisements and mobile advertisements are performing well - PC (WEB) Advertisements - Unit: million yen 4,000 Increased 11.9% 3,033 3,163 3,135 3,181 2,843 3,032 3,000 2,453 2,229 2,011 2,075 2,000 1,901 1,000 0 2004 2005 2006 2004 2005 2006 2004 2005 2006 20
Slide 29: Blog Media: The Leader of PC Advertising (web)
Media Business Blog Media: The Leader of PC Advertising (web) Unit: thousand yen Monthly "Ameba" Blog ralated sales Page Views of the "Ameba" Advertisement Listing Pages 140,000 Unit: thousand page views 40,000 3Q 06: 322 million yen 36,942 (Increase of 54.2% from the previous quarter) 33,164 33,833
Slide 30: Blog Media Advertisement Example (1)
Media Business Blog Media Advertisement Example (1) User Matched Advertising On May 1, 2006, BlogClick was revamped into the new MircoAd services. In addition to the coupling of contents, advertisements are now delivered according to information of the viewer such as their location and the sites the
Slide 31: Blog Media Advertisement Example (2)
Media Business Blog Media Advertisement Example (2) Tie-up Blogs Recruit Agent Co., Ltd. (staff agency) Blog users participate in the community through TrackBacks and popularity votes. We have a total of 80 tie-up blogs; Word-of-mouth information is spread from blog to blog. the highest figure natio
Slide 32: Medium- to Long-Term Outlook: Blog Media Ameba
Medium- to Long-Term Outlook Medium- to Long-Term Outlook Blog Media “Ameba” 36 31
Slide 33: Blog Media Expectations
Medium- to Long-Term Outlook Blog Media Expectations What is Web2.0 Media? This is a concept which encompasses all of the rising trends in net services, and includes CGMs etc. created in conjunction with service users. Portal Blog Reach Number of Users Sales Magnitude of Needs Web2.0 Media Long Tail
Slide 34: Expectations of Blog Media
Medium- to Long-Term Outlook Expectations of Blog Media The number of blog visitors have Rapid Increase in the Share of Web2.0 Media Usage doubled in one year. Unit: 10,000 visitors Changes in the number of visitors (Hours:Minutes) Web2.0 Media Usage Time and Total Internet Use 2,000 2:00 14.0% 2,01
Slide 35: What is Blog Media?
Medium- to Long-Term Outlook What is Blog Media? What is a Blog? A blog is a type of website that can be easily updated via the Internet. 2006, Blog Recognition of Internet Users 98.6% (As of April 2006, Source: Internet Hakusho 2006) Domestic Blog Users (Internet users that have their own blogs.) 8
Slide 36: What is Blog Media?
Medium- to Long-Term Outlook What is Blog Media? Blog use is diverse across the age groups, Approximately 40% of Internet users browse blogs. from users in their teens to those in their 60s. Unit: 10,000 people Blog Users Unit: % Unit: % 4,000 100 70 64.9 3,455 59.5 60 57.3 56.1 55.4 3,000 75 51.8 5
Slide 37: Becoming the overwhelming top blog media in Japan
Medium- to Long-Term Outlook Becoming the overwhelming top blog media in Japan Aiming for 1,000 million page views by end December 2006 Unit: million page views “Ameba” Blog Page Views Position of 1,000 Million Page Views 1,000 1st Yahoo! Portal Site 1,000 December 2006 2nd Rakuten Portal Site Goal
Slide 38: Becoming the overwhelming top blog media in Japan
Medium- to Long-Term Outlook Becoming the overwhelming top blog media in Japan Leading the industry with continued releases of new services. April 13, 2006 Commenced the user-participating type video delivery service “AmebaVision” . June 7, 2006 Commenced the “CyberBuzz” service through which produc
Slide 39: Example Blog Media Service (1)
Medium- to Long-Term Outlook Example Blog Media Service (1) Video Upload Service with 1.23 Million Users Commenced service July 13, 2005. Ameba Headquarters Users can upload and post videos to their blogs with ease, and these can be played directly from the blog article. In August 2006 a web based v
Slide 40: Example Blog Media Service (2)
Medium- to Long-Term Outlook Example Blog Media Service (2) Blog Accessory Business Established March 1, 2006 Start-up business Department The free Blog Accessory service that Users are able to communicate each other was commenced on July 5. Blog Accessory Group http://bloppa.ameba.jp/ Rewards Chest
Slide 41: Example Blog Media Service (3)
Medium- to Long-Term Outlook Example Blog Media Service (3) Drop-Shipping Business “MISEtsuku” Established July 3, 2006 Consolidated Subsidiary: Store Factory, Inc. A system is provided through which users can sell items through their blog, etc., and a subsequent service for receiving the revenue. h
Slide 42: Example Blog Media Service (4)
Medium- to Long-Term Outlook Example Blog Media Service (4) Word-of-Mouth Marketing Business Established April 3, 2006 Consolidated Subsidiary: CyberBuzz, Inc. Product word-of-mouth relating to specific products specified by the advertisers is spread through a structured group of hand-picked, influe
Slide 43: The Reader Oriented Extended Service Stage
Medium- to Long-Term Outlook The Reader Oriented Extended Service Stage Internet Users (79.48 million) 4) Drop-Shipping 1) Video Posting Service Consolidated Subsidiary, Store Factory, Inc. AmebaVision “MISEtsuku” 4) Dro Other New Services p-Sh A complete video service through which, Users become se
Slide 44: The Reader Oriented Extended Service Stage
Medium- to Long-Term Outlook The Reader Oriented Extended Service Stage Internet Users (79.48 million) 4) Drop-Shipping 1) Video Posting Service Consolidated Subsidiary, Store Factory, Inc. AmebaVision “MISEtsuku” 4) Dro Other New Services p-Sh A complete video service through which, Users become se
Slide 45: To become a leading company of the 21st Century
Medium- to Long-Term Outlook VISION To become a leading company of the 21st Century. 44
Slide 46: Mission Statement
Medium- to Long-Term Outlook To become a leading company of the 21st Century. MissionStatement. We must not shift away from the growing Internet industry. However, we must continue to actively participate in fields related to Internet. We must not forget the “Team CyberAgent” spirit. We must commit
Slide 47: Reference Material (1)
Reference Material (1) Reference Material(1) Overview of Consolidated Financial Results PL (over the previous quarter) 46
Slide 48: Q3, Year to Sept. 2006: PL (Year-on-Year)
Reference Material (1) Q3, Year to Sept. 2006: PL (Year-on-Year) Unit: million yen Apr-Jun 2006 Apr-Jun 2005 Change Net Sales 14,580 13,857 5.2% Gross Income from Sales 5,504 5,092 8.1% Gross Margin 37.8 % 36.7 % 1.1points SG&A 4,889 4,479 9.2% SG&A Ratio 33.5 % 32.3 % 1.2points Operating Income 615
Slide 49: Reference Material (2)
Reference Material (2) Reference Material(2) CAJJ Program Company Overview Business Model 48
Slide 50: CAJJ Program Model Diagram
Reference Material (2) CAJJ Program Model Diagram CyberAgent Business and Personnel Development Program CAJJ Program Model Diagram (CyberAgent Business and Personnel Development Program) J1 Promotion Standard As of June 2006 (Period: 3 to 6 months) ⇒Gross profit of 15 million yen/month J1 Lower limi
Slide 51: CAJJ Businesses
Reference Material (2) CAJJ Businesses Name of Business or Affiliated Company Service Contents Focused New total information media using a blog as a platform, Ameba Headquarters Business where users play the leading part J1 1 Internet Advertising Headquarters Internet advertising agency 2 MicroAd Co
Slide 52: Company Overview
Reference Material (2) Company Overview Company Name CyberAgent, Inc. (securities code: 4751) Head Office Shibuya Mark City West 21F, 1-12-1 Dogenzaka, Shibuya-ku, Tokyo West Japan Division, Meiji Yasuda Life Osaka Umeda Bldg. 14F, 3-3-20 Umeda-, Kita-ku, Osaka Osaka Office West Japan Division, Nish
Slide 53: Business Model
Reference Material (2) Business Model Client Users (Individuals/Consumers) Internet Media Internet Media Business Internet Advertisement Planning, Proposal and Effectiveness Verification Clients (Advertisers) Information Provision through Internet Media Charged Services/Product Sales Investment Subs
Slide 54: Internet Advertising Industry Map
Reference Material (2) Internet Advertising Industry Map Media Reps Ad Agencies Users (Individuals/Consumers) Clients (Advertisers) Yahoo(4689) CCI(4788) 4324 Google DAC(4281) 2433 Overture 2389 Rakuten(4755) 4293 53