Internet Initiative Japan Inc. · TSE:3774

Internet Initiative Japan — FY2013 Earnings Presentation

22 slides from Internet Initiative Japan's earnings presentation, May 15, 2014

  1. Slide 1: FY2013 Consolidated Financial Results

    FY2013 Consolidated Financial Results Internet Initiative Japan Inc. TSE1(3774), NASDAQ(IIJI) May 15, 2014

  2. Slide 2: Agenda

    Agenda Ⅰ. Summary of FY2013 Financial Results Ⅱ. Consolidated Financial Results for FY2013 Ⅲ. Reference Materials 1

  3. Slide 3: Summary of FY2013 Financial Results

    Ⅰ. Summary of FY2013 Financial Results < FY2013 Financial Results > < FY2014 Financial Targets > ・Revenues JPY114.3 billion (up 7.6% YoY) JPY123.0 billion (up 7.6% YoY) ・Gross margin JPY21.1 billion (down 3.6% YoY) ・Operating income JPY5.7 billion (down 26.2% YoY) JPY7.2 billion (up 25.8% YoY) ・Inco

  4. Slide 4: Consolidated Results for FY2013

    Ⅱ-１. Consolidated Results for FY2013 Unit: JPY billion % of Revenues % of Revenues % of Revenues FY13 FY12 YoY FY14 Target YoY (Apr. 2013 (Apr. 2012 Change in % (Apr. 2014 Change in % -Mar. 2014) -Mar. 2013) -Mar.2015) Total Revenues 114.3 106.2 +7.6% 123.0 +7.6% 81.6% 79.4% Total Cost of Revenues +

  5. Slide 5: Revenues

    Ⅱ-2. Revenues Network Services Systems Integration (SI) FY13 Network Services: JPY67,286 million Systems Construction (up 3.1% YoY) Internet Connectivity Services for Corporate Use FY13 Systems Integration: JPY42,470 million Systems Operation and Maintenance Internet Connectivity Services for Home

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

    Ⅱ-3. Cost of Revenues and Gross Margin Ratio Cost of revenues : Network Services Systems Integration（SI） Equipment Sales ATM Operation Business Gross margin ratio : Network Services Systems Integration（SI) Total Revenues Unit: JPY million YoY = FY13 compared to FY12 pt. = points FY13 Gross Margin 

  7. Slide 7: Revenues YoY Change

    Ⅱ-4. Revenues YoY Change ATM Operation Business Revenues Systems Construction & Equipment Sales Revenues Unit: JPY billion Network Services Revenues Systems Operation and Maintenance Revenues YoY = FY13 compared to FY12 Systems Construction & Equipment Sales Order Received +4.2 +3.1 (+17.6%) +4.0 +4

  8. Slide 8: Operating Costs / SG&A YoY Change

    Ⅱ-5. Operating Costs / SG&A YoY Change SG&A Unit: JPY billion <Breakdown of Major Difference> YoY = FY13 compared to FY12 ATM Operation Business Costs Personnel-related: +1.7 SI & Equipment Sales Costs <Breakdown of Major Difference> Rent-related: +0.4 Network Service Costs Personnel-related: +1.0 C

  9. Slide 9: Network Services (1) Revenues

    Ⅱ-6. Network Services (1) Revenues Unit: JPY million WAN Services Outsourcing Services Total Contracted YoY= FY13 compared to FY12 Bandwidth (Gbps) Internet Connectivity Services for Home Use Internet Connectivity Services for Corporate Use FY13 Corporate Connectivity  up JPY558 million YoY, up 3.

  10. Slide 10: Network Services (2) Cost of Revenues

    Ⅱ-6. Network Services (2) Cost of Revenues Unit: JPY million FY12: 50,692 FY13: 53,046 YoY = FY13 compared to FY12 (Gross margin ratio： 22.3%) (Gross margin ratio： 21.2%) 12,764 12,619 12,589 12,721 13,242 13,223 13,299 13,282 Others Outsourcing Costs Personnel Related Costs Network Operation Relate

  11. Slide 11: Systems Integration (1) Revenues

    Ⅱ-7. Systems Integration (1) Revenues <Systems Construction> YoY = FY13 compared to FY12 Unit: JPY million Systems Construction Revenues Systems Operation and Maintenance Revenues Order Backlog ※Systems construction’s order backlog and order received FY12 : 15,825 FY13: 18,674 Order Received include

  12. Slide 12: Systems Integration (2) Cost of Revenues

    Ⅱ-7. Systems Integration (2) Cost of Revenues FY12: 30,425 FY13: 36,510 Unit: JPY million (Gross margin ratio: 18.2%) (Gross margin ratio: 14.0%) 6,564 7,526 6,904 9,431 7,350 8,416 9,061 11,684 Purchasing Costs Outsourcing Costs Others Network Operation Related Costs Personnel Related Costs YoY = F

  13. Slide 13: Number of Employees

    Ⅱ-8. Number of Employees (Number of employees) 2,078 2,081 2,086 2,116 2,269 2,311 2,322 2,353 (+237 from 2013/3) Contract worker Full time worker [Employee Distribution] Administration 13% Sales 19% Engineers 68% Personnel related costs & expenses 3,741 3,858 3,902 3,979 4,212 4,254 4,317 4,408 (%

  14. Slide 14: SG&A Expenses/R&D

    Ⅱ-9. SG&A Expenses/R&D Unit: JPY million FY12: 14,101 FY13: 15,343 Research and Development Expenses (13.3%) (13.4%) General and Administrative Expenses Sales and Marketing Expenses 3,445 3,440 3,597 3,619 3,725 3,697 3,886 4,036 ( ) % of Total Revenues (13.9%) (13.1%) (14.1%) (12.2%) (14.1%) (13.2%

  15. Slide 15: Operating Income and Net Income

    Ⅱ-10. Operating Income and Net Income Operating Income YoY = FY13 compared to FY12 Unit: JPY million Net Income Attributable to IIJ Operating Margin Ratio ATM operation segment operating income: Unit: JPY million FY12 1Q13 2Q13 3Q13 4Q13 FY13 239 81 160 159 178 578  855 ATMs were placed as of May

  16. Slide 16: Summary of Consolidated Balance Sheets

    Ⅱ-11. Summary of Consolidated Balance Sheets Unit: JPY million 15

  17. Slide 17: Consolidated Cash Flows

    Ⅱ-12. Consolidated Cash Flows Operating Activities: Unit: JPY million YoY = FY13 compared to FY12 FY12 : 9,639 FY13 : 8,787 Operating Activities FY13 major YoY Breakdown Change Net income 4,684 (634) Depreciation and amortization 8,823 +1,267 Net gain on other non-cash (1,120) (632) transactions I

  18. Slide 18: Other Financial data (CAPEX etc.)

    Ⅱ-13. Other Financial data (CAPEX etc.) Unit: JPY million CAPEX (Include Capital Leases): <CAPEX BREAKDOWN> Cash CAPEX Capital Lease FY12 FY13 (JPY billion) (JPY billion) FY12 : 10,405 FY13 :12,560 Cloud related (include Matsue DCP) 2.3 3.7 Headquarter relocation - 0.4 ATM operation business 0.6 0.5

  19. Slide 19: IIJ Cloud Business

    Ⅲ-1. IIJ Cloud Business Cloud-related Revenue FY13 Business Development Unit: JPY billion  Expansion of Customer Base and Usage Less than 20% of the total  Average revenue per general corporate customers increased by 2.3 2.4 2.5 2.6 cloud related revenue over 20% YoY MRC over JPY0.5 million MRC ov

  20. Slide 20: MVNO Business

    Ⅲ-２. MVNO Business IIJ MVNO Revenue & Subscribed Lines: For Enterprises For Consumers Started MVNO Business in Jan. 2008 Total number of IIJ MVNO Providing enterprise solution, LTE SIM card offerings growing subscribed lines: approx. 380,000 (FY13 end) B2C service platform Revenue increased by JPY1.

  21. Slide 21: Reference: FY2014 Financial Target

    Ⅲ-3. Reference: FY2014 Financial Target Full Year FY14 Target Revenue : Unit: JPY billion Pursue recurring revenue increase and cloud related revenue to reach approx. JPY13.0 billion (+JPY3.2 billion YoY) Unit：JPY billion FY13 YoY Increase breakdown FY14 YoY Target Actual Network Services Slightly l

  22. Slide 22: Forward Looking Statements

    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 about

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