Cyberagent Incorporated · TSE:4751
Cyberagent — FY2003 Earnings Presentation
51 slides from Cyberagent's earnings presentation, Nov 12, 2003
Slide 1: September 2003 Financial Results Information Meeting
September 2003 Financial Results Information Meeting November 12, 2003 CYBER AGENT, LTD. http://www.cyberagent.co.jp/ 1
Slide 2: Contents
Contents Outline of Consolidated Settlements (The Forth Quarter) Outline of Consolidated Settlements (September 2003) Advertising Agency Business: Internet Advertising Headquarters Internet Media Business: CANetwork Cyber Agent Group Medium/Long-Term Strategy Opinions, predictions, etc. described in
Slide 3: Outline of Consolidated Settlements: Fourth Quarter
Outline of Consolidated Settlements The Forth Quarter of September 2003 3
Slide 4: Highlights of the Forth Quarter of 2003
Highlights of the Forth Quarter of 2003 This Quarter Up 83.5% over the previous Operating quarter 222 million yen income 1.8 point improvement over the Operating profit margin 4.7% previous quarter Up 13.5% over the General goods including Sales previous quarter advertising agency business Gross 0.7
Slide 5: Summary of Consolidated Settlements (Forth Quarter)
Summary of Consolidated Settlements (Forth Quarter) P/L Steady improvement of operating profit margin Unit (million yen) The 4th of 2002 The 3rd of 2003 The 4th of 2003 Jul. ∼ Sep. 2002 Apr. ∼ Jun. 2003 Jul. ∼ Sep. 2003 Sales Gross profit (Net profit margin) Sales and general administrative expenses
Slide 6: Changing in Sales and Gross Margin Ratio
Changing in Sales and Gross Margin Ratio The highest records of sales and gross margin ratio Unit: million yen Sales Gross margin ratio Unit: % Profit creating Preceding investment period period September 2000 September 2001 September 2002 September 2003 6
Slide 7: Quarterly Changes in Operating Profit
Quarterly Changes in Operating Profit Operating profit of 343 million yen in the second half of September term of 2003 Unit: million yen Unit: % Sales Operating profit Gross margin ratio Preceding investment period Profit creating period 7
Slide 8: Monthly Changes in Operating Profit
Monthly Changes in Operating Profit Good monthly profit, increase in advertising expenses in September Unit: million yen Unit: % Sales Operating profit Gross margin ratio Positive profits Oct. 2002 Nov. 2002 Dec. 2002 Jan. 2003 Feb. 2003 Mar. 2003 Apr. 2003 May 2003 Jun. 2003 Jul. 2003 Aug. 2003 Sep
Slide 9: Consolidated Sales and General Administrative Expenses
Consolidated Sales and General Administrative Expenses Decrease in ratio of sales and general Unit: million yen administrative expenses to sales In comparison with the previous quarter 1,707 1,834 Unit: million yen Costs Costs related related to to EC EC 1,656 1,662 Consolidated Consolidated adjustm
Slide 10: Consolidated Number of Directors/Staff Members
Consolidated Number of Directors/Staff Members Increased salespersons of advertising agency business “Internet Advertising Headquarters” Unit: person By business type Internet Internet Media Media Business: Business: CANetwork CANetwork ISM 6 persons decreased 278 272 243 259 198 204 Advertising Adv
Slide 11: Changes in Business Performance (Sales) by Business Type
Changes in Business Performance (Sales) by Business Type Internet Media Business Advertising Agency Business CANetwork Internet Advertising Headquarters Unit: million yen Unit: million yen EC EC Advertising Advertising Jan. - Mar. Apr. - Jun. Jul. - Sep. Oct. - Dec. Jan. - Mar. Apr. - Jun. Jul. - Se
Slide 12: Sales, Expenses and Operating Profit by Business Type
Changes in Sales and General Administrative Expenses and Operating Profit by Business Type Internet Media Business Advertising Agency Business CANetwork Internet Advertising Headquarters Sales Sales Sales and general administrative expenses Total of Sales and general administrative expenses Operatin
Slide 13: CANetwork Profit and Loss by Business Division
Profit and Loss by Note: Sales/operating profit are reference values before deduction of internal transaction/consolidated Business Division adjustment account amortization/all company expenses Unit Projects and April ∼ June 2003 July ∼ September 2003 (million yen) Group Companies Sales Operating Sa
Slide 14: Outline of Service by Business Division
Outline of Service by Business Division CA MOBILE, LTD. Mobile advertising/mobile commerce NETPRICE, LTD. Internet shopping service operation Axiv.com. Inc. Online promotion site operation melma! Mail magazine portal site, the largest class in Japan LifeMile Online point program business CANetwork K
Slide 15: Summary of Consolidated Settlements (Forth Quarter) B/S
Summary of Consolidated Settlements (Forth Quarter) B/S Cash equivalent increased due to good operating cash flow End of the 4th of 2002 End of the 3rd of 2003 End of the 4th of 2003 Unit (million yen) Sept. 30, 2003 Sept. 30, 2002 June 30, 2003 Current assets (Cash on hand and in banks + securities
Slide 16: Changes in Consolidated Cash Flow (Forth Quarter)
Changes in Consolidated Cash Flow (Forth Quarter) CF through operating activities, CF through investing activities, and CF through financing activities, all turned positive The 4th of 2002 The 3rd of 2003 The 4th of 2003 Unit (million yen) July ∼ Sept. 2002 Apr. ∼ Jun. 2003 July ∼ Sept. 2003 CF from
Slide 17: Outline of Consolidated Settlements through Entire September Term of 2003
Outline of Consolidated Settlements through Entire September Term of 2003 17
Slide 18: Summary of Consolidated Settlements (Entire Term)
Summary of Consolidated Settlements (Entire Term) Consolidation range [Addition] P/L CA SEARCH, LTD. established in May 2003 CA Capital, Ltd. established in September 2003 Previous-previous term Previous term This term Unit (million yen) Oct. 2000 ∼ Sep. 2001 Oct. 2001 ∼ Sep. 2002 Oct. 2002 ∼ Sep. 2
Slide 19: Changes in Consolidated Business Performance
Changes in Consolidated Business Performance Sales Operating profit and loss Unit: million yen September term/98 September term/99 September term/00 September term/01 September term/02 September term/03 (First term) (Second term) (Third term) (Fourth term) (Fifth term) (Sixth term) *Unconsolidated v
Slide 20: Summary of Consolidated Settlements (Entire Term) B/S
Summary of Consolidated Settlements (Entire Term) Consolidation range [Addition] B/S CA SEARCH, LTD. established in May 2003 CA Capital, Ltd. established in September 2003 End of entire term of End of entire term End of entire term of Unit (million yen) previous-previous year of previous year this y
Slide 21: Changes in Consolidated Cash Flow (Entire Term)
Changes in Consolidated Cash Flow (Entire Term) Cash Flow Entire term of Entire term of This entire term Unit (million yen) previous-previous year previous year Oct. 2000 ∼ Sep. 2001 Oct. 2001 ∼ Sep. 2002 Oct. 2002 ∼ Sep. 2003 CF from operating activities CF from investing activities CF from financi
Slide 22: Composition of sales of about 16.2 billion yen
Present Sales Composition Composition of sales of about 16.2 billion yen Internet Advertising: about 11.2 billion yen EC: Other Agencies’ Company’s Advertising about 5 Sale: about 3.4 Agency Business: billion yen billion yen about 7.8 billion yen Other Companies’ Company’s Media: Media: 6.2 billion
Slide 23: Internet Media Business CANetwork
Internet Media Business CANetwork 23
Slide 24: Position of Internet Media Business
Position of Internet Media Business Customer Customer Individuals Advertisers (corporations) Other companies Other advertising media advertising sale agencies, representatives Charging accounting Internet InternetAdvertising AdvertisingAgency AgencyBusiness Business Media Electronic representatives,
Slide 25: Internet Media Business (CANetwork)
Internet Media Business (CANetwork) Internet Advertising: about 11.2 billion yen EC: Internet Company’s Advertising Other Agencies’ about 5 Media billion yen Sale: about 3.4 billion yen Agency Business: about 7.8 billion yen Business Company’s Media: Other Companies’ Media: 6.2 billion yen 5 billion
Slide 26: Changes in Sales Composition Related to Advertising
Internet Media Business Changes in Sales Composition Related to Advertising Company’s media advertising sales, up 27% over previous quarter Unit: million yen , , , , Apr. - Jun. 2002 Jul. - Sep. 2002 Oct. - Dec. 2002 Jan. - Mar. 2003 Apr. - Jun. 2003 Jul. - Sep. 2003 Advertising PC (Mail) Advertisin
Slide 27: Commerce Sales of Internet Media Business
Commerce Sales of Internet Media Business EC sales from PC have slightly decreased due to increased advertising sales Mobile commerce: up 10% over previous quarter Unit: million yen , , , PC Mobile Oct. - Dec. Jan. - Mar. Apr. - Jun. Jul. - Sep. Oct. - Dec. Jan. - Mar. Apr. - Jun. Jul. - Sep. 2001 2
Slide 28: Changes in Numbers of Unique Users of CANetwork
Changes in Numbers of Unique Users of CANetwork 2002 2003 Unit: 1,000 End of End of End of End of June End of September December March September Mail (Text) , , , , , Mail (Html) , , , , , Mobile (Mail) , , , , , Others Total , , , , , Unit: 1,000 Note: The above numbers of unique users are obtained
Slide 29: Changes in Monthly PV of CANetwork
Changes in Monthly PV of CANetwork 2002 2003 Unit: 1,000 End of End of End of End of June End of September December March September PC site , , , , , Mobile site , , , , , Total , , , , , Unit: million Note: The above numbers of monthly PV (Page View) are obtained by totalizing by medium type the mo
Slide 30: Advertising Agency Business: Internet Advertising Headquarters
Advertising Agency Business Internet Advertising Headquarters 30
Slide 31: Position of Advertising Agency Business
Position of Advertising Agency Business Customer Customer Individuals Advertisers (corporations) Other companies Other advertising media advertising sale agencies, representatives Internet InternetAdvertising AdvertisingAgency AgencyBusiness Business Charging accounting Electronic Media Commerce rep
Slide 32: Advertising Agency Business: Internet Advertising Headquarters
Advertising Agency Business Internet Advertising Headquarters Internet Advertising: about 11.2 billion yen EC: Advertising Other Agencies’ Company’s Advertising about 5 billion yen Sale: about 3.4 billion yen Agency Agency Business: about 7.8 billion yen Business Other Companies’ Company’s Media: Me
Slide 33: Monthly Order Receiving
Advertising Agency Business Monthly Order Receiving Steady increases in orders received Unit: million yen Amount of orders received Linear(Amount (Amountofoforders ordersreceived) received) Oct. Jan. Apr. Jul. Oct. Jan. Apr. Jul. Oct. Jan. Apr. Jul. Oct. Jan. Apr. Jul. 1999 2000 2000 2000 2000 2001
Slide 34: Changes in Sales Composition
Advertising Agency Business Changes in Sales Composition The sales of Internet Advertising Headquarters are up 15% over the previous quarter Almost no changes in the ratio of other companies’ media and our company’s media Unit: million yen Oct. - Dec. Jan. - Mar. Apr. - Jun. Jul. - Sep. Oct. - Dec.
Slide 35: Quarterly Productivity per Salesperson
Quarterly Productivity per Salesperson 3 salespersons increased from the previous quarter, monthly sales per person being about 10 million yen Unit: million yen Quarterly productivity Unit: person Number of salespersons Oct. - Jan. - Apr. - Jul. - Oct. - Jan. - Apr. - Jul. - Oct. - Jan. - Apr. - Jul
Slide 36: Share of Sales by Industry
Advertising Agency Business: Share of Sales by Industry The sales with the previous tendency of depending on financing, insurance, and securities businesses have been distributed to Internet related services, education, human resources, transportation, and communications Oct. ∼ Dec. Jan. ∼ Mar. Apr.
Slide 37: Paid Search
Paid Search Changes in advertising sales of Paid Search of Internet Advertising Headquarters Unit: million yen Oct. - Dec. 2002 Jan. - Mar. 2003 Apr. - Jun. 2003 Jul. - Sep. 2003 Since the purchase amount for Paid Search is checked in the following month, the sales for September will be shown in the
Slide 38: Cyber Agent Group Medium/Long-Term Strategy
Cyber Agent Group Medium/Long-Term Strategy 38
Slide 39: Business Model of Our Company
Business Model of Our Company Customer Customer Individuals Advertisers (corporations) Other companies Other advertising media advertising sale agencies, representatives Internet InternetAdvertising AdvertisingAgency AgencyBusiness Business Charging accounting Electronic Media Commerce representativ
Slide 40: Composition image of sales of about 16.2 billion yen
Present Sales Composition Composition image of sales of about 16.2 billion yen Internet Advertising: about 11.2 billion yen EC: Other Agencies’ Company’s Advertising about 5 Sale: about 3.4 Agency Business: billion yen billion yen about 7.8 billion yen Other Companies’ Company’s Media: Media: 6.2 bi
Slide 41: Initiation period, investment period and profit creating period
Sales Gross margin ratio Initiation period Preceding investment period (3 years) Profit creating period From companies of click Highly profitable Internet advertising/EC companies guarantee type advertising Annual sales: 16.2 billion yen (expected in September period of 2003) Annual sales: 450 milli
Slide 42: Management Resources of Our Company
Management Resources of Our Company Internet marketing power, No. 1 class in Japan Customer winning power of media having an overwhelming number of members Internet business developing and expanding power Human resources well experienced in Internet business Sufficient fund power/strong financial sy
Slide 43: Market Environment
Market Environment Main battlefield shifting to broadband Increases in sales of our company Present Expanding period Mobile strengthening With 10 million broadband households as a turning point, the Period to cope with broadband market has entered a period when its scale expands largest in the Inter
Slide 44: Internet Advertising Market
Internet Advertising Market Market will become 2.8 times larger or more in 5 years 280 billion yen CA advertising sales 3 times or more Advertising 50% 100 billion yen Advertising 40% Internet business 50% Internet business 60% About 40 billion About 11.2 billion 2003 2008 44
Slide 45: EC Market (BtoC)
EC Market (BtoC) Market will become 2.6 times larger 12 trillion and 300 billion yen or more in 4 years CA EC sales 8 times or more 8 trillion and 500 billion yen 4 trillion and 700 billion yen About 40 billion About 5 billion 2003 2005 2007 BtoB EC market scale is predicted to be 59 trillion yen in
Slide 46: Winner Takes All
“Winner Takes All” The future Internet business will be all-out war among a few successful leading enterprises (Access leads to more access to further strengthen the leaders) Competitive power in Internet business (EC, advertising, etc.) is: (1) Customer winning power (2) Internet marketing power 46
Slide 47: CANetwork Strategy
CANetwork Strategy Our efforts will be concentrated in expanding our services and launching new businesses with the existing company’s media as the nucleus Portal type (Yahoo!, Rakuten) Network type (CA) Accident Home- Auction insurance delivery business business Real estate Matrimonial introduction
Slide 48: Composition image of sales
Composition image September term of sales 100 billion of 2003 Internet Sales 16.2 billion Retail Advertising EC Other September term of 2000 Internet Advertising EC 40 billion yen Sales 3.2 billion Internet Retail 11.2 billion yen 40 Company’s Other Advertising EC Company’s Other billion 20 Media Co
Slide 49: Future Investment Policy
Future Investment Policy In the coming 2 years (to September 2005), we plan to develop many new projects promising high profits with the investment policy “a baby born small is grown big.” • We will not make large purchases until the September term of 2005. • We will positively make such investments
Slide 50: Management Organization
Management Organization Board of Auditors’ directors Full-time: 5 persons, meeting external: 2 persons Compliance Full-time: 1 person, Advisory board external: 2 persons Full-time room Full-time: 5 persons, directors’ meeting external: 2 persons Full-time: 5 persons Operation Director in charge CEO,
Slide 51: Summary
Summary Both sales and profit were good in this quarter Thanks to the spread of broadband, both advertising and EC grew Transition was made to a profit creating period and the financial structure became stronger We will plant many seeds of business in the coming two years We aim at growing as a gene