Internet Initiative Japan Inc. · TSE:3774

Internet Initiative Japan — Q1 FY2014 Earnings Presentation

19 slides from Internet Initiative Japan's earnings presentation, Aug 8, 2014

  1. Slide 1: Consolidated Financial Results for 1Q FY2014

    Consolidated Financial Results for 1Q FY2014 (First 3 months ended June 30, 2014) Internet Initiative Japan Inc. TSE1(3774), NASDAQ(IIJI) August 8, 2014

  2. Slide 2: Agenda

    Agenda Ⅰ. Summary of 1Q FY2014 Financial Results Ⅱ. Consolidated Financial Results for 1Q FY2014 Ⅲ. Reference Materials 1

  3. Slide 3: Summary of 1Q14 Financial Results

    Ⅰ. Summary of 1Q14 Financial Results < 1Q14 Financial Results > <1H14 Financial Targets > ・Revenues JPY27.6 billion (up 4.2%) JPY57.5 billion (up 5.7%) ・Gross margin JPY5.0 billion (down 0.6%) ・Operating income JPY0.8 billion (down 41.2%) JPY2.8 billion (down 6.9%) ・Income before income tax expense

  4. Slide 4: Consolidated Financial Results for 1Q FY2014

    Ⅱ- 1. Consolidated Financial Results for 1Q FY2014 Unit: JPY billion % of Revenues % of Revenues % of Revenues 1Q14 1Q13 YoY FY14 Target YoY (Apr. 2014 (Apr. 2013 Change in % (Apr. 2014 -Jun. 2014) -Jun. 2013) -March 2015) Total Revenues 27.6 26.4 +4.2% 123.0 +7.6% Total Cost of 81.9% 81.0% +5.3% ―

  5. Slide 5: Revenues

    Ⅱ- 2. Revenues Network Services Equipment Sales Unit: JPY million Systems Integration (SI) Internet Connectivity Services (Enterprise) Systems Construction ATM Operation Business Internet Connectivity Services (Consumer) Systems Operation and Maintenance Outsourcing Service WAN Service YoY = 1Q14 co

  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 = 1Q14 compared to 1Q13 1Q14 Gross Margin  Total Gross M

  7. Slide 7: Network Services

    Ⅱ- 4. Network Services (1)Revenues WAN Services Unit: JPY million Outsourcing Services Total Contracted YoY = 1Q14 compared to 1Q13 Internet Connectivity Services (Consumer) Bandwidth (Gbps) Internet Connectivity Services (Enterprise)  1Q14 Internet Connectivity (Enterprise)  Down JPY99 million, d

  8. Slide 8: Network Services (2) Cost of Revenues

    Ⅱ- 4. Network Services (2)Cost of Revenues Unit: JPY million YoY = 1Q14 compared to 1Q13 FY13: 53,046 QoQ = 1Q14 compared to 4Q13 (21.2%) 13,242 13,223 13,299 13,282 13,213 Others (21.1%) (21.4%) (20.3%) (21.8%) (21.3%) Outsourcing Costs Personnel Related Costs Network Operation Related Costs Circui

  9. Slide 9: Systems Integration (SI) (1) Revenues

    Ⅱ- 5. Systems Integration (SI) (1)Revenues <Systems Construction> Unit: JPY million Systems Construction Revenues Systems Operation and Maintenance Revenues Order Backlog ※Systems construction’s order backlog and order received FY13: 18,674 Order Received include equipment sales YoY = 1Q14 compared

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

    Ⅱ- 5. Systems Integration (SI) (2)Cost of Revenues Unit: JPY million FY13: 36,510 YoY = 1Q14 compared to 1Q13 (14.0%) QoQ = 1Q14 compared to 4Q13 7,350 8,416 9,061 11,684 8,322 (15.4%) (15.7%) (13.9%) (12.0%) (12.0%) Purchasing Costs Outsourcing Costs Others Network Operation Related Costs Personnel

  11. Slide 11: Number of Employees

    Ⅱ- 6. Number of Employees (Number of employees) 2,116 2,269 2,311 2,322 2,353 2,523 Contract worker (+170 from 2014/3) Full time worker [Employee Distribution] Administration 13% Sales 19% Engineers 68% Personnel related 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 Unit: JPY million costs & expenses (% of revenue)

  12. Slide 12: SG&A Expenses/R&D

    Ⅱ- 7. SG&A Expenses/R&D Unit: JPY million FY13: 15,343 (13.4%) YoY = 1Q14 compared to 1Q13 QoQ = 1Q14 compared to 4Q13 3,725 3,697 3,886 4,036 4,229 (14.1%) (13.2%) (13.7%) (12.8%) (15.4%) Research and Development Expenses General and Administrative Expenses Sales and Marketing Expenses ( ) % of Tot

  13. Slide 13: Operating Income and Net Income

    Ⅱ- 8. Operating Income and Net Income Operating Income Net Income Attributable to IIJ Unit: JPY million YoY = 1Q14 compared to 1Q13 Operating Margin Ratio  ATM Operation Segment Operating Income: Unit: JPY million 1Q13 2Q13 3Q13 4Q13 1Q14 81 160 159 178 189 FY13 Operating Income: 5,723  915 ATMs i

  14. Slide 14: Consolidated Balance Sheets (Summary)

    Ⅱ- 9. Consolidated Balance Sheets (Summary) Unit: JPY million March 31, June 30, Changes 2014 2014 Cash and Cash Equivalents 22,421 20,421 (2,000) Accounts Receivable 19,214 17,295 (1,919) Inventories and Prepaid Expenses (Current and Noncurrent) 7,432 9,101 +1,670 Investments in Equity Method Inves

  15. Slide 15: Consolidated Cash Flows

    Ⅱ- 10. Consolidated Cash Flows Operating Activities: Unit: JPY million YoY = 1Q14 compared to 1Q13 FY13 :8,787 Operating Activities 1Q14 YoY Change Breakdown Net income 509 (450) Depreciation and amortization 2,312 +241 Net gain on other non-cash 146 +22 transactions Investing Activities: Fluctuatio

  16. Slide 16: Other Financial Data (CAPEX etc.)

    Ⅱ- 11. Other Financial Data (CAPEX etc.) Unit: JPY million CAPEX (Include Capital Leases): Cash CAPEX Capital Lease FY13 :12,560 CAPEX related to headquarter relocation: 3Q13 JPY0.42 billion, 1Q14 JPY0.18 billion Adjusted EBITDA: *( ) % of total revenues Depreciation and Amortization: FY13 : 14,546

  17. Slide 17: Developments of Cloud Business

    Ⅲ-１. Developments of Cloud Business ■Cloud-related Revenue (Unit: JPY billion) General purpose SaaS Unit: JPY billion Large SNS Game (groupware SaaS etc.) 1Q14 0.08 Revenue Other Users Task-specific SaaS 2.84 2.29 2.42 2.48 2.64 2.84 (FX & POS) 0.26 Less than 20% of the total cloud GIO/Hosting relat

  18. Slide 18: Developments of MVNO Business

    Ⅲ-2. Developments of MVNO Business MVNO for Consumer “IIJmio/LTE Service” MVNO for Enterprise • Established Leading Position for consumer MVNO • Various line-ups of M2M Solutions Additional features to SIM boost new subscriptions  Continuously acquiring many M2M projects • SIM card with voice call

  19. Slide 19: Forward-looking Statements / Contact Information

    ※ 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 abou

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