Cyberagent Incorporated · TSE:4751
Cyberagent — Q1 FY2006 Earnings Presentation
51 slides from Cyberagent's earnings presentation, February 2006
Slide 1: CyberAgent, Inc. Results Briefing for the First Quarter
CyberAgent, Inc. Results Briefing for the First Quarter of the Year Ending September 30, 2006 (October - December 2005) & CyberAgent 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
Slide 2: Table of Contents
Slide 3: Overview of First Quarter Consolidated Financial Results
| es Overview of First Quarter Consolidated Financial Results October - December 2005 & CyberAgent
Slide 4: Overview of Consolidated Financial Results: Net Sales
Overview of Consolidated o> Financial Results © & CyberAgent Consolidated net sales increased 54.7% year-on-year to 13,275 million yen Unit: million yen 15,000 2004 2005 2006 2004 2005 2006 2004 2005 2006 2004 2005 2006 10 (Oct-Dec) 2Q (Jan-Mar) 30 (Apr-Jun) 40 (Jul-Sep) HE 2004 ME 2005 ME 2006
Slide 5: Overview of Consolidated Financial Results: Operating Income
Overview of Consolidated o> Financial Results © & CyberAgent Increased 144.5% year-on-year to 604 million yen including 249 million yen from the Investment Development Business Unit: million yen 1,200 1,500 2004 «2005 2006 2004 «2005 2006 2004 =2005 2006 2004 = =2005 10 (Oct-Dec) 2Q (Jan-Mar) 3Q (Ap
Slide 6: Overview of Consolidated Financial Results: Quarterly Trend
Overview of Consolidated o> Financial Results © | Conso @ CyberAgent Unit: million yen 14,000 73213 13.275 12,000 10,000 8,000 6,000 4,000 3,041 3,067 3309 02 02) 02/ ox” 03) 03/ 03/ ov = Oa 04 04 05/ [tore 1-3 4-6 73 10-12 13 4-6 78) | 10-12 13 4-6 7-9 10-12 1-3 Yrto Sep, 2002 st ‘Yr to Sep, 2003 ‘
Slide 7: Overview of Consolidated Financial Results: SG&A
Overview of Consolidated o> Financial Results © & CyberAgent Unit: million yen 5,000 4,622 03/ 03/ oa) Oa) 04) 05/ 05/ 07-09 10-12 01-03 04-06 10-12 01-03 04-06 J l Yr to Sep, 2004 Jt Yr to Sep. 2005 354 550 666 —@ SGKA Ratio
Slide 8: Overview of Consolidated Financial Results: Employees
Overview of Consolidated go» Financial Results © & CyberAgent Quarter-to-quarter, the number of employees decreased by 16; 26 decreased in the Media Business, 6 increased in the Advertising Business oz 03/ 08 03 O08 Of O4 O44 O8 05) ON = (Ob 05/ 10-12 1:3 46 7-9 [iot2 1300 (4-6 79 | loa 130046 = «79
Slide 9: Overview of Consolidated Financial Results: Income Statement
Overview of Consolidated © Financial Results The quarterly net income was 2,490 million yen due to 3,349 million yen from the gain on sales of shares (extraordinary gain). Unit: million yen Oct-Dec 2005 Oct-Dec 2004 Net sales Gross income from sales Gross margin SG&A SG&A ratio Operating income Oper
Slide 10: Overview of Consolidated Financial Results: Balance Sheet
Overview of Consolidated ry Financial Results Unit: million yen Dec. 31, 2005 Sept. 30, 2005 | Change Current assets 26,337 22,075 19.3% (Cash + marketable securities, etc.) 13,3369 11,354 17.5% Fixed assets 9,101 9,755 -6.7% Total assets 35,438 31,830 11.3% Current liabilities 11,233 9,574 17.3% Fi
Slide 11: Overview of Consolidated Financial Results: Cash Flows
Overview of Consolidated ry Financial Results Unit: million yen Oct-Dec 2005 Jul-Sept 2005 CF from operating activities CF from investing activities CF from financing activities Change in cash and cash equivalents Term-end balance of cash and cash equivalents 11,186 Tax payment in November 2005 @ Di
Slide 12: Consolidated Results Forecasts for the Year Ending September 2006
Overview of Consolidated © Financial Results Consolidated Results Forecasts for the Year Ending September 2006 (October 2005 - September 2006) Unit: million yen Revised up on January 19, 2006 Previous period [year ended Septernber 2006) performance Change 48.1% Non-consolidated results forecasts Uni
Slide 13: Overview of Consolidated Financial Results: Summary
Overview of Consolidated o> Financial Results © & CyberAgent Continued growth of the Media Business and Advertising Agency Business Aggressive investment in the blog media, "Ameba" Restraints on mid-career hiring in order to increase productivity
Slide 14: Business Model
Business Model @ CyberAgent
Slide 15: Business Model
Business Model & Hakuhodo DY holdings ‘Hakuhodo DY Holdings (2433) et 2 = s na wo > a < o = S. a oO = = (saguinsuog/sjenpiaipuy) siasp
Slide 16: Media Business
Media Business ™ Internet Media Business & CyberAgent
Slide 17: Media Business: Quarterly Sales
Media Business Unit: million yen 10,000 2004 2005 2006 2004 «2005 2006 2004 2005 2006 2005 2006 10 (Oct-Dec) 2Q (Jan-Mar) 30 (Apr-Jun) (Jul-Sep) 1,995 3,142 5,173 2,637 4,242 DAdvertising1,901 2,453 2,011 3,163 Note: Sales figures are reference values before excluding internal transactions.
Slide 18: Media Business: Shift to Web Advertising Centered on Blog
Media Business & CyberAgent Shift from E-mail advertising to Web advertising centered on Blog Unit: million yen 4,000 2004 2005 2006 2004 2005 2006 2004 2005 2006 2004 2005 2006 20 (Jan-Mar) 30 (Apr-Jun) 40 (Jul-Sep) Note: Sales figures are reference values before excluding internal transactions.
Slide 19: Media Business: Ameba Blog Sales and Page Views
Media Business & CyberAgent Unit: thousand yen Monthly sales of the "Ameba" blog Page Views of the “Ameba" Advertisement Listing Pages Unit; Thousand page views 60,000 25, 000 ~@- No. of impressions —@ No. of Clicks 2004/ 2004/ 2004/ 2005/ 2005/ 2005/ 2005/ 2005/ 2005/ 2005/ 2005/ 2005/ 2005/ 2005/
Slide 20: Blog Sales: Tie-up Blog Advertising
Media Business |Blog Sales: Advertising Method 1: Tie-up Blog Example: Seven-Eleven Japan Co., Ltd. "Oden Loyalty Blog" Example: Seven-Eleven Japan Co., Ltd. "Oden Loyalty Blog" inducement through convenience store receipts, banner advertising on Ameba Blog, content-linked advertising, etc. Individu
Slide 21: Media Business: Scrap Book Feature
Media Business Collectively display theme-matched articles from various blogs. Users can create themes for each scrap book. “For Anyone who Likes Cosmetics!" Scrap Book * Stent nemo r . SAAHeMEN | OP uryne : scemmicesantie caprase ear e | UOT Od. HORE SONONTANRCENTEROT BOGE TRL oh EF momerscin, Haar
Slide 22: Blog Sales: Contents-linked Advertising
Media Business Blog Sales: Advertising Method 3: Contents-linked Advertising (1) Analyze the blog text! Breeserarsawect (2) Distribute related resen advertisements! seer ecene cone TIERSMORERAT sei, cromausseaeasracenors py in E 1 IT, Ap RAS TR ASH | ER Advertiser’ bsit enlarged BETS Dim > | cnearee
Slide 23: Media Business: Ameba User Growth
Media Business & CyberAgent The number of Ameba users had the biggest growth in the one year period starting from December 2004. One-year growth rate comparing the number of monthly users in Decamber 2004 and that of December 2005 + Ranking of Number of Established Major Blog Services 200.0% 1: live
Slide 24: Media Business: Using Blogs as Engine to Attract Customers
Media Business [Serenatns of CyberAgent Using Blogs as Engine to Attract Customers
Slide 25: Media Business: Blog Auction
Media Business i... Wee onsre al Pertti 1 Serres ars rawm-2| RAmeba 2-220 2 [ee SMARR KOTY ob | MTORR TYLA Rw rr or 1” eens MD em asecrar nts 1smRee Japan's first auction using a blog Auction services that allow users to place items within "Ameba" blog articles
Slide 26: Media Business: Ameba Music
Media Business #@ Ameba Music ae [s7eur.-vvene | pe) Artist originated music community ®Ameba Music SMXKD IT (19-*WTE We $OU0-PE CREM! mae ATG, SAKNYIIITF, ®RU CURA TiL79—Mobe Pe LL Mak eee dd SEIOF 7 —- FHL Od- TBST IY HADTDS. Mate tag HAT HT ARHDOMRIDY EAE APIO, 24MM! > Tcaaeme In the future, ; uu
Slide 27: Ameba Future Developments
|"Ameba" Future Developments BH cyberdgent "Ameba" Vision (To be opened on February 20) _SAmebo vision <I __ = ” Video contents viewable at no cost la. 3) & JAM dais 1 \\ il baal weird {\ & BAEx BAB Evtenou meets Susumu fujita Fob [SMS RUYH | REE [AMOSDe [ser ot re. A FIGHTS ESTE. Gb Cyherhgent Prop
Slide 28: Media Business: Ameba Top Page Renewal
Media Business & CyberAgent r son enma o-uenensnreie , v4 Users play the leading part! conemanemmemenmnene Total information media eae | AmebaJO7 . Be Anes F09 vr0700>11_., ienasasee. S | s PHA )FOAAL, ATM SALARIED | The top page will be renewed Se “ —_ oe on February 15. ~“ S ARFOP ERT. AUF Ia 4 RR
Slide 29: Media Business: E-commerce Sales
Media Business & CyberAgent E-commerce (EC) sales increased 64.6% year-on-year to 5,173 million yen, of which, sales of commissions and billing, etc., increased 97% year-on-year to 1,058 million yen. Unit: million yen 6,000 2004 2005 2006 2004 ~=2005 2006 2004 =2005 2006 2004 =2005 2006 10 (Oct-Dec)
Slide 30: E-Commerce (EC)
Media Business [E- Commerce (EC) @ CyberAgent PC commerce Commissions, billing, etc. A joint venture with Mitsui & Co., Ltd. The online game, Trickster+, operated by GCREST, Inc. LX. Inc. Received the first WebMoney Award (January 16, 2006) <4 2 2 es008reEnes come NePWAU Pe 2 a) f x I & pit) A g i}
Slide 31: Advertising Agency Business
Internet Advertising Agency Business G CyberAgent
Slide 32: Advertising Agency Business: Quarterly Sales
Unit: million yen Advertisin Business g Agency z 8,000 2,000 6,000 F---- 4,000 f---- Ajoint venture Fraudia Communications, Inc. -@ Established on July 1, 2005 with istyle Inc., the operator of the media for women, @cosme 5 2004 10 (Oct-Dec) 2004 2005 2006 2004 2005 2006 2004 «2005 2006 2Q (Jan-Mar)
Slide 33: Advertising Agency Business: Sales Growth
8,000 6,000 4,000 2,000 Advertising Agency e a Business & CyberAgent Unit: million yen Increased 45.3% = = = = — _ — = 2004 2005 2006 2004 2005 2006 2004 2005 2006 2004 2005 2006 20Q (Jan-Mar) 3Q (Apr-Jun) 40 (Jul-Sep) Other Production Foes 172 156 188 192 Note 1: Sales of Internet Advertising Headq
Slide 34: Number of Clients and Top 5 Business Categories
Advertising Agency ey Business Cd | Number of Clients and Top 5 Business Categories @ CyberAgent The finance/insurance/securities business ratio decreased and the ratio of service business and manufacturing/production business increased. Unit: No. of companies Number of Clients Top 5 Client Business
Slide 35: Quarterly Sales Productivity per Sales Employee
Advertising Agency ey Business Cy . | Quarterly Sales Productivity per Sales Employee @ cyberagent Unit: million yen Unit: People 60 150 60 |oeeeeeee ee mL TAD 4 26 : 40.7 a yoeannpgen==- 0)---- nt ------~-== == - ----{100 32.6 30 ----97-4--- ---§ @---B 9----f 9 ---4 75 20 --- ---- {| 9----B 9 ---4
Slide 36: Investment Development Business
Investment Development ~ Business Investment Development Business G CyberAgent
Slide 37: Investment Development Business: Quarterly Results
Investment Development Business ben Launched the Investment Development Business from the Oct-Dec 2004 quarter due to the establishment of the new fund in the consolidated subsidiary, CA Capital, Ltd. Unit: million yen 1,200 1,127 05/4-6 05/10-12 Yr to Sep, 2005 Yrto Sep, 2008 Breese 882 nose ane Ea
Slide 38: Investment Development Business: Expansion and Fund Structure
Investment Development ~ Business Continued expansion of the Investment Development Business utilizing the ability to discover and foster internet businesses. Investment Origin Investment Stance Investment Criteria Mainly Internet-related Companies CyberAgent Main Unit (Finance Headquarters} Busines
Slide 39: Operational Investment Securities Balance
Operational Investment Securities Balance Unit: million yen 1,600 Investment Development av Business | CyberA ent Group's Investment Amount Investment will be made up to no more than 20% of consolidated assets. {Reference)Consolidated assets:35,470 million yen, the investment limit:7,094 million yen
Slide 40: Investment Development Business: Policy
Investment Development ov Business & CyberAgent Invest up to no more than 20% of consolidated assets Shift to corporate venture capital Strengthen governance and information disclosure
Slide 41: Medium- to Long-Term Outlook
Medium- to Long-Term Outlook @ CyberAgent
Slide 42: Medium- to Long-Term Outlook: Sales and Operating Income
Medium- to Long-Term Outlook ws & CyberAgent 100,000 Growth in mobile Development of broai Growth in PC advertisi Development of 26,728 16,202 10,824 6,392 3,276 . 1,726 19 2 452-34 M1636 BB... 278 -142 YrtoSep.98 YrtoSep.98 Yrto Sep. 00 YrtoSep.01 YrtoSep.02 YrtoSep.03 YrtoSep. "04 YrtoSep."08 Yrto
Slide 43: Medium- to Long-Term Outlook: New Businesses and Joint Ventures
Medium- to Long-Term Outlook a Music distribution Publishing = Establishment of brand assets ——§ Scrap Fraudia Communications, Inc. Foundation: July 1, 2005 A joint venture with istyle Inc., the operator of the media for women, @cosme LX. Inc. VENUS x, Foundation: September 16, 2005 A joint venture
Slide 44: Growing into a Company Representative of the 21st Century
Medium- to Long-Term Outlook ws & CyberAgent Growing into a Company Representative of the 21st Century CyberAgent
Slide 45: Reference Material (1): Overview of Consolidated Financial Results
Reference Material (1) [4] Reference Material Overview of Consolidated Financial Results PL (Over the Previous Quarter) G CyberAgent
Slide 46: Q1 Year to Sept. 2006: PL (Over the Previous Quarter)
Reference Material (1) Ld] |Q1, Year to Sept. 2006: PL (Over the Previous Quarter) @ CyberAgent Unit: million yen Oct-Dec 2005 Oct-Dec 2004 Net sales 13,275 13,213 0.5% Gross income from sales 5,227 5,579 -6.3% Gross margin 39.4% 42.2% | -2.8points SG&A 4,622 4,309 7.3% SG&A ratio 34.8% 32.6% | 2.2p
Slide 47: Reference Material
J ee | Reference Material Reference Materials CAJJ Program Company Overview Business Model - CyberAgent
Slide 48: CyberAgent Business and Personnel Development Program (CAJJ)
Reference Material (2) & CyberAgent CyberAgent Business and Personnel Development Program CAJJ Program Model Diagram J1 Promotion Standard (Period: 3 to 6 months) ross profit of 15 million yen/mont! Lower limit on losses: 60 million yen/6 months (CyberAgent Business and Personnel Development Program
Slide 49: CAJJ Businesses
|CAJJ Businesses Name of Business or Affiliated Company Service Contents CA MOBILE, Ltd. ___ Mobile marketing EC Navi Company Price/information comparison website Internet Advertising Headquarters Internet advertising agency netprice, Itd. Online shopping service website CA Search, Ltd, ___ Planning
Slide 50: Company Overview
Reference Material (2) | Company Overview & CyberAgent 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 Jap
Slide 51: Business Model
Reference Material (2) [il] Business Model @ CyberAgent Internet Media @intornet Advertisement Planning, Proposal and Effectiveness Verification Internet Advertising Agency @ Information Provision through Internet Media @ Charged Services/Product Sales iternet Bu [e Advertising Cost J SJ9UINSUOD/S|E