Internet Initiative Japan Inc. · TSE:3774

Internet Initiative Japan — H1 FY2012 Earnings Presentation

20 slides from Internet Initiative Japan's earnings presentation, Nov 8, 2012

  1. Slide 1: 1st Half FY2012 Consolidated Financial Results

    1st Half FY2012 Consolidated Financial Results Internet Initiative Japan Inc. 2012.11.8

  2. Slide 2: Agenda

    Agenda Ⅰ. Summary of 1H FY2012 Financial Results Ⅱ. Consolidated Financial Results for 1H FY2012 Ⅲ. Reference Materials 1

  3. Slide 3: Summary of 1H FY2012 Financial Results

    Ⅰ. Summary of 1H FY2012 Financial Results < 1H FY2012 Financial Results > ・Revenues JPY51,109 million (up 8.3% YoY) ・Gross margin JPY10,148 million (up 9.9% YoY) ・Operating income JPY 3,263 million (up 33.3% YoY) ・Income before tax income expense JPY 3,176 million (up 38.7% YoY) ・Net income attribut

  4. Slide 4: Consolidated Financial Results for 1H FY2012

    Ⅱ-1. Consolidated Financial Results for 1H FY2012 Unit: JPY billion % of Revenues % of Revenues % of Revenues 1H12 1H11 YoY 1H12 Target Actual against (Change in %) Target in % （12/4～12/9） （11/4～11/9） （12/4～12/9） Total Revenues 51.1 47.2 8.3% 50.5 101.2% 80.1% 80.4% Total Costs 41.0 38.0 7.9% ― ― 19

  5. Slide 5: Revenues

    Ⅱ-2. Revenues Network Services Systems Integration （SI） Equipment Sales Unit: JPY million Internet Connectivity Services for Corporate Use Systems Construction ATM Operation Business Internet Connectivity Services for Home Use Systems Operation and Maintenance Outsourcing Service WAN Service Recurri

  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 revenue 23.3% 21.9% Unit: JPY million 20.5% 21.2% 20.1% 20.7% 19.9% 20.2% 22.2% 20.8% 21

  7. Slide 7: Network Services (1) Revenues

    Ⅱ-4. Network Services (1)Revenues Unit: JPY million Total Contracted 1,003.3 918.8 Bandwidth (Gbps) 791.0 820.7 853.0 857.7 FY11: 63,409 (up 22.7% from FY10) 15,800 15,921 16,167 16,092 16,167 15,521 6,391 6,476 6,489 6,312 6,265 6,310 WAN Services Outsourcing Services Internet Connectivity Services

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

    Ⅱ-4. Network Services (2)Cost of Revenues Unit: JPY million FY11: 49,985 (Gross margin ratio: 21.2%) 12,606 12,541 12,398 12,619 12,440 12,764 552 608 632 717 691 678 Others 2,145 2,126 2,026 2,005 2,162 2,280 Outsourcing Costs 1,132 1,134 1,108 1,063 1,161 1,126 Personnel Related Costs Network Oper

  9. Slide 9: Systems Integration (1) Revenues

    Ⅱ-5. Systems Integration (1)Revenues <Systems construction> Unit: JPY million Systems Construction Revenues Systems Operation and Maintenance Revenues Order Backlog ※System construction’s order backlog and order received includes Order Received equipment sales YoY = 2Q12 compared to 2Q11 FY11 : 11,9

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

    Ⅱ-5. Systems Integration (2)Cost of Revenues Unit: JPY million 7,712 7,526 FY11: 24,979 (Gross margin ratio: 20.6%) 6,564 5,957 2,530 2,007 5,770 5,541 1,387 Purchasing Costs 1,198 1,220 Outsourcing Costs 772 Others 2,285 Network Operation Related 2,111 2,137 Costs 1,837 1,823 1,912 Personnel Relate

  11. Slide 11: Number of Employees

    Ⅱ-6. Number of Employees Contract worker Full time worker (No. of employees) 2,078 2,081 2,000 1,953 1,955 1,941 1,923 256 261 243 246 250 244 [Employee Distribution] 1,500 Administration 14% 1,000 Sales 1,822 1,820 1,710 1,709 1,691 1,679 19% Engineers 67% 500 0 2011/6 2011/9 2011/12 2012/3 2012/6

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

    Ⅱ-7. SG&A Expenses/R&D Unit: JPY million Research and Development Expenses General and Administrative Expenses Sales and Marketing Expenses （ ） % of Total Revenues FY11: 13,635 9,236 10,148 (14.0%) 3,587 1H11 1H12 3,313 3,535 3,445 3,440 (15.4%) 3,200 (13.3%) (13.9%) 79 (14.1%) (13.1%) (13.4%) 149 1

  13. Slide 13: Operating Income and Net Income

    Ⅱ-8. Operating Income and Net Income Unit: JPY million Operating Income Net Income Attributable to IIJ Operating Margin Ratio FY11 Operating Income : 6,353 FY11 Net income attributable YoY = 2Q12 compared to 2Q11 to IIJ : 3,641 2Q12 Operating income: JPY1,889 million (up JPY355 million YoY, up 23.2

  14. Slide 14: Summary of Consolidated Balance Sheets

    Ⅱ-9. Summary of Consolidated Balance Sheets March 31, September 30, Unit: JPY million Changes 2012 2012 Cash and Cash Equivalents 13,537 11,670 (1,866) Balance Sheet Accounts Receivable 15,722 15,648 (74) Cash and cash equivalents: ・Decreased mainly due to the Inventories 752 1,591 +839 payment of

  15. Slide 15: Consolidated Cash Flows

    Ⅱ-10. Consolidated Cash Flows Operating Activities: Unit: JPY million FY11 : 11,659 5,079 2,966 2,292 2,546 1H12 Operating Activities: 1,323 1,424 Depreciation and amortization JPY3,639 million Payments for income taxes: JPY1,321 million etc. 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Investing Activities: FY1

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

    Ⅱ-11. Other Financial Data (CAPEX etc.) CAPEX (Include Capital Leases): Unit: JPY million FY11 : 10,917 Domestic IIJ GIO related CAPEX 3,567 JPY2.6 billion 1H11 3,298 (of JPY0.9 billion related to Matsue DC) 2,878 1H12 JPY1.6 billion 2,606 2,208 2,265 Adjusted EBITDA: Unit: JPY million FY11 : 13,534

  17. Slide 17: Developments of IIJ GIO

    Ⅲ-1. Developments of “IIJ GIO” ■ Business developments of IIJ GIO (JPY million) 1,750 IIJ GIO Revenues (# of proj.) 1600  2Q12 revenue: JPY1.4 billion (1Q12: JPY 1.2 billion) Large SNS Game Clients • Mainly, HaaS and IaaS revenues 1400 1,500 • Sep. 2012 monthly revenue: JPY0.5 billion Enterprise Bu

  18. Slide 18: Continuous Growth of our Core Businesses

    Ⅲ-2. Continuous Growth of our Core Businesses Internet Connectivity for Corporate Systems Construction 1H11 1H12 1H11 1H12 IP Service Revenue Revenue JPY 3.9 billion JPY 5.2 billion Total Contracted Bandwidth* Order Received 820.7 JPY 6.6 billion Gbps Gbps Number of contracts for over Over 1Gbps Con

  19. Slide 19: FY2012 Financial Target (Remain unchanged)

    Ⅲ-3. FY2012 Financial Target (Remain unchanged) Unit: JPY billion FY12 Target FY11 Actual YoY （12/4～13/3） （11/4～12/3） (FY12 to FY11 Acutal) Total Revenues 107.0 97.3 +9.7 10.0% Operating Income 7.5 6.4 +1.1 18.0% Income before Income Tax 6.9 6.0 +0.9 15.5% Expense Net Income attributable to IIJ 4.0

  20. Slide 20: Forward-looking Statements / Contact Information

    ※ Forward-looking Statements Statements made in this presentation regarding IIJ’s or management’s 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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