Cyberagent Incorporated · TSE:4751
Cyberagent — Q3 FY2007 Earnings Presentation
60 slides from Cyberagent's earnings presentation, October 2007
Slide 1: Results Briefing for the Third Quarter Ending September 2007
CyberAgent, Inc Results Briefing for the Third Quarter Ending September 2007 (October 2006 – September 2007) 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., at the time the docum
Slide 2: Table of Contents
Table of Contents Overview of Consolidated Financial Results “Existing Business” Internet Media Business “Existing Business” Internet Advertising Agency Business Investment Development Business “Ameba Blog” Strategy Reference Material (1) Reference Material (2) Reference Material (3) 1
Slide 3: Overview of Consolidated Financial Results
Overview of Consolidated Financial Results Overview of Consolidated Financial Results for the Third Quarter April – June 2007 2
Slide 4: Highlights of the Third Quarter (April – June 2007)
Overview of Consolidated Financial Results Highlights of the Third Quarter (April – June 2007) Net sales (excluding Investment Development Business) Net Sales increased by 17.7% on a year-to-year basis. 18,803 million yen The netprice group made good progress although experiencing (increased by 29.0
Slide 5: Existing Business
Overview of Consolidated Financial Results Existing Business Aim for a continued investment performance by utilizing the strengths Continued priority Growth Trend of discovering and fostering. investment. Internet Internet Investment Ameba Media Advertising Development (Ameba Blog) Business Agency B
Slide 6: Quarterly Consolidated Net Sales
Overview of Consolidated Financial Results Quarterly Consolidated Net Sales Unit: million yen 20,000 19,362 18,803 18,087 18,402 Increased by 29.0% 14,580 15,000 13,857 13,275 13,213 11,360 10,118 10,000 8,582 5,000 0 2005 2006 2007 2005 2006 2007 2005 2006 2007 2005 2006 2007 1Q (Oct – Dec) 2Q (Jan
Slide 7: Quarterly Consolidated Operating Income
Overview of Consolidated Financial Results Quarterly Consolidated Operating Income Recovery of the Unit: million yen 2Q, 2007 Unit: million yen 3Q, 2007 Exisiting Business 2,500 2,409 2,500 2,544 Unit: million yen 2,000 2,000 3,000 Consolidated Operating Income 2,510 1,500 1,765 Consolidated 1,500 1
Slide 8: Restructuring of the netprice Group
Overview of Consolidated Financial Results Restructuring of the netprice Group Fixed costs reduction of approximately 227 million yen (24.3% over 2Q) in the 3Q. netprice Group Unit: million yen Net Sales Operating Income Unit: million yen 5,000 Measures for 4Q of 2007 3,781 3,789 3,195 3,355 1 Emplo
Slide 9: Quarterly Consolidated Net Sales/Gross Margin Rate
Overview of Consolidated Financial Results Quarterly Consolidated Net Sales/Gross Margin Rate Unit: million yen Unit: % 20,000 70.0 18,402 19,362 18,803 18,087 1,889 2,027 3,093 1,654 60.0 15,000 14,580 13,857 327 50.0 13,213 13,275 28 43.4 44.1 43.4 42.7 314 42.7 41.2 41.5 41.5 42.2 42.3 41.7 39.4
Slide 10: Consolidated SG&A Expenses
Overview of Consolidated Financial Results Consolidated SG&A Expenses Unit: million yen Unit: % 7,000 5,938 6,073 5,890 40.0 6,000 5,265 36.0 36.5 36.0 4,889 38.4 5,000 4,622 4,479 36.5 4,309 4,090 33.5 34.8 32.8 4,000 3,695 3,292 32.6 32.3 30.0 2,875 31.4 31.3 3,000 2,558 28.6 2,000 1,000 20.0 0 04
Slide 11: Number of Employees in Consolidated Companies
Overview of Consolidated Financial Results Number of Employees in Consolidated Companies Increase of 115 employees over the end of March due to admission of new graduates. Unit: People 1,800 1,696 Increase of 333 1,561 1,597 1,581 Others 1,464 7.4% Sales Administration 21.8% Increase of 429 1,228 1,
Slide 12: Third Quarter FY2007: PL (year-on-year)
Overview of Consolidated Financial Results Third Quarter of the Year Ending September 2007: PL (year-on-year) Apr – Jun 2007 Apr – Jun 2006 Change Net Sales 18,803 14,580 29.0% Gross Income from Sales 7,398 5,504 34.4% Gross Margin 39.3 % 37.8 % 1.5points SG&A 5,890 4,889 20.5% SG&A Ratio 31.3 % 33.
Slide 13: Third Quarter FY2007: BS (year-on-year)
Overview of Consolidated Financial Results Third Quarter of the Year Ending September 2007: BS (year-on-year) End of Jun 2007 End of Mar 2007 Change Current Assets 38,614 41,388 -6.7 % (cash + marketable securities, etc.) 17,150 17,431 -1.6 % Fixed Assets 10,085 9,959 1.3 % Total Assets 48,700 51,34
Slide 14: Third Quarter FY2007: CF
Overview of Consolidated Financial Results Third Quarter of the Year Ending September 2007: CF (over the previous quarter) Apr – Jun 2007 Jan – Mar 2007 CF from Operating Activities 423 1,993 CF from Investing Activities -1 ,083 - 1,439 CF from Financing Activities 36 268 Change in Cash and Cash Equ
Slide 15: Progress toward Business Forecast
Overview of Consolidated Financial Results Consolidated Business Forecast for the Year Ending September 2007 (October 2006 – September 2007) Progress toward Business Forecast Unit: hundred million yen Operating Ordinary Net Sales Income Income Net Income Business Forecast for the Year 75,000 5,000 5
Slide 16: Existing Business: Internet Media Business
Existing Business Media Existing Business Internet Media Business 15
Slide 17: Media Business Subsidiaries and Divisions
Existing Business Media Consolidated Subsidiaries and Divisions that Constitute the Internet Media Business Media Business EC EC Advertising (product sales) (charged services) Other Agency Business Advertising Ameba Headquarters LifeMile Company CA MOBILE, Ltd. EC Navi Company netprice.com, ltd. (fo
Slide 18: Internet Media Business (net sales)
Existing Business Media Internet Media Business (net sales) Unit: million yen 12,000 10,089 Increased by 9,612 11.3% 9,202 9,000 8,728 8,206 8,139 8,266 7,784 7,085 6,719 6,000 Increased by 5,596 13.2% 3,000 Increased by 8.4% 0 2005 2006 2007 2005 2006 2007 2005 2006 2007 2005 2006 2007 1Q (Oct – De
Slide 19: EC (e-commerce) Net Sales
Existing Business Media EC (e-commerce) Net Sales Effects of Resizing on the netprice group. Unit: million yen 7,500 6,460 6,633 Increased by 13.2% 5,755 5,735 5,173 5,004 5,085 5,000 4,752 4,242 Increased by 9.8% 3,556 3,142 2,500 Increased by 11.5% Increased by 22.2% 0 2005 2006 2007 2005 2006 200
Slide 20: Advertising related Sales
Existing Business Media Advertising related Sales Unit: million yen 4,000 Increased by 3,456 8.4% 3,447 3,033 3,152 3,163 3,135 3,181 3,032 2,993 3,000 2,843 2,453 2,000 1,000 0 2005 2006 2007 2005 2006 2007 2005 2006 2007 2005 2006 2007 1Q (Oct – Dec) 2Q (Jan – Mar) 3Q (Apr – Jun) 4Q (Jul – Sep) PC
Slide 21: Grow into the No.1 Blog Media Nationwide
Existing Business Media Grow into the No.1 Blog Media Nationwide Number of Blog set up July 2007 Unit: million PV “ Am e b a B l o g ” P V exceeded 1.83 million 1,600 1,498 Number of Blog set up exceeded 1.7 million 1,349 1,303 1,200 1,157 1,164 Number of Blog set up 1,066 exceeded 1.5 million 977 9
Slide 22: Toward Generation of Earnings by Ameba Blog
Existing Business Media Toward Generation of Earnings by "Ameba Blog" Unit: million yen Quarterly Sales of the “Ameba Blog” 500 459 440 413 400 330 322 300 209 200 148 100 85 34 0 3Q, 2005 4Q, 2005 1Q, 2006 2Q, 2006 3Q, 2006 4Q, 2006 1Q, 2007 2Q, 2007 3Q, 2007 Ameba 5 23 43 88 162 178 246 191 223 Mi
Slide 23: Existing Business: Internet Advertising Agency Business
Existing Business Advertising Agency Business Existing Business Internet Advertising Agency Business 22
Slide 24: Advertising Agency Business Subsidiaries and Divisions
Existing Business Advertising Agency Business Consolidated Subsidiaries and Divisions that Constitute the Internet Advertising Agency Business Advertising Agency Internet Advertising Headquarters Agency Business Advertising Fraudia Communications, Inc. CA/H, Inc. CyberBuzz, Inc. Adplayin', Inc. CA T
Slide 25: Internet Advertising Agency Business (sales)
Existing Business Advertising Agency Business Internet Advertising Agency Business (sales) Take over of CA Search, Ltd. by Internet Advertising Headquarters as of July 1. Unit: million yen 10,000 9,203 9,270 Increased by 8,366 19.5% 8,180 8,000 7,756 7,134 6,151 5,882 6,000 5,001 4,783 4,002 4,000 2
Slide 26: Internet Advertising Headquarters Sales
Existing Business Advertising Agency Business Internet Advertising Headquarters Sales Large increase of revenues led by site listing advertisements. Unit: million yen 9,000 8,041 8,035 Increased by 7,426 16.6% 7,120 6,894 6,512 6,000 5,531 5,389 4,556 4,730 3,806 3,000 0 2005 2006 2007 2005 2006 200
Slide 27: Quarterly Sales Productivity per Sales Employee
Existing Business Advertising Agency Business Quarterly Sales Productivity per Sales Employee Temporary decrease in productivity due to admission of new employees. Unit: million yen Unit: people 60 240 50.9 202 50 49.6 166 166 46.7 42.9 180 42.2 41.5 162 40.5 40.7 159 39.8 40 37.9 145 37.1 145 136 3
Slide 28: Investment Development Business
Investment Development Business Investment Development Business 27 28
Slide 29: Investment Development Business Subsidiaries and Divisions
Investment Development Business Consolidated Subsidiaries and Divisions that Constitute the Investment Development Business Agency Business Advertising Media Business Investment Development Investment Development Business Development Business Investment VC Business Division CyberAgent Investment, In
Slide 30: Investment Development Business (net sales)
Investment Development Business Investment Development Business (net sales) Unit: million yen 3,093 3,000 2,027 2,000 1,889 1,654 1,053 1,000 547 314 327 28 0 05/4-6 05/7-9 05/10-12 06/1-3 06/4-6 06/7-9 06/10-12 07/1-3 07/4-6 Yr to Sep 2005 Yr to Sep 2006 Yr to Sep 2007 Net Sales 547 1,053 314 28 32
Slide 31: Business Model and Actual Investments
Investment Development Business Business Model and Actual Investments Business Model Past Investments Listing Day Excavation Full Speed Inc. (2159) August 2, 2007 and Investment Prospective Company AQ INTERACTIVE INC. (3838) February 28, 2007 Internet Media Business Web Do Japan Co., Ltd. (2138) Feb
Slide 32: Actual Investment Performance in Web2.0 companies
Investment Development Business Actual Investment Performance in Web2.0 companies Investments will be made up to no more than Unit: million yen Operational Investment Securities Balance 18,000 20% of consolidated assests. 15,881 Companies invested in as of June 30, 2007: 56 Invested Companies List (
Slide 33: Ameba Blog Strategy
“Ameba Blog” Strategy “Ameba Blog” Strategy 32 36
Slide 34: Web2.0 Media Market Now Expanding
“Ameba Blog” Strategy Web2.0 Media Market Now Expanding Web2.0 media market including blogs, SNS, etc. Purchased the product after will expand approximately eightfold in 5 years. reading the blog…40.8% Unit: 100 million yen Blog/SNS Market 2,000 1,706 1,600 Increase approx. 1,522 eightfold in 5 year
Slide 35: Ameba Blog Service
“Ameba Blog” Strategy “Ameba Blog” Service Profile Function Message Function Start: April 2007 Start: July 2006 This is a new profile page which displays profile information, This is a function which lets messages to be sent photos, blogs, music, videos, etc. and received. Customization and layout o
Slide 36: Ameba Blog Features
“Ameba Blog” Strategy “Ameba Blog” Features No.1 Blog Media Nationwide Largest Number of Celebrities’ Blogs Nationwide (813) Easy-to-Use User Interface Even for Beginners (number of blog set up: 1.83 million) 35
Slide 37: Accelerated PV Expansion
“Ameba Blog” Strategy Accelerated PV Expansion Topic Creation through 813 Celebrity Bloggers “Ameba Blog” PV Unit: million PV Unit: % 1,600 25 24.4% 1,498 Chinatsu Wakatsuk Shinji Takehara Emiri Henmi Moe Oshikiri 1,349 1,303 20 17.7% 19.8% 1,200 1,157 1,164 Saeko Yakkun Sakuraduka Leah Dizon Aki Hi
Slide 38: Service Expansion and PV of Ameba Blog
“Ameba Blog” Strategy Service Expansion and PV of “Ameba Blog” Unit: million PV “Ameba Blog” PV Jul 2007: Number of Blog set up exceeded 1.83 million. 1,600 1,498 Number of Blog set up exceeded 1.7 million. 1,348 1,303 Open recording studio “AmebaStudio” opened. 1,200 Number of Blog set up exceeded
Slide 39: Ameba Blog Positioning
“Ameba Blog” Strategy “Ameba Blog” Positioning Structuring the increasing-returns-to-scale type business model. Operating Profit Margin 50% mixi Yahoo! DeNA 25% Rakuten All About Gourmet Navigator Excite 0 “Ameba Blog” -10% 0 5 billion 10 billion 40 billion Monthly PV Note: “Ameba Blog” is the opera
Slide 40: Existing Business
Existing Business Aim for a continued investment performance by utilizing the strengths Continued priority Growth Trend of discovering and fostering. investment. Internet Internet Investment Ameba Media Advertising Development (Ameba Blog) Business Agency Business Business 39
Slide 41: Establish a High Revenue Business Model through Ameba Blog Growth
Establish a High Revenue Business Model through the Growth of “Ameba Blog” 40
Slide 42: Vision: Hallmark of the 21st Century
VISION To become a company that is the hallmark of the 21st Century. 41
Slide 43: To become a company that is the hallmark of the 21st Century
To become a company that is the hallmark of the 21st Century. We must not allow ourselves to slip away from the growing internet industry. Conversely, we must continue to actively participate in a variety of internet related fields. We must not forget the “Team CyberAgent” spirit. We must commit our
Slide 44: Reference Material (1)
Reference Material (1) Reference Material(1) Overview of Consolidated Financial Results 43
Slide 45: Third Quarter FY2007: PL (over the previous quarter)
Reference Material (1) Third Quarter of the Year Ending September 2007: PL (over the previous quarter) Apr – Jun 2007 Jan – Mar 2007 Change Net Sales 18,803 19,362 -2.9% Gross Income from Sales 7,398 7,209 2.6% Gross Margin 39.3 % 37.2% 2.1points SG&A 5,890 6,073 -3.0% SG&A Ratio 31.3 % 31.4% -0.1po
Slide 46: Reference Material (2)
Reference Material (2) Reference Material(2) “Ameba Blog” Service Mobile Function Expansion Tie-Up Blog Examples “Ameba Blog” PR Stragegies 45
Slide 47: Ameba
Reference Material (2) Ameba Profile Function Message Function Start: April 2007 Start: July 2006 This is a new profile page which displays profile information, This is a function which lets messages to be sent photos, blogs, music, videos, etc. and received. Customization and layout of designs are
Slide 48: Ameba Blog Service
Reference Material (2) “Ameba Blog” Service Ðòïæéìå Æõîãôéïî AmebaRoom “Design Change" Page Íåóóáçå Æõîãôéïî ¿ Ãïííõîéãáôéïî Ôïïì Various types of customization Messages similar to emails can be sent from the reader to the is possible as a personal writer with just one click. PV can be improved by a
Slide 49: Ameba Blog Service
Reference Material (2) “Ameba Blog” Service Video Sharing Service - AmebaVision AmebaPR As of May 7, 2007 From the list of word-of-mouth topics, users can freely choose the topics and post related articles. Approx. 140,000 posting; approx. 800,000 – 1 million streaming per day “Participating in word
Slide 50: Mobile Function Expansion
Reference Material (2) Mobile Function Expansion A mobile service that has the same functions as PCs. Renewal: June 19, 2007. Ameba Headquarters PV is also increased by having the same functions as PCs. http://m.ameblo.jp/ Unit: thousand PV Mobile Service PV “Ameba Blog” Shinji Takehara Official Blo
Slide 51: Ameba Blog Tie-Up Example
Reference Material (2) “Ameba Blog” Tie-Up Example Examples of Tie-Up Blogs (Daikin Industries, Ltd.’ s Pichon-kun) Conducting user participating type track-back present campaign and improving branding image through word-of-mouth by distributing blog parts and original skin. Personal Blog Select use
Slide 52: Ameba Blog PR Strategies
Reference Material (2) “Ameba Blog” PR Strategies Toward enhancement of “Ameba Blog” awareness and PV increase through reinforcing of topic creation. PR Measures June 14 – July 21, 2007 Topic Creation Special sponsorship for m-flo live tour July 4, 2007 Topic Creation June 28, 2007 Ameba Thanks Part
Slide 53: Ameba Blog PR Strategies
Reference Material (2) “Ameba Blog” PR Strategies June 12, 2007 Project coupled April 17, 2007 with TV “Oniyome Nikki – Iiyu Dana” Ameba Blog Hot Spring Hotel Katara Fukushimaya blog coupled with the drama TV Drama to Start “Oniyome Nikki – Iiyu Dana” “Oniyome Nikki – Iiyu Dana” press conference Mar
Slide 54: Ameba Blog PR Strategies
Reference Material (2) “Ameba Blog” PR Strategies Further creation of topics aiming to increase the number of visitors who naturally flow into blogs Unit: case Top Blog in the case of “blog” search Unit: case Visitors who naturally flow into blogs 500,000 60,000 480,067 57,262 55,193 442,151 419,802
Slide 55: Reference Material (3)
Reference Material (3) Reference Material(3) CAJJ Program Company Overview Business Model 54
Slide 56: CAJJ Program Model Diagram
Reference Material (3) CAJJ Program Model Diagram CyberAgent Business and Personnel Development Program CAJJ Program Model Diagram (CyberAgent Business and Personnel Development Program) J1 Promotion Standard As of June 2007 (Period: 3 to 6 months) ЈGross profit of 15 million yen/month J1 Lower limi
Slide 57: CAJJ Businesses
Reference Material (3) CAJJ Businesses Name of Business or Consolidated Company Service Contents Focused 1 Ameba Headquarters Web2.0 Media – Using blogs as platforms, where users play the leading part Business 2 MicroAd Company Blog network advertising distribution services J1 1 Internet Advertising
Slide 58: Company Overview
Reference Material (3) Company Overview 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 Japan Division Nishiki
Slide 59: Business Model
Reference Material (3) Business Model Client Users (Individuals/Consumers) Internet Media Internet Media Business Internet Advertisement Planning, Proposal and Effectiveness Verification Clients (Advertisers) Information Provision through Internet Media Charged Services/Product Sales Investment Subs
Slide 60: Internet Advertising Industry Map
Reference Material (3) Internet Advertising Industry Map Internet Media Advertising Agencies Users (Individuals/Consumers) Clients (Advertisers) Yahoo(4689) 4324 Google 2433 2121 2389 Rakuten(4755) 4293 59