Fiscal Year 2014 Second Quarter Results Presentation

Transcription

1 Fiscal Year 2014 Second Quarter Results Presentation August 1, 2014

2 1. Overview 2. Q2 Financial Results 3. Segment Report i. Group Overview ii. Internet Infrastructure iii. Online Advertising & Media iv. Internet Securities v. Mobile Entertainment 4. New Domains 2

3 Overview Operating Profit Significant earnings improvement over January quarter (JPY billions) Games 0.36 Securities 0.10 Ads/Media 0.17.tokyo TV Ads Infrastructure* Q1.14 (Jan Mar) Excluding one-time costs (Tokyo TV ads) Q2.14 (Apr June) 3

4 Overview Q2 Earnings Results Double digit growth in net sales and profit Operating, ordinary profit impacted by one-time costs in Q1 (JPY billions) 1-6/ / 2014 YoY % Increase Net Sales % Operating Profit % Ordinary Profit % Net Profit % 4

5 Overview Progress toward Year End Forecast Net sales, Net profit on track (JPY billions) Forecast 1-6/2014 Progress Net Sales % Operating Profit % Ordinary Profit % Net Profit % 5

6 Overview FY 2014 Earnings Forecast No revision to year-end forecast (JPY12.5 billion) 1H 2H Infrastructure (-0.4) One-time costs (-0.3) Q3 investment/(+)q4 return Ads/Media Securities Mobile Incubation (-0.2) Rep business lagging (+0.5) Q1 strong/ Q2 on par with previous year (-0.7) TV ads/improved cost composition (+) Improve composition of rep business (±) Linked to market conditions (+) Profit contribution (+0.8) Upcoming Exit *Figure in brackets indicates cost impact (JPY billions) Set to clear year-end forecasts with growth in existing businesses and return on investments 6

7 Overview Quarterly Earnings (JPY billions) Net Sales OP Q1 Q

8 Overview Net Sales by Segment (JPY billions) consecutive quarters of 20% growth (YoY) in Infrastructure Other Mobile Entertainment Internet Securities Online Ads/Media Internet Infrastructure Q1 Q

9 Overview Profit by Segment (JPY billions) Rock Solid Infrastructure Strengthening Games Structural revision in Media Other Mobile Entertainment Internet Securities Online Ads/Media Internet Infrastructure Q1 Q

10 1. Overview 2. Q2 Financial Results 3. Segment Report i. Group Overview ii. Internet Infrastructure iii. Online Advertising & Media iv. Internet Securities v. Mobile Entertainment 4. New Domains 10

11 Financial Results Consolidated Profit and Loss (JPY100 millions) Q (1-6/2013) Q (1-6/2014) Change Net Sales % Cost of Sales % Gross Profit in Sales % SGA % Operating Profit % (OP Margin) 12.6% 9.5% -3.1pt Ordinary Profit % Extraordinary Profit % Extraordinary Loss % Profit before Tax etc % Corporate Tax etc % (Corporate Tax Ratio) 37.9% 34.1% -3.8pt Minority Profits % Net Profit % 11

12 Financial Results Consolidated Balance Sheet (JPY100 millions) As of As of Change GMO CLICK HD (As of ) Change Current Assets 4,078 4, % 3, % Cash and deposits % % Fixed Assets % % Goodwill % % Software % % Investment securities % 0-8.2% Total Assets 4,297 4, % 3, % Liabilities 3,928 3, % 3, % Interest-bearingg debt % % Net Assets % % Minority Equity % 8-7.8% Shareholders' Equity % % Earned Surplus % % (Shareholders' Equity Ratio) 5.8% 6.2% +0.4pt 4.7% -0.3pt Liabilities/Net Assets Total 4,297 4, % 3, % 12

13 Financial Results Consolidated Cash Flow (JPY 100 millions) Q (1-6/2013) Q (1-6/2014) GMOCLICK HD (1-6/2014) Operating Cash Flow Investing Cash Flow Financing Cash Flow Change in Cash and Equivalents Balance of Cash and Equivalents

14 1. Overview 2. Q2 Financial Results 3. Segment Report i. Group Overview ii. Internet Infrastructure iii. Online Advertising & Media iv. Internet Securities v. Mobile Entertainment 4. New Domains 14

15 Group Overview Business Segments (Composition) Market share growth accelerating across all segments *1 Internet infrastructure contracts (ex. Provider) *2 Provider contracts *3 6/2014 nielsen-online 15

16 16 Group Overview Strengths - Technology Built with our own hands 4,014 Group Staff All products developed, sold and supported in-house 1,607 (40%) Engineers & Creators Number 1 in Customer Satisfaction (as of 6/2014) GMO CLICK Securities Oricon Customer Service Awards No.1 in FX GMO AppsCloud Top Award for 2 consecutive years GMO CLOUD 2014 Business Cloud Triple A Rating GMO GlobalSign GMO Internet SSL Global Information Microsoft Partner of the Security Product Year 2013 Excellence Award 2013 Hosting Competency Award

17 1. Overview 2. Q2 Financial Results 3. Segment Report i. Group Overview ii. Internet Infrastructure iii. Online Advertising & Media iv. Internet Securities v. Mobile Entertainment 4. New Domains 17

18 Segment Report: Internet Infrastructure Segment Composition Number one across all infrastructure products Strong No. 1 Strong No. 1 Domain Hosting & Cloud Domestic gtld market share at 94.5% *based on our own data Up 1.7points Domestic market share at 57.2% *Webhosting.info Up 0.4points No. 1 Ecommerce 84,000 stores (70,000 paid stores) No.1 Security 15.6% YoY increase in certificate issues No. 1 Payment 48,000 merchants 18

19 Segment Report: Internet Infrastructure Historical Performance by Quarter (JPY billions) Net Sales Revenue up 21.2% Profit up 2.9%.tokyo TV ad spend: JPY170M OP Q1 Q

20 Segment Report: Internet Infrastructure Net Sales by Sub Segment (JPY billions) Other Provider Payment Security Ecommerce Solutions Cloud & Hosting Domain Q1 Q

21 Segment Report: Internet Infrastructure Internet Infrastructure Contracts (millions) million contracts 12.8% YoY growth Q1 Q *Excluding provider contracts (26,000 contracts)

22 1. Overview 2. Q2 Financial Results 3. Segment Report i. Group Overview ii. Internet Infrastructure iii. Online Advertising & Media iv. Internet Securities v. Mobile Entertainment 4. New Domains 22

23 Segment Report: Online Advertising & Media Historical Performance by Quarter (JPY billions) Revenue up 3.2% 0.59 Profit down 32.5% Net Sales OP Q1 Q

24 Segment Report: Online Advertising & Media Net Sales (JPY billions) Other Online Advertising Internet Media Q1 Q2 Q3 Q1 Q1 Q

25 Segment Report: Online Advertising & Media Ad Network Products 1.7 (JPY billions) 34.0% 1.2 Revenue increase in ad tech 0.7 Q1 Q

26 1. Overview 2. Q2 Financial Results 3. Segment Report i. Group Overview ii. Internet Infrastructure iii. Online Advertising & Media iv. Internet Securities v. Mobile Entertainment 4. New Domains 26

27 Segment Report: Internet Securities Historical Performance by Quarter (JPY billions) Net Sales Profit maintained at previous Q2-level, despite 19-year low in FX market trading activity. OP Q Q2 27

28 Segment Report: Internet Securities FX/Securities Trading Volume GMO CLICK Trading Volume Share 34% Expanded market share despite drop in trading volume Total trading volume in top 12 JP FX trading platforms* JPY147tr GMOCLICK Trading Volume JPY50tr *Yano Research

29 Segment Report: Internet Securities FX Trading Volume Global high FX transaction volume for 2nd consecutive year DMM.com Securities World No.1 YJFX! FXCM Saxo Bank Alpari Gaitame Online SBI FX Trade Money Partners SBI Securities 29 (Source: Forex Magnates, Transaction volume in 2013)

30 Segment Report: Internet Securities Wide Reaching Promotion Aoyama Crossing Shibuya Station Shinjuku Station Shinbashi Station 30

31 1. Overview 2. Q2 Financial Results 3. Segment Report i. Group Overview ii. Internet Infrastructure iii. Online Advertising & Media iv. Internet Securities v. Mobile Entertainment 4. New Domains 31

32 Segment Report: Mobile Entertainment Historical Performance by Quarter (JPY billions) JPY570M loss reduction since previous Q2 Net Sales Profit contribution from Q3 OP Q1 Q

33 Segment Report: Mobile Entertainment Releases in the Second Half of 2014 Concentrating current resources on generating a hit title 7-9/ /2014 Kaleidoscope Pocket Coliseum Dragon Line Tokyo Caravan Hero Mirror War (PC) Wizadry Scheme Amatus no Kishi (PC) Kaleidoscope (S. Korea/Taiwan) Excalibur (English language) Shooting Yusha (S. Korea) LINE Dream Garden (in 20 countries) 33

34 1. Overview 2. Q2 Financial Results 3. Segment Report i. Group Overview ii. Internet Infrastructure iii. Online Advertising & Media iv. Internet Securities v. Mobile Entertainment 4. New Domains 34

35 New Domains Promotion: TV Advertising 35

36 New Domains Promotion: Billboard Advertising Shinagawa Station Shibuya Station Tokyo Station Yahoo! 36

37 New Domains Registration Volume 10,000.tokyo registrations in first 24 hours after General Availability launch Registrations Launch Ranking (of 344) 15,022 7/ ,660 6/ Source: (2014/7/31) 37

38 New Domains Registrar Ranking Ranked 9 th new gtld registrar worldwide Source: (2014/7/31) 38

39 In Closing Strengthening strengths and reinforcing weaker segments with strong products Infrastructure Securities Online Ad/Media Mobile Entertainment Further Strengthening Business A solid business built to last forever enhancing product marketing and brand Further Strengthening Business Enhancing technology, Cost leadership strategy in Japan to expand market share. Also expanding to HK and UK. Developing Number 1 Products Overhaul in rep business in response to evolving external environment Focusing on technology strength, developing products in-house and structural improvements Developing Number 1 Products Brink of profitability, amassing expertise Concentrating resources on producing hit title 39

40 Internet for Everyone

41 This document includes projections based on expectations, premises and plans as of August 1, These projections may differ from actual results due to factors including changes in the global economy, competition, exchange rate fluctuations, natural disasters and other unforeseeable events. Some of the figures given, such as market share are based on our own calculations. These figures may differ from research agency figures. Information contained in this document is provided for information purposes only and does not constitute solicitation of investors. Further, results forecasts and other forward-looking statements are based on premises that include risks and factors that are largely indeterminable. Please understand that actual results may differ significantly as a result of forces including economic conditions and market environment. No responsibility for any reason is accepted for damage sustained as a result of actions taken based on this information. Copyright (C) 2014 GMO Internet, Inc. All Rights Reserved.