Trend Micro FY Q / Annual Results. Mahendra Negi, CFO, Representative director February 4, 2003

Transcription

1 Trend Micro FY Q / Annual Results Mahendra Negi, CFO, Representative director February 4,

2 Forward Looking Statements Certain statements that we make in this presentation are forward-looking statements. These forward-looking statements include statements regarding: The business potential of the Internet Our ability to profitably develop and sell Internet-related products and services Trends in our future operating results and other financial results Our investments in Internet-related companies, and the success of those investments Many important factors could cause our actual results to differ materially from those expressed in our forward-looking statements. These factors include: Customer acceptance of our new products and services The impact of competing products and services Difficulties in adapting our products and services to the Internet Difficulties in addressing new virus and other computer security problems The potential lack of attractive investment targets and difficulties in successfully executing our investment strategy Declining prices for our products and services We assume no obligation to update any forward-looking statements. For more details regarding risk factors relating to our future performance, please refer to our filings with the SEC. 2

3 FY2002 4Q Financial Highlight Fiscal Year ended December

4 Consolidated Results Three months ended Dec 31, Net sales Cost of sales Gross profit Operating expenses Operating income Ordinary income Ordinary income margin 4Q2002 4Q2001 YoY growth 11, , % -20% 11,122 10,042 11% 6,689 4,433 3,942 6,125 3,916 4,239 34% 39% 9% 13% -7% Net Income 2, If same currency exchange rate is applied. Net sales 11,616 10,838 7% 4

5 Growth by region 6, % 5,006 5,000 4,706 4,000 3,000 2,000 1, % 2,361 2, % 2,965 2, % 9101,117 4Q2001 4Q % Japan US Europe Asia Pacific Others 5

6 Growth by region If same currency exchange rate is applied. 6, % 5,006 5,000 4,706 4,000 3,000 2,000-4 % 2,361 2, % 2,678 2, , % 1,115 4Q2001 4Q % Japan US Europe Asia Pacific Others 6

7 % share by region 4Q2001 Asia Others Pacific 3% 8% 4Q ,838 million Yen 11,760 million Yen Others Asia Pacific 4% 9% Europe 24% Japan 43% Europe 25% Japan 43% US 22% US 19% 7

8 Operating income 5,000 4,433 4,000 3,000 2,665 3,916 3,030 3,326 3,086 2,000 2,004 1, Q2001 2Q2001 3Q2001 4Q2001 1Q2002 2Q2002 3Q2002 4Q2002 8

9 Profitability Gross margin 100% 95% 95% 95% 95% 95% 94% 94% 94% 93% 90% 1Q2001 2Q2001 3Q2001 4Q2001 1Q2002 2Q2002 3Q2002 4Q2002 Operating profit margin 40% 35% 36% 38% 35% 30% 31% 31% 29% 30% 25% 20% 14% 15% 10% 1Q2001 2Q2001 3Q2001 4Q2001 1Q2002 2Q2002 3Q2002 4Q2002 9

10 Sales by product 14,000 12,000 10,000 8,000 4,150 4,638 Internet sever LAN PC(consumer) 4Q % 14% 25% 4Q % 16% 21% 6,000 4,000 1,535 2,700 1,840 2,526 PC(enterprize), others Total 23% 23% 100% 100% 2,000 2,453 2, Q2001 4Q

11 SGA by Department Operating expenses by department** 8,000 7, , ,000 2,126 1,983 4,000 3,000 1,762 1,925 2,000 1,018 1,070 1,000 1, R&D Marketing Sales Support Others 3Q % 30% 25% 14% 19% Total 100% 4Q % 30% 29% 16% 13% 100% 3Q2002 4Q2002 **Categorized in accordance with the accounting policy for internal reporting purpose 11

12 Headcount Sep ,795 Dec ,837 Technical Support 342 Others 224 Sales, Marketing (+ 2%) Technical Support 351 Others 226 Sales, Marketing 624 Research, Development 619 Research, Development

13 Non-operating operating items Exchange gain Interest expense Interest income 117M 74M 53M 550M Loss on securities & capital fund Disposal of inventories and others 77M Disposal of fixed assets 4M Operating income 4,433 M Ordinary income 3,942 M Income before taxes 3,937 M 13

14 Deferred revenue analysis 20,000 17,500 15,672 15,000 12,500 10,000 7,500 6,966 7,779 10,259 11,222 12,017 12,997 5,000 4,686 2,500 0 Mar-'01 Jun-'01 Sep-'01 Dec-'01 Mar-'02 Jun-'02 Sep-'02 Dec-'02 14

15 FY2002 Annual Financial Highlight Fiscal Year ended December

16 Consolidated Results Fiscal year ended Dec 31, Net sales Cost of sales Gross profit Operating expenses Operating income Ordinary income Ordinary income margin FY2002 FY2001 YoY growth 42,979 2,353 31,326 1,898 37% 24% 40,625 29,427 38% 26,749 13,876 13,449 19,946 9,481 9,549 31% 30% 34% 46% 41% Net Income 7,892 2, % If same currency exchange rate is applied. Net sales 42,035 31,326 34% 16

17 Growth by region 20, % 18,346 15,000 10,000 5, , % 9,215 8, % 9,807 6, % 4,208 2,803 FY2001 FY % 970 1,401 Japan US Europe Asia Pacific Others 17

18 Growth by region 20, % 18,346 If same currency exchange rate is applied. 15,000 10,000 5, , % + 32% 8,964 8,577 6,860 9, % 2,803 4,110 FY2001 FY % 1, Japan US Europe Asia, Pacific Others 18

19 Operating expenses 30,000 Operating expenses by department** FY2001 FY ,000 3,505 R&D 14% 13% 20,000 15,000 10,000 5,000 0 Marketing 7,405 19% 28% 2,755 Sales 3,810 31% 29% Support 7,640 12% 14% 6,206 Others 24% 16% 2,459 3,855 Total 100% 100% 4,716 4,344 FY2001 FY2002 **Categorized in accordance with the accounting policy for internal reporting purpose 19

20 Non-operating operating items Others Exchange Gain 64 M Interest income 48 M 409 M Interest expense 277 M Loss on securities & capital fund 550 M Disposal of inventories and others 122M Loss on repurchase of treasury bond 88M Disposal of fixed assets 93M Operating income 13,876 M Ordinary income 13,449 M Income before taxes 13,431 M 20

21 Balance sheet Dec-2002 YoY change Dec-2001 Total assets 74, ,848 65,317 Cash and bank deposit 47, ,042 40,853 Account receivable 12, ,280 Deferred tax assets (current) 4, ,209 Investment securities 1,150-1,379 2,529 21

22 Balance sheet Dec-2002 YoY change Dec-2001 Total liabilities 37, ,665 34,416 Corporate tax payable Deferred revenue Outstanding bond 3,683 15,672 11, ,413-3,000 3,006 10,259 14,500 Shareholders equity 37, ,183 30,901 Paid in capital 7, Additional paid in capital 12, Retained earnings 19, ,892 6,833 11,

23 Deferred Revenue by region 8, % 6,897 Dec ,000 4,000 5, % 3, % 3,519 Dec , ,678 1, % % Japan US Europe Asia Pacific Others 23

24 Deferred Revenue by region 8, % 6,897 If same currency exchange rate is applied. Dec ,000 5, % 4, % Dec ,000 3,283 2, ,678 1, % % 268 Japan US Europe Asia Pacific Others

25 Cash is King Total asset composition 100% Cash - Bond 75% 42% 43% 52% 58% Account receivable Other assets 50% 25% 27% 26% 31% 31% 24% 20% 24% 22% 0% D ec-99 D ec-00 D ec-01 D ec-02 25

26 Impact of Option Expense FY2002 FY2001 Japan GAAP Ordinary income 13,449 9,549 Pro forma stock option expense under SFAS 148, U.S. GAAP. Pro forma Option expense Pro forma Ordinary income 12,577 8,727 6% decline 9% decline 26

27 Internal Transaction Royalty Parent Japan 4,397 3, Subsidiaries US Euro Asia/ Oceania Others Accounting Treatment Parent: Sales Subsidiaries: Operating Expense Business outsourcing (R&D and others) Accounting Treatment 5,543 US (5,279) Japan 1,468 2,617 0 Euro Asia/ Oceania Others (1,398) (2,481) (0) Parent: Operating Expense Subsidiaries: Sales ( )-cost of sales 27

28 Review for FY2002 Japan - Strong growth of VB in 1H, slowing down in 2H. Building a new management team. North America - Slow enterprise market.rebuilding of channel, branding campaign, new Marketing team. Europe - Strong growth continued, increasing investment and business in Scandinavia, Italy and Eastern Europe. APAC - All round growth, China becomes cash flow positive in Q4. LA - Increasing geographical coverage, some negative impact of currency. 28

29 Projection for 1Q Net Sales Operating Income Net Income For 1Q Jan, Mar, ,000 Expected YoY growth 13% 3,100 1,800 Estimated exchange rate 1USD = 118 yen 1EUR = 128 yen Change the accounting standard to US GAAP Set 20 % of consolidated net income as a base for the dividends 29

30 Thank you! 30