Japan s Leading All-in Provider of Internet Services. Copyright (C) 2013 GMO Internet, Inc. All Rights Reserved.

Transcription

1 Japan s Leading All-in Provider of Internet Services

2 Fiscal Year 2012 Results Presentation Masatoshi Kumagai, CEO Masashi Yasuda, CFO February 6, 2013 GMO Internet, Inc. (TSE1: 9449) 2

3 About the Use of this Document This document includes projections based on expectations, premises and plans as of February 6, 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. 3

4 1. Overview 2. FY2012 Financial Results 3. Segment Report i. Group Overview ii. Web Infrastructure & Ecommerce iii. Internet Media iv. Internet Securities v. Social Media & Smartphone Platform 4. Growth Strategy (G-Gee/New gtlds) 4

5 Overview FY2012 Earnings Results Targets hit for the third consecutive year Record high results (JPY billions) Actual Forecast Actual % Increase % of Forecast Net Sales % 109.4% Operating Profit % 101.7% Ordinary Profit % 103.1% Net Profit % 102.7% 5

6 Overview Highlights Business Performance Record JPY9.1 billion profit even after JPY2.1 billion investment in new businesses Profit expected to exceed JPY10.5 billion in FY2013 (14.8% growth) Segment Breakdown Web Infrastructure: Profit up 38.3%, market share, momentum growing Internet Media: Profit up 26.8% YoY, GMO-AP Group driving growth Internet Securities: JPY4.4 billion profit contribution in FY2012, strong Q4 Growth Strategy G-Gee: Progress toward profitability. Net sales up 300% QoQ New gtld:.tokyo to launch this fall 6

7 Overview Earnings Forecast 14.8% profit growth projected, Set to become a 100-billion-yen-enterprise in 2014 (Unit: JPY billions) 2012 (Actual) 2013 (Forecast) YoY % Change Sales % Operating Profit % Ordinary Profit % Net Profit % 7

8 1. Overview 2. FY2012 Financial Results 3. Segment Report i. Group Overview ii. Web Infrastructure & Ecommerce iii. Internet Media iv. Internet Securities v. Social Media & Smartphone Platform 4. Growth Strategy (G-Gee/New gtlds) 8

9 Financial Results Consolidated P/L (JPY 100 millions) (Forecast) 2011/2012 % Change 2012/2013 % Change Net Sales % 11.6% Cost of Sales SGA Operating Profit % 14.8% Operating Profit Ratio 12.2% 12.3% - - Non-Operating Revenue Non-Operating Expenses Ordinary Profit % 14.4% Extraordinary Profit Extraordinary Loss Corporate Tax etc Minority Equity Net Profit % 6.2% (Corporate Tax Burden) 13.7% 36.7% - Operating Profit up 21.6% Ordinary Profit up 30.8% 9

10 Financial Results Consolidated Balance Sheet JPY21 billion shareholders equity (JPY100 millions) 12/ /2012 Change 12/2012 (GMO CLICK Holdings) Current Assets 1,862 2, ,097 (Cash & deposits) Fixed Assets (Goodwill) (Software) (Investment real estate) Total Assets 2,050 2, ,141 Total Liabilities 1,789 2, ,973 (Interest bearing liabilities) Net Assets (minority equity portion) Shareholders Equity (earned surplus portion) 261(76) 304(93) 42(17) 167(8) 184(96) 210(125) 25(28) 158(82) (Shareholders equity ratio) 9.0% 7.6% -1.4% 7.4% Liabilities/Net Assets Total 2,050 2, ,141 10

11 Financial Results Consolidated Cash Flow JPY13.72 billion provided by operating activities (JPY100 millions) GMO CLICK Holdings Cash Flow from Operating Activities Cash Flow from Investing Activities Cash Flow from Financing Activities Change in Cash and Equivalents Balance of Cash and Equivalents

12 1. Overview 2. FY2012 Financial Results 3. Segment Report i. Group Overview ii. Web Infrastructure & Ecommerce iii. Internet Media iv. Internet Securities v. Social Media & Smartphone Platform 4. Growth Strategy (G-Gee/New gtlds) 12

13 Segment Report: Group Overview Business Segments (Service Composition) Market share growth accelerating across all segments * *3/2012, GMO Media, Inc. 13

14 Segment Report: Group Overview Strengths - Technology An organization built with our own hands 3,152 Group Staff All products developed, sold and supported in-house Engineers 1,000 Number 1 in Customer Satisfaction Other GMO CLICK Securities Oricon Customer Service Awards No.1 in FX customer service ranking GMO AppsCloud Top award for 2 consecutive years (as of 12/2012) 14

15 Segment Report: Group Overview Net Sales by Segment (JPY billions) +20.6% 74.3B 61.6B % +24.0% Web Infrastructure up 24.0% % 年 1-9 月 2012 年 1-9 月 Internet Securities Web Infrastructure & Ecommerce Internet Media Social Media & Smartphone Platform 15

16 Segment Report: Group Overview Operating Profit by Segment (JPY billions) 7.52B % +1.2% 9.14B 4.44 Record High Operating Profit up 21.6% % % Internet Securities Web Infrastructure & Ecommerce Internet Media Social Media & Smartphone Platform 年 1-9 月 2012 年 1-9 月 16

17 1. Overview 2. FY2012 Financial Results 3. Segment Report i. Group Overview ii. Web Infrastructure & Ecommerce iii. Internet Media iv. Internet Securities v. Social Media & Smartphone Platform 4. Growth Strategy (G-Gee/New gtlds) 17

18 Segment Report: Web Infrastructure & Ecommerce Segment Composition & Highlights Number one across all infrastructure products Strong No. 1 Domain Ranked no. 5.com registrar worldwide (by net increase in registrations) *ICANN Domestic gtld market share at 87.9% *based on our own data Strong No. 1 Web Hosting Domestic market share at 54.2% *Webhosting.info No. 1 EC Solutions & Web Dev 63,000 stores No.1 Security 14.2% YoY increase in certificate issues No. 1 Payment Processing 58,000 stores 18

19 Segment Report: Web Infrastructure & Ecommerce Web Infrastructure Contracts (10,000s) 4.40m m m 4.40 million Contracts % YoY Growth 0 1Q Q1 2Q Q2 3Q Q3 4Q Q4 1Q Q1 2Q Q2 3Q Q3 4Q Q4 1Q1 Q 2Q Q2 3Q Q3 4Q Q

20 Segment Report: Web Infrastructure & Ecommerce Net Sales (JPY billions) +24.0% 30.2B 24.3B Domain +28.2% Hosting +15.2% Strong Performance Across all Products 24.0% Growth Payment +22.9% Other Provider Domain Hosting Ecommerce Security Payment Processing

21 Segment Report: Web Infrastructure & Ecommerce Historical Performance by Quarter 8.10B Net Sales OP 6.55B 0.77B 1.02B Another Strong Quarter in Q4 Profit up 32% YoY Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q

22 1. Overview 2. FY2012 Financial Results 3. Segment Report i. Group Overview ii. Web Infrastructure & Ecommerce iii. Internet Media iv. Internet Securities v. Social Media & Smartphone Platform 4. Growth Strategy (G-Gee/New gtlds) 22

23 Segment Report: Internet Media Net Sales (JPY billions) 22.0B % +31.1% 26.0B % Growth in Advertising Internet Advertising % Media & Search Media

24 Segment Report: Internet Media Historical Performance by Quarter 6.05B 6.49B Net Sales 0.40B 0.46B Profit Up 14.2% YoY OP Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q

25 Segment Report: Internet Media GMO AD Partners: Media Segment Driver GMO NIKKO Joins Group Over JPY10B Annual Sales 4 Upward Forecast Revisions (JPY) 880, , billion-yen Player Stock Price (Right Axis) Net Sales OP 440, , Earnings and Stock Price both Strong Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

26 Segment Report: Internet Media Media Products In-house development Leading ad technology Demand Side Platform for optimizing ad distribution Supply Side Platform for optimizing ad revenue Smartphone ad network Smartphone reward advertising Integrated ad platform for maximizing effective management 26

27 1. Overview 2. FY2012 Financial Results 3. Segment Report i. Group Overview ii. Web Infrastructure & Ecommerce iii. Internet Media iv. Internet Securities v. Social Media & Smartphone Platform 4. Growth Strategy (G-Gee/New gtlds) 27

28 Segment Report: Internet Securities Business Performance 4.83 B Sales OP 3.43B 0.58B 1.17B Active FX and Securities Markets Strong Q4 1Q Q1 2Q Q2 3Q Q3 4Q Q4 1Q Q1 2Q Q2 3Q Q3 4Q Q

29 Segment Report: Internet Securities FX Market Share Transaction volume higher than any other FX provider worldwide 4,125 No.1 FXCM 3,602 DMM.com Securities Saxo Bank 2,996 2,944 Gaitame Online Alpari 2,154 2,408 IG Group Oanda 1,785 1,730 CyberAgent FX 1,667 Gain (Forex.com) 1, ,000 2,000 3,000 4,000 5,000 (Forex Magnates, Average transaction volume in 2012) (USD billions) 29

30 Segment Report: Internet Securities Securities (Transaction Volume) Number 3 out of 6 major players % 9.9% 10.6% No. 6 No. 3 No. 3 30

31 Segment Report: Internet Securities Binary Option Trading Restrictions Binary Options A derivative product that allows traders to speculate on future exchange rates using a simple yes/no proposition. Popular with retail investors. Background In 2012 binary options trading increased dramatically in Japan and the FFAJ launched a review to determine whether regulation of the product was needed. Schedule 12/2012 Framework for regulations announced Spring 2013 New rules to be introduced GMO CLICK Securities to revise products as necessary in line with regulations 31

32 1. Overview 2. FY2012 Financial Results 3. Segment Report i. Group Overview ii. Web Infrastructure & Ecommerce iii. Internet Media iv. Internet Securities v. Social Media & Smartphone Platform 4. Growth Strategy (G-Gee/New gtlds) 32

33 Segment Report: Social Media & Smartphone Platform Business Performance 810M Net Sales 70M 250M G-Gee Net Sales up 300% from Last Quarter OP Aiming to achieve early profitability in 2013 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q M 33

34 1. Overview 2. FY2012 Financial Results 3. Segment Report i. Group Overview ii. Web Infrastructure & Ecommerce iii. Internet Media iv. Internet Securities v. Social Media & Smartphone Platform 4. Growth Strategy (G-Gee/New gtlds) 34

35 Growth Strategy G-Gee Strengths 100% Smartphone Leading Marketing Technology Monetization Expertise Differentiated from Existing Platforms and Social App Providers 35

36 Growth Strategy G-Gee Monthly Revenue (JPY100 millions) 2 (Projected) Monetization Underway Net Sales expected to reach JPY200M in 6 months July 2012 Oct Jan

37 Growth Strategy G-Gee Monthly Revenue Cost efficient marketing Promotional Spend JPY700M 24.6 million users *In total 19 months since launch 37

38 Growth Strategy G-Gee Popular Titles Monetization titles 10/19 Card Battle 11/17 Card Battle 10/23 Action Puzzle 1/9 Shooting 12/12 Shooting 12/17 Card Battle 38

39 Growth Strategy G-Gee Business Outlook Performance JPY2 billion investment Achieve Profitability Membership 24.6 million Target: 50 million OS Android Android / ios Japan From user acquisition to monetization phase Continue building strong stable of free apps with in-game purchase functionality Global User acquisition phase From user acquisition to monetization phase 39

40 Growth Strategy New gtlds Launch schedule Q Priority Registration 2014 General Registration Target: 2014 After evaluation and auction Q3 Q4 Q1 Q2 Q3 Q4 Q1.canon.kddi.okinawa.inc.dnp.nagoya.mail.ryukyu.nhk.osaka.toshiba.yokohama *Based on ICANN announcements. Subject to change or delay. 40

41 Internet for Everyone