Securities Code ACCA Networks Co., Ltd. Business Results for the First Quarter of the FY2006. Copyright 2006 ACCA Networks All Rights Reserved

Transcription

1 Securities Code 3764 ACCA Networks Co., Ltd. Business Results for the First Quarter of the FY2006 Copyright 2006 ACCA Networks All Rights Reserved

2 1. Summary of Business Results Copyright 2006 ACCA Networks All Rights Reserved

3 Covered Essence ACCA shall provide the best combination/integration of application, backhaul network, access lines and even consultation services as a Solution Provider, a new definition of the integrated service as a whole, for corporate business customers in alliances with ACCA Solutions and strategic business partners Shift in the revenue source Corporate service dramatically grew and commercialization of M2M also seen in the 1Q, Marketing strategy leveraging partners sales force for the new solution business (for mid-small business and M2M) also getting activated Solid base for reliable and secured network Network redundancy almost completed Access back-up service ready for service-in Diversification of access service Preparation for the mobile WiMAX business development Ready to shift from the consumer dependant business model Copyright 2006 ACCA Networks All Rights Reserved 3

4 Summary (1/2) Jump in Corporate service Corporate service becoming our driving force for future sales and earnings growth Recorded the highest quarterly net increase in subscriber lines (net in increase of 3,566 lines) M2M commercial use Service-in of the ticket vending machine network of 2,000 lines by 06/1Q (net increase of 1,000 in 1Q) Electricity monitoring solution project in good progress Large alliances Large alliance with Microsoft and WILLCOM will help our business growth in the future Copyright 2006 ACCA Networks All Rights Reserved 4

5 Summary (1/2) New sales channel established Agreed with Mitsubishi Electric Information Network Corporation (MIND) as a value partner Started network consulting business via Otsuka Corporation WiMAX for future FMC Business development planning and pilot test for the mobile WiMAX to obtain frequency license from the Government Preparing for the future growth in the coming era of fixed-mobile convergence with WiMAX Copyright 2006 ACCA Networks All Rights Reserved 5

6 2006 1Q Financial Results(Consolidated) Net Sales: slight decrease vs. 1Q/05, sales for Corporations covered the dip in the sales for Consumer (please note that per line sales and profits in Corporate business is x5 higher than Consumers ) Operating Profit: Increase in telecommunication facility costs due to the area expansion and halved reimbursements from NTT (special effect: 0.6B 0.26Byen) resulted in the earnings decrease vs. 1Q/05 (Millions of yen) First Quarter of Fiscal Year 2005 First Quarter of Fiscal Year 2006 vs. 1Q 2005 Net Sales 10,265 10, % For Consumer 8,722 8, % For Corporate 1,397 1, % Operating Profit 1, % Ordinary Profit 1, % Net Profit after Tax 1, % Adjusted EBITDA* 4,637 2, % Subscribers(million) % *EBITDA + lease paymentcopyright 2006 ACCA Networks All Rights *Consolidated Reservedresults from 2006/1Q6

7 Sales Trend Sales for Corporations increased by 19% year-on-year, by 12% vs. 05/4Q Service for Corporations shall drive the future growth in sales and earnings 100 Million of Yen Net Sales by Services (quarterly) Consumers Corporations Other Year-on-year growth % % 0 04/3Q 04/4Q 05/1Q 05/2Q 05/3Q 05/4Q 06/1Q *Consolidated results from 2006/1Q Copyright 2006 ACCA Networks All Rights Reserved 7

8 2006 Financial Results vs. Plan Net Sales and Profits are progressing as planned to the 2006 mid year forecasts (Millions of Yen) First Quarter of the FY2006 Results FY2006 Forecasts (middle of 2006) % of Progress Net Sales 10,106 20,000 51% Ordinary Profit % % of Net Sales 3.8% 4.0% - Net Profit 689 1,000 69% % of Net Sales 6.8% 5.0% - *Consolidated Results Copyright 2006 ACCA Networks All Rights Reserved 8

9 Cons. Consumer Subscribers and ARPU OCN ACCA FTTH service-in in March end, ready to focus on capturing new subscribers DSL subscription decreased due to higher cancellation ratio, counteraction by inviting more FTTH ISPs and subscribers Subscribers for Consumers ARPU of Services for Consumers 10 Thousand of Subscribers Subscribers of Year End (right) Net Subscribers (left) /1Q 2Q 3Q 4Q 06/1Q 10 Thousand of Subscribers Yen 2,400 2,200 2,000 1,800 1,600 2,387 Copyright 2006 ACCA Networks All Rights Reserved 9 2,370 2,360 2,365 NTT line cost reduction passed through ARPU 2,363 2,302 2,288 excluding initial set-up fees divided by the lines invoiced 2,281 2,289 04/1Q 04/3Q 05/1Q 3Q 06/1Q

10 Corp. Corporate Subscriber Lines and ARPU Recorded the highest quarterly net increase due to the continued and successful focus in large accounts and M2M business service-in as well 1,000 out of 3,500 is from the ticket vending network project (M2M) Accumulated orders remains high level of 8.5 thousand as of April end Subscribers for Corporations ARPU of Services for Corporations Thousand of Subscribers Number of Year End (right) Net Subscribers (left) /1Q 2Q 3Q 4Q 06/1Q Thousand of Subscribers Yen 14,000 12,000 10,000 8,000 6,000 11,869 12,017 11,930 11,762 ARPU 11,543 11,521 11,486 11,503 NTT line cost reduction passed through excluding initial set-up fees divided by the lines invoiced 11,201 04/1Q 04/3Q 05/1Q 3Q 06/1Q Copyright 2006 ACCA Networks All Rights Reserved 10

11 Corp. Progress of Corporations Service Net Subscribers increased due to the focus in the large accounts Accumulated orders of 8,500 remains very high as of April end Companies A transportation service company A cellular phone company A life insurance company A supermarket company A food delivery service company Financial service companies A rental service for DVD/video,CD company A jewelry company Line orders 4,500 1, Copyright 2006 ACCA Networks All Rights Reserved 11

12 Corp. Cases for Corporations Service HMV Japan(Music and DVD/Videos retailer) Networking the head office and 55 branches for sales and accounting information with DSL and FTTO which replaced the 128k dedicated lines A real estate agent company Networking more than 400 stores accounting and real estate information for more efficient use A secondhand bookstore company Networking of 300 stores sales and inventory information for more efficient use and strict control Copyright 2006 ACCA Networks All Rights Reserved 12

13 Corp. New DSL service to develop new market Access Back up Service tentatively named (back up in access lines) Back up service for the access lines with DSL and FTTO (redundancy in backbone and associate facilities are already in place) To ensure the reliability and security for Corporate business use Service menu by ACCA DSL 1. Back up for ACCA FTTO to enhance ACCA FTTO value 2. Back up for others FTTO to enlarge customer base WideArea Ether IP- VPN Already mostly in place GW Target of access backup service Copyright 2006 ACCA Networks All Rights Reserved 13

14 M2M Progress of M2M business Service-in of 2,000 lines for the ticket vending network business by 1Q Electricity monitoring solution project in good progress Started pilot tests in the credit card reader IP project More locations for video-surveillance monitoring solution already in place April 15, 2006 Nihon Keizai Shinbun Copyright 2006 ACCA Networks All Rights Reserved 14

15 Corp. M2M To be the Solution Provider ACCA shall provide ACCA Solution Platform (ASPF) for the best combination /integration of application, backhaul network, access lines and even consultation services as a Solution Provider, a new definition of service as a whole for corporate business customers in alliances with ACCA Solutions and strategic business partners End User (company) IT Consultation Partner Business Layer Application /Sier Data Center ACCA Solutions ACCA Networks ASP ISV IHV SIer NIer ACCA Solution Platform(ASPF) Basic Application Basic Application (VoIP, Hosting, Middleware etc.) IP-VPN / Wide area Ethernet / NSP/ISP Backhaul Network L2 Closed Network L3 Closed Network ADSL/FTTH/ CATV Access DSL Optical Fiber Wireless LAN Copyright 2006 ACCA Networks All Rights Reserved 15

16 Corp. M2M New Alliances News releases of alliances with big names, Microsoft and WILLCOM, for the future business developments early March March 3, 2006 Nikkei Sangyo Shinbun March 3, 2006 Nihon Keizai Shinbun Copyright 2006 ACCA Networks All Rights Reserved 16

17 Corp. M2M Partner Program ACCA (Telecom.) Sier/ASPvendor (IT) Management by New Co, ACCA Solutions Packaging IS/ASP and NW, provide it as Broadband Solution service to customers Small-mid mid size companies Install high security and reliable broadband NW infrastructure Reduce installation costs by One-stop (IT&NW) approach Also, minimize operation costs by One-stop service Starting network consultation service via Otsuka Corp. Copyright 2006 ACCA Networks All Rights Reserved 17

18 Corp. M2M ACCA Solutions Partners New Co, ACCA Solutions ACCA Solutions Partner Development and sales of Broadband Solution services for small-mid size companies Co-develop and sales M2M products Value Partner Sales Partner End Users Copyright 2006 ACCA Networks All Rights Reserved 18

19 Corp. M2M 1 st ACCA Partner Conference 1 st ACCA Partner Conference on March 3, participation from potential value/sales partners Partner recruiting started for contracts Copyright 2006 ACCA Networks All Rights Reserved 19

20 WiMAX in the Future business waves Past waves Present waves Future waves Consumers Conversion to broadband (ADSL) High-speed broadband (FTTH) billion* billion* Mobile telephone broadband/fmc Triple play Home networks Dedicated lines Optical dedicated lines Migration from dedicated lines to new-type WAN WiMAX/ Wireless LAN FMC Large corporations + Medium-sized corporations billion** Low-cost virtual networks Conversion of backup circuits to high speed Corporations Conversion to broadband High-speed broadband IP phone (050, 0ABJ) Small corporations Conversion to broadband High-speed broadband IP phone (050, 0ABJ) M2M Figures represent market scope * Fiscal 2005 (NRI) **ACCA estimates Facilities maintenance Operation Management 2,000.0 billion** * Surveillance solutions Net Services Use of WiMAX Copyright 2006 ACCA Networks All Rights Reserved 20

21 Winning subscribers and expanding functionalities by alliances Other access-line players Optical services (Electric power companies, USEN) ADSL service Customer service businesses Portal ISP businesses Attract and retain consumer subscribers Customer support businesses Call center Setup businesses Content holders Broadcast stations Movie companies Game companies Services to consumers Joint line use and marketing Stationary communications carriers Telephone networks (NTT, etc.) IP networks/junction networks Mobile carriers Mobile telephone players PHS players Services to corporations FMC/grand slam Corporate network solutions supplying players NI/Sier VAR Troubleshooting, support, and maintenance capabilities Ability to offer high-quality lines Increased access speed and stability. ACCA Networks STB/modem design expertise Ability to Network surveillance formulate solutions function Joint marketing and solutions development :referred in the package Service provider businesses Parking lot service businesses Card business players Joint operations in the content field Content providers BS/CS CATV Authentication Offer home network environment technology; platform Strengthen M2M services and provide solutions Network technology holders STB/modem manufacturers Venture businesses that own middleware Device manufacturers Office equipment manufacturers Factory equipment manufacturers M2M Copyright 2006 ACCA Networks All Rights Reserved 21

22 2. Quarterly Business Summary Copyright 2006 ACCA Networks All Rights Reserved

23 Sales Trend Sales for Corporations increased by 19% year-on-year, by 12% vs. 05/4Q Service for Corporations shall drive the future growth in sales and earnings 100 Million of Yen Net Sales by Services (quarterly) Consumers Corporations Other Year-on-year growth % % 0 04/3Q 04/4Q 05/1Q 05/2Q 05/3Q 05/4Q 06/1Q *Consolidated results from 2006/1Q Copyright 2006 ACCA Networks All Rights Reserved 23

24 Operating Profit Trend vs. 1Q 2005: Increase in the Telecommunication facility costs due to the area expansion and halved reimbursements from NTT(special item 0.6B 2.6B yen) resulted in the earnings decrease compared to the 1Q/05 vs. 4Q 2005: Decreased due mainly to the increase in the sales promotion expenses for the moving season Operating Profit (quarterly) 100 millions of Yen Operating Profit 16% 6.0 (10%) 8% 10.1 Ratio of Operating Profit to Net Sales 6% *( ) NTT line cost reduction passed through 4% 15% 10% (1.4%) -3% -5% 05/1Q 2Q 3Q 4Q 06/1Q 5% 0% *Consolidated results from 2006/1Q Copyright 2006 ACCA Networks All Rights Reserved 24

25 Earnings Trend Net profit after tax progressing beyond the planned schedule Loss carry-forward cleared with capital reserve after the GSM resolution, and now started to accumulate retained earnings Net Profit (quarterly) 100 millions of Yen % 11.5 Net Profit 4% 3.9 Ratio of Net Profit to Net Sales 8% 7% 7% % 10% 5% 0% -5 05/1Q 2Q 3Q 4Q 06/1Q -5% *Consolidated results from 2006/1Q Copyright 2006 ACCA Networks All Rights Reserved 25

26 2006 Business Plan(Consolidated) Target continuous increase in sales and earnings in 2006 (100 millions of Yen) FY2005 FY2006 (Estimate) Year on year Net Sales % Ordinary Profit % % of Net Sales 6.3% 7.6% - Net Profit % % of Net Sales 7.6% 8.3% - Net Profit per Share (Yen) 25, , % *Consolidated results from 2006 Copyright 2006 ACCA Networks All Rights Reserved 26