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January 2016
North America IR Presentation Materials
Materials for the First Half of the Fiscal Year Ending March 31, 2016
2
Contents
I. Overview of Performance for the First Half of the Fiscal Year Ending March 31, 2016 Page V. Shareholder Returns Policy Page
1. Highlights of the First Half Financial Statements 3 1. Additional Measures for Shareholder Returns 20
2. Details of the First Half Orders Received by Business Segment 4 2. Shareholder Returns Policy (Dividends and Acquisition of Treasury Stock) 21
3. Details of the First Half Sales by Business Segment 5 VI. Construction IT Platform
4. Details of First Half Operating Income 6 1. Overview of Construction IT Platform 22
II. Full Year Forecasts for the Fiscal Year Ending March 31, 2016 2. Construction IT Platform Results 23
1. Full Year Forecasts for the Fiscal Year Ending March 31, 2016 7 3. Future Outlook for Construction IT Platform 24
2. Contract Backlogs (1) 8 VII. Structural Reform and Medium- and Long-Term Vision
3. Contract Backlogs (2) 9 1. Operating Results by Year (Supplementary Materials) 25
III. Trends at Principal Carriers 2. Progress on COMSYS WAYa Structural Reforms 26
1. Trends in NTT Fixed-Line Related Business 10 3. Medium- and Long-Term Vision 27
2. Trends in NTT Mobile Business 11 VIII. Corporate Profile
3. Trends in NCC Business 12 1. COMSYS Group 28
4. Forecasts for Mobile Data Traffic 13 2. Business Segment (1) 29
5. NTT DOCOMO Network 14 3. Business Segment (2) 30
IV. Strategies for Top-Line Expansion 4. Corporate History 31
1. Medium- to Long-Term Targets 15 5. Stock Information 32
2. Solar Power-Related Business 16 6. Organization Chart/Board Members 33
3. Progress in Post Solar Development Business (1) 17
4. Progress in Post Solar Development Business (2) 18 IX. Interim Results for the Fiscal Year Ending March 31, 2016
5. Profit Improvement at Ecosystem Japan Group 19 — Data Book — 34
3
I-1. Highlights of the First Half Financial Statements
Although sales and profit fell short, orders received exceeded forecasts
Performance Performance in previous term
Comparisons withthe previous term Forecasts Comparisons
with forecasts RemarksPercent of Net Sales Percent of Net Sales Difference Percent of Net Sales Difference
Orders Received 1,626 1,735 -108 1,520 +106 Orders ReceivedThe NCC Engineering business declined con-siderably as investment by telecommunications carriers was restrained, so orders received were lower than the previous term, which recorded an all-time high. However, orders received were higher than forecasts as the mainstay NTT infra-structure business remained robust.
Net SalesCarrier-related business (NTT and NCC) was flat, and sales declined, falling below the pre-vious term, which recorded an all-time high. In addition, while non-carrier-related business (social system and IT) remained robust, sales fell short of forecasts due to a decline in sales in mobile-related business (NTT mobile and NCC).
Operating IncomeDespite structural reforms and efforts to raise productivity, income fell short of the previous term and forecasts due to the decline in net sales and deterioration in the product mix.
Net Sales 1,287 1,442 -155 1,310 -22
Gross Profits161 214 -53 180 -18
12.5% 14.9% -2.4 percentage points 13.7% -1.2 percentage points
Selling, General and
Administrative Expenses
95 102 -7 100 -47.5% 7.1% +0.4 percentage points 7.6% -0.1 percentage points
Operating Income65 111 -46 80 -145.1% 7.7% -2.6 percentage points 6.1% -1.0 percentage points
Recurring Profit68 113 -44 83 -145.3% 7.8% -2.5 percentage points 6.3% -1.0 percentage points
Net Income Attributable to
Owners of Parent
45 68 -23 50 -43.5% 4.8% -1.3 percentage points 3.8% -0.3 percentage points
Notes: 1. Performance in the previous term (first half of the fiscal year ended March 31, 2015) recorded an all-time high since the establishment of the Company, with ¥173.5 billion in orders received, ¥144.2 billion in net sales, and ¥11.1 billion in operating income.
2. Figures are rounded down to the nearest whole unit.
(Unit: ¥100 million)
4
I-2. Details of the First Half Orders Received by Business Segment
Target
1,626
(Unit: ¥100 million)
Comparisons with the Previous Term
Comparisons with Forecasts
-108(-6.2%)
Performance in Previous Term Performance
NTT-G+4.6%
+4
NCC-34.8%
Social System-Related
and Other+1.5%
Social System-Related
and Other-9.0%
IT-16.4%
NTT-G+19.3%
NCC-17.1%
IT-8.1%
Decline due to curbing of investment at au and Softbank (decline in orders placed)
1,735 1,520
+40
+149
-68
-26
-47
-32-21
NTT Business (Access) Increase due to early start on utility pole renewal workNTT Business (Network) Increase due to orders moved forward for infrastructure (network simplification) projects
+106(+7.0%)
Decline in reaction to large-scale projects(fire prevention/firefighting, police) in previous term
Decline in reaction to consolidation of Ecosystem Japan in previous term
• Increase due to orders • moved forward for • solar construction projects• Increase in C.C.Box • construction
Failure to receive orders for network construction and disaster prevention radio communications projects as a result of building relocations
Decline due to curbing of investment at au and Softbank (decline in orders placed)
NTT Business (Access) Increase due to early start on utility pole renewal workNTT Business (Network) IIncrease due to orders moved forward for network simplification projectsNTT Business (Mobile) Increase due to start of negotiations for new base stations and actual construction work
Orders received higher than forecast as NTT Engineering business remained robust
5Target
1,287
(Unit: ¥100 million)
Comparisons with the Previous Term
Comparisons with Forecasts
-155(-10.8%)
Performance in Previous Term Performance
NTT-G-14.8%
+13
NCC-30.1%
Social System-Related
and Other+6.1%
Social System-Related
and Other+0.0%
IT+10.3%
NTT-G-1.6%
NCC-21.4%
IT+4.0%
1,442 1,310
-123
-11-52
-33+20+0
+8
-22(-1.7%)NTT Business (Access)
Decline in general and integrated services projectsNTT Business (Network) Decline in D70 switching equipment renewal workNTT Business (Mobile) Decline in reaction to base station construction in previous term
Increase in allied company (medical) projects
Decline in reaction to au LTE-related projects in previous term
• Increase in solar • construction projects• Increase due to • new consolidated • companies• Failure to receive • orders for government • and municipal • office-related projects
Increase in solar construction projects
Increase in allied company projects
Decrease in au LTE-related projects
NTT Business (Mobile) Decrease due to postponement of base station negotiations and indoor base station projects
I-3. Details of the First Half Sales by Business Segment
Decline in sales due to flat carrier-related business
6
I-4. Details of First Half Operating Income
Target
(Unit: ¥100 million)Comparisons with the Previous Term
Comparisons with Forecasts
-46(-41.3%)
Performance in Previous Term Performance
+2
-62
-24
+9+3
+2 +5 +4
-15(-18.2%)
111Operating Margin
(7.7%)
65Operating Margin
(5.1%)
80Operating Margin
(6.1%)
Decrease in net sales and deterioration in product mix
Decrease in net sales and deterioration in product mix
Structural reforms and
improved productivity
Structural reforms and
improved productivity
Improvement due to
cost reduction
Improvement due to
cost reduction
Recovery in performance of
Ecosystems Japan
Recovery in performance of
Ecosystems Japan
Decline in income due to decrease in net sales and deterioration in product mix
7
II-1. Full Year Forecasts for the Fiscal Year Ending March 31, 2016We will aim to achieve forecasts by completing
the large number of contract backlogs and reducing lead time
FY March 2015Performance
FY March 2016Targets
Comparisons withFY March 2015 Remarks
Percent of Net Sales Percent of Net Sales Difference
Orders Received 3,369 3,320 -49Orders Received
While orders received in the NCC Engineering business were low in the first half, orders received overall progressed largely in line with forecasts. In the second half, we will further expand orders received based on an anticipated recovery in the NCC business and aggressive proposal marketing.
Net SalesWe will aim to achieve forecasts by improving construction efficiency with a large number of projects carried forward (contract backlogs) and appropriate operations management.
IncomeWe will aim to achieve forecasts by recording completions early through shorter lead times (from receipt of orders to project completion) and further reductions in expenses.
Net Sales 3,286 3,310 +23
Gross Profits479 480 +0
14.6% 14.5% -0.1 percentage points
Selling, General and
Administrative Expenses
202 200 -26.2% 6.0% -0.2 percentage points
Operating Income276 280 +3
8.4% 8.5% +0.1 percentage points
Recurring Profit281 285 +3
8.6% 8.6% +0.0 percentage points
Net Income Attributable to Owners of Parent
167 170 +25.1% 5.1% +0.0 percentage points
Notes: 1. The forecasts for the fiscal year ending March 31, 2016 have not been changed from the forecasts announced in the financial results summary dated May 8, 2015.
2. Figures are rounded down to the nearest whole unit.
(Unit: ¥100 million)
8
II-2. Contract Backlogs (1)
Hopes for net sales in second half and beyond due to all-time-high contract backlogs
1,059
3,160
1,133
2Q Contract Backlogs Net SalesFY March 31, 2013
2Q Contract Backlogs Net SalesFY March 31, 2014
2Q Contract Backlogs Net SalesFY March 31, 2015
2Q Contract Backlogs Net Sales (Target)FY March 31, 2016
(First half)1,322
(Second half)1,838
(First half)1,405
(Second half)1,908
3,313
(First half)1,442
(First half)1,287
(Second half)1,844
3,286
(Second-half forecasts)2,023
(Target)
1,1901,321
3,310
All-time-high contract backlogs
Social System-Related
and Other
NTT
NCC
IT
(Unit: ¥100 million)
9
II-3. Contract Backlogs (2)
FY March 31, 2015Contract Backlogs
FY March 31, 2016Contract Backlogs
First HarfContract Backlogs
Net Sales(First half)
1,287
Orders Received(First half)
1,626
Orders Received(Second half)
1,694 + α
992 + β
Net Sales(Second half)
2,023
981
1,321
(Unit: ¥100 million)
Second-Half Project Numbers (orders received + contract backlogs)
All-time-high contract backlogs
Large number of orders received
forecast in second half
All-time-high project volume
expected in second half and beyond
We will aim to achieve forecasts through
a high number of projects.
OrdersReceived
1,694+ α
R
ContractBacklogs
1,321
Expecting all-time-high project volume due to a large number of contract backlogs and orders received in second half
10
NTT WEST
NTT EAST
NTT WEST
NTT EAST
Mar. 2014 Mar. 2015 Mar. 2016(First-Half)
ResultsMar. 2014
ResultsMar. 2015 Mar. 2016
880932930
6,266 5,900
2,687 3,197
6,907
2,241
1,904 1,805
1,019
786
1,040
831
1,051
853
Mar. 2016(Full-Year Forecasts)
1,931
1,080
851
1,871
(Unit: 10,000 lines)
Note: No. of subscriptions is cumulative, optical fiber collaboration is reposted.
Source: NTT Results Briefing Materials
COMSYS Group materials: Simple total for five companies; NTT Engineering business–Access
1,613
1,584
452
478
475
457
455
425489
3,513
3,394 1,287
1,400
3,121
3,145 1,027
1,214
2,900
3,000Investment in
fiber optics2,630
Investment in fiber optics
2,240Investment in
fiber optics2,050
(Full-Year)Mar. 2014
(First-Half) (Full-Year)Mar. 2015
(First-Half) (Full-Year Target)Mar. 2016
(First-Half)
(Unit: ¥100 million)
(Unit: ¥100 million)
NTT East and NTT West capex
Orders received at COMSYS Group (NTT Business-Access)
No. of FLET’S subscriptions(including optical fiber collaboration)
Results Target
Second-half
First-half
Optical fiber collaboration
8
Optical fiber collaboration
71
Optical fiber collaboration
226
Optical fiber collaboration
399Optical fiber collaboration
164Optical fiber collaboration
19
III-1. Trends in NTT Fixed-Line Related Business
NTT East and West• Overall capex for NTT Group revised to ¥1,730.0 billion from initial ¥1,760.0 billion, in
consideration of a ¥30.0 billion decrease in NTT DOCOMO.• Although there are no revisions to the initial full-year capex of ¥590.0 billion at NTT
East and West, there is a trend of a gradual decline, with the first half down 17% from the previous term to ¥224.1 billion.
No. of FLET’S subscriptions (including optical fiber collaboration)• The net increase in FLET’s subscriptions has been diminishing due to the impact of
mobile communications, etc. • The number of optical fiber collaboration subscriptions at NTT East and West has increased
since the end of the previous fiscal year (the year ended March 31, 2015) with the majority being transfers from other services (new: 270,000 lines, transfers: 1.8 million lines).
COMSYS Group• At the current stage, optic fiber collaboration has not resulted in an increase in orders
received due to the large number of transfers.• Increase in orders received is due to the early start on utility pole renewal work.
11
Source: NTT DOCOMO Results Briefing Materials
ResultsMar. 2014
ResultsMar. 2015 Mar. 2016
570622
712
COMSYS Group materials: Simple total for five companies; NTT Engineering business–Mobile
395
317
299
323
320
250316
(Unit: ¥100 million)Orders received at COMSYS Group (NTT Business-Mobile)
Results Target
Second-Half
First Half
Capital Expenditure Trends
(Unit: ¥100 million)
[ First-half comparison ]
2,9252,195
LTE
FOMA
Other(Smart Life
business, etc.)
Mar. 2015(First-Half)
Mar. 2016(First-Half)
Mar. 2016(Current Forecast)
Mar. 2016(Initial Forecast)
FY March 2014 FY March 2015(First-Half)
March 2016 (projection)
1,057
1,859
82492
1,369
6,000 6,300
2,470
0
3,530
2,640
0
3,660
NTT DOCOMOLTE Network
LTE base stations97,400 stations
115,400stations
Fastest in Japan130,000stations First half fiscal 2015:
priority roll-out of 7,700 base stations in
640 cities across Japan
Launch of 262.5Mbps service
Launch of 300Mbps service
from October 2015 (410 cities nationwide)900
stations
7,700stations
Premium4G-enabled
base stations18,000
stations
III-2. Trends in NTT Mobile Business
NTT DOCOMO• First-half capex amount remains the same as the original forecast, but the second half
will increase over the first half• Overall capex for the year cut from initial ¥630.0 billion to ¥600.0 billion due to the in-
troduction of new technology, reductions in procurement costs, greater efficiency in re-search and development and information systems investment, along with other reasons.
• No change to future capex plans (until fiscal 2017) from maximum of ¥650.0 billion as in the medium-term target announced last year.
COMSYS Group• Initial planning was made with the emphasis on the latter half of the fiscal year, with the
first-half forecasts being too conservative. However, orders received during the first half exceeded forecasts due to an early start of new negotiations and the consulting business
• Expectations of orders received and sales in second half in anticipation of increasing the speed of the LTE network.
• Cost pressures are expected to be severe considering greater cost efficiency at NTT DOCOMO. However, assuming future traffic demand, there will be ongoing demand for mobile-related projects.
12
(Unit: ¥100 million) (Unit: ¥100 million)
Source: KDDI Results Briefing Materials Source: Softbank Group Results Briefing Materials (First quarter, fiscal year ending March 31, 2016)
KDDI Capex (payment) Softbank Capex(Telecommunications business in Japan)
(Japan standards) Targets (International accounting standards)
Full-Year
Mar. 2015
First-Half Full-Year(Forecast)
Mar. 2016
First-Half
Mobile
Fixed(Includes UQ)
1,282
1,942
1,238
1,312
3,224
6,677
2,551
6,000
COMSYS Group materials: Simple total for five companies; NCC Engineering business
Orders received at COMSYS Group (NCC)
ResultsMar. 2013 Mar. 2016
350340
142
198
ResultsMar. 2014
470
220
250
ResultsMar. 2015
395
212
183
195
155127
Results Target
Second-half
First-half
Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016(Forecast)
Mar. 2017(Forecast)
3,9003,900
7,1256,316
Softbank platinum band(Unit: ¥100 million)
5,355
III-3. Trends in NCC Business
KDDI• apital expenditures in first half down ¥63.0 billion from the same period in
the previous term, progress rate of 42.5%.• Mobile investment shifting to improvement of network quality with area
expansion already completed.
Softbank• Capital investments peaked and moving toward generation of free cash
flow (FCF).• Required investment in steel towers has run its course.
COMSYS Group• First half fell short of previous term and forecasts due to restraint and
decline of carrier investment.• Area expansion, including base station construction, already complete.• Expectation of work for network acceleration and new frequencies (3.5GHz
band) in the future.
13
III-4. Forecasts for Mobile Data Traffic<Current Status>• Not only is the volume of mobile data traffic increasing, but the form is also
changing significantly›› Per capita traffic is rising (World: approximately 1.8-fold/year, Japan:
approximately 1.4-fold/year)›› Tendency for concentration in urban areas and increase in local-area traffic›› Possibility of further increases in traffic in the future due to diversification
in communications devices (M2M, IOT, etc.)
<Forecast for 2020s>• While precise forecasting is difficult, it is expected that mobile data
traffic will continuously rise, considering the diversification of com-munications devices, user needs for ultra-high-speed communica-tions, and the use of diverse radio waves.
• Assuming that the annual rate remains at around 1.5 – 2-fold in the future, it is possible that traffic in the 2020s will be over 1,000 times that of 2010.
Average monthly traffic volume (Japan)
Promoting 4K and 8K (schedule draft)[Vision for 2020]
Trends and forecasts for Internet of Things (IoT) Increase in traffic volume in 2020s
2015 2016 2017 2018 2019 2020
Source: Data published by Ministry of Internal Affairs and Communications
CSCATV, etc.
BS
Expansion in number of channels
etc
Rio Olympics
Rugby World Cup
2020 Tokyo Olympics
4K broadcasts
4K and 8K broadcasts4K and 8K trial broadcasts
1,032.3
729.9
469.8
274.3
1,200(Gbps) (100 million items)
1,000
800
600
400
200
0
600
500
400
300
200
100
0
Source: Data published by Ministry of Internal Affairs Source: and Communications
Source: Data published by Ministry of Internal Affairs Source: and Communications
1.41-fold increase in one year
June 2015June 2014June 2013June 2012
Main factors supposed to include increase in the number of LTE subscribers held by carriers and growth in use of high volume content such as video
An explosive expansion is foreseen (5.1-fold in ten years) in IoT, or the number of things connected to the Internet
2011
104
242
530
2015 2020 2010 202XSource: Prepared by Comsys based on information concerning the Radio Policy Vision Meeting,Source: NTT DOCOMO
Over 1,000 times
Wearable devices
Smartphones and tablets (Video streaming, healthcare, education, etc.)
Domestic appliances 4K/8K
Automobiles and sensors
Traffic
14
III-5. NTT DOCOMO Network
March 2014 March 2015 March 2016 • • • March 2020
LTE
LTE-Advanced
5thGeneration
700MHz band
800MHz band (receiving max. 75Mbps)
1.5GHz band (receiving max. 112.5Mbps)
1.7GHz band (receiving max. 150Mbps)
3.5GHz band (TDD)
2GHz band (receiving max. 112.5Mbps)
4G5G
Toward 1 Gbps300 Mbps262.5 Mbps225 Mbps 370 Mbps
MIMO Upgrade,
etc.
3.5GHzBand
CA Upgrade
(3CC)
CA Speed Up
CA Launch
*1
*2*3
Under development5th generation frequencies: 3 – 30GHz bands
*1. Multiple patterns of bundling frequency bands have been achieved other than those described above.*2. CA (carrier aggregation): technology for bundling multiple frequency bands to improve communication speed*3. MIMO: technology for receiving and transmitting different signals simultaneously from multiple antennas Source: Prepared by C0MSYS based on NTT DOCOMO materials
15
IV-1. Medium- to Long-Term Targets
March 2012 March 2013 March 2014 March 2015 March 2016(Targets)
March 202X(Forecasts)
2,958
(Unit: ¥100 million)Figures in parentheses: sales composition ratio
Net Sales by Segment (Full Fiscal Year)
3,1603,313 3,286 3,310
376
445
336
1,800
(72%)
(28%)(28%)
(33%) (37%)
(63%)(67%)
(73%)(72%) (72%)
(27%)
1,909
409
489
352403
524
447
1,938 1,836
356
537
554 650
575
355
1,730 (50%)
(50%)
NCC
NTT
ITIT
Social System-Related
and Other
4,000
Non-Carrier-Related businessCarrier-Related Business
• To steadily expand non-carrier-related business (social systems and IT solutions business) as sales composition ratio, primarily solar construction projects (EPC business) with objective of top-line expansion
• Carrier-related business, primarily fixed line, expected to gradually decline in the future. Therefore, we plan to further expand sales for non-carrier-related business over the medium to long term with a target of 50% as sales composition ratio.
• Moreover, we are aiming for ¥400.0 billion in net sales over the medium to long term by promoting new business such as post solar and expanding business segments through alliances and M&As.
16
IV-2. Solar Power-Related Business
Solar Power Construction (EPC) Business
Solar Power Generation (IPP) BusinessSteady investment in first half with amount of investment to reach almost ¥8.0 billion at end of current fiscal year
Results Up toFiscal Year Ended March 31, 2015
FY March 2016 FY March 2017 and BeyondTargetsFirst-Half Results Second-Half Targets
Power stations
Hitachiota City, Ibaraki PrefectureShowa-mura, Gunma Prefecture
Tsu City, Mie PrefectureKita-Ibaraki City, Ibaraki Prefecture
Kato City, Hyogo Prefecture
Tsukuba City, Ibaraki Prefecture (completed June 2015)Iga City, Mie Prefecture
(completed September 2015)
Northern Kanto(Completion scheduled for December 2015)
Kyusyu(Completion scheduled for December 2015)
Other 2 projects
Northern Kanto(Completion scheduled for March 2017)
Tohoku(Completion scheduled for May 2017)
Other 6 projects
Volume of power
generated
Single year — 3.7MW 5.7MW 40.4MW
Cumulative total 14.7MW 18.4MW 24.1MW
64.5MW*Also considering utilization for PPS business
Investment
Single year — ¥1.2 billion ¥1.8 billion ¥12.6 billion
Cumulative total ¥4.5 billion ¥5.7 billion ¥7.6 billion ¥20.2 billion
40
100
60
20
60
Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016 Mar. 2017 Mar. 2018 Mar. 2019 Mar. 2020
(Unit: ¥100 million)Orders received
expected to be stable for next few years
190
220
120
2Q4Q
Due to favorable first-half performance, EPC business is reaching peak and orders received in the fiscal year ending March 2016 is expected to exceed the previous term due to favorable first-half performance
17
IV-3. Progress in Post Solar Development Business (1)Areas of Ecological Innovation
<Environment and Energy>Areas of Urban Revitalization Innovation
<Nationwide Resilience>Areas of Community Revitalization Innovation
<Community Development>
Already
introduced
(1) Solar power generation (IPP)(2) Solar power construction (EPC)
• Development of new projects (Floating/carport/ agriculture-model solar systems)
(3) Grey water business(4) Industrial Waste Recycling Business
• M&A with industrial waste recycling company in Hokkaido• Commercialization of industrial waste business in Shinetsu area
(1) Repair of NTT facilities• Increase in infrastructure-related work expected
(2) Full-scale earthquake reconstruction(3) Removal of utility poles
• Aim to expand orders received in Tohoku area
(4) Water and sewerage facilities• Plan expansion into Nagoya and Osaka taking advantage of successful performance in Tokyo Approx. ¥2.0 billion (this fiscal year) ¥3.0 billion (in 3 years’ time)
(5) Renovation of Shuto Expressway• Expand into NEXCO work leveraging Shuto Expressway track record• Success in receiving first order (approx. ¥500 million), leverage track record to expand Approx. ¥1.0 billion (this fiscal year) ¥3.0 billion (in 3 years’ time)
(1) Agricultural engineering• Develop Joshinetsu area business in collaboration with Kawanakajima Kensetsu• Success in receiving first order (approx. ¥100 million), leverage track record to expand
(1) Effective utilization of assets• Enhance property development business through utilization of idle real estate• Start commercialization of first projectBusiness investment ¥12.0 billion (in 3 years’ time)
(2) Okinawa projects• Launch of project team to acquire projects for develop-
ment and promotion of Okinawa
Short- to
medium-term
(1) Wood biomass• Commercialization combined with heat supply in small-scale category
(2) Energy Service Company (ESCO) business • Implement capital tie-ups with allied companies
(3) Electricity retailing (PPS)• Developing business with Eco Japan acting as electricity retailer• Collaborate with COMSYS Create’s power generation business
(4) Smart grid• Re-enter smart grid business leveraging qualifications
as an electrical construction company and a successful track record
• Also seek to enter new, expanding businesses, such as HEMs. ¥1.0 billion (in 3 years’ time)
(1) Water treatment and electrical installation work• Leverage track record to expand into Kansai and Kyushu areas• M&A with engineering companies in Shinetsu region
(2) Revitalization and upgrading of urban infrastructure• Long-term infrastructure plans for major cities
(1) Tokyo Olympics-related work• Establishment of venues, transportation networks, accommodation, etc.
(2) Development of area around Shinagawa Station• Utilize land rights to COMSYS Shinagawa Building to be actively involved in landowner redevelopment meetings
Medium- to
long-term
(1) Geothermal heat pump(2) Small-scale geothermal power generation(3) Smart cities
(1) Concession (1) Region creation projects
18
IV-4. Progress in Post Solar Development Business (2)
Receipt of order for first project with full-scale expansion from next fiscal yearSize of agricultural engineering market COMSYS Group civil engineering business
Current fiscal year budget: approx. ¥240.0 billionFuture work volume on the increase, partly due to business environment, including TPP prospects
Expand business field from communication related civil engineering work into diverse sectors
Promotion of agricultural village development program accompanying formulation of Japanese Ministry of Agriculture, Forestry and Fisheries’ Measures to Establish and Preserve Agricultural Production Infrastructure Aimed at Strengthening Competitiveness and Developing National Resilience
• Development of larger farms and multi-functionality for farming land• Earthquake-proofing• Repair and updating
Water conservation facility maintenance and rationalization projectsIrrigation and drainage improvement projects
• Communication related civil engineering workConstruction of Japan’s telecommunications infrastructure after WWIITrack record in underground installation of electrical cables from ducts and cable tunnels
• Water supply and sewerage work2011 first order received in Tokyo ››› Rank A in 2014
• General civil engineeringCapital tie-up with Kawanakajima Kensetsu ››› Kawanakajima’s track record in slope construction, etc.
Leverage extensive civil engineering track record to enter agricultural engineering market where expansion is expected
Successful bid for first project (Kanto Agricultural Administration
Office: ¥100 million)
Aim for at least three projects a year
Participatein bidding
Win first project
Gain stable orders
Acquire know how through construction
project work
Improve overall performance appraisal score based on
actual business performance
19
IV-5. Profit Improvement at Ecosystem Japan Group
Generating definite profit amid challenging market environment
135
110 120 130
Net Sales(Remarks)• Decline in demand for residential solar (due to increase in rate of consumption tax, abolition of subsidy, etc.)• Impact from pending grid connections, etc.
60
(Unit: ¥100 million)
2 2 4 7OperatingIncome
-3
Mar. 2015Results
Mar. 2016Target
Mar. 2017Target
Mar. 2018Target
Mar. 20162Q Results
Note: Amortization of goodwill not included.
[Measures to increase sales]• Strengthen sales of smart house products such
as storage batteries• Expand solar installation business for public
disaster-prevention facilities• Strengthen the construction and maintenance
of non-Ecosystem Japan solar-power systems• Enter electric power retail business
[Measures to reduce expenses]
• Reduce sales promotion expenses
• Streamline organization
• Review salary payment structure
• Revise workflow and leverage IT
20
V-1. Additional Measures for Shareholder Returns
Retire treasury stock for ¥7.5 billion and acquire additional treasury stock for ¥3.0 billion
500425
45533.58 million shares
(23.0%) 28.61 million shares(20.3%)
30.61 million shares(21.7%)
-75Additional 30
September 30 November 30 – March 31 (expected)
Acquired 50
Treasury StockNum
ber of shares issued
Retirement ofapproximately
5 million shares Additional acquisition of
2 million shares
[Share price] Calculated at 1 share = ¥1,500, figures in parentheses show percentage of treasury stock holding
(Unit: ¥100 million)
Retirement(Note 1)
45
Acquisition(Note 2)
Application
percentage of treasury stock holding
n
M&A targets<Areas of ecological innovation>• Energy business (wood biomass, geothermal)• Geothermal heat pump business
››› Air conditioning and heat-related equipment installation companies
<Areas of urban revitalization innovation>• Road-related business (removal of utility poles, road paving, etc.)• Water and sewerage business
››› Road construction companies and water supply construction companies
<Areas of community revitalization innovation>• 2020 Tokyo Olympics-related work (establishment of venues,
transportation networks, etc.)• Development of area around Shinagawa Station
››› Air conditioning and electrical equipment installation companies
<Industry restructuring>
Proactively expand business areas compatible with existing operations
Results of Main Recent M&As Conducted through Share Exchange• Central Building Services (April 23, 2014)• Kawanakajima Kensetsu (September 30, 2014)• Toa Kenzai (August 31, 2015)• Nippon After Kogyo (scheduled for December 1, 2015)
Notes: 1. 4,977,886 shares to be retired2. Acquisition period from November 9, 2015 to March 31, 2016
Before retirement
145.97 million shares
After retirement 141.00 million shares
21
V-2. Shareholder Returns Policy (Dividends and Acquisition of Treasury Stock)
Total return ratio to exceed 70% due to acquisition of additional ¥3.0 billion in treasury stock
March 2011 March 2012 March 2013 March 2014 March 2015 March 2016 (Planned)
Dividends per Share
(annual)
Interim ¥10 ¥10 ¥10 ¥10 ¥15 ¥15
Year-end ¥10 ¥10 ¥10¥15
Ordinary dividends: ¥10+
Commemorative dividends: ¥5
¥15 ¥20
Consolidated Payout Ratio 27.1% 36.0% 18.7% 18.4% 21.0% 23.1%
Total Return RatioDividends + treasury stock
Net income58.3% 77.7% 48.7% 66.9% 66.2%
52.6%
70.2%
Number of shares of treasury stock
at the end of the period
15.43 million shares
18.90million shares
22.74million shares
28.04million shares
31.32 million shares
33.58million shares
(As of September 30, 2015)
ROE 6.1% 4.4% 7.9% 9.4% 9.0% —
200
100
150
50
(Unit: ¥100 million)Net Income
(Target)
Dividends71 30
25
132
40
24
163 167 17080
29
75
35
50
39
30
9530
25
Acquired treasury stock
Additional acquisition
Note: 4,970,000 shares scheduled to be retired on November 30, 2015
(Note)
22
Creating a Platform To Drive Optimal Progress of “Construction Operations ”Marketing operations
Orders received Design
Workflow
Project/daily report Estimates Contract Execution Completion
Engineering operations
Invoicing/completion Financial accounting Management accounting
Accounting and account settlement
Missioncritical
systemsComstar front-end (IntraMart)/Comstar back-end (SAP) Comstar
database
NTT-relatedbusiness
Private-demandbusiness
Mobilecommunication
system
Fixed-line
ClientClient
EDI contract
Mobile communication construction IT platformOrder
information(DEAR)
Processmanagement
(Darwin)
Completioninformation
(DEAR)Standard onsiteworkflow usingmobile tools
Standard onsite workflow usingmobile tools
EDI completedAccess-related construction IT platformInformation
deliverysupply chain
Operation processing systems (USSS, ASSS, IRAKS, NCPC, etc.)
Private-demandsystems suchas OBPM
*1: Reports on work procedures, detailed instructions/reports on quality, progress, efficiency, time, etc.
Data linkbetweensystems
Data Warehouses(Data application function)
1. Processing and introductionInformation matching
2. Reference Integration/information sharing
3. Analysis Business analysis/information use
Basic Concepts• Figure out transparently on-site work process on mobile devices and automatically optimize system structures according to standardized work flow• Build data flow-through system via data warehouse to integrate construction management in each business
Businessdomain
VI-1. Overview of Construction IT Platform
23
VI-2. Construction IT Platform Results DarwinMobile: Construction IT Platform in Mobile Construction
FY March 2014
Before adoption
FY March 2015
After adoption at head office
From FY March 2016
After adoption nationwide
Profit
Costs Boost sales while curbing cost increases
About 5%
Productivity
improvement
About 20%
Results of adoption
Initial fiscal year with limited adoption, but a large number of LTE projects constructed at similar cost to the previous fiscal year, resulting in a 5% increase in productivity this fiscal year
Further results expected in the future• Increase in adoption rate to 100%• Establishment of best practices• Improvement in operational efficiency of • construction IT platform
Achieve an increase in productivity of around 5% this fiscal year and aim for an improvement of about 20% in the future
24
VI-3. Future Outlook for Construction IT Platform
STEP 0.
Current situation
STEP 1.
Adoption for standard projects
STEP 2.
Expansion to diverse projects
STEP 3.Entering construction projects in different construction industries
Aiming to expand scope of adoption
(Contribution on profit front) Improving existing business
(Contribution on profit ad sales front)Acquiring new business
Present Future
Mobile projects• Adoption for LTE projects
NTT-AC and NTT-NW projects and NCC projects• Aiming to adopt for small- to medium-scale, repetitive, standard projects from single customers (each telecommunications carrier) Productivity improvement from adoption of construction IT platform could form catalyst for industry reorganization
Construction projects in different constructionindustries (as a general contractor)
• Aiming to expand to entire construction industry• based on the COMSYS Group’s business performance • in the telecommunications construction industry
Seeking M&A of construction companies outside the telecommunica-tions industry triggered by productivity improvements due to IT tools
IT solutions and social systems projects• Aiming to expand to diverse projects from public- and private-sector customers utilizing expertise from STEP 1
Improve productivity in construction IT platform to enable promotion of M&As in legacy sectors
25
VII-1. Operating Results by Year (Supplementary Materials)
Operating Margin (%)
Net Sales (Unit: ¥100 million)
5.7%
5.0% 4.9%
4.3%3.7%
4.3%
7.1%
8.3% 8.4% 8.5%
FY March 2007(Fiscal 2006)
FY March 2008(Fiscal 2007)
FY March 2009(Fiscal 2008)
FY March 2010(Fiscal 2009)
FY March 2011(Fiscal 2010)
FY March 2012(Fiscal 2011)
FY March 2013(Fiscal 2012)
FY March 2014(Fiscal 2013)
FY March 2015(Fiscal 2014)
FY March 2016Targets
3,365
192162 156
125 117
225
276 280275
125
3,275 3,313 3,3103,2863,160
2,9582,9303,1543,211
TSUKENNet Sales
(-6.2%) (+6.8%)
Operating Income (Unit: ¥100 m
illion)
26
VII-2. Progress on COMSYS WAYa Structural Reforms FY March 2009(Fiscal 2008)
Spin-off of information
business
Construction of common
platform
Establishment of prime
contractor construction
management
Expansion of centralized
purchasing within the Group
Strategies to strengthen
management base
• Rationalization of
personnel
• Streamlining of assets
TSUKEN management
integration
Reconstruction of Group
business operation
system
Reconstruction of Group
business operation system
IT platform construction
of Access-related
construction
IT platform construction
of mobile-related
construction
TSUKEN Group
reorganization
Nationwide movement of personnelOperation of construction IT platformPromotion of Tokyo Olympic strategy
FY March 2010(Fiscal 2009)
FY March 2011(Fiscal 2010)
FY March 2012(Fiscal 2011)
FY March 2013(Fiscal 2012)
FY March 2014(Fiscal 2013)
FY March 2015(Fiscal 2014)
Group Innovation 2010
• Establishment of COMSYS JOHO System
• Introduction of Comstar
• Standardization of business process reengineering (BPR) and workflow
• Roll-out of purchasing system from Nippon COMSYS to other Group companies
• Transition to nationwide construction system for network-related operations
• Clarification of roles with prime contractor affiliates (dual stratification)
• Personnel reductions of 500 from Group overall
• Fair evaluation of software assets
• Disposal of idle assets
• Amalgamation of mobile-related subsidiaries
• Amalgamation of COMSYS access-related subsidiaries
• Roll-out of User Site Support System (USSS) and Access
Site Support System (ASSS) mobile
• Optimization of Hokkaido construction area
• Restructuring of mobile and network businesses
• Roll-out of Darwin mobile
• Amalgamation of TSUKEN access-
related subsidiaries
COMSYS WAY— Sustained, More In-Depth
Structural Reform
COMSYS WAY a
— Advance of structural reforms and top-line growth
Principal StrategiesOperating M
argin
4.9%4.3%
3.7%
4.3%
7.1%
8.3% 8.4%
27
VII-3. Medium- and Long-Term Vision
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
(Unit: 100 million)
FY 2006 2010 2016 2019 2022 20232013 2014(Target)
Non-NTT businessNTT business
Electrical CommunicationsEngineering (not including NCC)
Social System
IT
NCC
NTT-Mobile
NTT-Network
NTT-Access
¥345 billion ¥400 billion
Business relating to “National Resilience”measures and the 2020 Tokyo Olympics
Participate in Realization of ICT Smart Towns
Expansion of business with existing clients and expansion of alliance businessIncrease project orders from government and municipal offices
Participation in Smart Grid, Smart City developmentSolar power generation business (mega and small-scale systems)
LTE (3.9G) constructionNew frequency band (700M) related construction: au and eAccess
LTE-Advanced (4G: LTE-A) construction
Wireless MAN-Advanced construction
LTE (3.9G) construction
New frequency band (700M) related construction
LTE-Advanced (4G: LTE-A) construction
5G (LTE-B) constructionMigration to new nodes
IP network creation
Full-scale earthquakereconstruction
Optical fiber collaboration
Olympics preparations
Installation of smart TV compatible infrastructure (includes 4K and 8K compatible)
Removal of utility poles
Building high-speed, high-capacity networks (Internet traffic: Annual increase of 10% to 20%) (Mobile communication: Annual increase of 100% or more)
+¥55 billion(Net Sales)
Financial Results Briefing Materials for FY March 2014
28
VIII-1. COMSYS Group
COMSYS Holdings CorporationSecurities code: 1721 (Consolidated Results for FY March 2015)
Date of Establishment: September 29, 2003 Orders Received: ¥336.9 billionPaid-in Capital: ¥10 billion Net Sales: ¥328.6 billion
Number of Employees: Consolidated 9,931 Operating Income: ¥27.6 billionNon-consolidated 45 Net Income: ¥16.7 billion
http://www.comsys-hd.co.jp/
(As of March 31, 2015)
Number of Consolidated Subsidiaries: 16 companies
Number of Consolidated Subsidiaries: 3 companies
Number of Consolidated Subsidiaries: 3 companies
Number of Consolidated Subsidiaries: 4 companies
Number of Consolidated Subsidiaries: 1 company
Nippon COMSYS Corporation
Head Office:Shinagawa-ku, Tokyo
Establishment:December 20, 1951
Paid-in Capital: ¥31,140 million
Number of Employees:Consolidated 5,093Non-consolidated 3,046
Intra-Group Consolidation*Net Sales: ¥209.0 billionOperating Income: ¥19.9 billion
SANWA COMSYS Engineering Corporation
Head Office:Suginami-ku, Tokyo
Establishment:September 12, 1947
Paid-in Capital: ¥3,624 million
Number of Employees:Consolidated 1,437Non-consolidated 697
Intra-Group Consolidation*Net Sales: ¥56.8 billionOperating Income: ¥3.7 billion
Head Office:Nagano, Nagano
Establishment:January 23, 1960
Paid-in Capital: ¥450 million
Number of Employees:Consolidated 1,034Non-consolidated 658
Intra-Group Consolidation*Net Sales: ¥28.0 billionOperating Income: ¥0.8 billion
Head Office:Sapporo Hokkaido
Establishment:April 2, 1951
Paid-in Capital: ¥1,432 million
Number of Employees:Consolidated 1,658Non-consolidated 812
Intra-Group Consolidation*Net Sales: ¥40.7 billionOperating Income: ¥2.2 billion
Head Office:Minato-ku, Tokyo
Establishment:April 1, 2009
Paid-in Capital: ¥450 million
Number of Employees:Consolidated 510Non-consolidated 366
Intra-Group Consolidation*Net Sales: ¥8.3 billionOperating Income: ¥0.5 billion
Head Office:Minato-ku, Tokyo
Establishment:October 1, 2003
Paid-in Capital: ¥75 million
Number of Employees:Non-consolidated 154
Intra-Group Consolidation*Net Sales: ¥3.3 billionOperating Income: ¥0.1 billion
TOSYS Corporation TSUKEN Corporation COMSYS JOHOSystem Corporation
COMSYS Shared Services Corporation
* Intra-group consolidation means that while transactions within each of the five groups are eliminated, there is no elimination of transactions between any groups within the COMSYS Group.
29
VIII-2. Business Segments (1)
16.4%
10.8%
55.9%
16.9%
Note: COMSYS Shared Services Corporation (CSS) engages in administrative operations (general affairs, personnel, finance, salaries, social insurance, and so forth), commonly required by the Group companies, along with the temporary staff placement business.
BusinessSegments
Net Sales by Business Segment
(As of March 31, 2015)Business Overviews Business Domains
Principal Business Conducted
COMSYS SANCOM TOSYS TSUKEN COMJO CSS
NTT
Engineering
The COMSYS Group carries out electrical and telecommunications engi-neering work for the NTT Group. In recent years, the COMSYS Group has also received contracts for facility management such as maintenance and repair operations.
Principal Business PartnersNTT East, NTT West, NTT Communications, NTT Docomo, etc.
• Access (“Outdoor” projects) Installation of optical fibers, and so forth. ○ ○ ○• Network (“Indoor” projects) Construction and installation of switching and transmission equipment, and so forth.
○• Mobile Construction of mobile phone base stations, wireless relay base stations, etc.
○
NCC
Engineering
The COMSYS Group builds electrical and telecommunications facilities, cable television and ancillary equipment for telecommunications service providers outside the NTT Group, known in Japan as New Common Carriers (NCCs).
Principal Business PartnersKDDI Group, Softbank Group, and so forth.
• Telecommunications facilities for NCC Fixed-line and mobile telecommunications facilities
• Cable TV projects, and so forth.
○
IT Solutions
The COMSYS Group combines the extensive expertise it has accumulated in the telecommunication carrier business with advanced network tech-nologies to provide total solution services in the IT area, from the design and planning of system integration optimized for customers’ businesses to the maintenance of their operations.
Principal Business PartnersVarious private companies, national and local government offices, public agencies, and so forth.
• Network integration-related solutions• System integration-related solutions• LAN and WAN projects• Wi-Fi projects• Development and commissioning of
all types of software• Maintenance and operation
○ ○ ○ ○ ○
Social
System-Related
and Other
The COMSYS Group designs, plans, and installs electrical facilities for communication-related civil engineering and general civil engineering projects as well as for facilities and buildings. It also constructs buildings, warehouses, factories and other buildings. In addition, it engages in envi-ronment-related businesses covering disaster prevention equipment, solar power generation systems, and urban infrastructure development.Principal Business PartnersPublic agencies, national and local government offices, various private companies, and so forth.
• Communication related civil engineering works• and general civil engineering works• General electrical facilities works• Construction of multi-use underground• cable conduit facilities (C·C·BOX)• Building construction and ancillary facilities works• Environmental solutions• Leasing and temporary staff placement business
○ ○ ○ ○ ○ ○
30
Business Segments
Specific Lines of Business Main Customers
NTT
Engineering
Construction of telecommunications facilities
for telecommunications carriers(NTT Group)• Nippon Telegraph and Telephone East Corporation• Nippon Telegraph and Telephone West Corporation• NTT Communications Corporation• NTT DOCOMO, Inc. Others
NCC
Engineering
(KDDI Group)• KDDI Corporation• UQ Communications Inc. Others
(SoftBank Group)• SoftBank Corp. Others
IT Solutions
Provision of total solution service in IT field
Private corporations, government and municipal
offices, local governments, etc.
Social
System-Related
and Other
Electrical, civil engineering and other construction projects
related to urban infrastructure
Private corporations, government and municipal
offices, local governments, etc.
VIII-3. Business Segments (2)
Access projects
Network projects Mobile projects
Server construction Call center maintenance
Electrical facilityprojects
Solar construction projects
Communications and civil engineering projects
Data center construction
31
VIII-4. Corporate History
After the San Francisco Peace Treaty was concluded in 1951, Japan was free to pursue its own plans to build a telecommunications network. As the country went ahead with this national project, it became necessary to quickly set up a telecommunication construction company that could build infrastructure across the county. In 1951, one year before the establishment of Nippon Telegraph and Telephone Public Corporation (currently NTT), our original predecessor was founded; its name was Nippon Telecommunications Construction Co., Ltd. Given its vital role in building Japan’s new telecommunications infrastructure, the company was established by the country’s captains of industry at the time. The founder of the company was Taizo Ishizaka, who later became regarded as the “prime minister of Japan’s business world,” while Takeshi Kajii, the first president of Nippon Telegraph and Telephone Public Corporation, served as the company’s advisor.
Nippon COMSYS Corporation
Dec. 1951 Founded as Nippon Telecommunications Construction Co., Ltd. (NTK).
Aug. 1952As the first firm in Japan to hold top certifications in cable laying, machinery installation, and radio facilities projects, designated approved contractor by Nippon Telegraph and Telephone Public Corporation (now NTT).
July 1962 Listed on the Second Section of the Tokyo Stock Exchange.
Nov. 1972 Listed on the First Section of the Tokyo Stock Exchange and Osaka Securities Exchange.
July 1990 Name changed from Nippon Telecommunications Construction Co., Ltd. to Nippon COMSYS Corporation.
Feb. 1991 Certified as comprehensive contractor for telecommunications construction projects by NTT.
Mar. 1994 Paid-in capital increased to ¥10 billion.
Mar. 1997 Orders received and net sales exceed ¥200 billion.
Aug. 1999 Paid-in capital increased to ¥30 billion.
Dec. 2001 50th anniversary of the company’s founding.
Mar. 2002 Selected as one of 225 companies included in the Nikkei Stock Price Average.
COMSYS Holdings Corporation
Sept. 2003 COMSYS Holdings Corporation established. Shares listed on the First Sections of the Tokyo Stock Exchange and the Osaka Securities Exchange (Securities code: 1721).
Oct. 2003 COMSYS Shared Services Corporation established to be the common provider of business process outsourcing services for the COMSYS Group.
Apr. 2005SANWA ELEC Co., Ltd. renamed SANWA COMSYS Engineering Corporation, and its business integrated with the telecommunications carrier operations of Nippon COMSYS Corporation.
Apr. 2009 Information systems business related to software development outsourcing spun off from Nippon COMSYS Corporation to form COMSYS JOHO SYSTEM Corporation.
Oct. 2010 TSUKEN Corporation brought under COMSYS Holdings management.
Sept. 2013 10th anniversary of the COMSYS Holdings Corporation.
After the San Francisco Peace Treaty was concluded in 1951, Japan was free to pursue its own plans to build a telecommunications network. As the country went ahead with this national project, it became necessary to quickly set up a telecommunication construction company that could build infrastructure across the county. In 1951, one year before the establishment of Nippon Telegraph and Telephone Public Corporation (currently NTT), our original predecessor was
founded; its name was Nippon Telecommunications Construction Co., Ltd. Given its vital role in building Japan’s new telecommunications infrastructure, the company was established by the country’s captains of industry at the time. The founder of the company was Taizo Ishizaka, who later became regarded as the “prime minister of Japan’s business world,” while Takeshi Kajii, the first president of Nippon Telegraph and Telephone Public Corporation, served as the company’s advisor.
32
Number of Shares Issued and Number of Shareholders Composition of Shareholders(Number and percentage of shareholders by type)
Authorized: 580,000,000 shares
Issued: 145,977,886 shares
Number of Shareholders: 10,030
ShareholdersShares Held (Thousands)
Percentage of Total (%)
COMSYS Holdings Corporation (Treasury Stock) 33,589 23.01
The Master Trust Bank of Japan, Ltd. (Trust Account) 15,536 10.64
Japan Trustee Services Bank, Ltd. (Trust Account) 10,194 6.98
Japan Trustee Services Bank, Ltd. (Sumitomo Mitsui Trust Bank, Limited Retrust Account / Sumitomo Electric Industries, Ltd. Employee Pension Trust Account) 5,166 3.53
Trust & Custody Services Bank, Ltd. (Investment Trust Account) 3,198 2.19
Nippon Life Insurance Company 2,590 1.77
BNP Paribas Securities (Japan) Limited 2,400 1.64
CBNY-GOVERNMENT OF NORWAY 1,619 1.10
Meiji Yasuda Life Insurance Company 1,544 1.05
NEC Corporation 1,408 0.96
VIII-5. Stock Information (As of September 30, 2015)
Financial Institutions 36.7% (63 owners)
Individuals 10.3% (9,454 owners)
Treasury stock23.0% (1 owner)
Foreign Companies and Individuals 20.7% (303 owners)
Securities Companies 3.6% (45 owners)
Others 5.7% (164 owners)
33
VIII-6. Organization Chart/Board Members (As of June 26, 2015)
Organization Chart Directors and Audit & Supervisory Board Members
Title Name
President and Representative Director Hajime Takashima
Director Noriaki Ito
Director Takashi Kagaya
Director Hirofumi Yamasaki
Director Akio Ogawa
Director Hidetoshi Miura
Director Tsuyoshi Nishiyama
Director Hitoshi Kumagai
Director Kenichi Sato
Director Hidehiko Ozaki
Director (Outside Director) Takeshi Goto*
Director (Outside Director) Kenichi Narumiya*
Standing Audit & Supervisory Board Member Hiroshi Komori
Audit & Supervisory Board Member Hideki Niimi
Outside Audit & Supervisory Board Member Masahiko Miyashita*
Outside Audit & Supervisory Board Member Takaharu Saegusa*
Board of Directors
IR Department
President
Finance & Accounting Department
Board of Corporate Auditors
General Affairs Department
Senior Management Committee
Personnel Department
CSR Committee
Compliance Committee
Risk Management Committee
Internal Control Audit Department
Internal Control Office
Internal Audit Office
Personal Information Protection and Administration Committee
Corporate Planning Department
* The two Outside Directors and the two Outside Audit & Supervisory Board Members have been reported to the Tokyo Stock Exchange as independent officers.
Interim Results for the Fiscal Year Ending March 31, 2016
— Data Book —
35
IX-1. Consolidated Statements of Income (COMSYS.HD Consolidated)
Recurring Profit
Selling, General and Administrative Expenses
Operating Income
(Operating Margin)
Net Income Attributable to Owners of Parent
(Net Profit Margin)
(Recurring Profit Margin)
Orders Received
Net Sales
Gross Profits
(Gross Profit Margin)
Full YearTargets
ProgressRate
(a) (c) ⁄ (f)
26.7%
24.1%
47.9%
23.4%
49.0%
38.9%
33.6%
-33.8%
-39.3%
-6.8%
-41.3%
-6.2%
-10.8%
-24.8%
-9.1%
-17.3%
-4.1%
-18.2%
7.0%
-1.7%
-10.4%
-23
-44
-7
-46
-108
-155
-53
-2.4 p.p.
-2.6 p.p.
-2.5 p.p.
-1.3 p.p.
-4
-14
-4
-14
106
-22
-18
-1.2 p.p.
-1.0 p.p.
-1.0 p.p.
-0.3 p.p.
50
(3.8%)
83
(6.3%)
100
80
(6.1%)
1,520
1,310
180
(13.7%)
45
(3.5%)
68
(5.3%)
95
65
(5.1%)
1,626
1,287
161
(12.5%)
68
(4.8%)
113
(7.8%)
102
111
(7.7%)
1,735
1,442
214
(14.9%)
170
(5.1%)
285
(8.6%)
200
280
(8.5%)
3,320
3,310
480
(14.5%)
(Unit: ¥100 million)
2Q Results
(c) (f)
2Q Results
(b)
2Q Targets
FY March 2015 FY March 2016FY March 2016
Notes: 1. Figures are rounded down to the nearest whole unit. Profit margin, percentages of increase and decrease and progress percentage data are calculated using a base unit of yen. Figures are rounded to the nearest first decimal place. 2. p.p. = percentage points
(e) ⁄ (b)(d) ⁄ (a)(c) – (a) (c) – (b)
PercentageDifference
PercentageDifference
Difference (d) Difference (e)
Comparisons with the Previous Term Comparisons with Forecasts
36
IX-2. Statements of Income for Each Company
Comparisons with the Previous Term
Comparisons with Forecasts for the Full Year
(Unit: ¥100 million)
(Unit: ¥100 million)
13.3
8.4
(4.7%)
(4.5%)
21.1
(12.1%)
(4.8%)
8.1
7.8
175
219
11.8
4.9
(4.7%)
(4.5%)
19.5
(11.5%)
(2.9%)
7.9
7.6
170
212
7.0
1.0
(1.9%)
(1.7%)
8.9
(7.9%)
(0.9%)
2.1
1.8
113
146
6.5
0.3
(0.7%)
(0.6%)
7.1
(6.0%)
(0.3%)
0.8
0.6
120
146
11.2
0.5
(0.8%)
(0.7%)
12.5
(7.0%)
(0.3%)
1.4
1.3
179
207
12.2
10.9
(6.9%)
(6.9%)
29.9
(11.6%)
(4.2%)
17.7
17.7
257
308
-2.8 p.p.
-7.6
-17.8
-40.3
-31.1
-32.7
-85
-23
-3.1 p.p.
-2.9 p.p.
-1.6 p.p.
-0.9
-10.4
-17.4
-16.3
-16.4
-78
-101
-4.6 p.p.
-6.2 p.p.
-6.1 p.p.
-3.9 p.p.
0.5
0.7
1.7
1.3
1.2
-6
0
1.9 p.p.
1.1 p.p.
1.2 p.p.
0.6 p.p.
1.4
3.5
1.6
0.1
0.1
4
6
0.6 p.p.
0.0 p.p.
0.0 p.p.
1.9 p.p.
60.3
33.6
(6.4%)
(6.1%)
111.1
(13.3%)
(4.0%)
53.7
50.8
838
1,075
67.9
51.5
(9.2%)
(9.0%)
151.5
(16.4%)
(5.6%)
84.9
83.5
923
1,098
Recurring Profit
Selling, General and Administrative Expenses
Operating Income(Operating Margin)
(Gross Profit Margin)
Net Income Attributable to Owners of Parent(Net Profit Margin)
(Recurring Profit Margin)
Orders Received
Net Sales
Gross Profits
COMSYS-G SANCOM-G TOSYS-G TSUKEN-GMar. 20162Q Results
Mar. 20152Q Results
Mar. 20162Q Results
Mar. 20152Q Results
Mar. 20162Q Results
Mar. 20152Q Results
Mar. 20162Q Results
Mar. 20152Q Results
14
(3.6%)
25
(8.8%)
10
285
290
27
(5.6%)
50
(11.9%)
23
424
414
25
(6.6%)
63
(10.9%)
38
577
587
121
(9.7%)
324
(15.5%)
203
2,090
2,090
Selling, General and Administrative Expenses
Operating Income(Operating Margin)
(Gross Profit Margin)
Orders Received
Net Sales
Gross Profits
COMSYS-G SANCOM-G TOSYS-G TSUKEN-G
Difference Difference Difference Difference
13.3
(4.5%)
21.1
(12.1%)
7.8
175
219
7.0
(1.7%)
8.9
(7.9%)
1.8
113
146
11.2
(0.7%)
12.5
(7.0%)
1.3
179
207
60.3
(6.1%)
111.1
(13.3%)
50.8
838
1,075
Mar. 2016Full Year Targets
Mar. 20162Q Results Progress Rate Mar. 2016
Full Year TargetsMar. 20162Q Results Progress Rate Mar. 2016
Full Year TargetsMar. 20162Q Results Progress Rate Mar. 2016
Full Year TargetsMar. 20162Q Results Progress Rate
49.9%
34.3%
25.0%
40.1%
51.4%
45.1%
20.0%
3.4%
31.1%
35.3%
47.9%
35.7%
18.2%
39.7%
50.5%
49.4%
41.8%
33.1%
41.3%
53.0%
Notes: 1. Figures are rounded down to the nearest whole unit. Profit margin and progress percentage data are calculated using a base unit of yen. Figures are rounded to the nearest first decimal place. 2. Business transactions between operating groups have not been eliminated. 3. p.p. = percentage points
37
IX-3. Orders Received, Net Sales, and Contract Backlogs by Business Area (COMSYS.HD Consolidated)
NTT Engineering
Full YearTargets
ProgressRate
(a) (c) ⁄ (f)
55.9%-4.6% 19.3%40 149775 924884 1,655NCC Engineering 36.7%-34.8% -17.1%-68 -26155 128197 350IT Solutions 41.3%-16.4% -8.1%-47 -21265 243291 590Social System-Related and Other 45.5%-9.0% 1.5%-32 4325 329362 725
Total 49.0%-6.2% 7.0%-108 1061,520 1,6261,735 3,320
(Unit: ¥100 million)
2Q Results
(c) (f)
2Q Results
(b)
2Q Targets
FY March 2015 FY March 2016FY March 2016
(e) ⁄ (b)(d) ⁄ (a)(c) – (a) (c) – (b)
PercentageDifference
PercentageDifferenceDifference (d) Difference (e)
Comparisons with the Previous Term Comparisons with Forecasts
Business Area
Contract Backlogs
Orders Received(Six months ended September 30)
NTT Engineering
Full YearTargets
ProgressRate
(a) (c) ⁄ (f)
41.3%-14.8% -1.6%-123 -11725 713837 1,730NCC Engineering 34.3%-30.1% -21.4%-52 -33155 121174 355IT Solutions 38.0%10.3% 4.0%20 8210 218197 575Social System-Related and Other 35.9%0.0% 6.1%0 13220 233233 650
Total 38.9%-10.8% -1.7%-155 -221,310 1,2871,442 3,310
(Unit: ¥100 million)
2Q Results
(c) (f)
2Q Results
(b)
2Q Targets
FY March 2015 FY March 2016FY March 2016
(e) ⁄ (b)(d) ⁄ (a)(c) – (a) (c) – (b)
PercentageDifference
PercentageDifferenceDifference (d) Difference (e)
Comparisons with the Previous Term Comparisons with Forecasts
Business Area
Net Sales(Six months ended September 30)
NTT Engineering
(a)
19.9%118711593NCC Engineering -41.9%-354884IT Solutions -27.2%-54144198Social System-Related and Other 32.4%101415313
Total 11.0%1301,3211,190
(Unit: ¥100 million)
2Q Results
(c)
2Q Results
FY March 2015 FY March 2016
(d) ⁄ (a)(c) – (a)
PercentageDifferenceDifference (d)
Comparisons with the Previous Term
Business Area
Note: Figures are rounded down to the nearest whole unit. Percentages of increase and decrease are calculated using a base unit of yen. Figures are rounded to the nearest first decimal place.
38
IX-4. Orders Received and Net Sales by Detailed Business Area for Five Companies on a Non-Consolidated Simple Sum Basis (Results and Forecasts)
NTT Engineering
Full YearTargets
ProgressRate
(a) (c) ⁄ (f)
55.6%7.0% 15.2%32 64425 489457 88062.0%20.4% 27.4%19 2490 11495 18555.5%-2.2% 26.5%-7 66250 316323 57056.3%5.1% 20.3%44 155765 920875 1,635
NCC Engineering 36.4%-35.6% -17.7%-70 -27155 127198 350IT Solutions 40.2%-16.7% -5.5%-37 -10200 189226 470Social System-Related and Other 46.0%6.4% 8.5%11 15180 195183 425
Total 49.7%-3.5% 10.2%-51 1321,300 1,4321,484 2,880
(Unit: ¥100 million)
2Q Results
(c) (f)
2Q Results
(b)
2Q Targets
FY March 2015 FY March 2016FY March 2016
(e) ⁄ (b)(d) ⁄ (a)(c) – (a) (c) – (b)
PercentageDifference
PercentageDifferenceDifference (d) Difference (e)
Comparisons with the Previous Term Comparisons with Forecasts
Business Area
Orders Received(Six months ended September 30)
Notes: 1. The non-consolidated simple sum data are for the following five companies: Nippon COMSYS Corporation; SANWA COMSYS Engineering Corporation; TOSYS Corporation; TSUKEN Corporation; and COMSYS JOHO SYSTEM Corporation.
2. Figures are rounded down to the nearest whole unit. Percentages of increase and decrease are calculated using a base unit of yen. Figures are rounded to the nearest first decimal place.
AccessNetworkMobile
Subtotal
NTT Engineering
Full YearTargets
ProgressRate
(a) (c) ⁄ (f)
41.9%-7.2% -0.7%-29 -2380 377406 90043.8%-15.8% 4.0%-15 380 8398 19040.2%-23.3% -3.0%-75 -7255 247322 61541.5%-14.5% -1.0%-120 -7715 707828 1,705
NCC Engineering 34.2%-30.7% -21.6%-53 -33155 121175 355IT Solutions 36.2%11.8% 6.4%17 9155 164147 455Social System-Related and Other 26.0%13.3% -0.2%11 -095 9483 365
Total 37.8%-11.8% -2.8%-145 -301,120 1,0891,234 2,880
(Unit: ¥100 million)
2Q Results
(c) (f)
2Q Results
(b)
2Q Targets
FY March 2015 FY March 2016FY March 2016
(e) ⁄ (b)(d) ⁄ (a)(c) – (a) (c) – (b)
PercentageDifference
PercentageDifferenceDifference (d) Difference (e)
Comparisons with the Previous Term Comparisons with Forecasts
Business Area
Net Sales(Six months ended September 30)
AccessNetworkMobile
Subtotal
39
IX-5. Capital Expenditure, Depreciation and Amortization
145.1%35
29.8%627
41.4%933
(Unit: ¥100 million)
Capital Expenditure
Tangible Assets
Intangible Assets
Total
2Q Results2Q ResultsDifference Percentage
difference
56.6%10
56.1%48
56.2%58
6.3% 124
2
21
23
22Depreciation and Amortization 46.6%52
Full Year Targets
March 2015 March 2016 March 2016
Comparisons with the previous term
Note: Figures are rounded down to the nearest whole unit. Percentages of increase and decrease are calculated using a base unit of yen. Figures are rounded to the nearest first decimal place.
Progress rate
40
IX-6. Consolidated Balance Sheets (Condensed)
As of September 30, 2015As of March 31, 2015As of September 30, 2015As of March 31, 2015
-215
2,640 2,425
(-231)
1,287
1,138
(+16)
2,640 2,425
402
-215
(-205)
(+4)
(-13)Net Assets
1,940
Long-TermLiabilities
91
CurrentLiabilities
607
ASSETS LIABILITIES AND NET ASSETS (Unit: ¥100 million) (Unit: ¥100 million)
Current Assets
1,518
Fixed Assets
1,121
• Property and equipment
• Investments and other assets
• Intangible assets
+14
+5
-3
+28• Retained earnings-41• Treasury stock, at cost
+48• Cash and cash equivalents
1,926
-139• Accounts payable—trade
*Equity ratio From 73.0% to 79.0%
-371• Notes and accounts receivable—trade
+104• Accumulated cost of construction in progress and other inventories
95
41
IX-7. Consolidated Cash Flow (Condensed)
As of March 31, 2015
334 382
As of September 30, 2015
Cash and Cash Equivalents
at End of Year
Cash and Cash Equivalents at End of Half Year
-35
Cash Flows from Investing Activities
-66
Cash Flows from Financing Activities
+8Other
(Unit: ¥100 million)
• Acquisitions of property and equipment• Payments of loans receivable
-19-14
• Decrease in receivables—trade• Income before income taxes and other adjustments to net income• Increase in inventories• Decrease in payables—trade
-99-170
+376
+71
• Acquisitions of treasury stock• Cash dividends paid
-50-17
+48
+141
Cash Flows from Operating Activities
• Increase in cash and cash equivalents resulting from change of scope of consolidation +8
For further information, please contact:
IR Department
Telephone: +81-3-3448-7000 (direct)
Facsimile: +81-3-3448-7001
E-Mail: [email protected]
URL: http://www.comsys-hd.co.jp/
Cautionary Statement with Respect to Forward-Looking Statements
Forecast figures contained in these presentation materials are forward-looking statements that assume underlying risks and uncertain factors.
Accordingly, it should be recognized that actual results may differ from such forward-looking statements due to a variety of factors.
Important factors that could affect results include, but are not limited to, changes in economic conditions and social trends relevant to the Group’s business areas, and downward pressure on prices for the services provided by the Group owing to fluctuations in demand and intensified competition.
— COMSYS Group Management Philosophy —At the COMSYS Group, we are united as a Group and strive for strong partnership and collaboration with diverse external players in achieving our management philosophy.
• We will build a company that customers continue to choose through the construction of diverse infrastructure that carries our era forward.
• We will contribute to our country and local communities by building social infrastructure that supports affluent lifestyles.
• We will continue with unrelenting reform in our aim to further increase corporate value.