FUJI SOFT ABC., Inc FUJI SOFT ABC., Inc Hiroshi Nozawa Hiroshi - - PowerPoint PPT Presentation

November 10, 2005 November 10, 2005

Hiroshi Nozawa Representative Director, Chairman and President Hiroshi Nozawa Representative Director, Chairman and President

FUJI SOFT ABC., Inc FUJI SOFT ABC., Inc

Name : FUJI SOFT ABC Incorporated

(FSIABC:FujiSoft ABC Inc.）

Listed in the 1st Section of TSE Securities Code No. 9749 Head Office Address : 1-1 Sakuragi-cho, Naka-ku, Yokohama Kanagawa 231-8008, JAPAN Established on: May 15, 1970 Capital: ¥ 26,200 million (as of Sept 30, 2005) Number of Employee: 8,875 (as of Sept 30, 2005) Performance: Consolidated Financial Results for the Fiscal Year ended March 2005 Sales: ¥166,644 million Ordinary Income: ¥10,951 million Name : FUJI SOFT ABC Incorporated

(FSIABC:FujiSoft ABC Inc.）

Listed in the 1st Section of TSE Securities Code No. 9749 Head Office Address : 1-1 Sakuragi-cho, Naka-ku, Yokohama Kanagawa 231-8008, JAPAN Established on: May 15, 1970 Capital: ¥ 26,200 million (as of Sept 30, 2005) Number of Employee: 8,875 (as of Sept 30, 2005) Performance: Consolidated Financial Results for the Fiscal Year ended March 2005 Sales: ¥166,644 million Ordinary Income: ¥10,951 million

• 1. Company Profile
• 1. Company Profile

• 2. FSI Group Summary
• 2. FSI Group Summary

FSI Group Consolidated Subsidiary (13) Company Accounted for by the Equity Method (3) Non-Consolidated Subsidiary (3) Total (19) FSI Group Consolidated Subsidiary (13) FSI Group Consolidated Subsidiary (13) Company Accounted for by the Equity Method (3) Company Accounted for by the Equity Method (3) Non Non-

• Consolidated Subsidiary (3)

Consolidated Subsidiary (3) Total (19) Total (19)

New Subsidiary August 2005: Ace Securities Co., Ltd. --- Securities Business (Shareholding ratio 24.22% Financial Results for FY 2004 Sales: ¥ 8,373 million Ordinary Profit: ¥ 1,281 million) Cybernet Systems Group January 2005: CCA Engineering Simulation Software (Shanghai) Co., Ltd in China --- Computer-aided Engineering (CAE) Consulting April 2005: KGT Inc. --- Network related Software Development August 2005: PLAMEDIA CORPORATION --- Plastic CAE New Subsidiary New Subsidiary August 2005: Ace Securities Co., Ltd. August 2005: Ace Securities Co., Ltd. ---

• -- Securities Business

Securities Business (Shareholding ratio 24.22% Financial Results for FY 2004 Sales: ¥ 8,373 million Ordinary Profit: ¥ 1,281 million) Cybernet Systems Group January 2005: CCA Engineering Simulation Software (Shanghai) Co., Ltd in China --- Computer-aided Engineering (CAE) Consulting April 2005: KGT Inc. --- Network related Software Development August 2005: PLAMEDIA CORPORATION --- Plastic CAE

• 3. Management Topics for the First
• 3. Management Topics for the First-
• half Year Ended September 2005

half Year Ended September 2005

April 2005: “Operation 55” was launched. June 2005: Holding of “Salon Management Support Seminars” Announcement of integration solution “S’ manager” for Salon Industry June 2005: The 35th General Meeting of Stockholders Implementation of real-time distribution of data over the Internet with the Company’s

• riginal technology.

June 2005: Launch the sale of an upgrade version of high-speed data processing engine, “KARUWAZA WEB SUPER” June 2005: Announcement of High Speed Search Engine of “FSSQL” Series. September 2005: Launch the sale of best-selling software for printing postcards, “FUDEGURUME VER.13”, with a total sale of more than 2000 tens of thousands of

• units. -Encrypt address files in response to personal information protection law

October 2005: Launch the sale of Hospital Management Support System, “FSHosPack Management” October 2005: Consolidated Subsidiary, Vinculum Japan has received approval for listing its stock on the JASDAQ Stock Market.

We will present the Financial Results for the First-half Year Ended September 2005 We will present the We will present the Financial Results for Financial Results for the First the First-

• half Year

half Year Ended September Ended September 2005 2005

Performance for the First Performance for the First-

• half Year Ended September

half Year Ended September 2005 (Consolidated) 2005 (Consolidated)

(In millions of yen)

Mid-term Performance for Consolidated Results for the First-half Year Ended September 2005 Mid Mid-

• term Performance for Consolidated Results

term Performance for Consolidated Results for the First for the First-

• half Year Ended September 2005

half Year Ended September 2005

September September 2005 2005 September September 2004 2004

Change Change

Year Year-

• on
• n-
• year

year comparison comparison Forecast Forecast fluctuation fluctuation ratio ratio

Sales Sales 89,912 89,912 81,918 81,918 6,116 6,116 (7.5%) (7.5%) 6,320 6,320 (7.7%) (7.7%) 3,260 3,260 (4.0%) (4.0%) ¥ ¥88.00 88.00 7,994 7,994 4.2% 4.2% 100.5% 100.5% Operating Operating Profit Profit (Profit Rate) (Profit Rate) 6,072 6,072 (6.8%) (6.8%)

• 44

44 ( (-

• 0.7%)

0.7%) 109.8% 109.8% 99.3% 99.3% 94.6% 94.6% 76.4% 76.4% Net Income per Net Income per Share Share ¥ ¥67.21 67.21 ¥ ¥ -

• 20.79

20.79 76.4% 76.4% 92.2% 92.2% ROE ROE 3.1% 3.1%

• 1.1%

1.1% ― ― 110.4% 110.4% Ordinary Profit Ordinary Profit (Profit Rate) (Profit Rate) 5,980 5,980 (6.7%) (6.7%)

• 340

340 ( (-

• 1.0%)

1.0%) 108.7% 108.7% Net Income Net Income (Profit Rate) (Profit Rate) 2,490 2,490 (2.8%) (2.8%)

• 770

770 ( (-

• 1.2%)

1.2%) 92.2% 92.2% ― ―

※The above forecast fluctuation ratios are stated in relation to the figures published

• n May 17, 2005.

※The above figures was rounded down to the 1 million yen.

• Causes of Increase in Sales ---(Year-on-year comparison) +7,994 million yen

*The number of consolidated subsidiary increased. (Tosho Computer Systems., Inc became subsidiaries and accordingly subject to consolidated accounting from the second-half year of FY2005) +3,886 million yen *The sales of control software for telecommunication and machine control service in software development business increased +4,292 million yen

• Causes of Increase in Sales

Causes of Increase in Sales ---

• --(Year

(Year-

• on
• n-
• year comparison)

year comparison) +7,994 million yen

+7,994 million yen *The number of consolidated subsidiary increased. *The number of consolidated subsidiary increased. (Tosho Computer Systems (Tosho Computer Systems., ., Inc became subsidiaries and accordingly Inc became subsidiaries and accordingly subject to consolidated accounting from the second subject to consolidated accounting from the second-

• half year of FY2005)

half year of FY2005) +3,886 million yen +3,886 million yen *The sales of control software for telecommunication and m *The sales of control software for telecommunication and machine control achine control service in software development business increased +4,292 mill service in software development business increased +4,292 million yen ion yen

Causes of Changes in the Consolidated Results for the First-half Year Ended September 2005

(as compared with the preceding fiscal year)

Causes of Changes in the Consolidated Results Causes of Changes in the Consolidated Results for the First for the First-

• half Year Ended September 2005

half Year Ended September 2005

(as compared with the preceding fiscal year) (as compared with the preceding fiscal year)

• Causes of Change in Operating Profit ---(year-on-year comparison)
• 44 million yen

*Increase in profit in line with the sales increase +1,630 million yen *Increase in personal expense in sales administrative expense

• 929 million yen

*Increase in sales administrative expense for priority investment entailing personnel training and recruitment

• 744 million yen
• Causes of Change in Operating Profit

Causes of Change in Operating Profit ---

• --(year

(year-

• on
• n-
• year comparison)

year comparison)

• 44 million yen

44 million yen * *Increase in profit in line with the sales increase Increase in profit in line with the sales increase +1,630 million yen +1,630 million yen * *Increase in personal expense in sales administrative expense Increase in personal expense in sales administrative expense

• 929 million yen

929 million yen * *Increase in sales administrative expense for priority investment Increase in sales administrative expense for priority investment entailing entailing personnel training and recruitment personnel training and recruitment

• 744 million yen

744 million yen

• Causes of Change in Ordinary Profit ---(Year-on-year comparison)
• 340 million yen

*Decrease in Operating Profit

• 44 million yen

*Decrease in gain on sale of securities

• 200 million yen

*Decrease in currency gain and other related issues

• 55 million yen

*Loss on retirement of fixed assets

• 50 million yen
• Causes of Change in Net Income ---(Year-on-year comparison) -770 million yen

*Decrease in Ordinary Profit

• 340 million yen

*Profit from liquidation for welfare pension lump-sum payment (Occurrence in the preceding fiscal year) -186 million yen *Impairment loss on fixed assets

• 95 million yen

*Cancellation of leases

• 48 million yen
• Causes of Change in Ordinary Profit

Causes of Change in Ordinary Profit ---

• --(Year

(Year-

• on
• n-
• year comparison)

year comparison)

• 340 million yen

340 million yen *Decrease in Operating Profit *Decrease in Operating Profit

• 44 million yen

44 million yen *Decrease in gain on sale of securities *Decrease in gain on sale of securities

• 200 million yen

200 million yen *Decrease in currency gain and other related issues *Decrease in currency gain and other related issues

• 55 million yen

55 million yen *Loss on retirement of fixed assets *Loss on retirement of fixed assets

• 50 million yen

50 million yen

• Causes of Change in Net Income

Causes of Change in Net Income ---

• --(Year

(Year-

• on
• n-
• year comparison)

year comparison) -

• 770 million yen

770 million yen *Decrease in Ordinary Profit *Decrease in Ordinary Profit

• 340 million yen

340 million yen *Profit from liquidation for welfare pension lump *Profit from liquidation for welfare pension lump-

• sum payment

sum payment (Occurrence in the preceding fiscal year) (Occurrence in the preceding fiscal year) -

• 186 million yen

186 million yen * *Impairment loss on fixed assets Impairment loss on fixed assets

• 95 million yen

95 million yen * *Cancellation of leases Cancellation of leases

• 48 million yen

48 million yen

Causes of Changes in the Consolidated Results for the First-half Ended September 2005

(as compared with the preceding fiscal year)

Causes of Changes in the Consolidated Results Causes of Changes in the Consolidated Results for the First for the First-

• half Ended September 2005

half Ended September 2005

(as compared with the preceding fiscal year) (as compared with the preceding fiscal year)

(In millions of yen)

Mid-term Performance for the First-half Year Ended September 2005 (Consolidated Subsidiary) Mid Mid-

• term Performance for the First

term Performance for the First-

• half Year Ended

half Year Ended September 2005 (Consolidated Subsidiary) September 2005 (Consolidated Subsidiary)

※1 Consolidation to Non consolidation ratio ---Sales 1.73 times Net Income 1.26 times ※2 Consolidated Subsidiary---(13) (including 2 consolidated subsidiaries of Cybernet Systems Co., Ltd)

Sales Sales Ordinary Profit Ordinary Profit Net Income Net Income Year Year-

• on
• n-
• year

year comparison comparison Year Year-

• on
• n-
• year

year comparison comparison 79.4% 79.4% 1,970 1,970 631 631 710 710 300 300 Tosho Computer Systems Co., Ltd Tosho Computer Systems Co., Ltd 3,886 3,886 111.0% 111.0% 844 844 21.7% 21.7% 289.5% 289.5% 412 412 10.6% 10.6% 460.0% 460.0% 114 114 163 163 26 26 16 16 10 10 10 10 FUJI SOFT SSS., Inc FUJI SOFT SSS., Inc 385 385 147.8% 147.8% 32 32 8.5% 8.5% 144.0% 144.0% 19 19 4.9% 4.9% 142.1% 142.1% 91.7% 91.7% 91.0% 91.0% 130.7% 130.7% 117.8% 117.8% 89.8% 89.8% 541.0% 541.0% 871.4% 871.4% 60.8% 60.8% 144.3% 144.3% 102.8% 102.8% 86.8% 86.8% 126.1% 126.1% 144.8% 144.8% 121.9% 121.9% 103.8% 103.8% 113.1% 113.1% 110.2% 110.2% 102.1% 102.1% 100.6% 100.6% FUJI SOFT ABC., Inc FUJI SOFT ABC., Inc 51,914 51,914 3,482 3,482 6.7% 6.7% 3.8% 3.8% 73.6% 73.6% Cybernet Systems Co., Ltd Cybernet Systems Co., Ltd (Consolidated) (Consolidated) 8,574 8,574 1,215 1,215 14.2% 14.2% 8.3% 8.3% 89.6% 89.6% Nihon Business Soft., Inc Nihon Business Soft., Inc 387 387 18 18 4.7% 4.7% 2.8% 2.8% 148.8% 148.8% 14,372 14,372 6,568 6,568 3,061 3,061 2,411 2,411 2,098 2,098 1,289 1,289 992 992 Profit Profit Rate Rate Profit Profit Rate Rate Year Year-

• on
• n-
• year

year comparison comparison Vinculum Japan Corporation Vinculum Japan Corporation 473 473 7.2% 7.2% 4.6% 4.6% 125.3% 125.3% Cyber Com Co., Ltd Cyber Com Co., Ltd FUJI SOFT KCS FUJI SOFT KCS FUJI SOFT ABC Service Bureau FUJI SOFT ABC Service Bureau Co., Ltd Co., Ltd 50 50 2.4% 2.4% 1.3% 1.3% 504.0% 504.0% OA Laboratory Co., Ltd OA Laboratory Co., Ltd 200 200 6.5% 6.5% 3.7% 3.7% 114.2% 114.2% 267 267 11.1% 11.1% 6.8% 6.8% 92.0% 92.0% 40 40 3.2% 3.2% 1.2% 1.2% 5592.5% 5592.5% Fujisoft Kikaku., Ltd Fujisoft Kikaku., Ltd 15 15 1.6% 1.6% 1.0% 1.0% 66.3% 66.3% FUJI SOFT DIS Co., Ltd FUJI SOFT DIS Co., Ltd 661 661 4.6% 4.6% 4.4% 4.4% 88.0% 88.0%

(In millions of yen)

Mid-term Sales by Segment for the Fist-half Year Ended September 2005 (Consolidated) Mid Mid-

• term Sales by Segment for the Fist

term Sales by Segment for the Fist-

• half

half Year Ended September 2005 (Consolidated) Year Ended September 2005 (Consolidated)

05/9 05/9

Software development related Software development related Business Business

Component Component ratio ratio 04/9 04/9 Change Change Year Year-

• on
• n-
• year

year comparison comparison

Telecommunications Telecommunications System System

Others Others

10,129 10,129 11.3 11.3％ ％ 8,818 8,818 1,311 1,311 114.9 114.9％ ％

Sub Total Sub Total Financial Financial

7,445 7,445 8.3 8.3％ ％ 6,719 6,719 726 726 110.8 110.8％ ％

Manufacturing Manufacturing Public Public Medical Medical Others Others

Operation Operation

Sub Total Sub Total

546 546 0.6 0.6％ ％ 835 835

• 289

289 65.4 65.4％ ％

Distribution Distribution

28,344 28,344 31.5 31.5％ ％ 24,051 24,051 4,293 4,293 117.8 117.8％ ％ 5,852 5,852 6.5 6.5％ ％ 5,524 5,524 328 328 105.9 105.9％ ％ 2,616 2,616 2.9 2.9％ ％ 2,641 2,641

• 25

25 99.1 99.1％ ％ 3,184 3,184 3.5 3.5％ ％ 2,694 2,694 490 490 118.2 118.2％ ％ 20,874 20,874 23.2 23.2％ ％ 19,176 19,176 1,698 1,698 108.9 108.9％ ％

Others Others

4,455 4,455 5.0 5.0％ ％ 3,340 3,340 1,115 1,115 133.4 133.4％ ％ 1,230 1,230 1.4 1.4％ ％ 761 761 18,215 18,215 469 469 20.2 20.2％ ％ 161.6 161.6％ ％ 59.7 59.7％ ％ 53,674 53,674 15,233 15,233 2,982 2,982 119.6 119.6％ ％

TOTAL TOTAL

46,568 46,568 7,106 7,106 115.3 115.3％ ％

Control Control

(In millions of yen)

Mid-term Sales by Segment for the First-half Ended September 2005 (Consolidated) Mid Mid-

• term Sales by Segment for the First

term Sales by Segment for the First-

• half

half Ended September 2005 (Consolidated) Ended September 2005 (Consolidated)

05/9 05/9

Component Component rate rate

04/9 04/9 Change Change

Year Year-

• on
• n-
• year

year comparison comparison

System Maintenance System Maintenance and Operation and Operation

16,623 16,623 18.5 18.5％ ％ 12,970 12,970 3,653 3,653 128.2 128.2％ ％

Solution Solution Service Service business business

Other business Other business

74 74 0.1 0.1％ ％ 47 47 27 27 154.9 154.9％ ％

Consulting Consulting

1,609 1,609 1.8 1.8％ ％ 1,403 1,403 206 206 114.7 114.7％ ％

Outsour Outsour cing cing business business

Office Service Office Service

2,000 2,000 2.2 2.2％ ％ 1,740 1,740 260 260 114.9 114.9％ ％

Others Others

228 228 0.3 0.3％ ％ 216 216 12 12 105.6 105.6％ ％

Sub total Sub total

20,461 20,461 22.8 22.8％ ％ 16,331 16,331 4,130 4,130 125.3 125.3％ ％

Others Others

4,259 4,259 4.7 4.7％ ％ 3,488 3,488 771 771 122.1 122.1％ ％

Sub total Sub total TOTAL TOTAL

36,237 36,237 40.3 40.3％ ％ 35,348 35,348 889 889 102.5 102.5％ ％ 15,702 15,702 17.4 17.4％ ％ 18,970 18,970 11,442 11,442

• 3,268

3,268 12.7 12.7％ ％ 82.8 82.8％ ％ 100.0 100.0％ ％ 89,912 89,912

Commodity Sales Commodity Sales

15,481 15,481

• 4,039

4,039 73.9 73.9％ ％

SUM TOTAL SUM TOTAL

81,918 81,918 7,994 7,994 109.8 109.8％ ％

Trends of the Total Assets (Consolidated) Trends of the Total Assets (Consolidated)

64,509 75,612 70,314 75,119 79,568 82,744 13,206 16,452 17,470

20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 04/3 05/3 05/9 Investment Fixed Assets Current Assets

(In millions of yen)

171,633

※The blue figures are component ratios. (%)

44.1% 46.3％ 9.6％

Ratio for current assets 107.1 105.6 99.0 (%) Ratio for fixed assets 115.0 119.4 126.0 Ratio for preceding year to total assets 114.7 112.3 99.4

152,835

42.2% 49.2％ 8.6％

170,529

41.2％ 48.5％ 10.3％

Investments and others +1,018 Investment Securities +5,071

(Stock acquisition of Ace Securities +3,948)

Deferred tax assets on revaluation

• 3,672

Investments and others +1,018 Investment Securities +5,071

(Stock acquisition of Ace Securities +3,948)

Deferred tax assets on revaluation

• 3,672

Fixed Assets --- +3,176 Cost for the construction of the Akihabara Building +3,264 Fixed Assets --- +3,176 Cost for the construction of the Akihabara Building +3,264 Current Assets --- －5,298 Cash and Time Deposit ー3,122 Decrease in Bonds sold ー1,989 Inventories

ー 874

Securities + 456 Current Assets --- －5,298 Cash and Time Deposit ー3,122 Decrease in Bonds sold ー1,989 Inventories

ー 874

Securities + 456

Trend for Liabilities and Stockholder Trend for Liabilities and Stockholder’ ’s Equity s Equity

(Consolidated) (Consolidated)

60,251 71,578 71,017 19,966 80,433 79,544 15,799 19,621 76,783

20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000

04/3 05/3 05/9

Stockholder's Equity Fixed Liabilities Current Liabilities

(In millions of yen)

171,633

Loan Ratio 20.8 24.8 25.6 (%) Stockholders’ equity ratio 50.2 46.9 46.6 (Minority interest is included in fixed liabilities)

41.7％ 11.4％ 46.9％

※The blue figures are component ratios. (%)

152,835

39.4％ 10.4％ 50.2％

170,529

41.6% 11.8％ 46.6％

Stockholders’ Equity--- ー889 Land revaluation difference

ー3,672

Increase in retained earnings +2,000 Increase in net unrealized holding gain on securities +786 Stockholders’ Equity--- ー889 Land revaluation difference

ー3,672

Increase in retained earnings +2,000 Increase in net unrealized holding gain on securities +786 Fixed Liabilities --- +345 Long-term debt

ー298

Increase in minority interests +311 Increase in deferred tax liabilities +379 Fixed Liabilities --- +345 Long-term debt

ー298

Increase in minority interests +311 Increase in deferred tax liabilities +379 Current Liabilities ---

ー561

Decrease of purchase liabilities

ー2,892

Short-term debt +1,408 Accrued income tax and others +1,758 Accrued consumption tax and

• thers ー601

Current Liabilities ---

ー561

Decrease of purchase liabilities

ー2,892

Short-term debt +1,408 Accrued income tax and others +1,758 Accrued consumption tax and

• thers ー601

Trends for Cash Flow for the First Trends for Cash Flow for the First-

• half Year Ended

half Year Ended September 2005 September 2005

1,337 ▲6,582 5,768

11,875

• 25,000
• 20,000
• 15,000
• 10,000
• 5,000

5,000 10,000 15,000 20,000 25,000 September 2004 September 2005

Business Operation Investment Operation Financial Operation Term-End Balance

(In millions of yen)

15,083

8,153 ▲11,430 154

Investment Operation --- ー4,848 Expenditure for purchase of tangible fixed assets

ー3,101

Expenditure for purchase of investment securities

ー2,425

Investment Operation --- ー4,848 Expenditure for purchase of tangible fixed assets

ー3,101

Expenditure for purchase of investment securities

ー2,425

Financial Operation ---

ー5,614

Borrowing and repayment of loans

ー5,581

Financial Operation ---

ー5,614

Borrowing and repayment of loans

ー5,581

Business Operation --- +6,816 Increase and decrease of purchase liabilities ー3,969 Increase and decrease of accounts receivable +4,689 Increase and decrease of inventories +2,746 Payment of Income taxes and

• thers

+3,558 Business Operation --- +6,816 Increase and decrease of purchase liabilities ー3,969 Increase and decrease of accounts receivable +4,689 Increase and decrease of inventories +2,746 Payment of Income taxes and

• thers

+3,558

(In millions of yen)

Forecast Performance for the Term Ended March 2006 (Consolidated) Forecast Performance for the Term Forecast Performance for the Term Ended March 2006 (Consolidated) Ended March 2006 (Consolidated)

06/3 06/3 05/3 05/3 Change Change

Year Year-

• on
• n-
• year

year comparison comparison

Sales Sales 186,500 186,500 166,644 166,644 10,945 10,945 (6.6%) (6.6%) 10,951 10,951 (6.6%) (6.6%) 5,336 5,336 (3.2%) (3.2%) ¥ ¥139.79 139.79 19,856 19,856 6.8% 6.8% Operating Operating Profit Profit (Profit Rate) (Profit Rate) 12,400 12,400 (6.6%) (6.6%) 1,455 1,455 (0.0%) (0.0%) 111.9% 111.9% 113.3% 113.3% 111.9% 111.9% 105.9% 105.9% Net Income Net Income per Share per Share ¥ ¥152.48 152.48 ¥ ¥12.69 12.69 109.1% 109.1% ROE ROE 6.9% 6.9% 0.1% 0.1% Ordinary Ordinary Profit Profit (Profit Rate) (Profit Rate) 12,250 12,250 (6.6%) (6.6%) 1,299 1,299 (0.0%) (0.0%) Net Income Net Income (Profit Rate) (Profit Rate) 5,650 5,650 (3.0%) (3.0%) 314 314 ( (-

• 0.2%)

0.2%) ― ―

(In millions of yen)

Forecast Sales by Segment for the Term Ended March 2006 (Consolidated) Forecast Sales by Segment for the Term Ended March 2006 Forecast Sales by Segment for the Term Ended March 2006 (Consolidated) (Consolidated)

06/03 06/03 05/03 05/03

Sales Sales

Component Component ratio ratio Year Year-

• on
• n-
• year

year comparison comparison

Sales Sales

Componen Componen t ratio t ratio Telecommunicati Telecommunicati

• ns System
• ns System

35,955 35,955 19.3% 19.3% 119.1% 119.1% 30,184 30,184 18.1% 18.1% 105.0% 105.0% 5,770 5,770 11.3 11.3％ ％ 30.6 30.6％ ％ 8.1 8.1％ ％ 6.6 6.6％ ％ 2.8 2.8％ ％ 1.5 1.5％ ％ 0.8 0.8％ ％ 3.2 3.2％ ％ 23.0 23.0％ ％ 5.6 5.6％ ％ 59.2 59.2％ ％ 118.0 118.0％ ％ 118.7 118.7％ ％ 108.7 108.7％ ％ 101.0 101.0％ ％ 103.8 103.8％ ％ 138.8 138.8％ ％ 87.0 87.0％ ％ 104.6 104.6％ ％ 105.8 105.8％ ％ 141.1 141.1％ ％ 115.0 115.0％ ％ 17,925 17,925 48,110 48,110 13,909 13,909 12,253 12,253 5,019 5,019 2,021 2,021 1,609 1,609 5,722 5,722 40,535 40,535 7,299 7,299 95,945 95,945 10.8 10.8％ ％ 28.9 28.9％ ％ 8.3 8.3％ ％ 7.4 7.4％ ％ 3.0 3.0％ ％ 1.2 1.2％ ％ 1.0 1.0％ ％ 3.4 3.4％ ％ 24.3 24.3％ ％ 4.4 4.4％ ％ 57.6 57.6％ ％ 21,159 21,159 57,114 57,114 15,124 15,124 12,377 12,377 5,209 5,209 2,805 2,805 1,400 1,400 5,987 5,987 42,905 42,905 10,302 10,302 110,321 110,321 Software Development Software Development Related business Related business

Year Year-

• on
• n-
• year

year comparison comparison

Change Change 118.6 118.6％ ％ 3,233 3,233 9,003 9,003 1,214 1,214 124 124 190 190 784 784 － －208 208 264 264 2,370 2,370 3,002 3,002 14,376 14,376 109.7 109.7％ ％ 94.5 94.5％ ％ 130.7 130.7％ ％ 114.8 114.8％ ％ 134.4 134.4％ ％ 112.7 112.7％ ％ 112.6 112.6％ ％ 111.1 111.1％ ％ 119.4 119.4％ ％ 111.0 111.0％ ％

Others Others Sub Total Sub Total Finance Finance Distribution Distribution Manufacturing Manufacturing Public Public Medical Medical Others Others Operati Operati

• n
• n

Sub Total Sub Total Others Others Control Control

TOTAL TOTAL

(In millions of yen)

Forecast Sales by Segment for the Term Ended March 2006 (Consolidated) Forecast Sales by Segment for the Term Ended Forecast Sales by Segment for the Term Ended March 2006 (Consolidated) March 2006 (Consolidated)

06/03 06/03 05/03 05/03

Sales Sales

33,949 33,949 4,285 4,285 3,979 3,979 476 476 42,690 42,690 25,251 25,251 8,082 8,082 33,334 33,334 154 154 76,178 76,178 186,500 186,500

Component Component ratio ratio Year Year-

• on
• n-
• year

year comparison comparison

18.2% 18.2% 117.4% 117.4% 118.1% 118.1% 100.9% 100.9% 114.2% 114.2% 115.7% 115.7% 98.6% 98.6% 99.6% 99.6% 98.8% 98.8% 205.4% 205.4% 107.7% 107.7% 111.9 111.9 % % 2.3% 2.3% 2.1% 2.1% 0.3% 0.3% 22.9% 22.9% 13.5% 13.5% 4.3% 4.3% 17.8% 17.8% 0.1% 0.1% 40.8% 40.8% 100.0% 100.0%

Sales Sales Component Component ratio ratio

28,910 28,910 17.3% 17.3% 2.2% 2.2% 2.4% 2.4% 0.3% 0.3% 22.2% 22.2% 15.3% 15.3% 4.9% 4.9% 20.2% 20.2% 0.0% 0.0% 42.4% 42.4% 100.0 100.0 % % 3,630 3,630 3,943 3,943 416 416 36,901 36,901 25,606 25,606 8,117 8,117 33,723 33,723 75 75 70,699 70,699 166,644 166,644 System System Maintenance Maintenance and Operation and Operation 117.4% 117.4% 5,039 5,039

Solution Solution Service Service Business Business

Other Business Other Business 151.9% 151.9% 79 79

Consulting Consulting

110.4% 110.4% 655 655

Outsour Outsour cing cing business business

Office Services Office Services 126.6% 126.6% 35 35 Others Others 46.8% 46.8% 59 59 Sub Total Sub Total 115.6% 115.6% 5,789 5,789 Others Others 118.6% 118.6%

• 35

35 Sub Total Sub Total Total Total 124.9% 124.9% 5,541 5,541 137.0% 137.0%

• 389

389

Year Year-

• on
• n-
• year

year comparison comparison Change Change

144.1% 144.1%

• 354

354 19,855 19,855 116.9% 116.9% Sales of Goods Sales of Goods SUM TOTAL SUM TOTAL

44,004 51,188 64,004 80,412 86,727 99,047 109,000 35,904 25,051 15,233 11,545 79,079

20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000

95/3 96/3 97/3 98/3 99/3 00/3 01/3 02/3 03/3 04/3 05/3 06/3

(In millions of yen)

Forecast Trends of Sales (Consolidated/Non-consolidated) Forecast Trends of Sales Forecast Trends of Sales (Consolidated/Non

(Consolidated/Non-

• consolidated)

consolidated)

28,157 39,339 47,880 61,778 80,583 112,751 133,063

Non-consolidated Consolidated

143,031 166,644 186,500

(forecast)

6,700 6,334 7,177 7,223 9,322 7,010 5,608 6,188 4,497 1,623 841 341

2,000 4,000 6,000 8,000 10,000 12,000 14,000

95/3 96/3 97/3 98/3 99/3 00/3 01/3 02/3 03/3 04/3 05/3 06/3

(In millions of yen)

7,010 6,587 4,736 1,860

Forecast Trends of Ordinary Profit

(Consolidated / Non-consolidated)

Forecast Trends of Ordinary Profit Forecast Trends of Ordinary Profit

(Consolidated / Non (Consolidated / Non-

• consolidated)

consolidated)

9,500 11,305 9,311 10,324

Non-consolidated Consolidated

10,951 12,250

(forecast)

Trends of Sales in Information Service Industry

75,880 98,006 101,519 107,228 137,039 139,731 141,706 145,271 148,177 151,141 154,164 157,247 160,392

20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000

98/3 99/3 00/3 01/3 02/3 03/3 04/3 05/3 06/3 07/3 08/3 09/3 10/3

(In billions of yen)

3 year-long average growth rate in the industry: 2.0％ 3 year-long average growth rate in FSIABC group:12.1％ (Average growth rate from FY2003 to FY2005) Sales in Information Service Industry

（29.2％） （6.2％） （3.6％） （5.6％） （27.8％）（2.0％） （1.4％） （2.0％） （2.0％） (Growth Rate)

393 393 479 479 2,628 2,628 618 618 806 806 1,128 1,128 1,331 1,331 1,430 1,430 1,666 1,666 1,865 1,865 2,091 2,091 2,344 2,344 2,946 2,946 FSIABC Group Year-on-year comparison 139.7% 139.7% 121.7% 121.7% 112.1% 112.1% 129.0% 129.0% 130.4% 130.4% 139.9% 139.9% 118.0% 118.0% 107.5% 107.5% 116.5% 116.5% 111.9% 111.9% 112.1% 112.1% 112.1% 112.1% 112.1% 112.1% Sales *Sales of information service industry after FY2006 is based on the average growth rate of 2.0% from FY2003 to FY2005

(forecast) (forecast) (forecast) (forecast)

（2.5％）

(forecast)

Financial Results of Companies Ranked in the Top 10 in the Information Services Industry for the First-half Year Ended September 2005 (Consolidated) Financial Results of Companies Ranked in the Top 10 in the Information Services Industry for the First-half Year Ended September 2005 (Consolidated)

(In millions of yen)

Sales Sales Ordinary Profit Ordinary Profit Net Income Net Income 2 2 Nomura Research Institute Nomura Research Institute

132,502 132,502 115.1% 115.1% 17,383 17,383 134.5% 134.5% 10,370 10,370 150.7% 150.7%

8 8 Hitachi Software Hitachi Software Engineering Engineering

72,625 72,625 77.3% 77.3% 1,858 1,858 40.9% 40.9% 536 536 34.4% 34.4%

Ranking Ranking Company Name Company Name

Year Year-

• on
• n-
• year

year comparison comparison Year Year-

• on
• n-
• year

year comparison comparison Year Year-

• on
• n-
• year

year comparison comparison

1 1 NTT Data NTT Data

389,605 389,605 102.0% 102.0% 15,322 15,322 113.2% 113.2% 9,466 9,466 115.7% 115.7%

3 3 4 4 5 5 6 6 7 7 9 9 10 10 CSK Holdings Corporation CSK Holdings Corporation

110,985 110,985 63.1% 63.1% 7,669 7,669 56.6% 56.6% 11,607 11,607 38.5% 38.5%

Itochu Techno Itochu Techno-

• Science

Science

101,740 101,740 98.2% 98.2% 7,116 7,116 118.0% 118.0% 3,903 3,903 112.4% 112.4%

TIS TIS

98,210 98,210 98.3% 98.3% 3,780 3,780 51.1% 51.1% 2,216 2,216 78.9% 78.9%

FUJI SOFT ABC FUJI SOFT ABC

89,912 89,912 109.8% 109.8% 5,980 5,980 94.6% 94.6% 2,490 2,490 76.4% 76.4%

Hitachi Information Hitachi Information Systems Systems

85,562 85,562 100.3% 100.3% 4,368 4,368 91.9% 91.9% 2,156 2,156 81.1% 81.1%

Sumisho Computer Sumisho Computer Systems Corporation Systems Corporation

46,935 46,935 136.0% 136.0% 2,184 2,184 96.2% 96.2% 1,253 1,253 83.1% 83.1%

NS Solutions Corporation NS Solutions Corporation

64,763 64,763 98.5% 98.5% 4,752 4,752 111.2% 111.2% 2,706 2,706 118.3% 118.3%

Forecast Performance of Companies Ranked in the Top 10 in the Information Service Industry for the Term Ended March 2006 (Consolidated) Forecast Performance of Companies Ranked in the Top 10 in the Information Service Industry for the Term Ended March 2006 (Consolidated)

(In millions of yen)

Sales Sales Ordinary Profit Ordinary Profit Net Income Net Income 2 2 Nomura Research Institute Nomura Research Institute 270,000 270,000 106.7% 106.7% 35,400 35,400 114.2% 114.2% 21,000 21,000 128.8% 128.8% 3 3 Itochu Techno Itochu Techno-

• Science

Science 265,000 265,000 116.8% 116.8% 20,000 20,000 110.3% 110.3% 11,000 11,000 101.2% 101.2% 4 4 CSK Holdings Corporation CSK Holdings Corporation 250,000 250,000 78.1% 78.1% 31,000 31,000 112.2% 112.2% 37,000 37,000 110.9% 110.9% 6 6 FUJI SOFT ABC FUJI SOFT ABC 186,500 186,500 111.9% 111.9% 12,250 12,250 111.9% 111.9% 5,650 5,650 105.9% 105.9% 8 8 Hitachi Software Hitachi Software Engineering Engineering 154,500 154,500 85.5% 85.5% 4,700 4,700

• 50.8%

50.8% 1,900 1,900

• 16.9%

16.9% 9 9 NS Solutions Corporation NS Solutions Corporation 150,000 150,000 102.4% 102.4% 12,000 12,000 101.8% 101.8% 6,700 6,700 101.2% 101.2%

Ranking Ranking

Company Name Company Name

Year Year-

• on
• n-
• year

year comparison comparison Year Year-

• on
• n-
• year

year comparison comparison Year Year-

• on
• n-
• year

year comparison comparison

1 1 NTT Data NTT Data 880,000 880,000 103.0% 103.0% 41,000 41,000 127.6% 127.6% 27,000 27,000 134.3% 134.3% 5 5 7 7 10 10 TIS TIS 204,700 204,700 102.5% 102.5% 12,400 12,400 82.1% 82.1% 5,800 5,800 79.9% 79.9% Hitachi Information Hitachi Information Systems Systems 176,000 176,000 100.4% 100.4% 9,200 9,200 109.6% 109.6% 4,880 4,880 103.0% 103.0% Sumisho Computer Systems Sumisho Computer Systems Corporation Corporation 118,000 118,000 167.2% 167.2% 6,800 6,800 133.4% 133.4% 3,800 3,800 122.6% 122.6%

Business Strategy Business Strategy

First Year of Management Reforms First Year of Management Reforms Implementation of Reform of Business Model Implementation of Reform of Business Model

“Solution Vendor” Breakthrough of “Software Manufacturer” “ “Solution Vendor Solution Vendor” ” Breakthrough of Breakthrough of “ “Software Manufacturer Software Manufacturer” ”

• Embedded-type Technology

※Commercialization of Embedded-type Technology

• Expansion of FS Embedded Linux
• Creation of Software Products
• Establishment of Key Solution Business
• A Practical Use of Component-based Reuse System
• Advancement and Automation of Testing Tool

1.

• 1. Advancement and Creation of Value Added Service

Advancement and Creation of Value Added Service

• Reform of Embedded Business Model

Reform of Embedded Business Model

• 2. Further Promotion of Solution Business
• 2. Further Promotion of Solution Business
• for greater customer satisfaction and reform of business model i

for greater customer satisfaction and reform of business model in operation system n operation system

• SAKEBR and Follow-up Strategy

(Key Solution Operation)

• To Enhance Customer Satisfaction

Enrichment of Training for Fostering Human Resources (Sales, PM, Coordinator, Consultant, Senior SE) Introduction of Project Control --- Appointed for Full-time Project Manager (PM)

• Creation of the Company’s Own Software Products
• A Practical Use of Component-based Reuse System

Aim to Increase Orders Received

• 3. Elimination of Problematic Project
• 3. Elimination of Problematic Project
• Aim to zero the number of trouble, bug and divulging of informat

Aim to zero the number of trouble, bug and divulging of information ion

• Support for Project/Strengthening of Management
• Learn-by-doing Teaching/Training for

Project Manager and Administrator

• Review of Sales Workflow Module
• Review of Development Workflow Module

Elimination of Non-Profitable Business; Early Detection, Early Resolution

• 4. Introduction of New Development

Strategy to Enhance Customer Satisfaction

• To improve Corporate Performance at Low Cost

To improve Corporate Performance at Low Cost -

• Introduction of User-centered Design System
• Establishment of FS Framework
• High-speed Data Processing Engine

Improvement of Database System

*We will steadily improve the current system to develop a more efficient system.

Scheduled for a Proving Test with the Company’s Mission-critical System

2,616 1,911 1,115 1,479 1,442 1,159 2,870

500 1,000 1,500 2,000 2,500 3,000

March 2000 March 2001 March 2002 March 2003 March 2004 March 2005 March 2006

(In millions of yen) (In millions of yen)

(forecast)

Trends for Research and Development Expense Trends for Research and Development Expense

S: Security S: Security A: A: “ “Azo Azo” ” Delivery Distribution (High Delivery Distribution (High-

• Speed Streaming)

Speed Streaming)

“A” is pronounced as “ei” in Japanese. “Azo” means “image” in English.

K: K: “ “Kosoku Kosoku” ” Search Engine Search Engine

“Kosoku” means “High-speed” in English.

E: Embedded E: Embedded-

• type Technology

type Technology B: B: “ “Byoin Byoin” ” System Solution System Solution

“Byoin” means “Hospital” in English.

R: Retail Finance System Solution R: Retail Finance System Solution

• 5. Key Solution
• 5. Key Solution

SAKEBR (SAKE/BEER) Plan SAKEBR (SAKE/BEER) Plan

Security Solution Image Distribution (High-speed streaming) High-speed Search Engine Embedded-type Technology Hospital System Solution

• 6. FS Series of Software Products/Solution
• 6. FS Series of Software Products/Solution
• Successive Release of “SAKEBR” Products

252 1,000 2,000 4,000 8,000

2,500 5,000 7,500 10,000

March 2005 March 2006 March 2007 March 2008 March 2009

(In millions of yen) (In millions of yen)

Sales Target of Key Solution (Consolidated) Sales Target of Key Solution (Consolidated) Sales Target of Key Solution (Consolidated)

(planned) (planned) (planned) (forecast)

• 7. Key Solution and follow
• 7. Key Solution and follow-
• up

up

• New Key Solution Business-

D --- Datacenter

• O --- ODM (Original Design Manufacturing)
• SHO --- Securities Solution
• SAKEBR + DOSHO

SAKEBR + DOSHO SAKEBR + DOSHO SAKEBR + DOSHO

Giant Leap to “Software Product Manufacturer” and “Solution Vendor” Giant Leap to Giant Leap to “ “Software Product Manufacturer Software Product Manufacturer” ” and and “ “Solution Vendor Solution Vendor” ”

The Company will be fixated The Company will be fixated to software manufacturing to software manufacturing

Unquenchable Enthusiasm for Challenge and Unceasing Drive for Creation Unquenchable Enthusiasm for Challenge Unquenchable Enthusiasm for Challenge and Unceasing Drive for Creation and Unceasing Drive for Creation

The Company will achieve a sale

• f 300 billion and aim at ranking

5 in the industry within 5 years.

By the Term Ended March 2010

Thank you very much for your attention. Thank you very much for your attention.