May 18, 2005 May 18, 2005 FUJI SOFT ABC., Inc. Hiroshi Nozawa - - PowerPoint PPT Presentation

May 18, 2005 May 18, 2005

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

FUJI SOFT ABC., Inc.

Name ：FUJI SOFT ABC Incorporated (FSI ABC: Fuji Soft 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：26,200,289,482(YEN)(as of March 2005) Number of Employee：8473 (as of March 2005) Performance: Consolidated Financial Results for FY 2005 Consolidated Sales: 166,644,000,000(YEN) Consolidated Ordinary Income: 10,951,000,000(YEN)

Name ：FUJI SOFT ABC Incorporated (FSI ABC: Fuji Soft 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：26,200,289,482(YEN)(as of March 2005) Number of Employee：8473 (as of March 2005) Performance: Consolidated Financial Results for FY 2005 Consolidated Sales: 166,644,000,000(YEN) Consolidated Ordinary Income: 10,951,000,000(YEN) Consolidated Ordinary Income: 10,951,000,000(YEN)

1 1． ．Company Profile Company Profile

2 2． ．FSI Group Summary FSI Group Summary

FSI Group Consolidated Subsidiary (11) Company Accounted for by the Equity Method (2) Non-Consolidated Subsidiary (2) Total (15) FSI Group Consolidated Subsidiary (11) FSI Group Consolidated Subsidiary (11) Company Accounted for by the Equity Method (2) Company Accounted for by the Equity Method (2) Non Non-

• Consolidated Subsidiary (2)

Consolidated Subsidiary (2) Total (15) Total (15)

New Subsidiary

June, 2004 FUJISOFT SSS., INC--- Outsourcing Business of bank-affiliated (Financial Results for FY2004: Sales: 583,000,000 Ordinary Income: 42,000,000)

September, 2004 Tosho Computer Systems Co., Ltd.---

Software Development for Securities Operations and Outsourcing Business (Financial Results for FY 2004: Sales: 7,296,000,000 Ordinary Profit:779,000,000)

*The Tosho Computer System Co Ltd. is consolidated from the

second half of FY 2004

New Subsidiary New Subsidiary

June, 2004 FUJISOFT SSS

FUJISOFT SSS., ., INC INC---

• -- Outsourcing Business of

Outsourcing Business of bank bank-

• affiliated

affiliated (Financial Results for FY2004: (Financial Results for FY2004: Sales: 583,000,000 Ordinary Income: 42,000,000) Sales: 583,000,000 Ordinary Income: 42,000,000)

September, 2004 September, 2004 Tosho Computer Systems Co

Tosho Computer Systems Co., ., Ltd Ltd.

.---

• Software Development for Securities Operations and

Software Development for Securities Operations and Outsourcing Business Outsourcing Business (Financial Results for FY 2004: (Financial Results for FY 2004: Sales: 7,296,000,000 Ordinary Profit:779,000,000) Sales: 7,296,000,000 Ordinary Profit:779,000,000)

* *The Tosho Computer System Co Ltd. is consolidated from the

The Tosho Computer System Co Ltd. is consolidated from the second half of FY 2004 second half of FY 2004

• 3. Management Topics for the
• 3. Management Topics for the

Term Ended March 2005 Term Ended March 2005

April, 2004 Headquarters operations were moved to the Company’s new building in Sakuragi-cho, Yokohama-City April, 2004 Corporate Reorganization (Division system was adopted) May, 2004 Hiroshi Nozawa became Representative Director, Chairman of the board and CEO

• f the Company

May, 2004 CITYASCOM acquired capital in the Company June, 2004 The Company accquired the stocks of SHINWA SYSTEM SERVICE COMPANY LIMITED (present FUJISOFT SSS, INC) and made it to the subsidiary July,2004 The Company set up booth with "Hospital Management Support System" as a joint development with Takeda Hospital at the Modern Hospotal Show 2004. September, 2004 The Company accquired the stocks of Tosho Computer Systems CO., Ltd and made it to the subsidiary October, 2004 Corporate Reorganization (Solution Division was established for advancement of the end user oriented service) October, 2004 “Operation SAKEBR” was launched December, 2004 Full-scale entry into screen production business for program propaganda (“Gozilla” movie by Toho Co.,Ltd) February, 2005 The actual proof experimentation began aiming at servicing an epoch-making technology of delivering the image of the high-definition television quality on the Internet April, 2005 “Operation 55” was launched Note: FUJI SOFT ABC is referred to as the “Company”

We will present the Financial Results for the Term Ended March 2005 We will present We will present the the Financial Results for Financial Results for the Term Ended the Term Ended March 2005 March 2005

Performance for the Term Ended March 2005 (Consolidated) Performance for the Term Ended March 2005 (Consolidated)

(In millions of yen)

Result for the Term Ended March 2005 (Consolidated) Result for the Term Ended March Result for the Term Ended March 2005 (Consolidated) 2005 (Consolidated)

March 2005 March 2005 March 2004 March 2004 Change Change

Year Year-

• on
• n-
• year

year comparison comparison Forecast Forecast fluctuation fluctuation ratio ratio

Sales Sales 166,644 166,644 143,031 143,031 10,388 10,388 (7.3%) (7.3%) 10,324 10,324 (7.2%) (7.2%) 4,838 4,838 (3.4%) (3.4%) ¥ ¥126,32 126,32 23,613 23,613 6.5% 6.5% 101.6% 101.6% Operating Operating Profit Profit (Profit Rate) (Profit Rate) 10,945 10,945 (6.6%) (6.6%) 557 557 116.5% 116.5% 105.4% 105.4% 106.1% 106.1% 110.3% 110.3% Net Income Net Income per Share per Share ¥ ¥139,79 139,79 ¥ ¥13,47 13,47 110.7% 110.7% 84.2% 84.2% ROE ROE 6.8% 6.8% 0.3% 0.3% － － 88.8% 88.8% Ordinary Ordinary Profit Profit (Profit Rate) (Profit Rate) 10,951 10,951 (6.6%) (6.6%) 627 627 89.6% 89.6% Net Income Net Income (Profit Rate) (Profit Rate) 5,336 5,336 (3.2%) (3.2%) 498 498 86.8% 86.8% － －

* This table shows the forecast fluctuation ratios in relation to the modified results published on February 7, 2005

Cause of Changes in the Consolidated Results for the Term Ended March 2005

(as compared with the preceding fiscal year)

Cause of Changes in the Consolidated Results Cause of Changes in the Consolidated Results for the Term Ended March 2005 for the Term Ended March 2005

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

Causes of Increase in the Sales (Year-on-year comparison) +23,613 million yen

• 1. The number of consolidated subsidiary increased

(Tosho Computer Systems., Inc and Fuji Soft SSS., Inc) 4,378 million yen

• 2. The sales of embedded software development for telecommunication

control system as a core and machine control system increased 4,251 million yen

• 3. The financial industry grew at a sluggish pace, but the sales of software

development of operational applications used in the distribution industry increased 4,052 million yen

• 4. The system maintenance and operation service in the outsourcing

business increased 4,986 million yen

• 5. The sales of hardware and software products increased 7,833 million yen

Causes of Increase in the Sales Causes of Increase in the Sales (Year

(Year-

• on
• n-
• year comparison)

year comparison) +23,613 million yen

+23,613 million yen

• 1. The number of consolidated subsidiary increased
• 1. The number of consolidated subsidiary increased

(Tosho Computer Systems (Tosho Computer Systems., ., Inc and Fuji Soft SSS., Inc) Inc and Fuji Soft SSS., Inc) 4,378 million yen 4,378 million yen

• 2. The sales of embedded software development for telecommuni
• 2. The sales of embedded software development for telecommunication

cation control system as a core and machine control system incre control system as a core and machine control system increased ased 4,251 million yen 4,251 million yen

• 3. The financial industry
• 3. The financial industry grew at a sluggish pace

grew at a sluggish pace, but the sales of software , but the sales of software development of operational applications used in the distr development of operational applications used in the distribution ibution industry increased industry increased 4,052 million yen 4,052 million yen

• 4. The system maintenance and operation service in the outsou
• 4. The system maintenance and operation service in the outsourcing

rcing business increased business increased 4,986 million yen 4,986 million yen

• 5. The sales of hardware and software products increased 7,
• 5. The sales of hardware and software products increased 7,833 million yen

833 million yen

Cause behind the failure to achieve operating margins of 10% →→→ Minus factor (3.7%)

• 1. Narrowing profit margin caused by the outbreak of

underperforming operation

1,489 million yen (profit rate -0.8%)

• 2. Investment in R&D projects 2,616 million yen (profit rate -1.6%)
• 3. Reduction of profit ratio caused by the increase in product sales

1,558 million yen (profit rate -0.9%)

• 4. Reduction of profit ratio caused by the price pressure

666 million yen (profit rate -0.4%)

Cause behind the failure to achieve operating margins of 10% Cause behind the failure to achieve operating margins of 10% →→→ →→→ Minus Minus factor (3.7%) factor (3.7%)

1.

• 1. Narrowing profit margin caused by the outbreak of

Narrowing profit margin caused by the outbreak of underperforming operation underperforming operation

1,489 million yen (profit rate 1,489 million yen (profit rate -

• 0.8%)

0.8%)

• 2. Investment in R&D projects 2,616 million
• 2. Investment in R&D projects 2,616 million yen (profit rate

yen (profit rate -

• 1.6%)

1.6%) 3.

• 3. Reduction of profit ratio caused by the increase in product sale

Reduction of profit ratio caused by the increase in product sales s 1,558 million yen (profit rate 1,558 million yen (profit rate -

• 0.9%)

0.9%)

• 4. Reduction of profit ratio caused by the price pressure
• 4. Reduction of profit ratio caused by the price pressure

666 million yen (profit rate 666 million yen (profit rate -

• 0.4%)

0.4%)

The Company marks drastic increases both in sales and profit The Company marks drastic increases both in sales and profit for 2 consecutive fiscal years, despite narrowing profit margin. for 2 consecutive fiscal years, despite narrowing profit margin.

(In millions of yen)

Performance for the Term Ended March 2005

(Consolidated Subsidiary)

Performance for the Term Ended March 2005 Performance for the Term Ended March 2005

(C (Consolidated Subsidiary

• nsolidated Subsidiary)

)

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

88.3% 88.3% 3,917 3,917 1,511 1,511 1,380 1,380 418 418 242 242 272 272 12 12 30 30 23 23 19 19

FUJI SOFT SSS., Inc FUJI SOFT SSS., Inc

583 583 － － 42 42 7.3% 7.3% － － 25 25 4.3% 4.3% － － 150 150 114.6% 114.6% 121.1% 121.1% 115.2% 115.2% 132.0% 132.0% 128.7% 128.7% 119.1% 119.1% 203.4% 203.4% 114.2% 114.2% 85.7% 85.7% － － 114.2% 114.2% 111.2% 111.2% 111.5% 111.5% 127.8% 127.8% 113.1% 113.1% 110.5% 110.5% 115.3% 115.3% 107.0% 107.0% 121.1% 121.1% 84.1% 84.1% － －

FUJI SOFT ABC Incorporated FUJI SOFT ABC Incorporated

99,047 99,047 6,334 6,334 6.4% 6.4% 4.0% 4.0% 83.6% 83.6%

FUJI SOFT DIS Co., Ltd FUJI SOFT DIS Co., Ltd

31,773 31,773 1,584 1,584 5.0% 5.0% 4.3% 4.3% 142.9% 142.9%

Nihon Business Soft Inc Nihon Business Soft Inc

777 777 31 31 4.1% 4.1% 2.5% 2.5% 85.9% 85.9% 13,968 13,968 10,706 10,706 5,396 5,396 4,718 4,718 3,834 3,834 2,473 2,473 1,954 1,954 3,794 3,794 Profit Profit Rate Rate Profit Profit Rate Rate

Year Year-

• on
• n-
• year

year comparison comparison

Vinculum Japan Corporation Vinculum Japan Corporation

646 646 6.0% 6.0% 3.9% 3.9% 151.7% 151.7%

Cyber Com Co., Ltd Cyber Com Co., Ltd FUJI SOFT KCS Co., Ltd FUJI SOFT KCS Co., Ltd FUJI SOFT ABC Service Bureau FUJI SOFT ABC Service Bureau Co., Ltd Co., Ltd

23 23 0.6% 0.6% 0.3% 0.3% 104.8% 104.8%

OA Laboratory Co., Ltd OA Laboratory Co., Ltd

400 400 7.4% 7.4% 4.5% 4.5% 141.7% 141.7% 452 452 9.6% 9.6% 5.8% 5.8% 185.6% 185.6% 49 49 2.0% 2.0% 1.2% 1.2% 550.8% 550.8%

Fujisoft Fujisoft Kikaku Kikaku., Ltd ., Ltd

39 39 2.0% 2.0% 1.2% 1.2% 110.6% 110.6%

Tosho Computer Systems Co., Tosho Computer Systems Co., Ltd Ltd

487 487 12.8% 12.8% 4.0% 4.0% － －

Cybernet Cybernet Systems Systems Co Co., .,Ltd Ltd

2,616 2,616 18.7% 18.7% 10.8% 10.8% 116.0% 116.0% ※1 Consolidation to Non Consolidation Ratio ･･･Sales 1.68 times Net Income 1.36 times ※2 Consolidated Subsidiary･･･ (11)

(In millions of yen)

Sales by Segment for the Term Ended March 2005 (Consolidated) Sales by Segment for the Term Ended March Sales by Segment for the Term Ended March 2005 (Consolidated) 2005 (Consolidated)

March 2005 March 2005 Software Development Related Software Development Related Businesses Businesses

Component Component ratio ratio

March 2004 March 2004 Change Change

Year Year-

• on
• n-
• year

year comparison comparison

Telecommunicatio Telecommunicatio ns system ns system Others Others

17,925 17,925 10.8% 10.8% 15,114 15,114 2,810 2,810 118.6% 118.6%

Subtotal Subtotal Financial Financial

13,909 13,909 8.3% 8.3% 14,715 14,715 △ △805 805 94.5% 94.5%

Manufacturing Manufacturing Public Public Medical Medical Others Others

Operation Operation application application system system

Subtotal Subtotal

1,609 1,609 1.0% 1.0% 1,427 1,427 181 181 112.7% 112.7%

Distribution Distribution

48,110 48,110 28.9% 28.9% 43 43, ,859 859 4,251 4,251 109.7% 109.7% 12,253 12,253 7.4% 7.4% 9,377 9,377 2,875 2,875 130.7% 130.7% 5,019 5,019 3.0% 3.0% 4,373 4,373 645 645 114.8% 114.8% 5,722 5,722 3.4% 3.4% 5,083 5,083 638 638 112.6% 112.6% 40,535 40,535 24.3% 24.3% 36,483 36,483 4,052 4,052 111.1% 111.1%

Others Others

7,299 7,299 4.4% 4.4% 6,111 6,111 1,187 1,187 119.4% 119.4% 2,021 2,021 1.2% 1.2% 1,504 1,504 30,184 30,184 517 517 18.1% 18.1% 134.4% 134.4% 57.6% 57.6% 95,945 95,945 28 28, ,744 744 1,440 1,440 105.0% 105.0%

Total Total

86,453 86,453 9,491 9,491 111.0% 111.0%

Control Control system system

(In millions of yen)

Sales by Segment for the Term Ended March 2005 (Consolidated) Sales by Segment for the Term Ended March 2005 Sales by Segment for the Term Ended March 2005 (Consolidated) (Consolidated)

March 2005 March 2005

Component Component rate rate

March March 2004 2004 Change Change

Year Year-

• on
• n-
• year

year comparison comparison

System Maintenance System Maintenance and Operations and Operations

28,910 28,910 17.3% 17.3% 24,619 24,619 4,291 4,291 117.4% 117.4%

Solution service Solution service businesses businesses Others Others

75 75 0.0% 0.0% 49 49 25 25 151.9% 151.9%

Consulting Consulting

3,630 3,630 2.2% 2.2% 3,289 3,289 340 340 110.4% 110.4%

Outsourcing Outsourcing businesses businesses Office Services Office Services

3,943 3,943 2.4% 2.4% 3,115 3,115 827 827 126.6% 126.6%

Others Others

416 416 0.3% 0.3% 889 889 △ △473 473 46.8% 46.8%

Sub Total Sub Total

36,901 36,901 22.2% 22.2% 31,915 31,915 4,986 4,986 115.6% 115.6%

Others Others

8,117 8,117 4.9% 4.9% 6,841 6,841 1,275 1,275 118.6% 118.6%

Sub Total Sub Total Total Total

70,699 70,699 42.4% 42.4% 56,577 56,577 14,120 14,120 124.9% 124.9% 33,723 33,723 20.2% 20.2% 24,614 24,614 25,606 25,606 9,109 9,109 15.3% 15.3% 137.0% 137.0% 100.0% 100.0% 166,644 166,644

Commodity Sales Commodity Sales

17,772 17,772 7,833 7,833 144.1% 144.1%

SUM TOTAL SUM TOTAL

143,031 143,031 23,613 23,613 116.5% 116.5%

Trend of the Total Assets (Consolidated) Trend of the Total Assets (Consolidated)

57,529 64,509 75,612 64,730 75,119 79,568 10,946 13,206 16,452

20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 March 2003 March 2004 March 2005 Investments Fixed Assets Current Assets

(In millions of yen)

152,835 133,205

Current Assets Deposits in cash +6,652 Bonds sold +3,744 Securities -985 Inventories +1,229 Fixed Assets Cost for the construction of the Akihabara Building +3.264 Datacenter maintenance +1,000 Investments Investment Securities +1,212 Increase of new entry of Tosho Computer Systems Co., Ltd into the consolidated financial results +1,653

※The blue figures are component ratios（％）

43.2％ 48.6% 42.2% 8.2% 49.2％ 8.6％

Ratio for current assets 121.7 107.1 105.6 Ratio for fixed assets 105.7 115.0 119.4 (%) Ratio for preceding year to total assets 105.2 114.7 112.3

171,633

9.6％ 46.3％ 44.1％

Trend for Liabilities and Stockholder Trend for Liabilities and Stockholder’ ’s Equity s Equity (Consolidated) (Consolidated)

47,255 60,251 71,578 19,621 76,783 80,433 14,379 15,799 71,570

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

March 2003 March 2004 March 2005 Stockholder's equity Fixed Liabilities Current Liabilities

(In millions of yen)

152,835 133,205

Current Liabilities Decrease in accrued corporate taxes

• 3,617

Increase in short-term loans payable balance +13,082 Increase in account payable and others +2,174 Stockholders’ Equity Increase in retained earnings +3,943 Fixed Liabilities Increase in liabilities for retirement benefits of employees (Due to the new entry of Tosho Computer System CO., Ltd into the consolidated financial result ) +3,334

Loan Ratio 19.8 20.8 24.8 （％） Stockholders’ equity ratio 53.7 50.2 46.9

（Minority interest is included in Fixed Liabilities）

39.4％ 10.4％ 50.2％ 53.7％ 10.8％ 35.5％

※The blue figures are component ratios.（％）

171,633

46.9％ 41.7％ 11.4％

Trends for Cash Trends for Cash Flow

Flow for the Term Ended March 2005

for the Term Ended March 2005 (Consolidated) (Consolidated)

10,173 10,517

▲ 16,731 ▲ 13,346

9,682 3,102

11,352 18,206

▲ 25,000 ▲ 20,000 ▲ 15,000 ▲ 10,000 ▲ 5,000 5,000 10,000 15,000 20,000 25,000 March 2004 March 2005

Business Operations Investment Operations Financial Operations Term-end Balance

Business Operations Depreciation +2,056 Increase in consumer tax payable +1,311 Increase in inventories +1,439 Payments for corporate taxes and

• thers -3,995

Investment Operations Proceeds from purchases and sales of securities +3,486 Financial Operations Income from loans +5,314

(In millions of yen)

Future Targets and Future Targets and Strategies Strategies

Mid-term Management Targets (Consolidated) Mid Mid-

• term Management Targets (Consolidated)

term Management Targets (Consolidated)

March 2006 March 2006 (Forecast) (Forecast) March 2007 March 2007 (Planned) (Planned) March 2008 March 2008 (Planned) (Planned)

Sales Sales ＜ ＜Year Year-

• on
• n-
• year

year Comparison Comparison＞ ＞

190,000 190,000 ＜ ＜114.0 114.0% %＞ ＞ 219,000 219,000 ＜ ＜115.3 115.3% %＞ ＞ 14,500 14,500 （ （6.5 6.5% %） ） 14,500 14,500 （ （6.5 6.5% %） ） 7,000 7,000 （ （3.3 3.3% %） ） ＜ ＜116.7 116.7% %＞ ＞ 184.02 yen 184.02 yen 252,000 252,000 ＜ ＜115.1 115.1% %＞ ＞

Operating Profit Operating Profit （ （Profit Rate Profit Rate） ）

12,000 12,000 （ （6.3 6.3% %） ） 17,500 17,500 （ （7.0 7.0% %） ）

Ordinary Profit Ordinary Profit （ （Profit Rate Profit Rate） ）

12,000 12,000 （ （6.3 6.3% %） ） 17,500 17,500 （ （7.0 7.0% %） ）

Net Income Net Income （ （Profit Rate Profit Rate） ） ＜ ＜Year Year-

• on
• n-
• year

year comparison comparison＞ ＞

6,000 6,000 （ （3.2 3.2% %） ） ＜ ＜112.4 112.4% %＞ ＞ 9,000 9,000 （ （3.5 3.5% %） ） ＜ ＜128.6 128.6% %＞ ＞ Net Income per Net Income per Share Share 158.06 yen 158.06 yen 237.31 yen 237.31 yen

(In millions of yen)

(In millions of yen)

Sales Targets by Segment (Consolidated) Sales Targets by Segment (Consolidated) Sales Targets by Segment (Consolidated)

March 2007 (planned) March 2007 (planned) March 2008 (planned) March 2008 (planned) Software Development related Software Development related business business

March March 2006 2006 （ （Forecast Forecast） ）

38,192 38,192 25,207 25,207 63,400 63,400 18,331 18,331 13,836 13,836 6,259 6,259 2,255 2,255 2,241 2,241 6,875 6,875 49,800 49,800 9,570 9,570 122,770 122,770

Component Component ratio ratio Component Component ratio ratio

Year Year-

• on
• n-
• year

year comparis comparis

• n
• n

Year Year-

• on
• n-
• year

year comparis comparis

• n
• n

34,140 34,140 17.5% 17.5% 11.5% 11.5% 29.0% 29.0% 8.4% 8.4% 6.3% 6.3% 2.9% 2.9% 1.0% 1.0% 1.0% 1.0% 3.1% 3.1% 113.4% 113.4% 22.7% 22.7% 4.4% 4.4% 21,859 21,859 56.1% 56.1% 43,307 43,307 111.9% 111.9% 115.3% 115.3% 113.2% 113.2% 114.6% 114.6% 107.6% 107.6% 111.8% 111.8% 117.4% 117.4% 105.4% 105.4% 122.1% 122.1% 106.3% 106.3% 56,000 56,000 110.9% 110.9% 114.2% 114.2% 29,592 29,592 72,900 72,900 20,966 20,966 14,798 14,798 7,006 7,006 115.0% 115.0% 2,357 2,357 114.4% 114.4% 2,790 2,790 6,940 6,940 54,860 54,860 15,992 15,992 12,858 12,858 5,596 5,596 2,140 2,140 1,835 1,835 6,467 6,467 44,890 44,890 8,380 8,380 107.0% 107.0% 111.9% 111.9% 104.5% 104.5% 124.5% 124.5% 100.9% 100.9% 10,820 10,820 112.4% 112.4% 109,270 109,270 110.2% 110.2% 138,580 138,580 113.1% 113.1% 112.9% 112.9% 17.2% 17.2% 11.7% 11.7% 28.9% 28.9% 8.3% 8.3% 5.9% 5.9% 2.8% 2.8% 0.9% 0.9% 1.1% 1.1% 2.8% 2.8% 21.8% 21.8% 4.3% 4.3% 55.0% 55.0% Telecommunic Telecommunic ations system ations system Others Others Sub Total Sub Total Finance Finance Distribution Distribution Manufacturin Manufacturin g g Public Public Medical Medical Others Others

Operation Operation

Sub total Sub total Total Total

Control Control

SUM TOTAL SUM TOTAL

(In millions of yen)

March 2007 (planned) March 2007 (planned) March 2008 (planned) March 2008 (planned) March March 2006 2006

(Forecast) (Forecast)

Component Component rate rate 35,655 35,655 4,669 4,669 4,268 4,268 406 406 45,000 45,000 27,120 27,120 8,530 8,530 35,650 35,650 80 80 80,730 80,730 45,369 45,369 190,000 190,000 5,437 5,437 20.7% 20.7% 2.5% 2.5% 2.2% 2.2% 0.2% 0.2% 25.6% 25.6% 14.2% 14.2% 4.1% 4.1% 18.3% 18.3% 0.0% 0.0% 43.9% 43.9% 4,890 4,890 402 402 56,100 56,100 31,080 31,080 8,960 8,960 40,040 40,040 90 90 96,230 96,230 100.0% 100.0% 219,000 219,000 Year Year-

• on
• n-
• year

year comparison comparison 127.2% 127.2% 56,297 56,297 6,414 6,414 5,189 5,189 397 397 68,300 68,300 35,620 35,620 9,400 9,400 45,020 45,020 100 100 113,420 113,420 252,000 252,000 116.5% 116.5% 114.6% 114.6% 98.8% 98.8% 124.7% 124.7% 114.6% 114.6% 105.0% 105.0% 112.3% 112.3% 112.5% 112.5% 119.2% 119.2% 115.3% 115.3% System System Maintenance Maintenance and and Operations Operations 22.3% 22.3% 124.1% 124.1% Solution Solution Service Service Business Business Other Business Other Business 0.0% 0.0% 111.1% 111.1% Consulting Consulting 2.5% 2.5% 118.0% 118.0% Outsourcing Outsourcing Business Business Office Office Services Services 2.1% 2.1% 106.1% 106.1% Others Others 0.2% 0.2% 99.0% 99.0% Sub Total Sub Total 27.1% 27.1% 121.7% 121.7% Others Others 3.7% 3.7% 104.9% 104.9% Sub Total Sub Total Total Total 45.0% 45.0% 117.9% 117.9% 17.9% 17.9% Component Component rate rate Year Year-

• on
• n-
• year

year comparison comparison 14.2% 14.2% 114.6% 114.6% 112.4% 112.4% 115.1% 115.1% 100.0% 100.0% Sales of Sales of Goods Goods

SUM TOTAL SUM TOTAL

Sales Target by Segment (Consolidated) Sales Target by Segment (Consolidated) Sales Target by Segment (Consolidated)

44,00551,189 64,005 80,412 86,727 99,047 115,000 132,000 152,000 35,904 25,051 15,233 11,545 79,080

50,000 100,000 150,000 200,000 250,000

95/3 96/3 97/3 98/3 99/3 00/3 01/3 02/3 03/3 04/3 05/3 06/3 07/3 08/3

(In millions of yen)

Trend of Sales (Consolidated/Non-consolidated) Trend of Sales (Consolidated/Non Trend of Sales (Consolidated/Non-

• consolidated)

consolidated)

28,157 39,339 47,881 61,778 80,584 112,751 133,064 219,000

Non-consolidated Consolidated

143,031 166,644 190,000

(Forecast) (planned) (Planned)

252,000

7,500 9,000 11,000 6,334 7,178 7,223 9,322 7,011 5,609 6,189 4,497 1,623 841 341

2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000

95/3 96/3 97/3 98/3 99/3 00/3 01/3 02/3 03/3 04/3 05/3 06/3 07/3 08/3

(In millions of yen)

7,011 6,587 4,736 1,860

Trend of Ordinary Profit (Consolidated/Non-consolidated) Trend of Ordinary Profit Trend of Ordinary Profit (Consolidated/Non

(Consolidated/Non-

• consolidated)

consolidated)

9,506 11,305 9,311 10,324

Non-consolidated Consolidated

10,951 12,000 14,500

(Forecast) (Planned) (Planned)

17,500

Trend of Sales in Information Service Industry Trend of Sales in Information Service Industry

75,880 98,006 101,519 107,228 137,039 139,731 141,706 156,444 172,714 190,676 210,506 232,399 256,568

50,000 100,000 150,000 200,000 250,000

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: 10.4％ 3 year-long average growth rate in FSI ABC Group: 12.7% (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％） （10.4％） （10.4％） (Growth Rate)

393 393 479 479 2,719 2,719 618 618 806 806 1,128 1,128 1,331 1,331 1,430 1,430 1,666 1,666 1,900 1,900 2,141 2,141 2,413 2,413 3,064 3,064 FSIABC Group Year-to-year comparison 139.7% 139.7% 121.7% 121.7% 112.7% 112.7% 129.0% 129.0% 130.4% 130.4% 139.9% 139.9% 118.0% 118.0% 107.5% 107.5% 116.5% 116.5% 114.0% 114.0% 112.7% 112.7% 112.7% 112.7% 112.7% 112.7% Sales

※Sales of information service industry after FY2005 is based on the average growth rate

• f 10.4% from FY2002 to FY2004.

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

Financial Results of companies ranked in the top 10 in Information Service Industry for the Term Ended March 2005 (Consolidated) Financial Results of Financial Results of companies ranked in the top 10 companies ranked in the top 10 in Information Service Industry in Information Service Industry for the Term Ended for the Term Ended March 2005 (Consolidated) March 2005 (Consolidated)

(In millions of yen)

Sales Sales Ordinary Profit Ordinary Profit Net Income Net Income 2 2

CSK CSK 319,993 319,993 84.5% 84.5% 27,626 27,626 90.4% 90.4% 33,343 33,343 155.6% 155.6%

8 8

FUJI SOFT ABC FUJI SOFT ABC 166,644 166,644 116.5% 116.5% 10,951 10,951 106.1% 106.1% 5,336 5,336 110.3% 110.3%

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 854,153 854,153 100.9% 100.9% 32,144 32,144 64.8% 64.8% 20,110 20,110 74.6% 74.6%

3 3 4 4 5 5 6 6 7 7 9 9 10 10

Nomura Research Institute Nomura Research Institute 252,963 252,963 106.3% 106.3% 30,987 30,987 105.8% 105.8% 16,303 16,303 89.2% 89.2% Itochu Techno Itochu Techno-

• Science

Science 226,795 226,795 85.2% 85.2% 18,129 18,129 104.3% 104.3% 10,872 10,872 110.7% 110.7% TIS TIS 199,648 199,648 117.8% 117.8% 15,111 15,111 120.0% 120.0% 7,257 7,257 132.9% 132.9% Hitachi Software Hitachi Software Engineering Engineering 180,686 180,686 80.5% 80.5% △ △9,246 9,246 － － △ △11,225 11,225 － － Hitachi Information Systems Hitachi Information Systems 175,331 175,331 110.5% 110.5% 8,392 8,392 89.3% 89.3% 4,740 4,740 90.0% 90.0% NEC Soft Ltd NEC Soft Ltd 129,710 129,710 107.0% 107.0% 7,585 7,585 151.4% 151.4% 3,984 3,984 176.9% 176.9% NS Solutions Corporation NS Solutions Corporation 146,526 146,526 97.1% 97.1% 11,790 11,790 120.5% 120.5% 6,620 6,620 124.4% 124.4%

Note: “55” is a Japanese major league player Hideki Matsui’s uniform number. “Operation 55” is otherwise known as “Operation Godzilla” in the

• ffice.

Trends for performance in companies of Information Service Indus Trends for performance in companies of Information Service Industry (Consolidated) try (Consolidated)

8,000 8,500 9,000 9,500 10,000 NTT Data

(In billions of yen)

500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

March 2003 March 2004 March 2005 March 2006 March 2007 March 2008 March 2009 March 2010 CSK Itochu Techno-Science Corporation Nomura Research Institute Hitachi Software Engineering TIS Hitachi Information Systems NS Solutions Fuji Soft ABC NEC Soft

Average rate of growth over the past 3 years （FY2005～FY2007） NTT Data NTT Data 1.9% 1.9% CSK CSK △ △10.5 10.5 % % Itochu Techno Itochu Techno-

• Science

Science Corporation Corporation △ △1.9% 1.9% Nomura Research Nomura Research Institute Institute 3.8% 3.8% Hitachi Software Hitachi Software Engineering Engineering △ △10.3 10.3 % % TIS TIS 8.6% 8.6% Hitachi Information Hitachi Information Systems Systems 2.6% 2.6% NS Solutions NS Solutions Corporation Corporation △ △0.7% 0.7% NEC Soft NEC Soft 6.0% 6.0% FSIABC status March 05 March 10（forecast） Sales Rank 8th Rank 2nd 166,6 billion →306,4 billion Year-on-year comparison Rank 2nd Rank 1st Calculated on 3 year-long average growth rate of 12.7% （FY2003-FY2005）

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

FUJI SOFT FUJI SOFT ABC ABC

The growth rate is based on average rate from 2007 onward

This table shows that as for the company that has negative rate of average growth, the average rate is shown flat from 2007 onward.

Forecast Performance of companies ranked in the top 10 in Information Service Industry for the Term Ending March 2006 (Consolidated) Forecast Performance of companies ranked in the top 10 Forecast Performance of companies ranked in the top 10 in Information Service Industry for the Term Ending in Information Service Industry for the Term Ending March 2006 (Consolidated) March 2006 (Consolidated)

Note: The figures in the NEC Soft are based on the most recent contents of the “SHIKIHO” (Japanese Company Handbook) as the assessment figure is not yet announced for the group reorganization. (In millions of yen)

Sales Sales Ordinary Profit Ordinary Profit Net Income Net Income 2 2 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% 3 3 Nomura Research Institute Nomura Research Institute 260,000 260,000 102.8% 102.8% 33,000 33,000 106.5% 106.5% 19,500 19,500 119.6% 119.6% 4 4 CSK CSK 250,000 250,000 78.1% 78.1% 28,500 28,500 103.2% 103.2% 14,000 14,000 42.0% 42.0% 6 6 FUJI SOFT ABC FUJI SOFT ABC 190,000 190,000 114.0% 114.0% 12,000 12,000 109.6% 109.6% 6,000 6,000 112.4% 112.4% 8 8 Hitachi Software Hitachi Software Engineering Engineering 154,500 154,500 85.5% 85.5% 4,700 4,700 － － 1,900 1,900 － － 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 compariso compariso n n

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 209,500 209,500 104.9% 104.9% 18,800 18,800 124.4% 124.4% 8,200 8,200 113.0% 113.0% Hitachi Information Systems Hitachi Information Systems 176,000 176,000 100.4% 100.4% 8,800 8,800 104.9% 104.9% 4,560 4,560 96.2% 96.2% NEC Soft NEC Soft ※ ※ 135,000 135,000 104.1% 104.1% 9,000 9,000 118.7% 118.7% 4,800 4,800 120.5% 120.5%

Business Strategy Business Strategy

Reform of Business Model Reform of Business Model

1.

• 1. Focus on enhancing our response capacities

Focus on enhancing our response capacities to the end to the end-

• user side

user side ~

~Aim for greater customer satisfaction

Aim for greater customer satisfaction~

~

• To explore customer needs, improve planning

and creativity abilities and strengthen the comprehensive capabilities to increase orders received

• To shift our response capabilities more to

the end-use side

• To improve a professional training for

employees to enhance customer satisfaction

• 2. Expansion of Solution Business
• 2. Expansion of Solution Business
• Enhancement of the Company’s sales

capabilities

• Enhancement of the Company’s

coordination capabilities

• Enhancement of the Company’s

consulting capabilities

• Enhancement of the senior SE’s

capabilities

3.

• 3. Enhancing to secure qualified human resources

Enhancing to secure qualified human resources

• Management Staff
• Administrative Staff
• Planning Staff
• R&D Staff

• 4. Aim to Increase Software Productivity and
• 4. Aim to Increase Software Productivity and

Establish Development Process Establish Development Process

(To Improve Corporate Performance at Low Cost) (To Improve Corporate Performance at Low Cost)

• Development Process Standard
• Establishment of FS Framework
• Practical and Effective Component-based Reuse

System

• Reuse System for Application Package
• Cost Reduction for Development by Use of Tools

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

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

(Forecast) (In millions of yen)

S S： ： Security Solutions Security Solutions A A： ： “

“Azo Azo” ”Delivery Delivery Distribution (High Speed Streaming) Distribution (High Speed Streaming)

K K： ： “ “Kosoku Kosoku” ” Search Engine Search Engine E E： ： Embedded Embedded-

• type Technology

type Technology B B： ： “ “Byoin Byoin” ” System Solution System Solution R R： ： Retail Financial System Solution Retail Financial System Solution

• 5. Key Solutions
• 5. Key Solutions

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

“A” is pronounced as ‘ei’ in Japanese here. “Azo” means “Image” in English. “Kosoku” means “High-speed” in English “Byoin” means “Hospital” in English.

Company's Company's information information management management

• perations are
• perations are

being reviewed. being reviewed.

• S

S ： ： Security Security

Enforcement of Personal Information Enforcement of Personal Information Protection Law Protection Law

・ ・FS Gate (Security Gate System) FS Gate (Security Gate System) ・ ・FS Info Guard (Security Enhancement products with the Company FS Info Guard (Security Enhancement products with the Company’ ’s s

• wn encryption library
• wn encryption library “

“FS FS Ango Ango” ”) ) ・ ・Basic Security Assessment Service Basic Security Assessment Service ・ ・Consulting Service Consulting Service

Entry into the Market Entry into the Market

Information Security Information Security Market is boosted. Market is boosted.

• A

A： ：“

“Azo Azo” ” (Image) Distribution (High Speed Streaming) (Image) Distribution (High Speed Streaming)

Fastest-growing streaming market

Mobile Advertisement

H．264 H．264

FS3150v + FSLinux FS3150v + FSLinux

<Leading-edge Technology for Data Compression>

We will provide new image delivery solutions through tune-up FS 3150V + FS Linux as H264 and delivery server.

<Leading-edge Technology for Data Compression>

We will provide new image delivery solutions through tune-up FS 3150V + FS Linux as H264 and delivery server.

Broadcasting

Market Market Cultivation

Cultivation by Integrating Leading

by Integrating Leading-

• edge Technology

edge Technology

Observation Live Education Web Entertainment Shopping

770 1170 1540 2000

500 1000 1500 2000 2500 2004 2005 2006 2007

In billions of In billions of yen yen Reference: NRI Reference: NRI

• K

K ： ： “

“Kosoku Kosoku” ” (High (High-

• speed) Search Engine

speed) Search Engine Advance reform in the operation system through Advance reform in the operation system through super super-

• high speed data processing

high speed data processing

・ ・Hospital Management Support System

Hospital Management Support System

・ ・“

“Karuwaza Karuwaza” ” Web Super Web Super

・ ・Major Capital Consumer Finance Company

Major Capital Consumer Finance Company Super Super-

• high speed search engine

high speed search engine

Development of new products with high speed Development of new products with high speed d di ie es se el, l, “ “Kosoku Kosoku-

• Kikan

Kikan” ” a an nd d p pro rov vis isi ion

• n o
• f

f h hi ig gh spee h speed d dies diese el l s sol

• lu

ut ti io

• n

ns s

• E

E： ： Embedded Embedded-

• type Technology

type Technology

Most home information appliances, key part of ubiquitous Most home information appliances, key part of ubiquitous information society adopt embedded technology information society adopt embedded technology

We will provide total solution for embedded software through "Embedded Linux" in "FS Embedded/Linux Service“!!

We will maintain embedded development platform!!

We will achieve productivity promotion and quality improvement through component-based reuse system and maintenance of tools and others!!

• B

B:

: “ “Byoin Byoin” ” (Hospital) System Solution (Hospital) System Solution

We will provide total solution for hospital management We will provide total solution for hospital management support system through support system through “ “Kosoku Kosoku-

• kikan

kikan” ” and and “ “EAI EAI-

• HUB

HUB” ” as a key technology, which can correspond to a multi as a key technology, which can correspond to a multi-

• vender.

vender.

• Case Example of System Architecture

Case Example of System Architecture

Data Linkage System Data Linkage System

EAI EAI-

• HUB

HUB Hospital Management Support System

Data Warehouse Data Warehouse ( (Kosoku Kosoku-

• Kikan

Kikan) )

Medical Accounting System Hospital’s point

• f Distribution System

Accounting System

“Hoko” ERP (OBC)

Payroll Control of Fixed Assets ETC. Nursing Information

Electronic Medical Chart

Flexibly respond to system expansion in the future through multi-vendor system Ordering

Kameda Healthinformatics Institute HAPPY CS-Ⅱ (Toshiba Medical System Group)

• R: Retail Finance Solution

R: Retail Finance Solution

・ ・ Development and operation of one Development and operation of one-

• stop system for custom

stop system for custom development development ⇒ ⇒from call center to hosting service from call center to hosting service ・ ・ Development and sales of software packages for consumer Development and sales of software packages for consumer banking banking ・ ・ Establishment of operation center for retail finance Establishment of operation center for retail finance ・ ・ Creation of card solution Creation of card solution ・ ・ Market cultivation of CTI (Computer Telephony Integration) Market cultivation of CTI (Computer Telephony Integration) ⇒ ⇒Support for representative commissioned business Support for representative commissioned business ・ ・ Market Cultivation in the credit industry Market Cultivation in the credit industry

40

Software Product Manufacturer Software Product Manufacturer Software Product Manufacturer

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

Within Within 5 Years 5 Years

The Company will achieve a sale The Company will achieve a sale

• f 300 billion and aim at ranking
• f 300 billion and aim at ranking

5 in the industry within 5 years. 5 in the industry within 5 years.

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