#1COMSYS.HD Presentation of Business Results for Asian Investors COMSYS Holdings Corporation August 2017#2Contents S COMSYS.HD I. Corporate Profile 1. COMSYS Group 2. Business Segment (1) Page IV. Top-line Expansion 4 5. IT Solutions Business 5 3. Business Segment (2) 6 6. M&A Measures V. Promotion of Structural Reform 23 22 Page 22 4. Corporate History (1) 7 1. Structural Reform Initiatives 5. Corporate History (2) 8 2. Achievement in Structural Reform 6. Stock Information 9 3. Overview of Construction IT Platform 7. Organization Chart/Board Members 10 4. Future Outlook for Construction IT Platform II. Performance Trends 5. Centralization of Backyard Operations 25 26 27 28 29 1. Trends in Operating Results 12 2. Trends in Net Sales by Segment 13 VI. Other III. Medium-to Long-Term Targets 1. NTT Telecommunications-related Construction Industry 29 34 31 1. Medium-to Long-Term Targets 15 2. Initiatives Aimed at Achieving Target IV. Top-line Expansion 16 Overview of Performance for the Fiscal Year Ended March 31, 2017 32-50 1. Social System-Related Business (1) Initiatives in the green innovation sector 18 2. Social System-Related Business (2) Initiatives in the green innovation sector 19 Data Book - 3. Social System-Related Business (3) Initiatives in urban regeneration and innovation sector 20 Results for the Fiscal Year Ended March 31, 2017 51-59 4. Social System-Related Business (4) Initiatives in regional revitalization and innovation sector 21 2#3COMSYS.HD I. Corporate Profile 3#4I-1. COMSYS Group S COMSYS.HD COMSYS Holdings Corporation Securities code: 1721 Date of Establishment: September 29, 2003 Paid-in Capital: ¥10 billion Number of Employees: Consolidated 10,224 Non-consolidated 55 (Consolidated Results for FY March 2017) Orders Received: ¥370.1 billion Net Sales: ¥334.1 billion Operating Income: ¥25.0 billion Net Income: ¥14.4 billion S COMSYS.HD (As of March 31, 2017) http://www.comsys-hd.co.jp/ COMSYS Nippon COMSYS Corporation Head Office: Shinagawa-ku, Tokyo Establishment: December 20, 1951 Paid-in Capital: ¥10,000 million Number of Employees: Consolidated 5,164 Non-consolidated 2,901 Intra-Group Consolidation* Net Sales: ¥220.3 billion Operating Income: \18.3 billion Suncom SANWA COMSYS Engineering Corporation Head Office: Suginami-ku, Tokyo Establishment: September 12, 1947 Paid-in Capital: ¥3,624 million Number of Employees: Consolidated 1,450 Non-consolidated 705 Intra-Group Consolidation* Net Sales: ¥43.7 billion Operating Income: \1.8 billion TOSYS TOSYS Corporation Head Office: Nagano, Nagano Establishment: January 23, 1960 Paid-in Capital: ¥450 million Number of Employees: Consolidated 1,076 Non-consolidated 634 Intra-Group Consolidation* Net Sales: ¥26.8 billion Operating Income: \1.2 billion つうけん TSUKEN Corporation Head Office: Sapporo Hokkaido Establishment: April 2, 1951 Paid-in Capital: ¥1,432 million Number of Employees: Consolidated 1,791 Non-consolidated 883 Intra-Group Consolidation* Net Sales: ¥46.7 billion Operating Income: \2.6 billion $ comjo COMSYS JOHO System Corporation Head Office: Minato-ku, Tokyo Establishment: April 1, 2009 Paid-in Capital: ¥450 million Number of Employees: Consolidated 532 Non-consolidated 376 Intra-Group Consolidation* Net Sales: ¥9.9 billion Operating Income: \0.7 billion CSS COMSYS Shared Services Corporation Head Office: Minato-ku, Tokyo Establishment: October 1, 2003 Paid-in Capital: ¥75 million Number of Employees: Non-consolidated 156 Intra-Group Consolidation* Net Sales: ¥3.7 billion Operating Income: \0.2 billion Number of Consolidated Subsidiaries: 17 companies Number of Consolidated Subsidiaries: 3 companies Number of Consolidated Subsidiaries: 4 companies Number of Consolidated Subsidiaries: 6 companies Number of Consolidated Subsidiaries: 1 company * 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.#5Business Segments I-2. Business Segments (1) Net Sales by Business Segment (As of March 31, 2017) NTT Engineering 55.2% Business Overviews 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 Partners NTT East, NTT West, NTT Communications, NTT Docomo, etc. Business Domains Access ("Outdoor" projects) Installation of optical fibers, and so forth. S COMSYS.HD Principal Business Conducted COMSYS SANCOM TOSYS TSUKEN | COMJO CSS 010 Construction and installation of switching and transmission equipment, and so forth. О Network ("Indoor" projects) NCC Engineering 8.2% IT Solutions 16.5% Social System-Related and Other 20.1% 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 Partners KDDI Group, Softbank Group, and so forth. 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 Partners Various private companies, national and local government offices, public agencies, and so forth. 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 Partners Public agencies, national and local government offices, various private companies, and so forth. • Mobile Construction of mobile phone base stations, wireless relay base stations, etc. Telecommunications facilities for NCC Fixed-line and mobile telecommunications facilities •Cable TV projects, 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 • 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 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. 5#6Business Segments I-3. Business Segments (2) NTT Engineering Construction of telecommunications facilities for telecommunications carriers NCC Engineering IT Solutions H Specific Lines of Business Access projects 05 Main Customers S COMSYS.HD (NTT Group) Nippon Telegraph and Telephone • East Corporation Nippon Telegraph and Telephone West Corporation NTT Communications Corporation NTT DOCOMO, Inc. Others 作業中』 (KDDI Group) KDDI Corporation UQ Communications Inc. Others (SoftBank Group) SoftBank Corp. Others Network projects Mobile projects Provision of total solution service in IT field B Social System-Related Electrical, civil engineering and other construction projects related to urban infrastructure and Other Server construction Call center maintenance Data center construction Electrical facility projects Solar construction projects Communications and civil engineering projects Private corporations, government and municipal offices, local governments, etc. Private corporations, government and municipal offices, local governments, etc. 6#7I-4. Corporate History (1) 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 Nippon COMSYS Corporation Dec. 1951 Founded as Nippon Telecommunications Construction Co., Ltd. (NTK). S COMSYS.HD 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. As 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). Aug. 1952 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 Oct. 2003 Apr. 2005 Apr. 2009 COMSYS Holdings Corporation established. Shares listed on the First Sections of the Tokyo Stock Exchange and the Osaka Securities Exchange (Securities code: 1721). COMSYS Shared Services Corporation established to be the common provider of business process outsourcing services for the COMSYS Group. SANWA ELEC Co., Ltd. renamed SANWA COMSYS Engineering Corporation, and its business integrated with the telecommunications carrier operations of Nippon COMSYS Corporation. 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. 7#8I-5. Corporate History (2) Nippon COMSYS Established in 1951 Listed on 1st Section, Tokyo Stock Exchange SANWA ELEC (Now Sanwa COMSYS Engineering) Established in 1947 Listed on 1st Section, Tokyo Stock Exchange TOSYS K COMSYS Suncom S COMSYS.HD 2003 COMSYS-Grp COMSYS Holdings Corporation established in a three-way share transfer COMSYS Shared Services Established in 1960 TOSYS *Nippon COMSYS Corporation and SANWA ELEC Co., Ltd. were delisted from the stock exchange in conjunction with the listing of COMSYS Holdings Corporation. Established in 2003 (For the contracting of Group shared services) TSUKEN Established in 1951 Listed on 2nd Section, Tokyo Stock Exchange つうけん *TSUKEN Corporation was delisted from the stock exchange in conjunction with its management integration with COMSYS Holdings. CSS COMSYS JOHO System Established in 2009 (Information systems business of Nippon COMSYS Corporation spun off) $ comjo 2010 Management integration with TSUKEN Corporation in share exchange S COMSYS.HD 80#9I-6. Stock Information (As of March 31, 2017) Number of Shares Issued and Number of Shareholders Authorized: 580,000,000 shares Issued: 141,000,000 shares Number of Shareholders: 7,899 Treasury stock 22.6% (1 owner) Composition of Shareholders (Number and percentage of shareholders by type) Individuals 9.0% (7,374 owners) Foreign Companies and Individuals 16.7% (289 owners) S COMSYS.HD Financial Institutions 42.7% (61 owners) Securities Companies 4.0% (31 owners) Others 5.0% (143 owners) Shares Held Percentage Shareholders (Thousands) of Total (%) COMSYS Holdings Corporation (Treasury Stock) 31,824 22.57 The Master Trust Bank of Japan, Ltd. (Trust Account) 19,364 13.73 Japan Trustee Services Bank, Ltd. (Trust Account) 12,808 9.08 Japan Trustee Services Bank, Ltd. (Sumitomo Mitsui Trust Bank, Limited Retrust Account, Sumitomo Electric Industries, Ltd. Employee Pension Trust Account) Trust & Custody Services Bank, Ltd. (Investment Trust Account) 5,166 3.66 3,262 2.31 Nippon Life Insurance Company 2,590 1.83 Goldman Sachs Japan Co., Ltd. BNP Paribas Securities (Japan) Limited Japan Trustee Services Bank, Ltd. (Trust Account No.5) Meiji Yasuda Life Insurance Company NEC Corporation 2,000 1.41 1,668 1.18 1,609 1.14 1,554 1.10 1,408 0.99 9#10I-7. Organization Chart/Board Members (As of July 1, 2017) Organization Chart S COMSYS.HD Directors and Audit & Supervisory Board Members Audit & Supervisory Committee Senior Management Committee Yoshihisa Omura Title President and Representative Director Name Takashi Kagaya Directors Noriaki Ito Directors Akio Ogawa Board of Directors Directors Directors Directors Directors Directors President Directors Directors CSR Committee Compliance Committee Risk Management Committee Personal Information Protection and Administration Committee Shigemi Sakamoto Akihiko Aoyama Hitoshi Kumagai Kenichi Sato Hidehiko Ozaki Norio Suda Tsuyoshi Nishiyama Koichiro Kamiwaki Kenichi Narumiya* Masahiko Miyashita* Takaharu Saegusa* Director (Audit and Supervisory Committee Member) Director (Audit and Supervisory Committee Member) Outside Director (Audit and Supervisory Committee Member) Outside Director (Audit and Supervisory Committee Member) Outside Director (Audit and Supervisory Committee Member) Outside Director (Audit and Supervisory Committee Member) Kazuyoshi Onohara* *The four outside directors have been registered as independent officers with the Tokyo Stock Exchange. Corporate Planning Department Business Expansion Strategy Office IR Department Finance & Accounting Department General Affairs Department Personnel Department Internal Control Audit Department Internal Control Office Internal Audit Office 10#11COMSYS.HD II. Performance Trends 11#12II-1. Trends in Operating Results Net Sales (Unit: ¥100 million) All-time high net sales Operating Income (Unit: ¥100 million) Operating Margin (%) S COMSYS.HD 8.3% 8.4% 3,365 3,275 3,211 3,313 3,286 3,341 3,154 3,160 3,206 7.5% 7.4% 2,930 2,958 7.1% 5.7% 5.0% 4.9% All-time high profit 4.3% 4.3% 275 276 3.7% 250 238 225 192 162 156 125 117 125 FY March 2007 FY March 2008 FY March 2009 FY March 2010 (Fiscal 2006) (Fiscal 2007) (Fiscal 2008) (Fiscal 2009) FY March 2011 FY March 2012 (Fiscal 2010) (Fiscal 2011) FY March 2013 FY March 2014 (Fiscal 2012) (Fiscal 2013) FY March 2015 FY March 2016 (Fiscal 2014) (Fiscal 2015) FY March 2017 (Fiscal 2016) 12#13II-2. Trends in Net Sales by Segment Gradual decrease in NTT capital expenditure Medium-term targets established For recovery and reconstruction from Great East Japan Earthquake (Unit: ¥100 million) Downturn in mobile carriers and NCC Management integrated with TSUKEN Great East Japan Earthquake occurs 3,313 3,286 3,341 3,160 3,206 Social System 2,958 403 352 554 671 -Related 600 and Other 376 524 489 537 IT 445 507 550 409 447 NCC 336 356 271 274 NTT 1,800 1,909 1,938 1,836 1,825 1,845 S COMSYS.HD FY March 2012 (Fiscal 2011) FY March 2013 FY March 2014 (Fiscal 2012) (Fiscal 2013) FY March 2015 (Fiscal 2014) FY March 2016 (Fiscal 2015) FY March 2017 (Fiscal 2016) 13#14COMSYS.HD III. Medium- to Long-Term Targets 14#15III-1. Medium-to Long-Term Targets Aiming for at least ¥400.0 billion in net sales and at least ¥30.0 billion in operating income S COMSYS.HD - Aiming for sustained growth with expansion in non-carrier-related projects despite gradual decline in telecommunications carrier-related capital expenditure - (Unit: ¥100 million) Figures in parentheses: sales composition ratio 3,500 3,341 4,000 300 (50%) 270 1,222 (37%) 250 1,360 (39%) Net Sales Operating 2,119 (63%) Income 2,140 (61%) (50%) ● Relatively low profit margins, with goods and material expenses accounting for high proportion of net sales Aiming for sales ratio of 50% (By means of M&As, alliances, new business launches, etc.) Pursuing high earnings Non-Carrier Related bBusiness Carrier-Related Business Relatively high profit margins with goods and material expenses accounting for low proportion of net sales Net sales gradually declining ● Securing earnings (Further increase in profitability through structural reform and productivity improvements) (Notes) FY March 2017 FY March 2018 Results Target FY March 202X Projection Carrier-related business: NTT Engineering business and NCC Engineering business Non-carrier related business: IT Solutions business and Social System-Related and Other business, etc. *Telecommunications carrier-related target value for the fiscal year ending March 31, 202X is hypothetical, not a forecast value. 15#16III-2. Initiatives Aimed at Achieving Target At time of target establishment Around 70% of net sales are telecommunications carrier-related business Telecommunications Construction (NTT, NCC) IT Solutions Social System -Related Target 50% of net sales is telecommunications carrier-related business IT Solutions Telecommunications Construction (NTT, NCC) Social System -Related S COMSYS.HD Target Initiatives Internal Growth External Telecommunications Construction Business Aim to secure the current amount of profit, although a decrease in sales is expected in the future due to a gradual decline in capital expenditure • Expand maintenance business • Expand peripheral business • Promote further structural reform IT Solutions Business Aim to be a one-stop solution company that carries out system design, maintenance, and operation • Expand business by strengthening marketing and construction capabilities • Expand alliance business • Expand new business sectors • Promote further structural reform Social System-Related Business Aim to be a comprehensive infrastructure company that handles all infrastructure •Expand renewable energy sector ⚫Urban infrastructure regeneration business • Enter into regional revitalization business • Expand new business sectors M&As and alliances with other companies Growth 16#17COMSYS.HD IV. Top-line Expansion 17#18IV-1. Social System-Related Business (1) Solar Construction Business (EPC) Initiatives in the Green Innovation Sector Solar Power Plant Business (IPP) Environment Surrounding EPC Business Appearance of new types of solar power plant Diversification of customers due to expansion in number of new customers Acquire new customers through our construction track record and marketing activities and establish stable structure not dependent on specific customers Orders received in EPC business | New-type solar business Conventional-type solar business ¥19.0 billion ¥24.0 billion ¥22.0 billion FY March 2015 FY March 2016 FY March 2017 New-Style Solar Power Stations Floating-type Car port-type Power stations power generated Volume of Investment S COMSYS.HD Planning investment of approximately ¥23.0 billion Actual investment Up to fiscal year ended March 31, 2015 Hitachiota City, Ibaraki Prefecture Showa-mura, Gunma Prefecture and 3 other projects completed Actual investment Fiscal year ended March 31, 2016 Tsukuba City, Ibaraki Prefecture Iga City, Mie Prefecture and 5 other projects completed Actual investment Fiscal year ending March 31, 2017 onward Northern Kanto Tohoku and 6 other projects complete Single year Cumulative 14.7MW 10.1MW 24.8MW 73.7MW total Single ¥3.3 billion year Cumulative total ¥4.5 billion ¥7.9 billion ¥22.7 billion Contribute to net sales and profit through consolidation of COMSYS Create (IPP business subsidiary) ¥3.0 billion Business plan of COMSYS Create Corporation Net Sales Operating Income ¥2.0 billion [Installation location ] Ponds and lakes [Features] ✓ No construction cost, possible to achieve adequate internal rate of return (IRR) even with current feed-in tariff price ✓ There are ponds nationwide and plenty of potential locations. [Installation location] Roofs of large parking lots, etc. [Features] ✓ Objective is captive consumption, not impacted by falling FIT prices ¥1.5 billion 立限 ¥0.5 billion FY March 2017 Results ¥0.7 billion FY March 2018 Results ¥1.0 billion FY March 2019 Results 18#19IV-2. Social System-Related Business (2) Initiatives in the Green Innovation Sector Small-Scale Wind Power Generation Business Conclusion of sales agency agreement with Solid Wind Power a/s (SWP) Conclusion of sales agency agreement with Solid Wind Power a/s (SWP) of Denmark. The feed-in tariff (FIT) is ¥55/kWh (less than 20kW) with construction scheduled to commence after obtaining certification. SWP 19.8kW Small-Scale Wind Power Features > Quiet, safe wind turbine with track record in wind turbine "superpower" Advanced capabilities in response to customer consultations based on the simulation of wind conditions 20 years of continuous operation due to 24-hour monitoring and nationwide maintenance system Other Businesses Biomass (EPC and IPP) • Commercialization of 1 IPP project scheduled (in process of applying to local government for subsidy) • Utilize knowledge in IPP business to expand into EPC business (Already obtained 1 project) Grey water business • Commercialized Industrial waste recycling business • Expand recycling business for concrete utility poles after utility pole replacement • Implement at subsidiaries joining the Group through M&As; Electricity Retail Business Commence electricity retail business centered on solar power generation [A] [c] [8] [A] 12:00 Customers 24:00 There are 3 types of electricity in the business: [A] generated by PV and sold to customers; [B] procured from other power sources and sold to customers; and [C] generated by PV and sold through FIT. *Demand and supply management for [B] electricity performed by ENNET Corporation. ENNET [B] Wholesale supply NTT SMILE ENERGY *Ecosystems Japan and NTT SMILE ENERGY will collaborate primarily on the Eco-Megane service and the procurement of remote monitoring equipment. Electricity retailer and [B] Electric power supply Roof leasing and PV installation Electricity retail agreement [A] + [B] @ Ecosystem Japan Ecosystem Japan Co.,Ltd. Electricity retailers Payment of electricity charges general power transmission and distribution businesses Surplus power sales [C] FIT price Nippon COMSYS Business funding in process of gradually expanding business areas from Hokkaido Smart grid • Contracting for smart meters through Tokyo Electric Power Company Future initiatives Geothermal heat pump • Planning onsite verification of geothermal heat pump utilization Small-scale geothermal power generation Implementing joint research with Hokkaido University aimed at construction of heat collection model Smart cities • In charge of sales and construction of storage batteries for Kansai VPP Project verification initiatives Energy Service Company (ESCO) business •In process of efforts to receive orders S COMSYS.HD 19#20IV-3. Social System-Related Business (3) Initiatives in Urban Regeneration and Innovation Sector Electrical Facilities Business Expand based on experience of telecommunications carrier and government office business Plant electricity Regeneration of expressways Construction of electrical equipment in the east district of Tokyo Skytree Water treatment and electricity Shin-Tomei Expressway lighting equipment construction (ordered by NEXCO Central Nippon) Update electrical equipment, etc. 00 Electrical equipment construction projects for water supply and sewerage treatment facilities Water Supply and Sewerage Business Opportunities to receive orders increasing as governmental budgets in Tokyo metropolitan and Nagoya/Osaka areas rising due to measures to address aging infrastructure ➤ Project ordered by Bureau of Waterworks, Tokyo Metropolitan Government Bureau of Sewerage, Tokyo Metropolitan Government Osaka Water Supply Authority Nagoya City Waterworks & Sewerage Bureau, etc. Sewerage shield project Sewerage earthquake-proofing project Agricultural and Fisheries Civil Engineering Business Aiming to receive new orders based on track record in civil engineering Future initiatives Concession • Aiming to enter businesses related to road and water supply infrastructure S COMSYS.HD 20#21IV-4. Social System-Related Business (4) Initiatives in Regional Revitalization and Innovation Sector Use and Application of Idle Real Estate Utilization of real estate no longer in use as a result of centralization of construction sites [Privately owned condominiums in Onojo-shi, Fukuoka] Sales release [Rental condominiums in Mugino-shi, Fukuoka] Overseas Projects Aiming to receive orders for plant projects and marine projects, etc. from local Japanese-affiliated companies, mainly in Southeast Asia Main projects for which orders received • Marine projects of station construction for connection of optical fiber to land networks •Marine projects of station construction for optical fiber installation • Optical access construction inside industrial complex (Indonesia) ⚫Thermal power plant CCTV relocation and telecommunications construction (Indonesia) [Leasing to a tenant company in Settsu-shi, Osaka] [Rental apartments in Takasaki-shi, Gunma] 「コスモス Establishment of Okinawa Project In process of increasing orders received for electrical facility construction projects and underground installation of power transmission cables, etc. Installing underground cables in Jakarta Future initiatives Tokyo Olympics-related • Work proactively to obtain orders Shinagawa Station area development •Specific developments appearing from this fiscal year Regional revitalization projects S COMSYS.HD 21#22S COMSYS.HD IV-5. IT Solutions Business ○ Aiming to be a company trusted by customers (system integrators) to deliver a total service Creating a business expansion cycle leveraging network, server and SDX technology skill advantages (1) Total service provision (from delivery through construction, operation and maintenance) (2) Accelerate speed of technical development (Networks: CCIE, Servers: VMware, SDX: Nutanix, Professional, Security: CompTIA) ○ Expand alliance domains to respond to horizontal collaboration model Existing Business Sectors NTT, Area Business Network system construction Select and concentrate on public/ education/healthcare sectors Business expansion due to relocation of anchor SEs Profitability High Maintenance Business Shift from equipment maintenance to operation support Business Expansion Cycle Corporate Business • Gain new customers . • Identify projects by strengthening account marketing . Acquire New Markets Alliance Business Expansion through combination of system installation and system construction [DELL, HP, and Microsoft] High Low Low Market growth rate (1) New alliances • SDX [Nutanix] • Security [LAC] New Business Sectors Teleworking (Microsoft) (2) Strategic businesses • Management systems utilizing ICT • Education ICT • Personal identity number • Data centers and cloud WANS Priority Initiative Sectors 22#23IV-6. M&A Measures Promoting expansion of peripheral businesses through capital alliances for Target Type Business segment Area Businesses S COMSYS.HD top line expansion Results Industry restructuring-type (horizontal integration) (NTT and NCC Engineering business) Carrier-related business Regional • Telecommunications construction industry • TSUKEN • Kokusai Densetsu (in October 2005) (in October 2010) Value chain supplementation-type (vertical integration) Carrier-related business (NTT and NCC Engineering business) Nationwide (particularly Kanto, Meihan, Shinetsu, Hokkaido) • Transportation security industry • Industrial waste treatment industry • Coating industry • Logistics and warehousing industry Businesses currently outsourced but to be focused in house in future • Hokkaido Denden Yuso (in July 2015) • Toa Kenzai Kogyo (in August 2015) Business territory expansion-type Nationwide . IT Solutions (particularly Kanto, Meihan, Shinetsu, Hokkaido) Social System-Related and Other Nationwide (particularly Kanto, Meihan, Shinetsu, Hokkaido) System integrators • Software development industry Air conditioning work Electrical equipment contractors • Plant contractors • . Road paving contractors General construction contractors Building maintenance industry Temporary staffing industry • VACSLAB (scheduled for June 2016) • CENTRAL BUILDING SERVICE (in April 2014) • Ecosystem Japan (in May 2014) • Kawanakajima Kensetsu (in September 2014) • Nippon After Kogyo (in December 2015) • TOKYO HOSOH KOGYO (in April 2016) • Kando (in July 2017) 23#24COMSYS.HD V. Promotion of Structural Reform 24#25V-1. Structural Reform Initiatives S COMSYS.HD Group Innovation 2010 COMSYS WAY - Sustained, More In-Depth Structural Reform Fiscal year ended March 31, 2009 - fiscal year ended March 31, 2015 (fiscal 2008 - fiscal 2014) Promote IT Penetration Standardization of business process reengineering (BPR) and workflow • Construction of common platform, Comstar Strengthen Construction System Cost Reductions Integration Synergies • Clarification of roles with prime contractor affiliates (dual stratification) Expansion of centralized purchasing within the Group • Personnel reductions of 500 from Group overall • Fair evaluation of software assets • Disposal of idle assets • Introduce Group finances • Consolidate shared operations Merge business locations Group strategy - COMSYS WAYa Advance of structural reforms and top-line growth Fiscal year ended March 31, 2016 (fiscal 2015) • Nationwide movement of personnel Roll out construction IT platform Expand within Group • Reorganization of mobile-related subsidiaries (Nippon COMSYS Group) • Reorganization of access-related subsidiaries (Nippon COMSYS Group) Fiscal year ended March 31, 2017 (fiscal 2016) • Enhancement of quantity survey system within the Group • Consolidate backyard operations Consolidate access-related operations Merge operations centers Gradual introduction to all segments Promote IT development and standardization of workflow for companies that COMSYS Holdings has merged or acquired Reorganization of consolidated subsidiaries . Integration of access-related subsidiaries (TSUKEN Group) • Reorganization of access-related subsidiaries (TOSYS Group) Integration of human resource placement business subsidiaries (into COMSYS Shared Service) Consolidate project administration office (Technostation) • Introduce Group consolidated tax payment system • Management integration with TSUKEN . Integration of Hokkaido network business (into COMSYS) Reduce selling costs • Integration of Hokkaido access- related business (into TSUKEN) • Integration of Shinetsu network business (into COMSYS) 25#26V-2. Achievement in Structural Reform FY March 2009 (Fiscal 2008) FY March 2010 (Fiscal 2009) FY March 2011 (Fiscal 2010) FY March 2012 (Fiscal 2011) Group Innovation 2010 FY March 2013 (Fiscal 2012) COMSYS WAY Sustained, More In-Depth Structural Reform FY March 2014 (Fiscal 2013) FY March 2015 (Fiscal 2014) FY March 2016 (Fiscal 2015) COMSYS WAY a Advance of structural reforms and top-line growth S COMSYS.HD FY March 2017 (Fiscal 2016) • Establishment of COMSYS JOHO System, specializing in the information business spun off from Nippon COMSYS • Construction of common platform, Comstar • Standardization of business process reengineering (BPR) and workflow 4.9% • Clarification of roles with prime contractor affiliates (dual stratification) Transition to nationwide construction system for network-related operations Expansion of centralized purchasing within the Group 4.3% • Personnel reductions of 500 from Group overall • Fair evaluation of software assets Disposal of idle assets 3.7% 4.3% 7.1% 8.3% . 8.4% Operation of construction IT platform • Nationwide movement of personnel •Amalgamation of TSUKEN access-related subsidiaries •Amalgamation of TOSYS access-related subsidiaries • IT platform development of mobile-related construction Amalgamation of mobile- related subsidiaries Amalgamation of COMSYS access-related subsidiaries • IT platform development of access-related construction • TSUKEN management integration • Restructuring of mobile and network businesses 7.4% • Introduction of information technology and standardized workflow to new consolidated companies • Enhancement of quantity survey system within the Group 7.5% • Centralization of AC backyard • Centralization of operation centers 26#27V-3. Overview of Construction IT Platform Creating a Platform to Drive Optimization and Evolution of "Construction Operations Workflow Marketing operations Engineering operations Business Project/daily report Estimates Orders received Contract Design Execution domain Completion Mission critical systems Comstar front-end (IntraMart)/Comstar back-end (SAP) دو S COMSYS.HD Accounting and account settlement Invoicing/completion Financial accounting Management accounting Comstar database NTT-related business Private-demand business Private-demand systems such as OBPM Mobile communication construction IT platform Mobile communication system Order information (DEAR) Process management (Darwin) Completion Standard onsite information workflow using mobile tools (DEAR) Client EDI contract Access-related construction IT platform Information delivery supply chain Fixed-line Operation processing systems (USSS, ASSS, IRAKS, NCPC, etc.) Standard onsite workflow using mobile tools EDI completed Client *1: Reports on work procedures, detailed instructions/reports on quality, progress, efficiency, time, etc. Data link between Data Warehouses (Data application function) 1. Processing and introduction Information matching 2. Reference Integration/information sharing systems 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 27#28V-4. Future Outlook for Construction IT Platform Improve productivity in construction IT platform to enable promotion of M&As in legacy sectors STEP O. Initial introduction STEP 1. STEP 2. Adoption for standard projects Expansion to diverse projects STEP 3. Entering construction projects in different construction industries Mobile projects Adoption for LTE projects (Contribution on profit front) Improving existing business I Aiming to expand scope of adoption S COMSYS.HD (Contribution on profit ad sales front) Acquiring new business Construction projects in different construction industries (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 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 Present Future 28#29V-5. Centralization of Backyard Operations Cost reduction due to centralization of business sites Centralization of access-related business Centralize area-free operations Consolidated operation center for starting communication service Consolidated operation center for metallic line construction and post-construction process management Quality inspection center (photo inspection) Effect targets Approx. ¥400 million in cuts for current fiscal year on full-year base (consolidated Nippon COMSYS Group-basis) Further increase in amount of reductions through expansion of consolidated areas Image of operations centralization Consolidation of Operation Centers Details of operations (1) 24-hour, 365-day call center (2) Delivery center (116 functions) (3) Line resale (optical fiber collaboration) (4) Primary fault response (5) Remote monitoring (6) Remote operation (7) Secondary fault countermeasures S COMSYS.HD OPC expenses reduction target (Unit: ¥100 million) 70 Labor cost 25% reduction 60 Single site centralization 180 Office rent Communications expenses Utilities, etc. 125 250 185 Mar. 2015 Mar. 2020 Image of operations centralization Step 1 (Nippon COMSYS) Step 3 (COMSYS Group) Step 1 Step 2 Operational consolidation for Greater Tokyo area ■Consolidation of operations within Group Consolidate in Sapporo OPC Group-wide consolidation in Sapporo OPC Category Construction management Design Completion processing communication service Photo Service integration construction User construction AC construction Consolidated operation center for starting General construction Construction office Consolidated operation center for metallic line construction and post-construction process management inspection East Japan and West Japan Quality Inspection Center Step 2 (Nippon COMSYS) Consolidation of West and East Japan operations Consolidation of East Japan operations Shinetsu TSUKEN (Sapporo) Existing market NI/SI users (second) MY users TOSYS (Matoba) COMSYS Duplicated operations TSUKEN Marketing front office COMSUS TOSYS Suncom つうけん COMSYS Backyard Subcontracting CHD-OPS* integrated platform business *Consolidated sites to be considered in migration project Sapporo operation center Expanded market NTT-G Newly developed users (System integrator second) Consolidation of West Japan operations Utsunomiya Toda Koshigaya Hachioji Ueno Sagamihara Southern Tokyo Tokyo start of service operations consolidated center Fukuoka Hirabayashi Hiroshima Itano Nishihara (To open in October 2017) 29#30COMSYS.HD VI. Other#31VI-1. NTT Telecommunications-related Construction Industry S COMSYS.HD COMSYS Holdings Corporation KYOWA EXEO Group MIRAIT Holdings Corporation Regional independent company Hokuriku region West Japan Area East Japan Area Hokkaido region Tokai region NDS Co., Ltd. Hokuriku Denwa Kouji Co., Ltd. C-Cube Co. Ltd. Chugoku region Kinki region I I COMSYS.HD TSUKEN Corporation Tohoku region Shinetsu region COMSYS.HD TOSYS Corporation I Nationwide I SOLCOM Co., Ltd. MIRAIT Technologies Corporation Nippon Dentsu Co., Ltd. I Kyushu region Shikoku region Seibu Electric Industry Co., Ltd. SYSKEN Corporation Shikokutsuken Co., Ltd. I TTK Co., Ltd. Daiwa Densetsu Corporation Kanto region COMSYS.HD Nippon COMSYS Corporation COMSYS.HD SANWA COMSYS Engineering Corporation Certification relinquished March 2005 EXEO TECH CORPORATION *WAKO ENGINEERING CORP. and Ikeno Tsuken Co., Ltd. merged on July 1, 2015 to become EXEO TECH CORPORATION. KYOWA EXEO CORPORATION MIRAIT Holdings Corporation 31#32COMSYS.HD Overview of Performance for the Fiscal Year Ended March 31, 2017 32#33Contents I. Overview of Performance for the Fiscal Year Ended March 31, 2017 1. Highlights of Performance 2. Details of Orders Received by Segment 3. Details of Net Sales by Segment 4. Details of Operating Income 5. Trends in Ecosystem Japan Performance 6. Contract Backlogs II. Full Year Forecasts for the Fiscal Year Ending March 31, 2018 1. Full Year Forecasts for the Fiscal Year Ending March 31, 2018 2. Breakdown of Orders Received, Net Sales and Operating Income III. Trends in Principal Businesses 1. Trends in NTT Fixed-Line Related Business 34 35 36 37 38 39 40 41 2. Trends in NTT Mobile Business 3. Trends in NCC Business 4. Moving Ahead towards "5G" IV. Strategies for Top-Line Expansion 1. Medium-to Long-Term Targets 2. M&A Results 3. Initiatives Aimed at Further Topline Expansion 4. Promotion of Future Structural Reform V. Shareholder Returns Policy (Dividends and Acquisition of Treasury Stock) 42 43 44 45 S COMSYS.HD 46 47 48 49 50 33#34I-1. Highlights of Performance for the Fiscal Year Ended March 31, 2017 S COMSYS.HD Growth in sales and profit due to newly consolidated company; orders received recorded all-time high Performance Performance in previous term Comparisons with the previous term Forecasts Percent of Net Sales Percent of Net Sales Difference Percent of Net Sales Comparisons with forecasts Difference Remarks (Unit: ¥100 million) Orders Received 3,701 3,319 +382 3,500 +201 Net Sales 3,341 3,206 +135 3,400 -58 457 433 +23 465 -7 Gross Profits 13.7% 13.5% +0.2 percentage points 13.7% Selling, General and 206 195 +11 215 Administrative Expenses 6.2% 6.1% +0.1 percentage points 6.3% 250 238 +11 250 Operating Income 7.5% 7.4% +0.1 percentage points 253 242 +11 255 Recurring Profit 7.6% 7.6% +0.0 percentage points 7.5% Net Income 144 154 -9 160 -15 Attributable to [167] [+13] Owners of Parent 4.3% 4.8% -0.5 percentage points 4.7% [+7] -0.4 percentage points -0.0 percentage points -8 -0.1 percentage points +0 7.4% +0.1 percentage points -1 +0.1 percentage points Orders Received Orders received increased significantly compared with the previous fiscal year and forecasts because LTE-A work by mobile telecommunications carriers moved into top gear and there was an increase in maintenance process orders from NTT, in addition to the effect of the consolidation of TOKYO HOSOH KOGYO CO.,LTD. from this fiscal year. Net Sales Sales increased compared with the previous fiscal year as a result of the newly consolidated company, despite delays in mobile and other construction progress, but there was a failure to achieve forecasts due to major delays in construction progress in projects related to social systems. Operating Income Profit increased compared with the previous fiscal year, even though there were changes in the product mix, and it was largely in line with forecasts due to efforts directed at structural reform, increasing productivity and cutting costs. Extraordinary Loss Impairment of "goodwill" of Ecosystem Japan due to deterioration in environment for consumer solar power construction business. Note: Figures are rounded down to the nearest whole unit. Figures in brackets show estimates without impairment loss. 34#35I-2. Details of Orders Received by Segment S COMSYS.HD The NTT Engineering business remained robust, and orders received recorded an all-time high. Comparisons with the Previous Term +382 (+11.5%) • Increase due to newly consolidated subsidiaries • Decrease in consumer solar construction projects • Decrease in alliance projects • Decrease in manufacturer-based IT solution projects (Unit: ¥100 million) Comparisons with Forecasts Social System-Related and Other +28.6% Social System-Related and Other -8.4% +201 IT -3.8% -21 NCC +11.6% +29 NTT-G +15.3% (+5.8%) -76 Increase in au (3.5GHz) Increase in au (3.5GHz) negotiations and wireless construction processes, etc. negotiations and wireless construction processes, etc. +184 • Orders for expressway electrical construction failed to materialize IT NTT-G +8.0% NCC +5.8% +6.0% • Decrease in consumer solar construction projects Anticipated overseas projects did not materialize +31 +15 +151 •Increase in software development projects Increase in IT solution projects (public sector and corporate) 3,319 Performance in Previous Term NTT Business (Access) Increase in user processes and platform/maintenance processes NTT Business (Network) Downturn in reaction to network simplification processes NTT Business (Mobile) Front-loading of LTE-A negotiation processes and increase in wireless construction processes 3,701 Performance +270 NTT Business (Access) Increase in user processes and platform/maintenance processes NTT Business (Network) Increase in maintenance processes NTT Business (Mobile) Front-loading of LTE-A negotiation processes and increase in wireless construction processes 3,500 Target 35#36I-3. Details of Net Sales by Segment Increase in sales due to newly consolidated subsidiary, despite delays in construction progress Comparisons with the Previous Term +135 (+4.2%) • Increase due to newly consolidated subsidiaries • Decrease in consumer solar construction projects • Decrease due to delays in receipt of orders for the mega-solar power business S COMSYS.HD (Unit: ¥100 million) Comparisons with Forecasts Social System-Related and Other -12.2% IT +2.0% NCC +1.5% +10 +4 NTT-G +1.1% +20 -58 (-1.7%) 3,206 Performance in Previous Term • Increase in alliance business • Increase in software development projects Social System-Related and Other +11.7% IT +8.5% +70 NTT-G +1.1% NCC +0.8% +43 +2 +19 NTT Business (Access) Increase in user processes and platform/maintenance processes ◇ NTT Business (Network) Decrease due to delays in electrical construction progress NTT Business (Mobile) Decrease as a result of delays in construction progress due to accidents -93 • Increase in software development projects 3,341 Decrease because orders for expressway electrical construction failed to materialize • Decrease in consumer solar construction projects • Decrease because anticipated overseas projects did not materialize NTT Business (Access) Increase in user processes and platform/maintenance processes NTT Business (Network) Increase in maintenance processes NTT Business (Mobile) Decrease as a result of delays in construction progress due to accidents 3,400 Performance Target 36#37I-4. Details of Operating Income S COMSYS.HD Operating income ended in line with forecasts, due to effect of newly consolidated subsidiary Comparisons with the Previous Term +11 (+5.0%) Main measures to increase productivity • Streamlining through consolidation of access-related backyard operations (workflow standardization and integrated operations) Streamlining through consolidation of network operations and personnel movement • Reduction of field expenses and indirect expenses Excluding the newly consolidated subsidiary Effect of newly (Unit: ¥100 million) Comparisons with Forecasts +0 (+0.1%) I 238 Operating Margin (7.4%) Fall in net sales -8 products and consolidated Cost reduction Increase in.........subsidiary Cost reduction Fall in net sales productivity +4 -8 Improved productivity -14 +7 +13 250 Operating Margin (7.5%) 250 Operating Margin (7.4%) Performance in Previous Term Performance Target 37#38I-5. Trends in Ecosystem Japan Performance Initial Objectives of Acquisition • Contribution to COMSYS Group by addition of numerous technicians, including 150 licensed electricians at Ecosystem Japan • Expansion of corporate solar power business through synergies Decline in feed-in tariff price Downturn in solar power generation market S COMSYS.HD • 33 technicians actively involved in COMSYS Group Expansion of EPC and IPP businesses at COMSYS Group End of public subsidies for solar power generation in private houses ◆ Prohibition of partial sales of a low-voltage power generation system. ◆ Output controls •Utilization of green investment tax cuts (100%) Reduction of selling expenses by closing permanent stores Management integration with Solar Service Japan Co.,Ltd. Industrial use Residential use •Utilization of green investment tax cuts (30%) Establishment of Jibun Denryoku (own electricity) service sales structure Reduction in selling expenses by closing permanent stores Revision of salaries Liberalization of electricity retailing ◆End of public subsidies for storage batteries Consolidation of COMSYS Create Corporation Suspension of marketing activities due to Kumamoto earthquake Increase in selling expenses due to advance investment for Jibun Denryoku service Electricity sales (by COMSYS Create) Fall in price of solar power systems and storage batteries Promotion of zero energy house (ZEH) Utilization of human resources from COMSYS Group, etc. Revision of salaries Reduction in indirect personnel Reduction in expenses through centralization of sales offices Reduction in materials expenses Implementation of revised energy conservation standards From April 2020, power generation equipment required for all new construction ◆Purchasing system Possibility of demand to switch to captive consumption in 2022, ten years after commencement of system Future Initiatives Alliances with custom-made and ready-built house providers and real-estate brokers who are promoting ZEH. Target existing customers with business proposals for captive consumption-type systems A cumulative total of at least 38,000 installations for residential use so far Approach potential customers Net Sales Operating income/loss FY March 2015 LFY March 2016 LFY March 2017 LFY March 2018 Target 38#39I-6. Contract Backlogs Significant contribution to sales in fiscal year ending March 2018 from all-time-high projects carried forward 1,373 437 S COMSYS.HD (Unit: ¥100 million) Social System-Related and Other • Increase in private-sector, demand-related civil engineering projects • Decline in completed projects due to delays in orders received for solar construction projects 931 Social System-Related and Other IT NCC NTT 1,013 981 898 March 2014 Beginning of Term March 2015 Beginning of Term March 2016 Beginning of Term March 2017 Beginning of Term +157 +2 -------- +190 136 550 749◄ NTT-Access • Increase in cable tunnel repair projects • Increase in maintenance projects ◇NTT-Mobile • Increase in LTE-A negotiations and construction processes • Increase due to delays in project progress March 2017 End of Term *All-time-high projects carried forward was ¥101.3 billion recorded at the beginning of fiscal year ended March 31, 2017. 39#40II-1. Full Year Forecasts for the Fiscal Year Ending March 31, 2018 Planning on sales and profit growth due to completion of large number of projects carried forward and improvement in construction efficiency FY March 2017 Performance FY March 2018 Targets Comparisons with Percent of Net Sales Percent of Net Sales FY March 2017 Difference Remarks S COMSYS.HD (Unit: ¥100 million) Orders Received 3,701 3,600 -101 Net Sales 3,341 3,500 +158 457 475 +17 Gross Profits 13.7% 6.2% 13.6% 205 -0.1 percentage points -1 5.9% -0.3 percentage points +19 270 +0.2 percentage points Selling, General and 206 Administrative Expenses 250 Operating Income 7.5% 7.7% 253 Recurring Profit 7.6% 7.9% Net Income Attributable to Owners of Parent 144 185 +40 4.3% 5.3% +1.0 percentage points 275 +21 +0.3 percentage points Orders Received Forecasting positive expansion in orders received from non-carrier segment despite a significant decline in reaction to the increase in NTT fixed-line maintenance processes and front-loading of mobile negotiations and wireless construction processes in the previous fiscal year. Net Sales Forecasting increase in sales due to positive orders received from non-carrier segment in addition to the large number of projects carried forward. Operating Income Profit is projected to rise due to forecasted sales growth and the effect of structural reforms and measures to increase productivity implemented to date. Note: Figures are rounded down to the nearest whole unit. The contribution from the acquisition of Kando is not anticipated in the forecast values of this business plan. 40#41II-2. Breakdown of Orders Received, Net Sales and Operating Income Orders Received NTT-G -11.6% Comparisons with the Previous Term Social System-Related and Other -101 (-2.8%) +5.0% IT -235 +12.1% +41 3,701 NCC +66 +8.9% +25 Net Sales Social System-Related and Other +13.2% IT +88 +8.9% NCC NTT-G 0.0% +7.6% +49 +20. 0 3,600 3,341 S COMSYS.HD (Unit: ¥100 million) Comparisons with the Previous Term + 158 (+4.7%) 3,500 Performance Target Expenses for the consolidation of Comparisons with subsidiaries the Previous Term in the previous Strengthening fiscal year of marketing, etc. +19 (+7.8%) -6 +4 Gross profits Operating Income 250 Performance SG&A expenses +17 -1 270 Performance Target [Orders Received] • NTT fixed-line-related business forecasted to decline in reaction to increase in cable tunnel repair and maintenance processes in the previous fiscal year • NTT mobile business also forecasted to fall due to impact from front-loading of negotiations and wireless construction processes in the previous fiscal year ⚫NCC business forecasted to rise due to increase in new base station construction for 3.5GHz and 700MHz bands • IT and social systems-related business forecasted to increase with strengthening of marketing capabilities aimed at topline expansion [Net Sales] • Despite completion of projects carried forward from previous fiscal year, NTT fixed-line-related business forecasted to fall due to decline in reaction to network simplification • NTT mobile business forecasted to rise despite decline in negotiation processes as wireless construction for 3.5GHz band and 700MHz band moves into top gear NCC business forecasted to rise due to increase in orders received for new base station construction for 3.5GHz and 700MHz bands ⚫ IT and social systems-related business forecasted to expand due to expected completion of projects carried forward and increase in orders received [Operating Income ] Profit growth forecasted due to effect of sales growth and results from mobile mix Target 41#42III-1. Trends in NTT Fixed-Line Related Business No. of FLET'S subscriptions (including optical fiber collaboration) Net increase 1,926 +54 NTT East and NTT West capex (Unit: ¥100 million) 5,834 5,450 5,100 (No. of collaboration agreements) (469) 2,700 FY March 2016 Results NTT EAST 2,940 Investment in fiber optics 1,770 NTT WEST 2,894 Investment in fiber optics 2,500 Investment in fiber optics 1,650 2,750 1,530 2,600 FY March 2016 Results FY March 2017 Forecast FY March 2018 Target [Source: Application document for approval of NTT business plan] Note: Full-year earnings results for fiscal year ended March 31, 2017 planned to be disclosed on May 15 Orders received at COMSYS Group (Access) 1,996 +70 2,076 +80 000 (854) FY March 2017 Forecast (1,169) FY March 2018 Target Orders received at COMSYS Group (Network) Second-half 245 240 205 131 145 120 旭目目 First-half 114 95 85 FY March 2016 Results FY March 2017 FY March 2018 Results Target S COMSYS.HD (Unit: 10,000 lines) (Unit: ¥100 million) (Unit: ¥100 million) 1,061 973 990 523 484 510 Second-half 538 480 489 First-half FY March 2016 Results FY March 2017 Results FY March 2018 Target COMSYS Group materials: Simple total for five companies; NTT Engineering business-Access COMSYS Group materials: Simple total for five companies; NTT Engineering business-Network [ NTT Group] Capital investment plans by NTT East and NTT West for the fiscal year ending March 31, 2018 are ¥510.0 billion, ¥35.0 billion below the previous fiscal year, trending toward a gradual decline in line with medium-term plans. • Significant increase is forecasted for FLET'S Hikari due to steady expansion in Hikari Collaboration, with net increase forecasted at 800,000 lines, exceeding the previous fiscal year. [COMSYS Group] • In fiscal year ended March 31, 2017, orders received and sales both increased significantly due to growth in user processes and increase in cable tunnel repair and all types of maintenance processes, thanks to the increase in Hikari Collaboration business. • In fiscal year ending March 31, 2018, increase in sales expected due to further growth in main- tenance processes and completion of projects carried forward, despite decrease in capital investment. 42#43III-2. Trends in NTT Mobile Business NTT DOCOMO capex LTE Network (Unit: ¥100 million) 5,952 5,971 161,900 stations Addition 5,700 LTE base stations +162 138,100 stations Plans 130,000 stations Communications 5,739 69,700 stations 5,762 5,420 business 22,800 stations Other than above 214 209 280 Plans 18,000 stations FY March 2016 Results FY March 2017 Results FY March 2018 Target FY March 2016 S COMSYS.HD Premium 4G-enabled base stations PREMIUM 4G Significant increase in 2H Highest domestic speed 682Mbps Provided to 120 cities nationwide *682Mbps service uses two frequency FY March 2017 bands: 3.5GHz and 1.7GHz [Source: NTT DOCOMO Results Briefing Materials] Orders received at COMSYS Group (Mobile) Second-half 650 334 716 360 (Unit: ¥100 million) 585 300 000 First-half 316 356 285 FY March 2016 FY March 2017 FY March 2018 Results Results Target • [ NTT DOCOMO ] Capital investment for fiscal year ended March 31, 2017 increased by ¥12.1 billion from ¥585.0 billion planned at the beginning of the period. It included a ¥16.2 billion increase in capital investment for the telecommunications business and was higher than the ¥573.9 billion in the preceding fiscal year. • Capital investment for fiscal year ending March 31, 2018 will fall ¥27.1 billion com- pared with the previous fiscal year. That of the telecommunications business will de- crease by ¥34.2 billion. [COMSYS Group ] • In fiscal year ended March 31, 2017, orders received exceeded ¥70.0 billion due to the impact from the front-loading of LTE-A negotiations and consulting services and the increase in construction processes due to rapid negotiation progress. • In fiscal year ending March 31, 2018, orders received will decline from the previous fiscal year due to the impact from the front-loading of negotiations despite continued orders for LTE-A construction. Net sales are forecasted to rise as construction for 3.5GHz and 700MHz bands moves into top gear. COMSYS Group materials: Simple total for five companies; NTT Engineering business-Mobile 43#44III-3. Trends in NCC Business ◆ KDDI Capex (payment) ◆ 5,314 S COMSYS.HD Softbank Capex (Telecommunications business in Japan) (Unit: ¥100 million) (Unit: ¥100 million) 5,194 5,300 4,125 3,205 3,500 Mobile 3,380 3,300 (Includes UQ) 3,250 Fixed line, etc. 1,934 1,943 2,000 FY March 2016 Results FY March 2017 Results FY March 2018 Forecast [Source: KDDI Financial Performance Briefing Materials for fiscal year ended March 31, 2017] Orders received at COMSYS Group (NCC) (Unit: ¥100 million) 310 285 267 180 Second-half 162 140 First-half 127 123 130 FY March 2017 Results FY March 2018 Target FY March 2016 Results COMSYS Group materials: simple total for five operating companies NCC Engineering business FY March 2016 Results FY March 2017 Results International accounting standards FY March 2018 COMSYS estimate [Source] Figures for fiscal year ended March 31, 2016 taken from Softbank Securities Report Figures for fiscal year ended March 31, 2017 taken from Softbank's results briefing materials for telecommunications business in Japan [KDDI ] (COMSYS assumptions) • In fiscal year ended March 31, 2017, ¥560.0 billion set at beginning of period reduced by ¥40.6 billion to ¥519.4 billion due to delays in use of capital investment funds. • In fiscal year ending March 31, 2018, capital investment forecasted at ¥530.0 billion. A substantial increase in the project volume is expected due to construction project expansion as a result of termination of 700MHz interference suppression measures in addition to full-scale construction for 3.5GHz band. [Softbank] (COMSYS assumptions) . Capital investment for fiscal year ending March 31, 2018 projected to be expanded from fiscal year ended March 31, 2017. • Even though project volume will increase significantly because large-scale projects are planned, including introduction of Massive MIMO aimed at 3.5GHz band construction and 5G, construction unit price will remain challenging. [COMSYS Group ] • Orders received for the fiscal year ending March 31, 2018 are expected to increase overall in the NCC Engineering business with the positive tone being due to base station construc- tion for the 3.5GHz and 700MHz bands as well as the ending of the LTE changeover period. 44#45III-4. Moving Ahead towards "5G" Aiming to commence 5G service by 2020 Further advances from 2020 onward with new technologies and new frequencies NTT DOCOMO Roadmap 2020 Carrier trends NTT DOCOMO "5G trials" using 28GHz and 4.5GHz bands S COMSYS.HD 2017 2019 2025 • Develop 5G commercial systems February 26, 2017 "5G trials" 22 carriers and vendors, etc. agree on joint proposals aimed at formulating standard 5G specifications as soon as possible Use available frequency bands that have become available by 2020, including existing bands 5G (peak: several Gbps) Ultra-high-speed capacity Major cities Tokyo Waterfront City and around Tokyo Skytree tower • Conduct various verification tests such as 8K video, remote control of driverless vehicles, and data transmission during high-speed travel Olympics and Paralympics Around facilities Expand from urban areas to suburbs New 5G technologies Massive MIMO (beam forming) Phantom cells Add even broader frequency bands 5G+ (peak: at least 10Gbps) Ultra-low latency and multiple simultaneous connections From urban areas Construction au Succeed in handover at 28GHz band SB "5G Project" launch announced September 8, 2016 • Massive MINO installed in 100 stations in urban areas nationwide • Verification testing at Tokyo Waterfront City (Odaiba) from August on 2016 4GHz, 4.5GHz, 28GHz Sales trends and forecasts for NTT Mobile business October 24, 2006 MNP launch PDC FOMA FY March 2004 March 11, 2011 Great East Japan Earthquake December 24, 2010 LTE launch September 11, 2013 iPhone sales launch March 31, 2012 PDC deactivation LTE March 27, 2015 LTE-A launch LTE-A 5G FY March 2017 FY March 2020 45#46IV-1. Medium- to Long-Term Targets Start endeavors for early achievement of medium- to long-term targets Operating Income 275 8.3% Toward further growth M&As in social systems and IT business segments Integrated marketing and construction management across the Group (introduction of business company system) Increase productivity through workstyle innovation 276 8.4% 238 7.4% 250 7.5% S COMSYS.HD (Unit: ¥100 million) Medium-term Targets 270 7.7% 300 7.5% 3,500 +α 4,000 Kando Co., Ltd.i α 3,313 3,286 3,341 Social 3,206 Non-carrier System-Related related business M&A and Other 927 IT 2,000 1,092 1,108 1,222 1,360 NCC Carrier-related business NTT 2,386 2,193 2,097 2,119 2,140 2,000 FY March 2014 FY March 2015 FY March 2016 FY March 2017 FY March 2018 FY March 202X Target 46#47IV-2. M&A Results S COMSYS.HD Making Kando Co., Ltd. into wholly owned subsidiary through share exchange (planned for July 1, 2017) M&A objectives and synergies Nippon COMSYS Group growth sectors • Increase in communications projects through promotion of undergrounding, etc. • Agricultural civil engineering, water supply and sewerage projects, Tokyo Hoso's paving business Peripheral business related to renewable energy Urban infrastructure regeneration, expressway regeneration projects Existing business sectors of Nippon COMSYS Groups • Survey, inspection, and repair of NTT cable- tunnels and manholes • Purchase of concrete secondary products using Communication Cable BOX (C.C. Box), etc. Areas of collaboration with Kando Co., Ltd. General civil engineering projects, sewerage projects, pipeline projects, paving restoration projects Expansion of new business domains through integration with gas energy business Electrical and communications projects, including new installation and replacement of traffic signals Location Representative Paid in Capital Date of Establishment Number of Employees Main business partners Business areas Profile of Kando Co., Ltd. Shinjuku-ku, Tokyo Manabu Fukumoto ¥448 million April 14, 1948 1,422 (Consolidated) TOKYO GAS Co., Ltd., Bushu Gas Co., Ltd., NTT InfraNet, etc. (1) Construction and maintenance of gas pipe facilities (2) Electrical and telecommunications construction (3) General piping and road paving, etc. Consolidated FY March 2017 Targets Non-Consolidated Consolidated Kando's business sectors Certified as NTT special vendor Development and sale of a range of concrete products and tools Net Sales Operating Income Recurring Profit Net Assets FY March 2016 Results Non-Consolidated ¥28.0 billion ¥1.2 billion ¥1.4 billion ¥10.2 billion ¥35.8 billion ¥1.6 billion ¥1.6 billion ¥12.4 billion ¥28.3 billion ¥1.1 billion ¥1.2 billion ¥36.2 billion ¥1.3 billion ¥1.5 billion COMSYS Partnership with Kando in Nippon COMSYS Group's growth sectors and existing sectors Business areas Paid in Capital Number of Employees Tokyo Gas Lifeval Kando Co., Ltd. Sale of gas equipment, payments, safety inspections, opening and closing of gas valves ¥100 million 543 ICANDO Subsidiaries Kando Security Co., Ltd. Construction onsite patrols ¥45 million 62 Kando Techno Co., Ltd. Inspection and repair work of NTT pipes Secondary concrete products ¥80 million Nishi Nihon Tokushu Kogyo Co., Ltd. Inspection and repair work of NTT pipes Secondary concrete products ¥100 million 42 17 47#48S COMSYS.HD IV-3. Initiatives Aimed at Further Topline Expansion Digital transformation sector Biomass (EPC and IPP) • Planned commercialization of an IPP project . Expand entry into EPC business, leveraging knowledge in IPP business Small-scale wind power generation • Plan to acquire certification PFI Expand orders received through PFI method Private electric facilities • Received first order • Expanding market development in collaboration with NTT Group and others Expand digital transformation business to ¥30.0 billion level within three years Alliance with Microsoft Basic Structure for creating cloud services Customer [Service menu] Skype for Business Cloud PBX planning service Skype for Business Cloud PBX integration service Skype for Business Cloud PBX managed service Consulting Joint proposal by COMSYS Group Construction Operation Okinawa project • Order received for common-use cable tunnels and U.S. military compound electrical installation work ESCO • Continue efforts, including small-scale projects Expressways • Continue large-scale projects for Shuto and NEXCO expressways • Maintain market share at high level Agricultural civil engineering • Opportunities to receive orders expanding, with increased budgets of local governments in Tokyo metropolitan and Nagoya-Osaka areas, etc. Utilize idle real estate COMSYS Track record of IP-PBX construction, such as COMSIP TOSYS Microsoft Gold Cloud Competency Partner Collaboration Scheme Microsoft 48#49IV-4. Promotion of Future Structural Reform Pursuing "Increased productivity" and "diverse human resources" through workstyle reform COMSYS WAYa S COMSYS.HD Harness IT Strengthen construction system Reduce costs Integration synergy Group strategy Reform areas for workstyle innovation Comprehensive design of personnel system and operating rules Improve employee awareness A Review operational work flow Transform management structures P Workstyle innovation project Change C corporate culture Achieve flexible work methods and communication through utilization of IT tools Develop in-house environment Visualize Redefine jobs and harness IT Build up construction information through construction IT platform Thoroughly review job structures and screen processes Redefine jobs and review workflow Possible to simplify procedures Automation (AI) Business centralization D work progresses Telecommuting High value added Streamline and increase productivity by further harnessing IT Upgrade construction IT platform + Wearable terminals i-Construction 49#50V. Shareholder Returns Policy (Dividends and Acquisition of Treasury Stock) Planning increase in dividend for fifth year in a row and acquisition of ¥5.0 billion in treasury stock 200 ⑤ COMSYS.HD Net Income (Target) 150 100 50 (Unit: ¥100 million) 0 30 H: 71 25 132 40 40 24 163 00 80 29 29 167 75 75 35 35 [167] 185 154 80 80 144 Treasury 50 stock acquisition 39 44 54 Total dividends March 2012 March 2013 March 2014 March 2015 March 2016 March 2017 March 2018 (Planned) Interim ¥10 ¥10 ¥10 ¥15 ¥15 ¥20 ¥25 Dividends per ¥15 Share (annual) Year-end ¥10 ¥10 Ordinary dividends: \10 ¥15 ¥20 ¥20 ¥25 + Commemorative dividends: ¥5 Consolidated Payout Ratio 36.0% 18.7% 18.4% 21.0% 25.6% 30.8% [26.6%] 29.5% Total Return Ratio Dividends + treasury stock Net income 77.7% 48.7% 66.9% 66.2% 77.2% 85.6% [74.0%] 56.5% Number of shares of treasury stock at the end of the period* (Ownership Ratio) 19.18 million shares 23.01 million shares 28.31 ROE (13.1%) 4.4% (15.8%) 7.9% million shares (19.4%) 9.4% 31.41 million shares (21.5%) 30.24 million shares (21.5%) 31.86 million shares (22.6%) 9.0% 7.9% 7.3% [8.3%] - *The total number of issued shares changed from 145.97 million shares to 141.00 million shares with the cancellation of 4.97 million shares of treasury stock on November 30, 2015. 2.12 million shares of treasury stock (1.5%) were contributed as a result of the exchange of shares with TOKYO HOSOH KOGYO CO., LTD. on April 1, 2016. *Figures in brackets show estimates without impairment loss. 50#51Data Book S COMSYS.HD Detailed Data Consolidated Statements of Income 01 02 Income Statements [by operating company group] (results for fiscal year ended March 31, 2017) 03 04 50 05 90 06 Reference Income Statements [by operating company group] (forecasts for fiscal year ending March 31, 2018) Orders Received, Net Sales, and Contract Backlogs by Business Area Orders Received and Net Sales by Detailed Business Area for Five Companies on a Non-Consolidated Simple Sum Basis Capital Expenditure, Depreciation and Amortization 80 08 10 07 Consolidated Balance Sheets (Condensed) Consolidated Cash Flow (Condensed) 51#5201 Consolidated Statements of Income S COMSYS.HD FY March 2016 FY March 2017 FY March 2018 (Unit: ¥100 million) 2nd Quarter Full Year Results Results 2nd Quarter Results YOY Percentage difference Full Year Targets Full Year Results YOY Percentage difference vs. Forecast 2nd Quarter Percentage Targets difference (a) (b) (c) ((c)-(a)(a) (d) (e) ((e)(b))/(b) ((e) - (d))/(d) (f) YOY Percentage difference ((f)-(c))/(c) (g) Full Year Targets ΥΟΥ Percentage difference ((g)-(e))/(e) Orders Received 1,626 3,319 1,786 9.8% 3,500 3,701 11.5% 5.8% 1,650 -7.6% 3,600 -2.8% Net Sales 1,287 3,206 1,322 2.7% 3,400 3,341 4.2% -1.7% 1,400 5.9% 3,500 4.7% Gross Profits 161 433 165 2.5% 465 457 5.4% -1.7% 175 5.8% 475 3.9% (Gross Profit Margin) (12.5%) (13.5%) (12.5%) (13.7%) (13.7%) (12.5%) (13.6%) Selling, General and Administrative Expenses 95 195 102 6.7% 215 206 5.9% -3.8% 100 -2.3% 205 -0.9% Operating Income 65 238 63 -3.6% 250 250 5.0% 0.1% 75 19.0% 270 7.8% (Operating Margin) (5.1%) (7.4%) (4.8%) (7.4%) (7.5%) (5.4%) (7.7%) Recurring Profit 80 68 242 64 -5.9% 255 253 4.6% -0.6% 77 19.3% 275 8.5% (Recurring Profit Margin) (5.3%) (7.6%) (4.9%) (7.5%) (7.6%) (5.5%) (7.9%) Net Income Attributable to 45 154 41 -9.2% 160 144 -6.1% -9.5% 50 21.1% 185 27.7% Owners of Parent (Net Profit Margin) (3.5%) (4.8%) (3.1%) (4.7%) (4.3%) (3.6%) (5.3%) Note: Figures are rounded down to the nearest whole unit. Profit margin, and percentages of increase and decrease are calculated using a base unit of yen. Figures are rounded to the nearest first decimal place. 52#5302 Income Statements [by operating company group] (results for fiscal year ended March 31, 2017) S COMSYS.HD Comparisons with the Previous Term Nippon COMSYS-G SANCOM-G TOSYS-G (Unit: ¥100 million) TSUKEN-G Results Mar. 2016 Mar. 2017 Percentage Mar. 2016 Results difference Results Mar. 2017 Percentage Mar. 2016 Results difference Results Mar. 2017 Percentage Mar. 2016 Results difference Results Mar. 2017 Percentage Results difference Orders Received 2,195 2,520 14.8% 451 454 0.5% 297 278 -6.3% 423 486 14.9% Net Sales 2,101 2,203 4.8% 423 437 3.3% 283 268 -5.4% 440 467 6.2% Gross Profits 305 315 3.4% 34 42 22.8% 25 27 7.7% 52 54 2.5% (Gross Profit Margin) (14.5%) (14.3%) (8.1%) (9.6%) (8.9%) (10.1%) (12.0%) (11.6%) Selling, General and Administrative Expenses 123 132 7.1% 22 23 5.4% 14 14 3.7% Operating Income 181 183 0.8% 11 18 56.0% 10 12 12.9% 22 28 27 -0.8% 24 26 6.3% (Operating Margin) (8.6%) (8.3%) (2.8%) (4.2%) (3.8%) (4.6%) (5.6%) (5.6%) Recurring Profit 184 185 0.5% 11 18 54.3% 11 12 10.0% 25 26 5.8% (Recurring Profit Margin) (8.8%) (8.4%) (2.8%) (4.2%) (4.0%) (4.6%) (5.8%) (5.8%) Net Income Attributable to Owners of Parent (Net Profit Margin) 116 100 -13.6% 7 11 58.0% 6 (5.5%) (4.6%) (1.7%) (2.6%) (2.4%) 7 (2.9%) 15.2% 18 22 20.1% (4.3%) (4.9%) Comparisons with Forecasts Nippon COMSYS-G SANCOM-G TOSYS-G (Unit: ¥100 million) TSUKEN-G Mar. 2017 Mar. 2017 Percentage Mar. 2017 Mar. 2017 Percentage Mar. 2017 Targets Results difference Targets Results difference Targets Mar. 2017 Results Percentage Mar. 2017 difference Mar. 2017 Percentage Targets Results difference Orders Received 2,346 2,520 7.4% 478 454 -5.0% 294 278 -5.3% 435 486 11.9% Net Sales 2,291 2,203 -3.8% 457 437 -4.2% 294 268 -8.6% 442 467 5.7% Gross Profits 332 315 -5.0% 39 42 8.0% 26 27 4.1% 53 54 2.2% (Gross Profit Margin) (14.5%) (14.3%) (8.5%) (9.6%) (8.8%) (10.1%) (12.0%) (11.6%) Selling, General and Administrative Expenses Operating Income 139 132 -4.8% 23 23 3.3% 14 14 5.5% (Operating Margin) 192 (8.4%) 183 (8.3%) -4.6% 15 18 22.2% 12 12 2.6% 25 28 27 -0.5% 25 26 5.3% (3.3%) (4.2%) (4.1%) (4.6%) (5.7%) (5.6%) Notes: 1. Figures are rounded down to the nearest whole unit. Profit margin, and percentages of increase and decrease are calculated using a base unit of yen. Figures are rounded to the nearest first decimal place. 2. No elimination of intergroup transactions between groups 53#5403 Income Statements [by operating company group] (forecasts for fiscal year ending March 31, 2018) S COMSYS.HD Forecasts for the full year Nippon COMSYS-G SANCOM-G TOSYS-G (Unit: ¥100 million) TSUKEN-G Mar. 2017 Mar. 2018 Percentage Mar. 2017 Results Targets difference Results Mar. 2018 Percentage Mar. 2017 Targets difference Results Mar. 2018 Percentage Mar. 2017 Targets difference Results Mar. 2018 Percentage Targets difference Orders Received 2,520 2,370 -6.0% 454 510 12.3% 278 278 -0.2% 486 485 -0.3% Net Sales 2,203 2,316 5.1% 437 479 9.4% 268 290 8.0% 467 485 3.8% Gross Profits 315 328 4.0% 42 43 2.1% 27 28 3.4% 54 54 57 57 5.2% (Gross Profit Margin) (14.3%) (14.2%) (9.6%) (9.0%) (10.1%) (9.7%) (11.6%) (11.8%) Selling, General and Administrative Expenses Operating Income 132 126 -4.8% 23 24 1.0% 14 15 1.6% 27 30 7.7% 183 202 10.3% 18 19 3.6% 12 13 5.6% 26 27 2.6% (Operating Margin) (8.3%) (8.7%) (4.2%) (4.0%) (4.6%) (4.5%) (5.6%) (5.6%) Note: Figures are rounded down to the nearest whole unit. Profit margin, and percentages of increase and decrease are calculated using a base unit of yen. Figures are rounded to the nearest first decimal place. 54#5504 Orders Received, Net Sales, and Contract Backlogs by Business Area S COMSYS.HD Orders Received FY March 2016 FY March 2017 FY March 2018 (Unit: ¥100 million) 2nd Quarter Full Year Results Results 2nd Quarter Results Business Area (a) (b) (c) YOY Percentage difference |((c) - (a) (a) Full Year Targets Full Year Results YOY Percentage difference vs. Forecast Percentage difference 2nd Quarter Targets (d) (e) ((e)(b))/(b) ((e) - (d))/(d) (f) ΥΟΥ Percentage difference ((f)-(c))/(c) Full Year Targets YOY Percentage difference ((g)-(e))/(e) NTT Engineering 924 1,884 1,003 8.5% 1,765 2,035 8.0% 15.3% 860 -14.3% 1,800 -11.6% NCC Engineering 128 269 122 -4.4% 255 284 5.8% 11.6% 130 IT Solutions 243 522 263 8.1% 575 553 6.0% -3.8% 290 Social System-Related and Other 329 644 396 20.2% 905 828 28.6% -8.4% 5.9% 10.2% 370 -6.7% 310 8.9% 620 12.1% 870 5.0% Total 1,626 3,319 1,786 9.8% 3,500 3,701 11.5% 5.8% 1,650 -7.6% 3,600 -2.8% Net Sales FY March 2016 FY March 2017 2nd Quarter Full Year 2nd Quarter Results Results Results Business Area (a) (b) (c) YOY Percentage difference ((c)-(a)(a) Full Year Targets Full Year Results YOY Percentage difference vs. Forecast Percentage difference 2nd Quarter Targets FY March 2018 YOY Percentage difference Full Year Targets YOY Percentage difference (d) (e) ((e)(b))/(b) ((e) - (d))/(d) (f) ((f)-(c))/(c) (g) ((g)-(e))/(e) NTT Engineering 713 1,825 737 3.4% 1,825 1,845 1.1% 1.1% 770 4.4% 1,845 -0.0% NCC Engineering 121 271 99 -18.4% 270 274 0.8% 1.5% 120 20.7% 295 7.6% IT Solutions 218 507 210 -3.4% 540 550 8.5% 2.0% 240 13.8% 600 8.9% Social System-Related and Other 233 600 273 17.4% 765 671 11.7% -12.2% 270 -1.5% 760 13.2% Total 1,287 3,206 1,322 2.7% 3,400 3,341 4.2% -1.7% 1,400 5.9% 3,500 4.7% Contract Backlogs FY March 2016 FY March 2017 2nd Quarter Full Year 2nd Quarter Results Results Results YOY Percentage difference YoY Full Year Results Percentage difference Business Area (a) (b) (c) ((c) - (a)(a) ((e) - (b))/(b) NTT Engineering 711 558 824 15.9% 749 34.1% NCC Engineering 48 39 62 28.6% 50 26.9% IT Solutions 144 133 186 28.7% 136 1.8% Social System-Related and Other 415 362 403 -2.9% 437 20.8% Total 1,321 1,094 1,477 11.8% 1,373 25.4% 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. 55#5605 Orders Received and Net Sales by Detailed Business Area for Five Companies on a Non-Consolidated Simple Sum Basis S COMSYS.HD (Unit: ¥100 million) Orders Received FY March 2016 FY March 2017 FY March 2018 2nd Quarter Full Year Results Results 2nd Quarter Results Business Area (a) (c) YOY Percentage difference ((c) - (a))/(a) Full Year Targets Full Year Results (d) (e) YOY Percentage difference ((e) - (b))/(b) vs. Forecast Percentage difference 2nd Quarter Targets YOY Percentage difference Full Year Targets YOY Percentage difference ((e) - (d))/(d) (f) ((f)-(c))/(c) (g) ((g) -(e))/(e) Access 489 973 538 10.0% 945 1,061 9.0% 12.3% 480 -10.9% 990 -6.7% NTT Engineering Network 114 245 95 -16.9% 200 240 -2.0% 20.4% 85 -10.8% 205 -14.9% Mobile 316 650 356 12.8% 600 716 10.2% 19.5% 285 -20.1% 585 -18.4% Subtotal 920 1,870 990 7.6% 1,745 2,019 8.0% 15.7% 850 -14.2% 1,780 -11.9% NCC Engineering 127 267 123 -3.5% 255 285 6.6% 12.0% 130 5.6% 310 8.5% IT Solutions 189 413 203 7.7% 450 434 5.0% -3.4% 225 10.5% 485 11.6% Social System-Related and Other 195 392 177 -9.4% 490 431 9.8% -12.0% 190 7.3% 475 10.2% Total 1,432 2,944 1,494 4.3% 2,940 3,170 7.7% 7.9% 1,395 -6.6% 3,050 -3.8% Net Sales FY March 2016 FY March 2017 FY March 2018 2nd Quarter Results Full Year Results 2nd Quarter Results Business Area (a) (b) (c) ΥΟΥ Percentage difference ((c) - (a))/(a) Full Year Targets Full Year Results YOY Percentage difference vs. Forecast Percentage difference 2nd Quarter Targets YOY Percentage difference Full Year Targets YOY Percentage difference (e) ((e) - (b))/(b) ((e) - (d))/(d) (f) ((f)-(c))/(c) (g) ((g) -(e))/(e) Access 377 963 405 7.5% 980 1,021 6.0% 4.2% 415 2.3% 1,030 0.8% NTT Engineering Network 83 228 79 -4.0% 220 229 0.6% 4.4% 85 6.4% 200 -12.9% Mobile 247 620 243 -1.7% 590 572 -7.7% -3.0% 260 6.9% 580 1.3% Subtotal 707 1,812 728 3.0% 1,790 1,823 0.6% 1.9% 760 4.3% 1,810 -0.7% NCC Engineering 121 270 99 99 -18.0% 270 274 1.6% 1.8% 120 20.5% 295 7.3% IT Solutions 164 391 160 -2.8% 415 435 11.3% 5.0% 175 9.3% 485 11.3% Social System-Related and Other 94 319 Total 1,089 2,794 126 1,115 33.3% 385 359 12.4% -6.7% 115 -9.0% 410 14.1% 2.4% 2,860 2,893 3.6% 1.2% 1,170 4.9% 3,000 3.7% 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. 56#5706 Capital Expenditure, Depreciation and Amortization S COMSYS.HD (Unit: ¥100 million) March 2016 March 2017 March 2018 Comparisons with the previous term Comparisons with FY March 2017 Results Results Percentage Targets Percentage Difference Difference difference difference Tangible Assets 49 84 35 71.3% 61 -23 -37.9% Capital Expenditure Intangible Assets 12 11 -1 -8.6% 9 -1 -17.3% Total 62 96 34 55.2% 71 -24 -35.0% Depreciation and Amortization 50 57 7 14.3% 49 -7 -16.2% 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. 57#5807 Consolidated Balance Sheets (Condensed) ASSETS +183 (Unit: ¥100 million) 2,843 S COMSYS.HD LIABILITIES AND NET ASSETS (Unit: ¥100 million) +183 2,843 2,660 2,660 (+100) (+116) Accounts receivable-trade +117 Current Liabilities 612 • Accounts payable-trade Advances received on construction in progress +63 712 +5 •Income taxes payable -12 • Other current liabilities +43 Current Assets 1,555 • Accumulated cost 1,671 of construction in progress +43 Cash and cash equivalents -79 Long-Term Liabilities 82 (+18) 101 ⚫ Other current assets +34 (+66) Fixed Assets 1,105 • Property, plant and equipment, including buildings +140 1,172 Long-term loans receivable -69 • Goodwill -22 • Other assets +18 As of March 31, 2016 (+64) • Net Income attributable to owners of parent +144 Net Assets 1,965 •Treasury stock, at cost -80 • Cash dividends -44 2,029 • Other +43 *Equity ratio From 73.4% to 70.9% As of March 31, 2017 As of March 31, 2016 As of March 31, 2017 58#5908 Consolidated Cash Flow (Condensed) Cash Flows from Operating Activities +125 • Income before income taxes Cash Flows from Investing Activities -99 288 Cash and Cash Equivalents at End of Year As of March 31, 2016 Acquisitions of property and equipment -88 and other adjustments to net income +228 • Acquisitions of intangible fixed assets • Other -11 +0 ⚫Depreciation and amortization +57 • Amortization of goodwill +30 •Cash and cash equivalents paid for income taxes -83 Cash Flows from Financing Activities • Increase in receivables-trade -76 -121 • Increase in inventories • Other -42 +13 • Acquisitions of treasury stock -80 • Cash dividends paid -44 • Newly consolidated subsidiaries +16 • Other +2 -79 S COMSYS.HD (Unit: ¥100 million) 208 Cash and Cash Equivalents at End of Year As of March 31, 2017 59#60COMSYS Group Management Philosophy S COMSYS-Grp 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. We formulated our management philosophy based on the three central themes of "customers,” “the community” and “employees and shareholders." • For the first theme, our message to customers is: "Construction of Diverse Infrastructure That Carries Our Era Forward." Our business is not only electrical and telecommunications facilities, but it is also expanding into diverse sectors that support social and economic activity from its foundation. • In the second theme, "Building Social Infrastructure That Supports Affluent Lifestyles," we express the Group's mission to contribute to the country and local communities. • In the third theme, "Unrelenting Reform and Further Increasing Corporate Value," we mainly had in mind our employees in expressing a clear commitment to everyone outside the Company to continue with our structural reform initiatives to overcome the competitive environment by raising productivity and strengthening cost competitiveness.#61Cautionary 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. For further information, please contact: COMSYS Holdings Corporation IR Department Telephone: +81-3-3448-7000 (direct) Facsimile: +81-3-3448-7001 E-Mail: [email protected] URL: http://www.comsys-hd.co.jp/