Midterm Management Plan
2013.3 - 2015.3"Change as your No.1 IT Partner"
2012.6.15

Copyright 2012 NSD CO., LTD.

In pursuit of " Value Creation" only NSD is capable of achieving
While the environment that surrounds the IT industries is undergoing drastic changes such as the shift from the “On-Premise”
system to the “Services-Provision” system represented by cloud computing, inroads of foreign IT companies into the Japanesemarket, and the trend of IT industry restructuring, we currently see many new business opportunities lying ahead, as theimplementation of the National ID System has come in sight, the introduction of IT services is being accelerated to strengthen
competitiveness in the field where they were hardly put to practical use in the past, and the IT-related corporate investment islikely to increase in the wake of the recovery of domestic economy.
The year 2019, seven years from now, will mark the 50th anniversary of the inauguration of NSD. Toward that important
turning point, we have just started the Three-Year Midterm Management Plan from FY March 2013 as the initial year in order tomake NSD established more firmly among IT industries as the valued and selected IT Partner for the customers through solving
their issues and enhancing their enterprise value.
We will further expand and strengthen our Vertical Business Model (continuous provision of systems development services tolongstanding customers) that has been cultivated through many years of business, and endeavor to become one of the leading
players in each field including the financial industry to begin with. Also, considering various changes as business opportunities,
we will exert every effort to maximize our enterprise value by developing and marketing new businesses and services that arehighly unique, promoting global business expansion, and actively seeking M&A opportunities.
We reorganized our company structure this April. The divisional organization system has been underway so that each division
is assigned the responsibility and authority to manage business flexibly. Under this new organization system, officers andemployees as one will strive for achieving the target set forth in the Midterm Management Plan for which your corporation andsupport are highly appreciated. Thank you very much.
June 15, 2012

Yoshikazu Imajo
President & CEO
NSD CO., LTD.
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Management Environment１

In domestic market, Cloud, National ID System, etc. for new growth
opportunities

２

Accelerated shift from “On-premise” to “Services-Provision”

３

Inroads of foreign IT companies into the Japanese market

４

Industry Restructuring well under way

Reform of the Business Structure is essential

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Course of Action in Long-Term
Contribute to enhancing the Enterprise Value of customers
by providing high quality services

１

Become familiar with every aspect of financial operation and obtain
unwavering confidence from Japanese financial institutions in particular
In the field other than the financial industry, secure the position as one of

２ the leading players in each field ( industry or service )３

Make the presence felt not only in the Made-to-Order Contract Development
but in other services

Create multiple core businesses
with balanced earnings
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Target Indices１

In the final fiscal year, aim for the Net Sales to exceed those peaking in FY March 2008

２

Ratio of “other than Made-to-Order Contract Development” 20% (Non-Consolidated)

３

Operating Income Ratio 12%

４

ROE 8％
2008/3 Net Sales
Consolidated

2012/3

2013/3

2014/343,664 (¥million)

2015/334,41237,00040,000

44,000Operating Income

3,386

4,000

4,500

5,300

Ordinary Income

3,668

4,100

4,600

5,500

Net Income

1,867

2,100

2,700

3,200

Net Sales

2008/3 Net Sales 39,282
Non-Consolidated

2012/3

2013/3

2014/3

2015/330,15733,00036,00040,000Operating Income

2,922

3,700

4,200

5,000

Ordinary Income

3,535

4,100

4,500

5,300

Net Income

1,883

2,200

2,700

3,100

Net Sales

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Key Policy
Basic Strategy
１

Boost further competitiveness in Made-to-Order Contract Development

２

Aim at becoming a leader in a niche market of Services-Provision-oriented Solution
Application３Promote Global Business Expansion

４

Actively seek M&A opportunities

SpecificFinanceIndustry/Public/Telecom
ＩＴ Services
Software Package
New business development
Business Partners
Global Business Expansion
M＆A
Process Improvement

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StrategyEnter new areas of operation of existing customers
Obtain orders by improving sales systems, and enter new areas of operation and fields
Expand Non-Resident Services in addition to the continuous improvement of service quality
Step up the care of the assigned accounts and introduce new solution packages
Create new market by putting highly unique services into the market(strengthen R & D)
Subcontract Ratio:14％ ⇒ 25％ Aim at the level of FY March 2008
North America: Resumed activities in USA. Develop business in collaboration
with Japanese-affiliated companies in USA
Asia: Discover and cope with local needs in anticipation of establishing local subsidiaries
Seek synergy benefit and make the most of outside management resources
Aim at acquiring CMMI L3

Analysis of factors to achieve the Plan
Net Sales

Non-Consolidated( ¥100 million)
400
Factor2

Factor1

302
31271

30

OtherServices6968

Other Services *1

Made-toOrder
ContractDevelopment・ Strengthen relations with existing customers
and increase the number of new customers
through various measures such as establishing
new SI departments for sales drive.
・ Expand cooperative work with business
partners
Made-toOrder
Contract
Development

OtherServices

Finance22

Industrial

26

Public/Telecom

12

Facilities ManagementServices, Software
Products

8

2012/3・Expand the line of newsolution/products including
Services-Provision responsive ones・Make the best use ofoutside resources forcomplementary roles
・Double the total R&D
expenses compared tothose in preceding threeyears

Made-toOrder
ContractDevelopment331

2015/3*1 Facilities Management and Software Product*2 The CAGR for 2011 through 2016 is 3.2% according to the forecast of domestic software product market by IDC Japan.

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Our policy on returns to shareholders
Returns to our shareholders have been regarded as one of the top priorities among management issues. It is
our basic policy to maintain a steady payout as well as to pay returns flexibly to the shareholders byconsidering the performance and the trend of the share price as a whole.
１Maintain a steady payout aiming at the ratio of 30% and over
《 DOE target 3% as of FY March 2015 》

２Consider flexibly the buyback of own shares, taking the performance and the trend of the share priceinto account as a whole
Note* DOE

Dividend on Equity

Changes in Dividends & Payout Ratio, and Purchase of Own Shares（¥）（円）
100100（％）

Dividend per share(the column graph)（¥million）

一株当たり配当金

Payout Ratio (the upper-right scale)

80

配当性向

DOE (the lower-right scale)

DOE

Total Payout of Dividends
Purchase of Own Shares

5,000

Cancellation of Treasury Stockof 3million was executed onMay 26th , 2012.

200

Total Payout Ratio

60880804,000
15040
6206060（％）
0
440
4020
2000（％）

28
28

2008/3
2008/33030

2009/3
2009/3

1,453

1,979

1,500

100

2,000-20

28
28

2010/3
2010/32828

2011/3
2011/32525

2012/3
2012/3

Note: Dividend as for the term ended March 2009 includes ¥2 of 40th anniversary
dividend.

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2,000

3,000

2-40-60
050
1,000

1,364

1,403

1,264

1,232
0

1,045

00

2008/3

2009/3

2010/3

2011/3

2012/3

Note: Neither the total payout for the term ended March 2011 nor March 2012
includes dividend paid to ESOP Trust accounts.

Comparison with other IT Services Vendors（as of Recent Fiscal Year） 〔１〕
Net Sales and Operating Income Ratio
Company N2

Operating Income Ratio

12%NSD
10%

8%

Company I2

Average Operating IncomeRatio of 11 companies

Company N1

Company C

Company N4

Company S

6%Company D
Company N3

4%Company I1
Company F

2%01,000

2,000

3,000

Net Sales (¥100 million)
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4,000

12,00013,00014,000Comparison with other IT Services Vendors（as of Recent Fiscal Year） 〔２〕
ROE and Payout Ratio

100%

Company N3

Payout Ratio

80%

Company I1

ＮＳＤ60%

Company N4
Company F Company D

40%Company N1Company I2Company N2

20%

0%
0%

2%

4%

6%

8%

10%

12%

14%

ROE
DOE 2.5% level

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