January 2005

- CONTENTS -1. FY2004 1H Results (2004.4.1〜2004.9.30)

3

2. FY2004 Forecast Based on 1H Results

4

3. COMSYS Group5

4. Purposes of Management Integration

6(Reference) Missions of 3 Companies

7

5. Core Competence of COMSYS Group8

6. Results and Plans of COMSYS HD

9

7. Business Summary

108. Management Policy (1)11Management Policy (2)129. Management Strategy (Business Direction)

13(Reference-1)
Focus on Sectors with Higher Added Value

14(Reference-2)
Missions in Core Business15

10. Management Improvement Effects and Expensesfor Business Expansion(Reference) Alliance History1617

11. Market Analysis and COMSYS Group Strategy(1) NTT･DoCoMo Market

18(2) Non-NTT Market

19(3) IT Solution Market (Details of Non-NTT Market)

20(Reference) Number of Qualified Vedors by Major Makers

21

Appendix:22

1. Corporate Profile23

2. Profile of President

24

3. Corporate History25

4. Shareholder Composition (Top 5 Major Shareholders)26

2

1. FY2004 1H Results（2004.4.1〜9.30）
Summary (Improved Sales & Profits)
FY2004 1H Results（2004.4.1〜2004.9.30）
Consolidated

Simple Accumulationof 3 Companies(Billion yen)

FY2003 1H Results（2003.4.1〜2003.9.30）
Simple Accumulationof 3 Companies

yoy change

New Orders
Received

134.3

137.1

133.8

+3.3 [2.5%]

Net Sales

111.7

112.7

103.8

+8.9 [8.6%]

Operating Income(%)

3.1 (2.8%)

3.1 (2.8%)

0.1 (0.1%)+3.0 [24x]

Recurring Profits(%)

4.2 (3.8%)

4.2 (3.8%)

0.3 (0.4%)+3.9 [11x]Net Income (%)

1.4 (1.3%)

1.4 (1.3%)-0.1 (-0.1%)+1.5 [ NM]◎◎ NetNet Sales
Sales
・NTT・NTT andand DoCoMo
DoCoMo BusinessBusiness werewere largely
largely improved
improved due
due toto strengthened
strengthened marketing
marketing efforts
efforts
・Non-NTT・Non-NTT BusinessBusiness waswas improved
improved especially
especially owing
owing toto marketing
marketing efforts
efforts inin New
New Common
Common Carrier
Carrier businessbusiness◎◎ Profits
Profits
・Increased
・Increased along
along withwith net
net sales
sales volume
volume・Improved
・Improved net
net profits
profits inin projects
projects byby consolidated
consolidated companies
companies avoiding
avoiding taking
taking non-profitablenon-profitable ordersorders
・Cost-down
・Cost-down inin materials,materials, outsourcing
outsourcing expenses,expenses, salaries,salaries, andand other
other expenses
expenses3

2. FY2004 Forecast Based on 1H Results(Billion yen）
1H Results (Note)

FY2004 Forecast(2004.4.1〜2004.9.30)(2004.4.1〜2005.３.31)

1H
FY 2004

YoY
ChangeChange from
Initial PlanFY 2004
Forecast

YoY
ChangeChange from
Initial Plan

45.2

+2.8+1.9

102.0

+7.0

+8.0

DoCoMoBusiness

25.7+4.0

+0.9

62.0

+5.0+10.0

Non-NTT
Business

41.6+2.0-0.1

120.0-4.2-14.0

Total

112.7+8.9+2.7

284.0+7.8+4.0

Operating Income(2.8%)
3.1

[24x]
+3.0

[2.4x]+1.8(4.2%)
12.0[22.4%]＋2.2[9.1%]+1.0

Recurring Profits(3.8%)
4.2

[11x]
+3.9

[2.0x]+2.1(4.9%)
14.0[34.6%]+3.6[16.7%]+2.0

Net Income(1.3%)
1.4[-]+1.5[1.5x]+0.5(2.4%)
6.8[74.4%]+2.9[1.5%]+0.1

Net Sales

NTT Business(Note) The comparison of net sales is on the basis of the simple accumulation of 3 companies.

43. COMSYS Group (31 Companies)
COMSYS Holdings Corporation[As of 30 Sep. 2004]

http://www.comsys-hd.co.jp/TOSYS Corporation
SANWA ELEC Co., Ltd.
Address:
6-17, Aobadai 3-chome
Meguro-ku, Tokyo 153-0042, Japan
Commencement of Business:
1 August1947
Establishment: 12 September 1947
Paid-in Capital: ¥ 3,624.71 million
Number of Employees：
Consolidated 1,383
Non-consolidated 729
URL: http://www.sanwa-elec.co.jp

Consolidated Subsidiaries:
7 Companies

Nippon COMSYS Corporation
Address:
17-1, Higashigotanda 2-chome
Shinagawa-ku, Tokyo 141-8647,
Japan
Establishment： 20 December 1951
Number of Employees：
Consolidated 4,658
Non-consolidated 3,346
URL: http://www.comsys.co.jp/

Consolidated Subsidiaries:
12 Companies

5Address:1108-5, Higashiyama Aza, Watauchi,Wakaho, Nagano 381-0193, Japan
Establishment: 23 January 1960
Paid-in Capital: ¥ 360.25 million
Number of Employees：
Consolidated 1,048
Non-consolidated 368
URL:
http://www.tosys.co.jp/index.html

Consolidated Subsidiaries:
8 Companies

4. Purposes of Management Integration(1)(1)WhyWhymanagement
managementintegration?
integration?
①①Not
Notefficientefficientfor
forthethesamesametype
typeofofcompanies
companiestotocompetecompeteinin
thethesame
samemarket
marketwith
withthethesamesamemethod,
method,while
whilethethemarket
marketitselfisshrinking
itself is shrinking②Limit② Limitofofbusinessbusinessexpansion
expansionby
byone
onecompany’s
company’sresources
resources(2)(2)WhyWhywith
withSANWASANWAand
andTOSYS?
TOSYS?
①①SANWA’s
SANWA’sstrengths
strengthsinintelecommunications
telecommunicationsfacilities
facilitiesandandNEC
relatedbusinesses
NEC related businesses②TOSYS’s② TOSYS’sstrength
strengthas
asaalocal
localcompany
companyininthetheregion
region(3)(3)WhyWhypurepureholding
holdingcompany?
company?
①①Speedy
Speedymanagement
managementintegration
integration②
Speedybusinessexpansion② Speedy business expansion(Succession(Successionofofbusinessbusinessrights)
rights)③
Speedyself-reform(Self-management
ispossible)③ Speedy self-reform (Self-management is possible)④④Speedy
Speedyselection
selectionand
andconcentration
concentrationofofmanagement
managementresources
resources⑤
Speedyreformofcorporate
culture⑤ Speedy reform of corporate culture(Mixture(Mixtureofofdifferent
differentcorporatecorporatecultures)cultures)

6

(Reference) Missions of 3 Companies
Division of Responsibilities among 3 Companies(Selectivity and Concentration)② Responding to IP networks③ Expanding NTT and DoCoMo business andimproving profit margins① Expanding telecommunications facilities business② Expanding private sector businesses such as
New Common Carrier (NCC) / NEC business③ Strengthening of Financials① Establishing locally-tailored business model for solutions
sector
② Establishing rationalised business operation model fornetwork accesses③ Further improvement of financials and profit margins

7Commitment to COMSYS Holdings Corporation① Expanding solutions business5. Core Competence of COMSYS Group(1) Experience and trust in the construction of network infrastructure(2) Experience in the development of information system software(3) Experience in the construction and the operation of highlysophisticated in-house information systems(4) Offers of IT solutions by highly value-added and various engineergroups(One-stop solution provider of from consulting, design, development,construction, and to maintenance)(5) Offers of maintenance services in all over Japan(Monitoring, operation, call centres, on-site maintenance)

86. Results and Plans of COMSYS HD
1st FY(6 Months)
2003.9〜

2nd FY
2004.4〜

3rd FY
2005.4〜(1) Expansion of Business Volume(vs Nippon COMSYS Corp.）

23.4

66.0

74.0

(2) Reduction of Construction Expenses(including Reduction of Staffs)

0.2

4.4

7.4

0.01

0.3

1.0

-0.05

0.25

0.01

0.05

0.15

(Billion yen)

(3) Reduction of Indirect Costsa) Establishment of COMSYS Shared Services Co.
b) Integration of In-house Systems
・Integration of the Basic Systems
・Introduction of COMFORCE System(Support Systems for Construction Businesses)c) Unification and Reorganisation of Operating Offices andConstruction Offices(4) Reorganisation of Subsidiariesa) Reorganisation of Construction Subsidiaries (Clarify
the mission of each subsidiary)(5) Reduction of Interest Expenses with the Introduction ofGroup Financing

9*Numbers are accumulated basis

7. Business Summary
Ⅰ. NTT Information
Telecommunication
Engeneering Business

Ⅱ. Electrical Communications
Engineering Business

NTT Construction
DoCoMo Construction

Communications Facilities Construction
Electrical Facilities Construction
C・C・BOX※1Construction etc.

Ⅲ. IT Solution Business

Ⅳ. Social System Related
Business etc.

Software Development
Solution Business etc.
Information Related Businesses

Building Construction
Ecology Related Construction
Overseas Business
Earthwork (excl. C・C・BOX※1Construction）
LeasingOthers※110

C･C･BOX：Construction to bury cables
Community･Communication･CompactCableBOX8-1．Management Policy (1)(1)(1) Aiming
Aiming forfor thethe top
top brandbrand ofof
oneone- stop
stop solution
solution provider
provider(2)(2) Becoming
Becoming aa company
company with
with continuous
continuous
growth
growth inin sales
sales andand profits
profits as
as aa group
group

11

8-2. Management Policy (2)① Reallocation ofManagement Resources

Management Vision⑤ Demonstration ofStrong Leadership byManagement

Ⅰ. Top Brand②Group Unification(Fusion)

Ⅱ. Continuous Growthin Sales and Profits④Creation of
Enthusiastic Corporate
Culture with Job
Satisfaction③Strict Observanceof Compliance129. Management Strategy (Business Direction)
Comprehensive
ComprehensiveEngineering
EngineeringService
ServiceCompany
Company
MobileMobileConsulting
DesignConstruction

・ Establishment as a Onestop Solution Provider
・ Creation of COMSYS Brand

Network
Network
AccessAccessBasic
Basic

Software Development

NINI
Network Integration
SISI
System Integration

ElectricalElectricalFacilities
Facilities
Testing
Maintenance

EcoEcoNMC
NMC
Operation・Maintenance・Monitoring

BuildingBuilding
Construction
ConstructionBusinessBusiness

Solution
SolutionBusinessBusiness
SocialSocialSystem
SystemRelated
RelatedBusinessBusiness13

(Reference-1) Focus on Sectors with Higher Added ValueHigh

Smiling Curve

Added Value

Sectors warranting
greater attention/expansion

Sectors warranting
greater attention/expansion

Current COMSYSGroup Status

Low
Consulting

DesignDevelopment

Construction

Upstream process
14

Testing

Facilities Mgmt.
Monitoring
Maintenance/Operation

(Reference-2) Missions in Core Business
Construction Business・Maintain No.1 status in infrastructure
constructions
・Expand NTT and DoCoMo’s Business
Areas and Improve the market share in
NCC business・Impove profitability with stronger on-site
operationSolution BusinessSocial System Related Business・Aim to become the top brand as a onestop solution provider

・Actively participate in new businesses
effectively utilising information systemtechnologies

・Develop COMSYS brand and businessmodels(IP Telephone, Security Business etc.）

・Creation of ecology /welfare related
business models

・Expand business with M&A / Alliances

・Secure the profits with stable and loglasting businesses

1510. Management Improvement Effects and Expenses
for Business Expansion
M anagement Improvement Effects: ¥ 10 Billion(Billion yen)

4.0Increase in Profits alongwith Sales Volume

Expenses for Business Expansion: ¥ 9 billion
2.0

IT-Related CapEx
Investment in IT-Related Personel

2.5
Reduction of General Expenses

Investment in Product Development

3.0

2.0

Reduction of Outsoursing Expenses

0.5

2.0

Reduction ofMaterial Costs

TechnologyResearch/Development

2.5

2.0
19

Reduction of Staff

2.5
Up by 5 billion yen
14

Investment in New
Businesses

Recurring
Profits

Recurring
Profits

FY2004（ 2004.4〜 2005.3）

FY2007（ 2007.4〜 2008.3）

16（Reference） Alliance History
Date
15/11/1999

21/4/2003

Alliances in the pastBusiness Alliance with Nippon Denwa Shisetsu Co., Ltd.
 Wide-ranged business alliance including operations/ construction
systems etc. with a communications construction company basedin the area of NTT West

Joint Business Operation with CRC Solutions Corp.
 Jointly providing a series of services in relation to the introductionof IP telephone systems and the maintenance and operating
business

1/10/2003

Business Alliance with Nissho Electronics Corp. and NisshoTechno System Corp.
 Realised one-stop services in IP Solutions Business fromconsulting to supports

1/2005Development / Sales Alliance with ULI Expand our IP telephone business by the development and sales
alliance with a vendor company of IP telephone systems

1711-1. Market Analysis and COMSYS Group Strategy(1) NTT･DoCoMo Market
FY2004 (Forecast)(¥Billion) (2004.4〜2005.3）
2,000
1,813
1,600

ＮＴＴ958400● Expansion of business areas
along with new trends
New Orders
Received
163

0

1,600

Cap. Ex.
DoCoMoDoCoMo
855

800

2,000

1,760

Business Strategy

Cap. Ex.
1,200

Cap.Ex.=Small Decrease

FY2007(COMSYS Estimates)(2007.4〜2008.3）(¥Billion)

9.0%● Taking high value-addedbusinesses①Interior ②Maintenance③Facilities Management

1,200800

ＮＴＴ400New Orders
Received
16009.1%

COMSYS’s Response Stance towards Management Strategy of NTT Group
★
★
★
★
★
★

Establishment of the design/construction systems supporting the installment of 30 million optical fiber lines
Response to the demand of higher efficiency in cap. ex. by strengthening on-site operations
Acceleration of fostering IP engineers to participate the establishment of the next generation network
Contribution to the reduction of operation costs using the network construction technologies and expansion of business areas
Development of new construction methods for the quick recovery from large disasters
Acquiring new orders with incentives by strengthening VE (Value Engineering) proposals and improving efficiencyof constructions★ Participation to Net Work (NW) Facilities, PHS base stations, maintenance business of mobile base stations18

11-2. Market Analysis and COMSYS Group Strategy(2) Non-NTT Market

FY2004 (Forecast)(¥ Billion)

Market Size=Expanding(2004.4〜2005.3)（2007.4〜2008.3）

4,200

4,200

● Providing one-stop solution
from consulting, design/development (testing) andconstruction / maintenance

3,000
3,000

MarketSize● Providing monitoring
operation, on-site
Maintenance all over Japan

1,800
1,200600

New Orders
Received11803,700

Business Strategy

3,600

2,400

FY2007(¥ Billion) (COMSYS Estimates)

3.9%● Development of COMSYS’Brand① IP Telephone <COMSIP>② Security Business③ Interior Construction
Services

193,600
3,000

MarketSize

2,400
1,800
1,200

New Orders
Received

600

160
04.3%

11-3. Market Analysis and COMSYS Group Strategy(3) IT Solution Market (Details of Non-NTT Market)
FY2007 (COMSYS Estimates)

FY2004 (Forecast)(¥Billion) (2007.4〜2008.3)
1,600
Market Size(¥Billion) (2004.4〜2005.3)

1,400

1,600

Maintenance
80

1,200

Market Size
880
60

New Orders
Received

Maintenance5080029404380SI

Maintenance

20SI13Huge Increase(¥Billion)

NI 12400

80

1,200SINI450

New Orders
Received

80520

64

Maintenance
60

1040

SI 24800

204000New Orders
Received31(¥Billion)

NI 800NI 30

New Orders 0
Received
64

3.5％004.6％

Strategy(1) Providing one-stop solution from consulting, design, development (testing), construction, and maintenance(Net Sales from Solutions vs Total Net Sales: 20% (Under the plan for the end of FY2007))(2) Providing monitoring operation service for 365 days/24 hrs and on-site maintenance service all over Japan(3) Developing COMSYS brand (IP Telephone <COMSIP>, Security, Interior Services etc)
(4) Promoting direct marketing efforts for SME and marketing alliance with NTT Corporate Marketing Dept. forlarge corporates(5) Active alliance with vendors etc.

20

(Reference) Number of Engineers with Major
Vendor Qualifications(Unit: Person)

CiscoMicrosoftOracleLinux

Maker /Certification

CCIE ※1

PLATINUMMCSE ※2

Period

FY2004 (Forecast)

1,048(2004.4〜2005.3)

FY2007 (Plan)（2007.4〜2008.3）

※1

※2788
10

1,600

10410

1,0007010929160
20RHCE ※4GOLD ※3536050CCIE“Cisco Certified Internetwork Expert” is the top qualification for the engineer recognition by Cisco, a maker for network
appliances, such as routers.
MCSE“Microsoft Certified Systems Engineer” is the top qualification for the engineer qualification system by Microsoft.

※3

PLATINUM GOLD
The top qualification for the vendor quality recognition series by Oracle Japan.
This qualification is also recognised as the global qualification by Oracle, “Oracle Certified Professional (OCP)”

※4

RHCE
“Red Hat Certified Engineer“ is the qualification for Linux engineers authorised by Red Hat, a global distributor of Linux.

2130

Appendix:
Corporate Summary22

1. Corporate Profile∥ Establishment:

29.9.2003 (Establishment of Nippon COMSYS Corp.: Dec. 1951)∥ Paid-in Capital:

10 billion yen∥ Representative:

Hirofumi Shimada, President∥ No. of Employees:∥ Net Sales:

7,101 (As of 30.9.2004)
276.2 billion yen (FY2003 (2003.4〜2004.3) Simple accumulationof 3 companies)
111.7 billion yen (FY2004 (2004.4〜2004.9) 1H Actual）∥ Recurring Profits:

10.4 billion yen (FY2003 (2003.4〜2004.3) Simple accumulationof 3 companies)
4.2 billion yen (FY2004 (2004.4〜2004.9) 1H Actual）∥ Major Businesses:○ NTT Information Telecommunication Engineering Business○ Electrical Communication Engineering Business○ IT Solution Business○ Social System Related Business23

2. Profile of President

President
Hirofumi Shimada
1967

Completed Master’s Course for Electrical Engineering, Graduate School ofTechnology, Keio University

1994

Joined Nippon Telegraph and Telephone Public Corporation (Former NTT)

1999

Assumed the position of Director, Head of Shin-Etsu Branch Office
Supported Nagano Winter Olympic Game, (“High-tech” Olympic Game) on
information communication technologies and lead it to a success

2002

Appointed as President of NI and C Co., Ltd. (a NTT-IBM joint venture SIcompany)
Experienced the corporate culture of IB and studied thoroughly on e-business2003

Appointed as Executive Vice President of Nippon COMSYS Corp.
Appointed as President of Nippon COMSYS Corp.
Concurrently assumed the position of President, COMSYS Holdings Corp.
24

3. Corporate History
Nippon COMSYS Corp. was established as a private construction company with the demand to promote the rebuilding of
telecommunication facilities far left behind after the WWII. Since it was one of the largest public project to rebuild the lifeline
telecommunication base of Japan, leaders in Japanese economic society and major corporates at the time gathered to found ourcompany as The Nippon Telecommunications Construction Co., Ltd. in 1951.

≫12.1951

Founded as The Nippon Telecommunications Construction Co., Ltd.

≫

8.1952

Certified as the first top comprehensive contractor by Nippon Telegraph andTelephone Public Corporation (Former NTT)

≫7.1962

Listed on the Tokyo Stock Exchange, Second Section≫11.1972

Listed on the First Section of the Tokyo and Osaka Stock Exchanges≫

7.1990Changed our name from The Nippon Telecommunications Construction Co., Ltd. toNippon COMSYS Corporation≫

2.1991

Certified as comprehensive contractor for telecommunications construction projectsby NTT≫

3.1994Paid-in capital exceeded ¥10 billion≫

3.1997

Orders received and net sales exceeded ¥200 billion≫

8.1999Paid-in capital exceeded ¥30 billion≫

12.2001

50th Anniversary of the Company’s founding≫

3.2002

Selected as one of the 225 companies included in the Nikkei Stock Price Index≫

9.2003

Establishment of COMSYS Holdings (Ticker Code: 1721)

25

4. Shareholder Composition (Top 5 Major Shareholders)〇 Top 5 Shareholders <As of 30. 9. 2004>
Major Shareholders’ Name

Shares Held(thousandshares)

Percentage
of Total (%)

Japan Trustee Services Bank,Ltd. (Trust Account)

21,71014.87

The Master Trust Bank ofJapan, Ltd. (Trust Account)

14,374

9.84

Fujikura Ltd.

6,835

4.68

Sumitomo Electric Industries,
Ltd.

5,166

3.53

The Furukawa Electric Co., Ltd.

5,166

3.53

No. of Shareholders

10,660Percentage hekl by Foreign
Corporates and Individuals

18.43%

Composition of Shareholders(No. of Holders):

0.00%
(1)

14.95%(10,164)

18.43%(198)
20.04%(179)

44.96%
(89)

1.59%
(29)

Financial Institutions
Securities Companies
Other Corporates
Foreign Corporates and Individuals
Individuals and Others
Government and Munucipalities

26