Consolidated Financial and Business Results
FY09 (Ended March 2010)

Faith, Inc.
May 14, 2010111

Agenda1.
•••
2.

Consolidated Financial Results for the FY09(Ended March 2010)
Highlights of Consolidated Financial Results
Results of the Contents BusinessResults of the Electronic Money Business
Full-Year Forecast of Consolidated Financial Results for the FY10(Ending March 2011)

3. Business Strategies• Faith Group's Business Realignment• Creation of New Contents Distribution

222

Consolidated Financial Results for the FY09(Ended March 2010)333

Highlights of Consolidated Financial ResultsAchieved continuous growth in net sales due to the expansion of the Electronic Money business.
Operating profit and recurring profit decreased, and net loss posted extraordinary loss related to thereversal of foreign currency translation adjustment account caused by the exclusion of foreignsubsidiaries from consolidation.

Profit: billion yen

Net Sales: billion yen

660

550

440

330

220

110Net Sales

00EBITDA-10

OperatingProfit

FY05-1

FY06

FY07

FY08

FY09

Net Profit-2-20444

Results of the Contents Business during FY09
Net sales decreased due to the decline of ringtone business revenue and the business realignment.
Profits also decreased due to the upfront investments on the platform for the new contents distribution.

Net Sales: billion yen

Profit: billion yen

620
18516
144123108216Net Sales

4EBITDA

200
FY05

FY06

FY07

FY08

Operating
ProfitFY09555

Results of the Electronic Money Business during FY09
Net sales and profit achieved continuous high growth driven by the increase in the total
value of settlement mainly in the online game category.

Net Sales: million yen

Profit: million yen850550
500750450650

400550350450300
250350200250150
10015050-50-150

FY05

FY06

FY07

FY08

FY09

50Net Sales

0EBITDA-50-100

OperatingProfit666

Highlights of Business Development
during the FY09

777

Highlights of Business Development during FY09
●Launched “UTAMO”, a Karaoke application service for iPhone.

Content Distribution Business 1●Improved “KASIMO”, an automatic lyric display service for iTuneusers, by adding a new download function, and enabling users to enjoy
hundred thousand lyrics on iPhone® and iPod®
●Launched “COOK” Publisher, the application for iPhone / iPod touch tosupport digital book publishing and linkage to other communication tools
including “Twitter” and “Facebook”.
●Launched a film production of “Kokuhaku” after a big hit of “Paco andthe Magical Book” which Tetsuya Nakajima directed.
●Expanded the NFRM™ service for SoftBank mobile in addition to NTT
DOCOMO on the video distribution site provided by Asahi Broadcasting
Corporation.

888

BtoC service for iPhone
Karaoke application for iPhone■Recorded the top sales in the music category
at App Store■Selected one of the top seller application
during 2009 at iTunes

Automatic lyric display service foriTunes users■Reached 79,000 Download

999

BtoB service for iPhone
Series of application Development and support for “iPhone and iPod touch”
under the brand of “COOK”.

“COOK” Publisher
Support for magazine publisher to publish electronic books for “iPhone/iPodtouch”“COOK” Promotion
Promotional support for world-wide distribution of music and video

101010Film “Kokuhaku”
Launched a film production of a bestseller book "Kokuhaku," written by Kanae
Minato, with a consortium including Toho Co.,Ltd. and major entertainment
companies. This film is the latest work produced by Tetsuya Nakajima, the director,and Yuji Ishida, the producer and the vice president of Faith Wonderworks, Inc., thesame pair who had produced a big hit "Paco and the Magical Book" in 2008.

©”Kokuhaku” Film Partners
111111NFRMTM Service

Purchase on mobile

View on PC

View on mobile

View on TV

121212NFRMTM Service

Expanded the service for
SoftBank mobile

Launched service via NTT
Smartconnect Corporation＋131313

Highlights of Business Development during FY09

Content Distribution Business 2●Launched cooperative program with “Short Shorts Film Festival &Asia” to expand the distribution business of new contents created byintegration of music and short film.
●Cooperated with TBS to launch “MusicBirth+”, a TV program, created byintegration of TV, Internet and mobile.
●Improved “Pocket Karte”, a personal medical recording system, byadding search function of 160,000 medical institutions such as
hospitals, clinics and dentists.
●Started demonstration experiment of digital receipt service which helps
the paperwork for the medical expense deduction. The service adopted for"ICT International Competitiveness Enhancement Program ("Ubiquitousspecial zones" business)" of the Ministry of Internal Affairs andCommunications.
●Acquires shares in Columbia Music Entertainment and welcomes CME tothe Group to establish strategic partnership.
14

14
14

Creation of New Contents Distribution (SSFF)
Established a new award category, “Music Short Creative Award”,
at “Short Shorts Film Festival & Asia”
Tied-up with “Short Shorts Film Festival & Asia”, the film festival authorized byAcademy Award and established “Music Short Creative Award”. Launchedcompletely new program of creating video clips.

15

Creation of New Contents Distribution (SSFF)
Business Scheme

List of Musical Artists

青山伸也区 麗情Lee Sang Eun (イ・サンウン） 元気ロケッツ泉谷しげる
KONISHIKI
INORAN
SaitoneIWAO
坂上弘
ウスペラーズ
笹川美和
佑多田三斗
sun's market
wooderd chiarie
THE JETZEJOHNSON
ウミネコサウンズ
THE JIZZ MONKS
8bit Project
THE BACK HORN
大黒摩季
柴田淳
ORIGA
JaccaPopオトナモードJAM Project
カサリンチュSHUUBI
カラーボトルシュリスペイロフ
木内健
JYONGRISLY TRIBES
外間隆史
タカオカアツシ
竹内電気
種ともこ
千田真友美
着 ＭＯ
つしまみれ
つじあやの
トベタ・バジュン
2＋1(Two plus One)
ナオミール
Nerddelic Studio Works
西脇唯
野宮真貴
PAITITI

浜野絵美
バミューダ★バガボンド
Floor on the Intelligence
細川ひとみ
Hermin（ホ・ミン）
マルカート
山本浩司
LOVE PSYCHEDELICO
Lil’梁 邦彦
LAZYgunsBRISKY渡邊奈央
渡辺等

16

Creation of New Contents Distribution (MusicBirth+)
Launched a media integrated TV program, “MusicBirth+”“MusicBirth+”, a TV
program, created byintegration of TV, Internetand mobile
Nonconventional musicprogram realized by one-stop
service, including training andmanagement of artists,
distribution and promotion of
their music, and providing
direction for viewers to thewebsite.
171717Creation of New Contents Distribution (Pocket Karte)

Equipped with additional function to search approximately 160,000 ofhospitals, clinics and dental offices on “Pocket Karte”, an electronic
medical recording service.
●Enables users to search medical institutions at an outside location.
●Refine users' search by location, nearest transportation and department tovisit.
●One click transition to retrieval screen of medical institutions just after
confirmation of the own health information.

18

1818

Creation of New Contents Distribution (Digital Receipt)
Service transition

①

●●薬局

②

●●薬局

2010年10月10日14:58
風邪薬湿布

2010年10月10日14:58
風邪薬湿布

Medical institutions or drugstoresissue receipts

Read the receipt data on mobilephone and access the site

③④

○○病院
○○薬局
○○クリニック○○病院

Linkage with Pocket Karte enables users
to register records and information

Simplifies paperwork for themedical expense deduction

191919Creation of New Contents Distribution (Partnership with CME)

Acquires shares in Columbia Music Entertainment and welcomes
CME to the Group to establish strategic partnership

Evolve around music-related business…
●Contents business mainly of film or short film
●Online game business●Artist promotion utilizing mobile and internet

Create new business proceeding utilization of extensive music
resources in addition to artists branding and promotion.
202020Highlights of Business Development during FY09

Electronic Money Business●WebMoney launched interpersonal transaction
services of electronic money, “Petit-Kampa” and“Soku-Furi”.
●WebMoney started CM distribution widget,“manna”, in cooperation with AIDIA Inc.
●WebMoney held an event, “ONLINE GAME messe.
2009”, one of the largest live event of online games inJapan.

21

21
21

Launch of interpersonal WebMoney Transaction Services"Petit-Kampa" enables
individual users to donate inWebMoney to creators or social
action works.
<Suitable users>● Creators who distribute their own
music or CG design●Bloggers who post news and events●People who works on social activity
programs"Soku-Furi" provides function
for interpersonal WebMoneytransaction by embedding asettlement cashier on individual
website or blog.
<Suitable usage>●Payment on e-mail newsletters,
weblog, Podcast, or variety of pay
services and purchase on Internetauction

222222

Further Expansion of Online Game Market
Held “ONLINE GAME messe. 2009” as a place of communication forgame funs, creators and operating companies

232323

Enhancement of Users’ Environment
The Online Game market expands and settlement through mobile site
including “Mobage-Town” and “GREE” increased.

242424Full-Year Forecast of Consolidated
Financial Results for the FY10252525FY10 Financial Forecast for the Business Results
Fractional increase is expected in net sales due to the expansion of the Electronic Money
business covering the expected decrease in ringtone business. Profits are expected todecrease due to the fall in revenue from ringtone business and the cost for ongoinginvestments on the system construction, the production and the procurement of contents.
Net Sales: billion yen

Profit: billion yen

440

330

220

1

1000-2FY10(P-1lan)

50

FY09

5FY0860FY076FY06

70

FY057-10-20

Net Sales
EBITDA
OperatingProfit
Net Profit
262626

FY10 Consolidated Financial Forecasts by Segment(million yen)
FY09

FY10(Plan)Y
Net Sales
Content
Business
Electronic
Money
Others
EBITDA
Content
Business
Electronic
Money
OthersOperating Profit
Content
Business
Electronic
Money
OthersRecurring Profit
Net Sales

Year-on-year change Year-on-year change(amount)(%)

56,63465,000

8,366

14.8%

9,269

8,200

▲ 1,069-11.5%

46,23755,500

9,263

20.0%

1,128

1,300

172

15.2%

3,326

2,300

▲ 1,026-30.8%

2,485

1,480▲ 1,005-40.4%

805

800

▲5-0.6%5720▲ 37-64.9%

735

1,000

265

36.0%

11240

229

2081.8%

679

680

10.1%

45803577.8%

62785022335.4%▲1,755100

1,855-272727

Growth Strategy

28

2828

Faith Group Realignment
Post-realignment

Brave,Inc.

WebMoney
Corporation

Columbia MusicEntertainment Inc.

GoodyPoint, Inc.

Faith Wonderworks, Inc.
292929Market Environment<1> Evolution of hardware, network and contents

303030Market Environment<2> Advent of New Media

313131

Faith Group Companies

Users

Various contents

323232Creation of New Contents Distribution■New structure of video content distribution⇒Short Shorts Film Festival & Asia
■New structure of music content distribution⇒MusicBirth+■New Structure of music content distribution⇒Establishment of strategic partnership withColumbia Music Entertainment
333333

Multi-Platform and Multi-Content Strategies
Multi-Content

Multi-Platform

UserMusic

FilmPC

Mobile phone

GameSTBTV

DVD
Game

Information

Car navigation
systemPDA

Ticketing device

Meet the market needs instantly and deliver contents
through any network or devices to users

34

34
34

Appendix

353535

Consolidated Financial Results by Segment (year-on-year change)(million yen)363636

Consolidated Balance Sheet (year-on-year change)■ End of March2009■ End of March2010

Short-term loans 2 billion

Cash equivalent 13.5billion

Trade notes andaccounts payable
6.2 billion
Current liabilities
13.4 billion
Long-term loans 2 billion

Accounts and notes
receivable 6.9 billion
Current assets 22 billion
Tangible fixed assets
0.4 billion
Intangible fixed assets
5.6 billion

Fixed liabilities 2.5 billion

Capital stock
3.2 billion
Capital surplus
3.7 billion
Accumulated profit
7.3 billion

Investment securities 1.7billion

Fixed assets 8.4 billion

Net assets 14.4 billion

Total assets 30.5 billion yen

Short-term loans 2.4 billion

Totalliabilities
15.9 billion
includesLiabilitywithinterest
4.1 billion

Cash equivalent 9billion

Accounts and notes
receivable 6.3 billion

Trade notes andaccounts payable
7.1 billion
Current liabilities
15.1 billion
Long-term loans 1.5 billion
Fixed liabilities 1.8 billion

Tangible fixed assets 2.9billion
Intangible fixed assets 1.8billion

Capital stock
3.2 billion
Capital surplus
3.7 billion

Investment securities 7.4billion

Accumulated profit
5.4 billion

Current assets 17.2 billion

Fixed assets 12.7 billion

Totalliabilities
16.9 billion
includesLiabilitywithinterest
3.9 billion

Net assets 12.9 billion

Total assets 29.9 billion yen

373737

Amortization of Goodwill(million yen)

※Posted 1,420 million yen of Extraordinary loss from amortization of goodwill during FY09.

38

38
38

FY09 Consolidated Net Sales (year-on-year basis）(billion yen)

Approx. 53.9 billion

FY08

Content Business

Decrease in revenue from ringtone solution

Electronic Money
Business

Growth of settlement amount‐3.8 billion+6.7 billion

Others-0.2 billion

Approx. 56.6 billion

FY09051015202530

354045505560393939

FY09 Operating Profit (year-on-year basis)(million yen)

1,425

FY08

Decrease inrevenue fromringtone solution

Content BusinessElectronic Money
Business-979+290-3Others

Growth of settlement
amount driven bypartnership andenhancement of mobile
contents

735

FY09
0200

400

600

800

1,000

1,200

1,400

40

4040

FY09 Recurring Profit (year-on-year basis)(million yen)

994

FY08
De cre ase in ope rating profit‐690-26

De cre ase in inte re st re ce ive d
De cre ase in de vide nd re ce ive d-14

Re ve nue from anonymous association-30

De cre ase in inte re st paid

+31+72De cre ase in e xchange loss
De cre ase in inve stme nt loss on e quity me thod+264

O the rs

+17627

FY09

200

300

400

500

600

700

800

900 1,000

414141

FY09 Net Profit (year-on-year basis)(million yen)

FY08
Decrese in recurring prof it
G ain on sale of investments in securities
G ain on sale of subsidiaries
G ain on reversal of allowance f or doubtf ul accounts
Decrease in proceeds f rom equity movement
Decrease in reserve f or subsidiaries losses
Loss f rom disposal of f ixed assets
Increase in loss due to impairment
Decrease in loss on revaluation of investments in securities
Decrease in amortization of goodwill
Decrease in loss f rom disposal of business
Increase in impairmant loss on goodwill
Loss f rom of f ice relocation
Reversal of f oreign currency translation adjustment
Increase in income taxes
Decrease in income taxes-def erred
Loss of minority shareholders
OthersFY 09‐367+472-149+110+42‐48‐95‐77‐82+234+294‐340+222‐1,420-206‐509+274-171+61-1755-2100 -1800 -1500 -1200 -900-600-300

0300

600

424242

NoticeThis document and its supporting documents containprojections of our company’s future performance. Theseare estimates by the management of Faith based on
currently available information. There are potential risks
and uncertainties that may affect the results. Please beadvised that actual performance may differ significantly
from the forecast.

434343