Consolidated Financial and Business Results
FY07 (Ended March 2008)

Faith, Inc.
May 16, 200811

Agenda1. Consolidated Financial Results for FY07
z Highlights of Consolidated Financial Resultz Highlights of Business Development during FY07
z Results of Content Distribution Business during FY07
z Results of Electronic Money Business during FY07
z Consolidated Balance Sheet - Compared to the end of FY06
2. Growth Strategy of Faith Groupz Increasing Diversity of Networks/Viewing Environment/Content
z Multi-Platform and Multi-Content Strategies
NFRM Services - Viewing Rights Authentication Platform
GPass - User Authentication Platform
PocketQQ/PocketKarte - Medical and Health Information Distribution Platform
Electronic Settlement Platform
Expansion and Reinforcement of Partnership with Leading Companies& Businesses Expansion by Realizing the Group Synergy
Creation of New Models for Video/Music Distribution
Creation of New Markets with Multi-Platform and Multi-Content Strategy
3. Consolidated Financial Forecasts for FY08
zConsolidated Financial Forecasts for FY08
zFY08 Financial Forecasts by Segment
4. Notice
5. Appendix
22

Consolidated Financial Results for FY0733

Highlights of Consolidated Financial Results•Achieved continued high growth in Net sales with expansion of group companies especiallycontent distribution and Electronic Money business.
•Offsetting the decrease caused by the sellouts of overseas subsidiaries and other factors.
•All the profit indices sharply rose as a result of overseas business realignment and other factors.
Profit: billion yen
6

Net Sales: billion yen
60

5

50

4

40

30

3

Ne t Sale s
EBIT DA
Ope r at in g
Pr o fit
Ne t Pr o fit

2

20

1

10

0

0
FY 0 3

FY 0 4

FY 0 5

FY 0 6

FY 0 7

-1

-10

-2

-20

44

Highlights of Business Development during FY07 - 1

Content
Distribution
Business(Domestic)zAcquired all business rights of "Rose Online" in Japan.
zEstablished Faith.biz* aiming to develop a new market and to expand
business through establishing new distribution platforms.
zGIGA Networks* launched official i-mode mobile services by utilizing
Faith's NFRM** authentication technology.
zMedical Communication* launched "Pocket QQ Health Check
Service."zDesperado* started movie distribution to mobile phone and PC.
zBrave* expanded EC business with Faith.biz*, through acquisition of"Music Door" and tie-up with other leading companies.
z"NFRM** PC Viewer" was preinstalled on Sonｙ's VAIO, 2007 autumn
model.
zNFRM** made compatible with Sharp's PCTV “ Internet AQUOS."
zLaunched "KAZAS Channel," a NFRM portal site on "Osaifu Keitai***"mobile menu for i-mode.
zFaith.biz* developed a mobile high-definition video player and started
provision of the technology to GIGA Networks* and BIGLOBE for video
distribution*Please see p.37-40 for Outline of Faith Group.
**Please see p.15-16 for NFRM.
***

Osaifu Keitai: a mobile phone handset with a built-in contactless IC smart card55

Highlights of Business Development during FY07 - 2

Content
Distribution
Business(Domestic)zBrave* launched viBirth, a cyber label.
zMedical Communication* started provision of HR administration service,"Makasete Romu" targeting the retail industry.
zTied up with Credit Saison for the content distribution business.
zR&D project to apply NFRM** for TV and other devices cooperatingwith Intel, Quixun, and Dreamboat.
zNFRM** adoption is to expand to au and Softbank besides NTT
DoCoMo in partnership with FeliCa Networks due in summer 2008.
zHeld NFRM** demonstration of viewing "One Seg" digital TV related
content on mobile and PC cooperating with Nippon Television and NTT
Smartconnect.
GIGA Networks* launched a mobile site, "Hollywood GIGA Miranca."
Over 1,000 videos for both PC and mobile phone to be available.
Medical Communication* started an operational test of "Pocket
Karte," an electronic medical record management service available on
PC and mobile phone in partnership with DOKOKARU.NET and
WILLCOM.
"NFRM** PC Viewer" was preinstalled on 2007 spring models of major
PC manufacturers such as Sony, NEC, Toshiba, and Fujitsu.

*Please see p.37-40 for Outline of Faith Group.
**Please see p.15-16 for NFRM.

■ Businesses developed after Apr. 200866

Highlights of Business Development during FY07 - 3
Content
Distribution
Business(Overseas)

Electronic
Money
BusinesszRealignment of content distribution business in China by sellout of
AnyMusic.
zSelling TakeNET, a content distribution subsidiary in South America.
Decided to liquidate Faith Technologies, a distribution platform
developer and licensing subsidiary in France

zRenewal of "WebMoney Wallet" online charging function allowed users
to reload at over 1,300 locations of banking facilities besides mobile
phones.
zStarted provision of "WebMoney Wallet" executive use for "morawin"music distribution service.
zWebMoney* listed on JASDAQ Securities Exchange's new market NEO.
Launched Debit@, a debit service of WebMoney* in partnership with
Suruga Bank.
Sale of WebMoney at Seven-Eleven Japan started. Available on "Prepaid service" multi-photocopiers*Please see p.37-40 for Outline of Faith Group.
**Please see p.15-16 for NFRM.

■ Businesses developed after Apr. 200877

Results of Content Distribution Business during FY07
Net sales decreased due to the decline of overseas revenue caused by the businessrealignment, despite the steady growth in Japan.
Profit also decreased due to the prior investments in new businesses and the increase in costfor procurement of rich-content
Profit: billion yen

Net Sales: billion yen

20

6 .0

18

5 .5
5 .0

16

4 .5
14

4 .0

12

3 .5

10

3 .0

8

2 .5
2 .0

6

1 .5
4

1 .0

2

0 .5

0

0 .0
FY0 3

FY0 4

FY0 5

Ne t Sale s

EB ITDA

FY06

FY0 7

Ope ratin g Profit

88Results of Electronic Money Business during FY07
Net Sales: billion yen

Profit: million yen

45
40
35
30
25
20
15
10
5
0
-5

FY0 3

FY0 4

FY0 5

FY0 6

FY0 7

-10
Ne t Sale s

EBITDA

700
650
600
550
500
450
400
350
300
250
200
150
100
50
0
-50
-100
-150

Ope r at in g Pr o fit
99Consolidated Balance Sheet
Cash equivalent increased by ¥5.2 billion and interest bearing debt decreased by ¥4.5 billion.
As a result, net cash increased from △¥3.1 billion to ¥6.6 billion.
Capital-to-asset ratio improved by 2.9 percentage points from 38.6% to 41.5%.

End of March 2007

Cash equivalent¥8.2 billion

Accounts and notes
receivable¥6.9 billion
Current assets¥20 billion

End of March 2008
Short-term loans¥5.2 billion
Trade Notes andAccounts payable¥4.6 billion

Current liabilities¥15.4 billion

Long-term liabilities¥6.1 billion
Fixed liabilities ¥8 billion

Tangible fixed assets¥1 billion
Intangible fixed assets¥11.1 billion

Investment securities¥5.2 billion
Fixed assets ¥19.4 billion

Short-term loans¥2.5 billion

Total
liabilities¥23.5 billion
includesliability withinterest¥11.3 billion

Cash equivalent¥13.4 billion

Current liabilities¥13.9 billion
Accounts and notes
receivable¥6.8 billion

Capital stock¥3.2 billion

Current assets ¥22.6 billion

Capital surplus¥3.7 billion

Tangible fixed assets¥0.6 billion
Intangible fixed assets¥8.5 billion

Accumulated profit¥7.2 billion
Net assets ¥15.9 billion

Total assets 39.4 billion yen

Trade Notes andAccounts payable¥5.9 billion

Investment securities¥2.1 billion
Fixed assets ¥13.4 billion

Long-term liabilities¥4 billion

Total
liabilities¥19.6 billion
includesliability withinterest¥6.7 billion

Fixed liabilities ¥5.6 billion
Capital stock¥3.2 billion
Capital surplus¥3.7 billion

Accumulated profit¥7.6 billion

Net assets¥16.5 billion

Total assets 36.1 billion yen

1010Growth Strategy of Faith Group11
11

Increasing Diversity of Networks/Viewing Environment/Content - 1
Advent of the New Era of Rich-Content Distribution■Network Environment
2006

2007

■ Content Viewing Environment
2008

Ultrahigh-speed networks（～100Mbps）

・Wiredcommunication

communication

2011▲Full-scale services of ▲Launch of NGN▲NTT next generation networks
100M optical fiber communication
link with mobile services▲Prevalence of 1G▲Introduction of 1G▲Speeding up
optical fiber communication
optical fiber communication(Under 10 Mbps)(Under 100 Mbps)

・Improvement of processors
Improvement of video viewing environment

・Digital high-vision
Improvement of video viewing environment

・Internet TV
Integration of broadcasting and communication▲Launch of
3.5G mobile phones▲Launch of 3.9G
mobile phones

New wireless communications▲Launch of UWB▲Launch of fixed WiMax

・IP phone･IP
communication

2010

Optical fiber giga Byte Networks（～1Gbps）

Broadbandizationof mobile phones

・Wireless2009

Prevalence
stage of IP
phones(voice service)▲Launch of 4G
mobile phones

・FeliCa

Integration of new wireless technologies
and mobile phones
Interface mobile phones to PCs▲▲Launch of mobile WiMax Realization of wireless software

Full-scale IP phone services beyond telephone functions(Link with multi-media and various applications)▲Linked to consumer electronic devices▲Introduction of TV/PC
conferences on broadband▲Context-aware services

Network Environment x Content Viewing Environment= Complex and Diversified Environment

1212Increasing Diversity of Networks/Viewing Environment/Content - 2
Total volume of content distribution increasing year after year,
prominently of games novels, graphics, and texts.
8150

8027

6888

7598

FY07 Forecast
FY06 Estimate

7112

7828

FY05 Estimate

6948

7864

FY04 Estimate
FY03 Estimate
FY02 Estimate

5435

6134
4951

7628

4483

7394

3566

0

5000
video

music

game

5252
5056

4291

10000

5820

4550
4097

7710

6626

4581

15000
novel, graphic, text

20000

25000

30000

35000

出典：(財)デジタルコンテンツ編 「デジタルコンテンツ白書2007」

90
81.3

80

77.6

74.8

70

70.5

67.5

64.1

60
50
40
30
20
12.4

10

13.1

6.3

14.1
11.2

9.3

0
2002

2003

PackageMobile phone

15.5

2004
Internet

16.7
15.9

14
2005

2006

18.6
17.3

2007

Source: Digital Content White Paper 2007 issued by Digital Content
Association of Japan

Source: Digital Content White Paper 2007 issued by Digital Content Association of Japan

Network Environment x Content Viewing Environment x Content= Expansion of Needs for Seamless Distribution for Multi-Content on Multi-Platform

13
13

Increasing Diversity of Networks/Viewing Environment/Content - 3
Multi-Platform and Multi-Content Strategies
Distributing a wide range of content independent on networks and devices

Contents

Users

Platform

Ring tone
Song tone

Networks

Rights holders

Music

TV Broadcast

Drama

BS/CS

Movie

CATV

ComedyOne Seg(Mobile Digital TV)

SportsBeautyHealthDevicesInternet
Mobile phone
ＷｉＭａｘ

Faith Group’s One Stop Solution Realizes the Multi-Platform and Multi-Content Strategies.

14
14

NFRM Services - 1
Creation of Multi-Platform for Video Distribution
Search video
by mobile phone

Buy the right to watch

Watch on large screen

Hold mobile phone
over PC

15
15

NFRM Services - 2
Rapid Business Development for Encouraging Broad Use■Improving the Viewing Environment■"NFRM PC Viewer" was preinstalled on PCs of the leading
manufacturers in Japan, such as Sony, NEC, Toshiba, and Fujitsu.

■No need to install video
playback applications on PCs■FeliCa Port was preinstalled on PCs of the leading
manufacturers in Japan, such as Sony, NEC, Toshiba, and Fujitsu.

■Prevalence of "Osaifu Keitai"
and FeliCa port

■Corresponds to "pitmotto" realize NFRM services available on
major carriers, NTT DoCoMo, au, and Softbank from summer
2008.

■Available on three major carriers.

■Demonstrated infrared communication from Internet
AQUOS, a PC-TV of Sharp Corporation .
■In cooperate with Intel, Quixun, and Dreamboat, started a R&D
project to apply NFRM to TV and other devices.
■Faith.biz developed a mobile high-definition and full-screen
video player.

■Realized infrared connection■Expand possible viewing devices
aside from PC.

■Expanding the Content■GIGA Networks launched a mobile site, "Hollywood GIGA
Miranca."
Over 1,000 NFRM corresponding videos are available.
■Launched "KAZAS Channel", a NFRM portal site.

■Enhanced the line of
popular content overwide range of categories

16
16

GPass(GamePass)- Applied NFRM User Authentication Technology
Creation of a New User Authentication Platform■ What’s GPass(GamePass）“Login Authentication Technology” utilizing NFRM
●User’s benefit

a. Able to login by just holding an "Osaifu Keitai " mobile on PC. (Automatic login system)b. Safely storing all the IDs and passwords registered for each game.
c. Prevention of unauthorized access and spoofing from abroadd. One-touch settlement of payment

Choose a game on"Osaifu Keitai" Mobile.

Hold the mobile over PC
with a built-in FeliCa port

Auto-login to the
Game

Payment Method
Carrier, WebMoney, etc

GPass
Choose a game

bleep

bleep

Rose on Line・XXYY・YZPR01
Game title A
・１２３４ｘｙｚ
・０９３４ust

Recognized

Launched a trial service on a popular online game site, “Rose Online”

Settled17
17

PocketQQ/PocketKarte
Medical and Health Information Distribution Platform■PocketQQ
Providing a corporate-use health checkservice in ASP package. Individual medical
and health information is accesible throughmobile phone and PC.
＜ Users' benefit ＞
1. Search for hospitals and chemists
nationwide
2. Health check3. Search for OTC medicine information
4. Keep track of secular changes in healthcheck■PocketKarte
Joint business with WILLCOM and othercompanies
Maintenance and viewing of a user's
individual health and medical record (Karte)is easily available on mobile phone and PC.
＜ Users' benefit ＞
1. Maintenance and viewing of a user's
individual health and medical record
2. Transferable records remove complicatedprocedures of recheck in case of changing
hospitals.
3. Easily inquire to second opinions about
treatment by carrying the record.

▼Service scheme of PocketKarte
Other medical
institutions
Home doctor
Emergency
medical service

Viewing
medical record

PocketKarte
stored on
MedicalCommunication
site

Updating andviewing medical
recordOutsideAt home
Health andmedical advice

18
18

Electronic Settlement Platform
Creation and Expantion of a New Payment Settlement Platform■WebMoney●●WebMoney Wallet

A new settlement service developed by
WebMoney and Suruga BankTransactions made by "Debit@" at WebMoney
partner vendors are settled immediately bydirect debit.

Vastly improved functions
Online-charging became more convenient.
Online charging available at over 1,300 locationsof banking facilities, besides mobile phones.

Have you got your WebMoney Wallet?

19
19

Expansion and Reinforcement of Partnership with Leading Companies
Businesse Expansion by Realizing the Group Synergy
Creation of New Markets by Providing Platforms such as E -Commerce■Partnership with Leading Companies●Willcom/Medical Communication etc.

●Credit Saison
Eikyufumetsu.com● Credit Saison

ポケットカルテ

PocketKarte●XING
Uta SukiEikyufumetsu Contents●LAWSON●Neo/GIGA Networks
LAWSON
net shopping

Hollywood GIGA Miranca■The Group Synergy●GIGA Networks●BraveChakushin Melody GIGA

MUSICDOOR

20
20

Creation of New Models for Video/Music Distribution
New Models for Video Distribution

New Models for Music Distribution■Content by viewing
environment■viBirthCreating, producing and distributing
content suitable for each viewing
environment.
●"Koisuru Ketsuekigata*" - Drama for mobilephone
1. Shot and edited suitable for mobile phone
2. Two-minute story in i-motion style
3. One story distributed daily upon registration*
Funded and distributed
by GIGA Networks*
Advance distribution from
GIGA Networks

Providing with network structure
through which creators can deliver theirworks directly to worldwide consumers.
From PC at home
1. Distribution of "iTunesStore" and "Chakushin
Melody GIGA" to PCs in more than 20 countries in
the world
2. Sales registration and application on mobile music
distribution site
3. Sales of CD and DVD
4. Organizing events and live bookings
5. Promotional activities on viBirth.com
6. Supporting service for CD production●"Konno-san to Asobo**" - Drama
1. Broadcasted on WOWOW
2. Distributed for mobile phone**
Funded by GIGA Networks
and Desperado**
Advance distribution from
GIGA Networks

21
21

Creation of New Markets with Multi-Platform and Multi-Content Strategy
Provision of New Platforms Targeting Diversifying Content Market

Diversifying Content
Authentication platform

Business Partners

Business Partners

NFRM Services
Content distribution platformVideo, Music, entertainment
information
Content distribution platform
Medical and health information

ポケットカルテ

Electronic settlement platform

User authentication platform

GPass

EC
Platform

Users
22
22

Consolidated Financial Forecasts for FY0823
23

Consolidated Financial Forecasts for FY08
Net sales is expected to keep double figures growth due to the expansion of domestic contentsbusiness and Electronic Money business.
Profits are projected to decrease due to the prior investments and implement of procurement.
The investments are for development and construction of new multi-content distribution
services via multi-platforms and the procurement is for rich-content for various devices.

4

40

3

30

2

20

1

10

0

0
la

n)

Net Sales:billion yen

-10

FY

08

(P

FY

FY

05
FY

FY

-1

07

50

06

5

04

60

03

6

FY

Profit:billion-2
Ne t Sale s

EBIT DA

Ope r at in g Pr o fit-20
Ne t Pr o fit an d Lo ss

24
24

FY08 Financial Forecasts by Segment(million yen)

Net Sales

FY 2007

FY 2008(Plan)

50,19257,000

Yea r-on- y ea r Yea r-on- y ea r
cha ng echa ng e（A mount）
( %)

6,807

R ea s ons f or y ea r-on- y ea r cha ng e

13.6%
Decrease of overseas business(disposal of TakeNET, liquidation of Faith
Technologies) △approx. \1.1 billion-9.6% Decrease the revenue from ringtone solution △approx. \700 million
Increase of domestic contents business
Increase due to demand increment

Content-di s tri buti on
Serv i ces

16,264

14,700▲ 1,564

El ectroni c Pa y ment
B us i nes s

32,38940,7008,310

MV N O B us i nes s－ーOthers

1,538

1,600

61

4.0%

EBITDA

5,285

4,200

▲ 1,085-20.5%

4,579

3,300

▲ 1,279-27.9% implement of production and procurement of rich-contents

643

800

157

Content-di s tri buti on
Serv i ces
El ectroni c Pa y ment
B us i nes s
MV N O B us i nes s

ー

ー

ー

25.7%
ー

ー

Prior investment in development of NFRM distribution platform and in

24.4%

increased revenue effect

ー

64

100

36

56.3%

2,266

1,200

▲ 1,066-47.1%

Content-di s tri buti on
Serv i ces

1,674

500

▲ 1,174-70.1% implement of production and procurement of rich-contents

El ectroni c Pa y ment
B us i nes s

527

600

72

OthersOperating Profit

MV N O B us i nes s

ー

ー

ー

Prior investment in development of NFRM distribution platform and in

13.7%
ー

63

100

36

56.4%

Recurring profit

1,909

1,000

▲ 909

-47.6%Net Income

537

100

▲ 437

Othersincreased revenue effect-81.4%

Decrease of operating profit
Decrease of recurring profit

25
25

Achieving Sustainable and High Growth by Realizing the Group Synergy
and Strengthening Partnership with Other Leading Companies

Rights Holders

Creation and purchase of content

Development and provision of platforms
to distribute medical and health information
Development and provision of
platforms to settle payments

Business Partners

Business Partners

Development of platforms, establishment ofbusiness models, holding technology licenses

Construction of systems, construction
and operation of sites
Utilization of user-reach as a content provider
with 3 million of paid-membership subscribers

Users

26
26

Notice
This
This document
document andand its
its supporting
supporting documents
documents containcontainprojections
projections ofof ourour company’s
company’s future
future performance.
performance. These
These
are
are estimatesestimates byby thethe management
management ofof Faith
Faith based
based ononcurrently
currently available
available information.
information. There
There areare potential
potential risks
risks
and
and uncertainties
uncertainties thatthat may
may affectaffect thethe results.
results. Please
Please bebeadvisedadvised thatthat actual
actual performance
performance may
may differ
differ significantly
significantly
fromfrom thethe forecast.
forecast.
27
27

Appendix

28
28

FY07 Consolidated Financial Result by Segment(million yen)

Net Sales
Content-distribution
Services
Electronic Payment
Business
MVNO Business

FY2003

FY2004

14,671

23,628

8,957

61.0%

30,040

6,412

27.1%

44,152

14,112

46.9%

50,192

6,039

13.7%

10,29911,550

1,251

12.1%

14,040

2,490

21.5%

18,572

4,532

32.2%

16,264▲ 2,307-12.4%

4,084

11,7247,640

187.0%

15,106

3,382

28.8%

22,650

7,544

49.9%

32,389

9,739

43.0%

－

－

－

－

－

－

24

24

0

▲ 24

－

Others288

EBITDA
Content-distribution
Services
Electronic Payment
Business
MVNO Business

Content-distribution
Services
Electronic Payment
Business
MVNO Business
Others0Year-onYear-onyear change year change(%)（ Amount）

FY2006Year-onYear-onyear change year change(%)（ Amount）

FY2007－Year-onYear-on- year
year changechange(%)（ Amount）

22.8%

893

540

152.8%

2,905

2,011

225.0%

1,538▲ 1,366-47.1%

5,728

4,712 ▲ 1,015-17.8%

4,630

▲ 82

-1.8%

4,395

▲ 235

-12.7%

5,285

890

20.3%

5,628

4,729

▲ 899

-16.0%

5,033

304

6.4%

5,503

470 2240.1%

4,579

▲ 924

-16.8%

42▲ 19▲ 62 -145.6%

235

254

－

581

345 -193.3%

643

62

10.7%

－

－

－

▲ 622

－

▲ 54

-95.6%▲ 15▲ 18 -718.2%－

353

FY200565

57

OthersOperating Profit

Year-onYear-onyear change year change(%)（ Amount）

2－▲ 1,687 ▲ 1,065
▲1

14

－

－

ー

1,687

ー

64

65

ー

5,115

4,017 ▲ 1,098-21.5%

3,391

▲ 626

-15.6%

1,060 ▲ 2,331-68.8%

2,266

1,206

113.7%

5,133

4,152

▲ 981

-19.2%

4,029

▲ 123

-3.0%

2,484 ▲ 1,545-38.4%

1,674

▲ 810

-32.6%

▲ 30

▲ 136

▲ 106

－

119

255

295.3%

527

54

11.5%

－

－

－

－

▲ 706

－

2 -900.0%

-82%

▲ 51

▲ 53 -2479%

▲ 64

▲ 966

-19.3%

3,455

▲ 592

-14.7%

853 ▲ 2,602

316 ▲ 2,384-88.3%

1,438

1,122

355.1% ▲ 1,883 ▲ 3,321

12

Recurring profit

5,013

Net Income

2,700

4,047

－
－

473

354

▲ 1,832 ▲ 1,126
▲ 13

－

1,832

－

63

128

－

-75.3%

1,909

1,055

123.7%

ー

537

2,420

－

ー

ー

29
29

FY07 Consolidated Financial Result by Segment（year-on-year change）
Net Sales

FY2006

FY200744,15250,192

Reasons foe year-on- year change

Year-on- year Year-on- yearchangechange(%)（ Amount）

6,039(million yen)

13.7%
Contribution of domestic contents business subsidiary +2,300 million yen
Increase in GIGA Networks +300 million yen-12.4% Decrease in non-consolidated ringtone distribution solutions △800 million yen
Decrease in licensing of ringtone playback technologies △500 million yen
Decrease due to the sale of overseas content distribution subsidiaries △3,600 million yen
Increase in the settlement volume due to increase of demands for online games, mobile
43.0% content, videos and other distributions

Content-distribution
Services

18,572

16,264▲ 2,307

Electronic Payment
Business

22,65032,389

9,739

Others

2,905

1,538

▲ 1,366-47.1%EBITDA

4,395

5,285

890

20.3%

Content-distribution
Services

5,503

4,579

▲ 924

Electronic Payment
Business

581

643

62

10.7%

Others

▲1

64

65

ー

1,060

2,266

1,206

113.7%

Content-distribution
Services

2,484

1,674

▲ 810

-32.6% Decrease in non-consolidated ringtone distribution solutions △800 million yen

Electronic Payment
Business

473

Operating Profit

MVNO Business
OthersSale of MVNO business during FY06_4Q +1,687 million yen
Decrease in SG&A etc. +500 million yen-16.8% Decrease in non-consolidated ringtone distribution solutions △800 million yen
Decrease in licensing of ringtone playback technologies △500 million yen

Sale of MVNO business during FY06_4Q +1,832 million yen
Decrease in SG&A etc. +500 million yen
Decrease in licensing of ringtone playback technologies △500 million yen▲ 1,832

527
ー

54

11.5%

1,832

－
－

▲ 64

63

128

853

1,909

1,055

Sold during FY06_4Q

Increase in interest and dividends income +128 million yen

Recurring profit

Net Income＊▲ 1,883

For further details, see p.33-36.

537

2,420

123.7% Increase in currency gain +113 million yen－

Increase in investment loss on equity methode △374 million yen
Decrease in goodwill amortization +2,691 million yen(FY06 TakeNET 2,218 million yen, Faith Communications 462 million yen, etc.)
Decrease in provision for allowance 1,491 million yen(FY06 allowance for loss on guarantees of Faith Communications 1,298 million yen)
Gain on transfer of former Moderati +826 million yen
Decrease in profit on sales of affiliates △3,110 million yen(FY06 Digiplug about 2.300 million yen, Faith Communications about 1,000 million yen)
Increase in deferred tax expense △1,488 million yen(FY07 Reversal of deferred tax assets 717 million yen)

30
30

FY07 Consolidated Financial Result（compared to the initial plan ）(million yen)
FY2007
InitialPlan

FY2007
actual

50,00050,192

192

17,40016,264▲ 1,135-6.5%

31,03032,389

1,359

4.4%

Others

1,570

1,538

▲ 31

-2.0%

EBITDA

5,200

5,285

85

1.6%

4,400

4,579

179

4.1% delay in development expenses due to the delay in start-up of new business

708

643

▲ 65

-9.2%

92

64

▲ 28

2,100

2,266

166

7.9%

1,400

1,674

274

19.6%

571

527

▲ 43

-7.5%

129

63

▲ 65

Recurring profit

1,700

1,909

209

Net Income

1,300

537

▲ 762

Net Sales
Content-distribution
Services
Electronic Payment
Business

Content-distribution
Services
Electronic Payment
Business
OthersOperating Profit
Content-distribution
Services
Electronic Payment
Business
OthersActual-onPlan change（ Amount）

Actual-onPlan change（ %）Reasons foe year-on- year change

delay in start-up of new business

0.4% unfinished plans related to film production business

expenditure operated efficiently and effectively-30.4%-50.4%
12.3%-58.7%

Gain on disposal of fixed assets +2,300 million yen
Proceeds from equity movement +4,200 million yen

31
31

Amortization of Goodwill(million yen)

FY2 0 0 3 FY2 0 0 4 FY2 0 0 5 FY2 0 0 6 FY2 0 0 7

WebMoney

51

82

Digiplug

221

239

82
－

82
－

FY2008Y e ar s o f
En d o f(Plan) am o r t i zat i o n am o r t izat i o n

84

74

１０years

2013/9－－ーー

TakeNet

－

－

531

424

－

－

ー

ー

Faith Communications

－

－

63

94

－

－

ー

ー

Goody Point

－

－

39

39

－

－

ー

ー

GIGA Networks

－

－

－

1,771

2,125

2,125

5years2011/5

Brave

－

－

－

3

3

5years2012/3

MVP

－

－

－

4

4

5years2012/3

Media Complex

－

－

－

11

11

5years2012/6

－

－

217

217

118

5years2011/3

2,627

2,444

2,334

ー

ー

Cyber Plus
Total

－
272

322

715

zDigiplug: one-time depreciation of unamortized balance 1,936 million yen in FY04 (recorded asextraordinary loss）
zGoodypoint: one-time depreciation of unamortized balance 308 million yen in interim FY06 (recorded asextraordinary loss）
zTakeNET: one-time depreciation of unamortized balance 2,218 million yen in 3Q FY06 (recorded asextraordinary loss）
zFaith Communications: one-time depreciation of unamortized balance 462 million yen in 3Q FY06 (recorded asextraordinary loss）

32
32

FY07 Consolidated Net Sales （year-on-year basis）
Sellout of Digiplug, Contents Subsidiary in Europe
Sellout of Contents distribution business in USA(Unit: billion yen)

FY06

441
△approx. 8

Ringtone Solution△approx. 5

Ringtone Lisence Fee
Overseas△approx. 36

Consolidated Adjustment △approx. 16
GIGA Networks+approx. 3

Domestic Contents Business+approx. 23

Electric Money+approx. 97

Others
501

FY07

350

370

Acquired at the end of May 2006 andconsolidated from June 2006
FY06 10months→FY07 12months

390

410

430

450

470

490

510

Faith biz, Desperado, MVP, Mediacomplex,
Rightsscale, etc.
33
33

FY07 Consolidated Operating Profit （year-on-year basis）
GIGA Networks 355, Media Complex 11,MVP 4, Brave 3

Goodwill amortization in FY06: Take Net424, Goodypoint 39
Not accrued in FY07 due to the write-off in FY06

(million yen)

1,060

FY06
FY06
Disposal of MVNO business
Disposal of MVNO business＋1,832

Electronic
Money
Electronic
Money

＋57

PointPoint
SystemSystem＋156

Write-offof Goodwill inofFY06
Previous Amortization
Goodwill＋463

Amortizationof Goodwill
Amortizationof Goodwill△373

Faith,Faith,Inc. Inc.

△976

OthersOthers

2,266

FY07FY07

0

＋47

2,266

0

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

Entrusted system architecture decreased by approx. ¥200 million
Licensing fee decreased by approx. by ¥300 million
Sales of ringtone distribution solution decreased by ¥800 million
License fee for ringtone reproduction technologies decreased by ¥500 million
Distribution royalties increased by ¥200 million

34
34

FY07 Consolidated Recurring Profit （year-on-year basis）(million yen)

FY06

853

Increase in Operating
Profit＋1,206

Interest and Dividends
Income＋128

Exchange profit＋113

Investment loss onequity method△374

Others

△17
1,909

FY07

500

1,000

1,500

2,000

35
35

Increase of profit due to capital
expansion of subsidiaries andaffiliates

FY07 Consolidated Net Profit（year-on-year basis）
FY06:TakeNET¥2.2 billion Goodypoint ¥300 million
Faith Communications（FC）approx. ¥500 million
FY07：Cyber Plus appox. 300 million

Gain on sellout of former Moderati（Faith
West）, contents distribution business in
USA

Reserve for dept guarantee l（FY06 FC approx. ¥1.3 billion）
Reserve for subsidiaries losses（FY07Faith Technologies ¥300
million） Decrease of transfer to allowance for bad debt(approx.
¥500 million)（単位：百万円）(million yen)

FY06
Increase of recurring profit
Decrease of amortization of goodwill
Decrease of transfer to allowance
Gain on transfer of operation
Gain or loss from disposal of fixed assets
Increase of proceeds from equity movement
Gain or loss on revaluation of investments in
Decrease of gain on sale of subsidiaries
Increase of loss due to impairment
Loss from entrusted development
Other extraordinary gain or loss
Income tax, etc.
Profit of Minority shareholders
FY07△1,883+1,055+2,691+1,491
+826
+420
+276
+281
△3,110
△199
△160
+258
△1,290△119537-2000-1500-1000-500 0 500 100015002000250030003500400045005000
Decrease of Income taxes and other taxes, approx. ¥200 million
Increase of income taxes-deferred, approx. ¥1.5 billion（FY07 reversal of deferred tax assets approx. ¥700 million）

FY06：Digiplug approx. ¥2.3 billion
FC approx. ¥1 billion
FY07：TakaNET ¥100 million, AnyMusic, etc.

3636

Major Faith Group Companies in Japan
Desperado

Brave

Faith

Creating Production

Rightsscale

Faith.biz

GIGA Networks

MVP

MedicalCommunication

Media Complex

Distribution Platform

WebMoneyContents Provider

Payment Platform

GoodyPoint37
37

Outline of Faith Group - 1
Content Creation and Production

Desperado
In addition to the traditional production investments in movies, Desperado undertakes the production anddistribution of the videos other than films. It enables the company to establish new scheme which does notdepend on the existing distribution route. Joint Venture with Amuse Group (Faith holds 60% of its shares)

Brave
Targeting the 10 million subscribers of music services of Faith Group and Taito Corp., Brave produces themusic creation, promotion, and other music business of next generation.
(Faith holds 60% of its shares, Taito Corp. 30%, and Square Enix Co., Ltd. 10%)

Rightsscale
Provides with solution to the music distribution industry for PC and mobile phone such as iTunes
Store. The operation ranges from delivery of content to royalty payment.

MVP
Creation and distribution of digital content for mobile phones utilizing a wide array ofentertainers, purchase of distribution rights of video content, and production and creation of
the cross-media contents compatible among online games, radio programmes, and videos for PC.

Media Complex
Runs “Yoshimoto warau senior.com”, a free comedy video site for PC users that distributes
classical comedy content targeting senior-oriented market.
3838

Outline of Faith Group - 2
Distribution Platform

Faith.biz
Development, construction, and operation of the software, system, network etc. related to theprovision of content distribution services and the provision of distribution platform technologies
for Faith Group, and other companies. Split off from Faith.

Faith Technologies
It expands the business of technology development and licensing in Europe. The head office andR&D center for next-generation mobile phone are based in Montpellier, France.

Faith WestIt expands the business of technology development and licensing in North America.

Payment Settlement Platform

WebMoney
Issuance of electronic money and provision of electronic settlement platforms used for online
game and other digital content distributions.

GoodyPoint
Provision of point card systems
39
39

Outline of Faith Group - 3
Content Provider in Japan

GIGA Networks
It provides content distribution service for mobile phone, and has No.2 shares in i-mode
ringtone business with 3 million paid subscribers.
(Faith holds 95.4% of its shares, Yoshimoto Kogyo holds 4.6%)

Medical Communication
Distribution of various medical service and information through mobile phoneservice and information through mobile phone(Faith holds 60% of its shares)

40
40

Recent Lineup of Desperado Films
・ Started distribution of drama series of “Uranai-shi Tenjin(Fortune teller, Tenjin,)”, “Senjo-no Girls’ Life(Girls on a battle
field,)” and “Konno-san to Asobo (Let‘s Play with Konno-san)”as NFRM corresponding content for TV broad-casting, mobile
phones, and PCs.
© 『A COIN LOCKER OF THE DOMESTIC.
DUCK AND THE WILD DUCK

・ “A COIN LOCKER OF THE DOMESTIC. DUCK AND THE
WILD DUCK.” funded by Desperado achieved box-office record
among Japanese films at Ebisu Garden Cinema.
・ Entry 3 films to 20th Tokyo International Film Festival<Competition>“Crossing Over”
Produced by Naoyuki Sakagami, CEO/President of Desperado<Special screening>"Happily Ever After"
Produced by Yuji Ishida, Executive vice president of Desperado"Little DJ" Distributored by Desperado© 2007「Crossing Over」© 2007 Little DJ film partners

・ "I'm not There" Desperado is the distributor in Japan.
Legendary Bob Dylan, played by 6 Hollywood stars.

20th Tokyo International Film Festival

41
41