Financial Results Briefing
FY2016
November 1, 2016

Securities Code :9438

1Financial Results Overview for FY2016
2345Financial Highlights
Consolidated P/LConsolidated SG&A
Business Overview

10New Approach in FY2017

22

Consolidated Earnings Forecast for FY2017

25

Capital Policy

28(See Appendix)

1112141619

Basic Policy in FY2017
Enhancement in the Non-virtual Affiliate Network
Enlargement of Contents Service
Phase to Achieve Sales for the Healthcare-related Service
Healthcare-related Service Topics

23 Consolidated Earnings Forecast

26 Capital Policy

Financial Results
Overview forFY2016

1

Financial Highlights

In FY2016, operating income hit a record high！
Net sales ¥32,844 million (Down ¥617 million, YoY)
Operating income ¥5,355 million (Up ¥1,110 million, YoY)

The number of paying subscribers
on smartphones declined.
5.69 million subscribers（Down 0.05 million subscribers compared to June 30, 2016)

In FY2017, operating income
is expected to decline.
Sales ¥32,000 million (Down ¥844 million, YoY)
Operating income ¥4,060 million (Down ¥1,295 million, YoY)2

Consolidated P/LNet sales declined slightly, and profits increased significantly.
(Millions of yen)

FY2016FY2015

ChangeAmountPercentage

Net sales

32,84433,461(617)(1.8%)

Cost of sales

5,353
27,4905,439
28,022(85)(531)(1.6%)(1.9%)（Ratio）

83.7%

83.7%

SG&A

22,13523,776(1,641)(6.9%)（Ratio）

67.4%

71.1%

5,355

4,245

+1,110+26.1%

16.3%

12.7%

5,310

4,144

+1,166+28.2%

16.2%

12.4%

3,317

2,607+710+27.2%

10.1%

7.8%

Gross profit

Operating income（Ratio）

Ordinary income（Ratio）

Profit attributableto owners of parent（Ratio）

3

Consolidated SG&A

(Millions of yen)

FY2016FY2015

ChangeAmountPercentage

22,13523,776(1,641)(6.9%)

Advertisingexpenses

7,607

9,077(1,469)(16.2%)

Personnel expenses

5,637

5,770(132)(2.3%)

Commission fee

3,741

3,727

+13+0.4%

Subcontract
expenses

1,456

1,326

+129+9.8%

Depreciation

1,272

1,318(46)(3.5%)

Other

2,420

2,555(135)(5.3%)

SG&A

4Business Overview ⅰ）

Subscriptions by wayof cellphone shops failed to grow.
External conditions
FromFebruary“Virtuallyfree of change”“Cellphones virtually
free of charge”
AbolishedinApril

Sales of cellphones
failed to grow

Ministry of Internal Affairs
and Communications

Guidelines Applied（Guidelines for adjustment ofsmartphones purchase support）
5

Business Overview ⅱ）

The number of paying subscribersof the smartphone

5.69

millionsubscribers(Down 0.05 million compared to June 30, 2016)
5.90(Unit: Millions of people)
5.33

5.28

5.40

5.52

6.00

6.10

6.08
5.74

5.69

5.69

4.80

10月11月12月
8月 9月
1月 Feb
2月 Mar
3月 Apr
4月 May
5月 6月
8月 Sep
9月 Oct10月11月12月
2月 Mar
3月 Apr
4月 May
5月 6月
8月 Sep
9月
Oct Nov Dec 1月
Jan 2月Feb 3月Mar 4月Apr 5月May 6月Jun 7月Jul Aug
Sep 10月11月12月
Oct Nov Dec Jan
Jun 7月Jul Aug
Nov Dec 1月
Jan Feb
Jun 7月Jul Aug

FY2014FY2015FY2016

6Business Overview ⅲ）

The total number of paying subscribers

7.22(Unit: Millions of people)

7.85

Q1
1Q

8.17

Q2
2Q

7.90

Q3
3Q

FY2014

millionsubscribers(Down 0.13 million compared to June 30, 2016)
7.86

Q44Q

7.83

Q1
1Q

8.08

Q2
2Q

7.73

7.94

Q3
3Q

Q4
4Q

7.94

Q1
1Q

FY2015
FPFeature phones

7.81

Q2
2Q

7.35

7.22

Q3
3Q

Q4
4Q

FY2016
SPSmart phones

7Business Overview ⅳ）

Non-virtual Affiliate Advertising Sales

Sales from Sugo toku-related
au Smart
スマパス

APP
APPPass
Pass(Unit: Millions of yen)

Passdocomo
スゴ得Sugo toku

Ads for other
他社向け
companies

400

300

200

100

0
1Q
Q1

2Q
Q2

3Q
Q3

FY2015

4Q
Q4

1Q
Q1

2Q
Q2

3Q
Q3

FY2016

4Q
Q4

1Q
Q1

2Q
Q2

3Q
Q3

FY2015

4QQ41Q
Q12Q
Q2

3Q
Q3

4Q
Q4

FY2016

8Business Overview ⅴ）
The average revenue per user (ARPU) has been on the rise.
Trends in ARPU of the paying subscribers for smartphones

前年同期比
YoYChangeＵP¥9.9
1Q
Q1

2Q
Q2

3Q
Q3

FY2014

4Q
Q4

1Q
Q1

2Q
Q2

3Q
Q3

FY2015

4Q
Q4

1Q
Q1

2Q
Q2

3Q
Q3

4Q
Q4

FY2016

9New Approach
in FY2017

10Basic Policy in FY2017

1. Maintaining of the total number of paying subscribers
Enhancement in the Non-virtual Affiliate Network

2. Improvement in average revenue per user（ARPU）

Enlargement of contents service

3. Medium-term approachPhase to achieve sales for the Healthcare-related
service11Enhancement in the Non-virtual Affiliate Network ⅰ）

Sales promotion for high ARPU services

Smartphones

Non-virtual Affiliate Network
Introduce contents
in the cellphone shops

Contents

Sales offices

Shop staff

Sales offices
Cellphone shops

Customers who come in12

Enhancement in the Non-virtual Affiliate Network ⅱ）

Expansion of tie-ups with MVNO operators* MVNO is an abbreviation for mobile virtual network operator. An MVNO provides mobile network services, such as cellphones and PHS,
through its own brands. It does not develop or manage wireless communication link facilities.

13

Enlargement of Contents Service ⅰ）

Ratios for service of higher fees
increased in each category.
Value added service line up
Music, Books,
Videos & DVD¥500¥ 1,000

per month (excluding tax)

Expandingthe lineup ofvideos & DVD￥400

Healthcare-related
Service￥400

Weather information andMaps & Navigation￥380

per month (excluding tax)

per month (excluding tax)

To a high added
value service

To a integratedservice

per month (excluding tax)

To an integratedservice￥300

per month (excluding tax)

￥300

per month (excluding tax)

￥300

per month (excluding tax)

14

Enlargement of Contents Service ⅱ）

Music, Books, Videos & DVD service

Expanding the number of users with high ARPU
Quarterly change in ARPU music.jp
400

380

¥500
¥1,000360(C) 2016 Twentieth Century Fox FilmCorporation.
All rights reserved.

BATMAN V SUPERMAN: DAWN OF JUSTICE
and all related characters and elements aretrademarks of and (C) DC Comics. (C) 2016
Warner Bros. Entertainment Inc. andRatpac‐Dune Entertainment Inc. All Rights
Reserved.

per monthper month

340

2Q
Q2

3Q
4Q
Q3 Q4

FY2015

1Q
2Q
Q1 Q2

3Q Q44Q
Q3

FY201615

Phase to Achieve Sales for the Healthcare-related Service ⅰ)
Medical information service cooperated
with doctors etc.

A 400-yen course has been getting popular.
The number of paying monthly
subscribers of KARADAmedica（ten thousands of people)

30

20

10The answers over the phones
made by healthcare providers,
not doctors.

0
1Q
Q1

2Q
Q2

3Q
Q3

FY2015

4Q
Q4

1Q
Q1

2Q
Q2

3Q
Q3

FY2016

4Q
Q416

Phase to Achieve Sales for the Healthcare-related Service ⅱ)
Checkup packaged service

The number of received orders
from companies has been increasing steadily.
Sales expansion to corporate customers
making the most of the RAF network

Direct sales to corporate customers
by the Company strengthened
Trends in the number of received orders fromcompanies for CARADA package service

Corporations

companies operating
cellphone shops(dealers) nationwide

1月
Jan2月
5月a y 6月
F e b 3月
M a r 4月
Apr M
JunJ7月u l A8月
u g S9月
ep

Sales offices* CARADA and ●ARADA (● denotes C with ・・attached above) are the trademarks of MTI Ltd., which owns the right to use them.

17Phase to Achieve Sales for the Healthcare-related Service ⅲ)
Sports management service

Expanding the number of orders received
from schools, clubs at schools, and sports gyms.
The numberof service contracts

For other12％
For professionals
6％

For incorporatedschools, clubs
39%

For nursing
Facilities,
orthopedic clinics

11%
For sports gyms
32%

3Q
Q3

4Q
Q4

FY2015

1Q
Q1

2Q
Q2

3Q
Q3

4Q
Q4

FY201618

Healthcare-related Service Topics ⅰ)
Expanding of the number of orders from local governments
for the electronic maternal and child health handbook.
Cumulative total of orders received
from local governments

Used in Kanagawa
Prefecture’sHealthcare ICT
Model ProjectJan 2月Feb 3月Mar 4月Apr 5月May 6月Jun 7月Jul Aug
Mar 4月Apr May
Dec 1月
3月
5月 Jun
6月 Jul
7月 Aug
8月 Sep
9月 Oct10月 Nov
11月 12月
8月 Sep9月
2015年
FY2015

2016年
FY201619

Healthcare-related Service Topics ⅱ)

Electronic medicine notebook service
Collaboration with Seishu Link
(Kinokuni medical cooperation network)

e-clinical
Recordsin hospital

Receipt
computerin clinic

Receipt
computerin pharmacy

Hospitals
Pharmacies

Pharmacies

20【Reference】Overview of Healthcare-related to Service
Developing healthcare information management databases
to connect data in each Service
Data coordination

Electronicmaternity
healthrecord bookservice

Healthcare information
for women

Medical information
Service cooperated
with doctors etc.

(Subsidiary)

Chemicalthermometercoordination

Municipalities

Geneticanalysis(Subsidiary)

Checkupservice

Machine tomachineservice

Nutrition
consulting
serviceElectronic
medicine
notebook
service

Sportsmanagement
service

Data coordination
research cooperators

Doctors, etc.

Hospitals

Health insuranceorganizations

Pharmacies

Sport gyms

Collaborations between other companies and organizations
21

Consolidated Earnings
Forecast for FY201722

Consolidated Earnings Forecast ⅰ)

Decrease in sales and profits● Decrease in the total number of paying subscribers
from the previous fiscal yearR●Decreases in sales and profits in the
Non-virtual Affiliate businessNet sales¥32,000 millions(Down ¥844 millions, down ¥2.6%,YoY)

Operatingincome¥4,060 millions

Profit attributableto owners of parent(Down ¥1,295 millions, down ¥24.2%,YoY)¥2,500 millions(Down ¥817 millions, down ¥24.6%,YoY)
23

Consolidated Earnings Forecast ⅱ)

FY2017 (Forecast)

FY2016 (Actual)

Change(Millions of yen)AmountPercentage

Full-year

1st half

2nd half

Full-year

1st half

2nd half

32,00015,50016,50032,844

16,994

15,849(844)(2.6%)

5,800

2,800

3,000

5,353

2,635

2,718

+446

+8.3%

22,14010,97011,17022,135

11,87010,265+4+0.0%

4,060

1,730

2,330

5,355

2,489

2,866

(1,295)(24.2%)（Ratio）

12.7%

11.2%

14.1%

16.3%

14.6%18.1%

Ordinary
income

4,000

1,700

2,300

5,310

2,434

2,876(1,310)(24.7%)（Ratio）

12.5%

11.0%

13.9%

16.2%

14.3%

18.1%

Profitattributableto ownersof parent

2,500

1,100

1,400

3,317

1,425

1,892(817)(24.6%)（Ratio）

7.8%

7.1%

8.5%

10.1%

8.4%

11.9%

Net sales
Cost of sales
Selling,general andadministrative
expenses
Operatingincome（Full-year） （Full-year）

24

Capital Policy

25Capital Policy ⅰ)

We harmonize steadily increases
our sales and income and share buybacks.

In FY2017
Annual dividends per share ¥16
Interimdividend

FY2016¥8FY2017（Forecast）¥8

Year-end
dividend

Annualdividend¥8（Planned）¥8（Planned）

¥8

¥16

※ A Dividend at the end of FY2016 are to be referred to the 21th general shareholders’ meeting on December 23, 2016.

26

Capital Policy ⅱ)

Acquisition of Own Sharesby Stock Company
Amount of shares
to be repurchased:

Maximum of 1,000 millions of yen*1

Number of shares
to be repurchased:

Maximum of 1,600,000 shares
2.9% of outstanding shares(excluding treasury shares)*2

Repurchase period: From November 2 to December 22, 2016

*1 All or part of the transactions may not be carried out depending on market trends.
*2 Total number of shares issued (excluding treasury shares)
as of September 30, 2016: 55,623,972 shares, Treasury shares: 4,925,228
27

Thank you very much for today.

〈Contact us〉
Investor Relations Department
TEL: +81-3-5333-6323 FAX: +81-3-3320-0189
MAIL: ir@mti.co.jp
www.mti.co.jp
This report contains forward-looking statements on business performance based on the judgments, assumptions, and beliefs
of management using the information available at the time. Actual results may differ materially due to changes in domestic oroverseas economic conditions or changes in internal or external business environments or aspects of uncertainty contained in
the forecasts, latent risks or various other factors. In addition, risk and uncertainty factors include unpredictable elements that
could arise from future events.