Information Meeting Materials for
Fiscal 2008,
2008 ended March 31,
31 2008● Financial Results for Fiscal 2008 ((TIS and INTEC Holdings)g)● Forecast for Fiscal 2009 (IT Holdings)● Management Philosophy, Business Direction and Management Strategy of IT Holdings

May 16, 2008

Fi
Financial
i l Results
R lt forf FiscalFi l 2008

copyright © 2008 IT Holdings Corporation

1

Fiscal 2008 Financial Summary (TIS and INTEC Holdings)
TIS (Consolidated) and(Millions of yen) INTEC Holdings (Consolidated)
AmountComposition
Net sales

322,412

Operatingincome19,973

Recurring profit

19,947100.0%
6.2%
6.2%(Millions of yen)

TIS (Consolidated)
AmountComposition

Net sales
Outsourcing services

199,261
80,844100.0%
40.6%

Software development

92,655

46.5%

Solution services

22,026

11.1%

Other business

3,735

1.8%

10,432
11,170
4 153
4,153

5.2%
5.6%
2 1%
2.1%

Operating income
Recurring profit
Net income
8,673
2.7%
Net income*The figures above are the respective consolidated totals for TIS and INTEC Holdings.
(Millions of yen)
Balance of orders received at the end of fiscal 2007 (1)(Millions of yen)

TIS (Consolidated)and INTEC (Nonconsolidated)
49,002

Net sales
Information andtelecommunication
Leasing businesses
Real estate rental
and management
Other business
Operating income
Recurring profit
Net income

TIS (Consolidated)

INTEC Holdings(Consolidated)
Amount Composition
123,151
100.0%
114,526

93.0%

5,070

4.1%

1,848

1.5%

1,705
9,541
8,777
4 520
4,520

1.4%
7.7%
7.1%
3 7%
3.7%

INTEC (Nonconsolidated)

36,90912,093150,924

109,616

41,308Net sales in fiscal 2008 (3)134,700

92,65542,045

Balance of orders received at the end of fiscal 2008 (1)+(2)-(3)65,22753,87011,357

Order volume received during fiscal 2008

(2)

*The figures above are consolidated amounts for TIS and nonconsolidated amounts for INTEC.

【 IT Holdings Business Segments】
TIS

IT Holdings

INTEC Holdings

Outsourcing services

Outsourcing and network

Outsourcing and network

Software development

Software development

Solution services

Solution services

Other business

Other businesscopyright © 2008 IT Holdings Corporation

Software development, and system
integration
Leasing real estate rental andLeasing,management, and other businesses
2Fiscal 2008 Financial Summary (TIS)(Millions of yen)

Consolidated

Fiscal 2007 (a)AmountNet sales
Outsourcing services
Software development
Solution services
Other business

Operating income (loss)
Recurring profit
Net income (loss)

Fiscal 2008 (b)Composition

Amount100.0%
35.7%
48.7%
13.2%
2.4%
(0.0)%
0.6%(0.4)%

199,261
80,844
92,65522,026
3,735
10,432
11,1704,153

211,581
75,553102,944
28,028
5,055
(0)
1,216
(818)

(5.8)%
7.0%(10.0)%(21.4)%(26.1)%－
818.4%－

200,000
80,00092,50024,000
3,500
8,000
8,800
3,200

ChangeComposition Amount (b-a)

100.0%
40.6%
46.5%
11.1%
1.8%
5.2%
5.6%
2.1%

% (b/a)Fiscal 2008
ChangeOriginal estimates (c)Amount Composition Amount (b-c) % (b/c)(12,320)
5,290(10,289)(6,001)(1,320)10,4339,954
4,972

100.0%
40.0%
46.3%
12.0%
1.7%
4.0%
4.4%
1.6%

( 738)
844
155( 1,973)
235
2,432
2,370
953

( 0.4)%
1.1%
0.2%( 8.2)%
6.7%
30.4%
26.9%
29.8%

*Revisions to the original estimates above were announced on May 26,
26 2007.
(Millions of yen)

Nonconsolidated
Net sales
Outsourcing services
Software development
Solution services

Operating income (loss)
Recurring profit (loss)
Net income (loss)

Fiscal 2007 (a)Fiscal 2008 (b)AmountComposition

Amount109,594
30,18260,37019,042( 4,020
4 020 )
( 3,398 )( 1,269 )100.0%
27.5%
55.1%
17.4%
( 3.7
37)%
( 3.1 ) %( 1.2 ) %97,412
31,48852,023
13,900
1 614
1,614
1,966
471

ChangeComposition Amount (b-a)

100.0%
32.3%
53.4%
14.3%
1 7%
1.7%
2.0%
0.5%

% (b/a)( 12,181 ) ( 11.1 ) %
1,306
4.3%
( 8,346 ) ( 13.8 ) %( 5,141 ) ( 27.0 ) %
5 634
5,634
－
5,364
－
1,740
－

Fiscal 2008
ChangeOriginal estimates (c)Amount Composition Amount (b-c) % (b/c)

100,000
31,00054,00015,000
1 000
1,000
1,200
400

100.0%
31.0%
54.0%
15.0%
1 0%
1.0%
1.2%
0.4%

( 2,587 ) ( 2.6 )%488
1.6%( 1,976 ) ( 3.7 )%( 1,099 ) ( 7.3 )%
614
61 4%
61.4%
766
63.8%
71
17.8%

* Revisions to the original estimates above were announced on May 26, 2007.
Net Sales
O t
Outsourcing:iThe
Th twot majorj contributors
t ib t tot higherhi h revenues ini thisthi segmentt were TIS,
TIS whichhi h benefitedb fit d fromfsteadyt d interesti tt fromf
k client
key
li t sectors,tandd Agrex,Awhichhi h loggedld favorablefbldemand for business process outsourcing services.
Software Development: Revenues retreated significantly, primarily because large-scale projects handled by TIS passed their development-stage peak. Revenues fell slightly short of the
anticipated target, because sales on some projects were not entered into the accounting ledger until after fiscal 2008 had ended.
Solution Services: In fiscal 2007, TIS had some unexpected, short-term projects. The absence of such projects in fiscal 2008 led to a year-on-year decrease in revenues in this segment.
pg Income
Operating
Second-half results were in line with revised estimates of problematic large-scale software development projects, and other software development projects delivered good results,
buoyed by solid performances from subsidiaries. Overall, actual operating income surpassed estimates.
copyright © 2008 IT Holdings Corporation

3

Fiscal 2008 Financial Summary (INTEC Holdings)(Millions of yen)

INTEC Holdings (Consolidated)
Net sales
Information and telecommunication
Leasing businesses
R l estateRealt t rentalt l andd managementt
Other business

Operating income
Recurring profit
Net income

Fiscal 2007 (a)AmountFiscal 2008 (b)Composition

115,483
105,470
6,447
1 716
1,716
1,849
9,588
8,391
4,960

100.0%
91.3%
5.6%
1 5%
1.5%
1.6%
8.3%
7.3%
4.3%

AmountComposition

123,151
114,526
5,070
1 848
1,848
1,705
9,541
8,777
4,520

100.0%
93.0%
4.1%
1 5%
1.5%
1.4%
7.7%
7.1%
3.7%

ChangeAmount (b-a)% (b/a)

7,668
9,055
( 1,376 )132( 143)( 46 )
386( 440 )

6.6%
8.6%
( 21.4 ) %
7 7%
7.7%
( 7.7 ) %( 0.5 ) %4.6%
( 8.9 ) %※Fiscal 2008 initial targets (full year) of INTEC Holdings (consolidated) :net sales ¥125,000 million, operating income ¥10,000 million, recurring profit ¥9,100 million, net income ¥5,800 million(Millions of yen)

INTEC (Nonconsolidated)

Fiscal 2007 (a)AmountNet sales
Outsourcing services
Software development
System integration
Networkingg business

Operating income
Recurring profit
Net income (loss)

Fiscal 2008 (b)Composition

95,572
21,75539,89723,452
10,467
,
7,630
6,517
(2,325)100.0%
22.8%
41.7%
24.5%
11.0%
8.0%
6.8%
( 2.4 ) %AmountComposition

98,496
21,52642,044
25,116
9,809
,
7,709
6,904
1,730

100.0%
21.9%
42.7%
25.5%
10.0%
7.8%
7.0%
1.8%

ChangeAmount (b-a)% (b/a)2,923( 229 )
2,147
1,664
( 658 )
79
386
4,056

3.1%
( 1.1 ) %5.4%
7.1%
( 6.3 ) %
1.0%
5.9%
－

Net Sales
Despite the revenue-limiting impact caused by partial liquidation of the leasing business, solid demand for software development and system integration services frommainstay client sectors—finance, manufacturing, distribution and services—supported a 6.6% rise in net sales.
Operating Income
Operating income was more or less on a par with fiscal 2007.
2007

copyright © 2008 IT Holdings Corporation

4

Net Sales by Client Sector (TIS)(Millions of yen)

TIS: Consolidated
March
2008
2008年3月期

1.5％
1
5％
0 5％
0.5％
6.5％ 3.5％ 5.3％
15.2％

26.0％

March
2007
2007年3月期

30.0％

7.6％

0

3.7％

1.2％ 1.3％
4.1％ 4.7％
12.0％

50,000

2.6％
2
6％
4.9％
7.5％

12.9％

3.7％ 11.0％

100,000

10.0％

2.4％
4.9％
5.8％

11.2％

150,000

Electrical machinery,
PublicLeasing,
CreditSecurities
financeequipment,
corporations,
Services
Commerce
カードBanking
銀行 consumer
リース/ノンバンク
証券Insurance
保険 Other
その他金融
サービス業
官公庁transportation
電機・機械・輸送機器・精密
loans
precision
instruments
government
card

200,000

250,000

Chemicals,
Utilities,
Others
商業
電力・ガス・通信化学・医薬品
pharmaceuticals
communications

TIS Nonconsolidated
TIS:N
lid t dMarch 20082008年3月期(Milli(Millions
off yen))

1.9% 0.2%
4.3% 5.4% 2.5%

31.2%

March 20072007年3月期

36.7%

0

5.9%

20,000Credit
カード Banking
銀行
g
card

2.2%
21.1%

7.3% 4.8% 4.1% 6.3%

1.5% 0.2%
2.5%
6.2%

1.7%

40,000

Leasing,
Securities
リース/ノンバンク
証券 Insurance
保険
consumer loans

16.6%

7.2%

60,000Other
finance
その他金融

8.7%

3.8% 3.8% 4.8%

80,0001.8% 0.1%
2.5%
3.6% 6.0%

33.7%

100,000

40.1%

0Creditcard

2.1% 7.3%

20 00020,000Banking
カード

Leasing,
consumer loans

Securities

copyright © 2008 IT Holdings Corporation

Other financeその他(Millions of yen)

19.6%

2.9%

40 00040,000Insurance
銀行

120,000

2.4%
7.3%

1.1% 0.2%
2007年3月期
March 2007

8.8%

PublicElectrical machinery,
Chemicals,
Utilities,
Otherscorporations,transportation電機・機械・輸送機器・精密
equipment,
Services
サービス業
官公庁・学校・病院
商業 電力・ガス・通信
化学・医薬品Commerce
pharmaceuticals
comm nications
communications
government
precisioni i instrumentsiReference: Nonconsolidated comparisons (development and outsourcing)
2008年3月期
March 2008

その他

Publiccorporations,
Services
リース/ノンバンク
government

4.4% 4.0% 6.5%

8.1%

2.0%
17.2%

6.7%

4.0% 3.7% 4.4%

60 00060,000Electrical machinery,transportation equipment,
証券
precision instruments

8.2%

80 00080,000Commerce

Utilities,
communications

100 000
100,000
Chemicals,
保険
pharmaceuticals

Others5

Net Sales by Client Sector (INTEC)(Millions of yen)

INTEC: Nonconsolidated
2008年3月期
March
2008

27.4％

March
2007
2007年3月期

28.0％

31.4％
0

28.6％

11.9％

28.1％

20,00040,00060,000

Manufacturing
製造

Finance
金融

Distribution and service
流通・サービスcopyright © 2008 IT Holdings Corporation

14.5％

30.0％

80,000100,000

Publiccorporations, government
公共6Fiscal 2008 Operating Income Analysis (TIS: Consolidated)(100 million yen)
Decrease ingoodwill burden

Agrex
increase
UFIT
increase

AJS
increase

6.6

Qualicaincrease

SEL*
increase

1.6

0.6

104.3

5.2

6.8

▲
0.5
(0.5)
Other

27.8
Differences
due to additional costs
on large-scale projects

Fiscal 2008：80
Fiscal 2007：128

48.0

Increase inoutsourcing
services

Increase insoftwaredevelopment

72
7.2
1.1

(0.0)
▲0.1

Fiscal2007
2007年3月期
TIS (Nonconsolidated)
copyright © 2008 IT Holdings Corporation

Subsidiaries*Systems Engineering Laboratory Co., Ltd.

2008年3月期
Fiscal2008
7

Fiscal 2008 Operating Income Analysis (INTEC Holdings)(100 million yen)
INTEC
increase

0.8

95.9

95.4
▲0.9
(0 9)
(0.9)

▲0.4
(0 4)
(0.4)

Increase inretirement benefit costof W&G*

Decrease inother group companies

Fiscal 20072007年3月期

Fiscal 20082008年3月期
INTEC (Nonconsolidated)

copyright © 2008 IT Holdings Corporation

Group companies*INTEC Web and Genome Infomatics Corporation （Currently, INTEC Systems Institute, Inc.）

8

Order Volume and Balances (TIS)(Millions of yen)
TIS (Consolidated)

Fiscal 2007

Fiscal 2008

YOY change

Balance of orders received at theend of the previous term (1)46,47336,909(9,564)(20.6)%(Excluding large-scale projects)

26,97330,8883,915

Order volume received (2)93,380109,616

Net sales (3)102,944

Balance of orders received at the) ( )( )end of the stated term ((1)+(2)-(3)(Excluding large-scale projects)(Millions of yen)
Fiscal 2007

Fiscal 2008

Balance of orders received at theend of the previous term (1)31,21021,776(9,434)(30.2)%

14.5%(Excluding large-scale projects)

11,71015,755

4,045

34.5%

16,236

17.4%

Order volume received (2)50,936

67,468

16,531

32.5%

92,655(10,289)(10.0)%Net sales (3)60,37052,023(8,346)(13.8)%

36,90953,87016,96046.0%

Balance of orders received at theend of the stated term ((1)+(2)-(3)) ( )( )21,77637,221

15,44470.9%

30,88840,088

9,200

29.8%

(Excluding large-scale projects)

15,75523,440

7,685

48.8%

Fiscal
2007
Fiscal
2007

Fiscal 2008

Fiscal 2008

Order
volumereceived
during thestated term

Net sales
during thestated term

Ordervolumereceived
during thestated term

Large-scale
projects

Large-scale
projects

Large-scale
projects

Balance of orders
received at the endof previous term

Balance of orders
received at theend of term

Balance of orders
received at the endof previous term

copyright © 2008 IT Holdings Corporation

Net sales
during thestated term

Large-scale
projects

Balance of orders
received at theend of term

TIS (Nonconsolidated)

Fiscal2007
2007
Fiscal

YOY change

Fi
Fiscal
2008
Fiscall 2008

Order
volumereceived
during thestated term

Net sales
during thestated term

Ordervolumereceived
during thestated term

Large-scale
projects

Large-scale
projects

Large-scale
projects

Balance of orders
received
ece ved at thet e ende dof previous term

Balance of orders
received at theend of term

Balance of orders
received at the endof previous term

Net sales
during thestated term

Large-scale
projects

Balance of orders
received at theend of term

9

Order Volume and Balances (INTEC)(Millions of yen)
INTEC (Nonconsolidated)

Fiscal 2007

Fiscal 2008

YOY change

Balance of orders received at the end of the previous term (1)10,89912,093

1,195

11.0%

Order volume received (2)41,092

41,308216

0.5%

Net sales (3)39,89742,045

2,148

5.4%

Balance of orders received at the end of the stated term(1)+(2)-(3)12,093

11,357( 737)(6.1)%

Fiscal2007
2007
FiscalOrder volume
received
during theterm

Balance of orders
received at theend of previous
term

copyright © 2008 IT Holdings Corporation

Net sales
for theterm

Balance of orders
received at thed off statedt t d tterm
end

Fiscal2008
2008
FiscalOrder volume
received
during theterm

Balance of orders
received at theend of previousterm

Net sales
for theterm

Balance of orders
received at theend of stated term

10

Status of Principal Subsidiaries (TIS Group, as of March 31, 2008)
UFIT Co., Ltd.

Agrex Inc.

TIS holds 70.4% equity. Particularly strong in services for credit card and consumer
finance companies. Focuses on outsourcing services.

TIS holds 50.6% equity. Leading company in Japan’s business process outsourcing(BPO) business. Listed on First Section of Tokyo Stock Exchange.

Fiscal 2008 Results

Fiscal 2008 Results• Despite
De ite reduced
ed ed demand,ded owingi tot completion
leti off large-scalel e
le developmentde ele t projects
je t
for clients in the public service sector and streamlined investment among financerelated clients, due to challenges in their operating environment, the contribution
from new projects kept net sales on a par with fiscal 2007.
• Achieved dramatic improvement in profits, largely by resolving the issue ofplarge-scalegpprojectsjfor credit card companiespand byy cuttingg systemyunprofitable
operation costs.
• Took a medium- to long-term perspective toward expanding client base toreinforce the marketing structure.

Fiscal 2009 Forecast• Net sales are likely to decrease, as system integration at major clients, particularlybanks, reduces the number of requests for system operation and maintenance andmore large-scale development projects wrap up.
• Profits may
y also decline,, owing
g to the lower net sales startingg ppoint as well as
higher costs, especially costs incurred to reinforce marketing processes andupgrade facilities.

• Expanded scope of outsourcing to include more sophisticated services for insurers, such as
premium reassessment, address searches and contract correction, prompted by issues
surrounding unpaid premiums and overpayments.
• Marked an increase in sales of Trillium, a data-cleansing and name-identification tool, and theenterprise resource planning (ERP) software LX (formerly, BPCS).
• Recorded favorable order activity for special system integration and system upgrades fromclients in the finance industry, particularly insurers, banks and securities firms.
• Welcomed full-year sales contribution from Agrex Fine Techno.

Fiscal 2009 Forecast• Will strive enhance services by applying know
know-how
how gained through contract correction services
for insurers.
• Will endeavor to boost sales of competitive client resource management (CRM) software andpromote services, especially system configuration, peripheral development and maintenancesupport, that utilize CRM software.
• Expect demand for system development to remain high among members of the financeindustry, particularly life insurers and banks.
• Look forward to full-year contribution from Registration Network, Ltd., which became an
Agrex subsidiary in March 2008.
Note: In the first half of fiscal 2009, Agrex plans to consolidate two centers in Tama and enhance
the amalgamated operations. The company will also relocate its headquarters.

(Millions of yen)

Fiscal 2007
Net sales
Operating income
Recurring profit
Net income

40,900
960
1,170
830

Fiscal 2008 Fiscal 2008 Fiscal 2009
(planned)(actual)(forecast)
38,00040,90036,730
2,300
3,740
2,800
2,500
3,850
2,890
1,400
2,300
1,660

copyright © 2008 IT Holdings Corporation(Millions of yen)

Fiscal 2007
Net sales
Operating income
Recurring profit
Net income

23,027
1,400
1,304
668

Fiscal 2008 Fiscal 2008 Fiscal 2009
(planned)(actual)(forecast)
25,50025,55829,000
1,940
2,079
2,300
1,950
2,123
2,310
1,050
998
1,170
11

Status of Principal Subsidiaries (TIS Group, as of March 31, 2008)
AJS Inc.

Qualica Inc.
TIS holds 80% equity and Komatsu Ltd., 20%. Maintains a high profile withservices for the manufacturing, distribution and service industries.

Fiscal 2008 Results

TIS holds 51% equity and Asahi Kasei Corp., 49%. Focuses on systems for the
manufacturing and medical services industries.

Fiscal 2008 Results• Capitalized
C it li d on favorablef
bl IT investmentitt trends
t d among construction
t ti equipmentitmakers to boost revenue and income.
• Large-scale projects for major manufacturers also contributed to higher revenues.

Fiscal 2009 Forecast• Favorable demand for system operation and maintenance services from the Asahi
Kasei Group.
• Despite efforts to cut prices and expand sales routes for products used in medical
systems, the opening of new sales channels was delayed and order volume
suffered as a result.
• Revenues dropped about 5%,
5% but enhanced productivity and quality
quality, as well as
cost-cutting measures, underpinned substantial year-on-year increases inoperating income, recurring profit and net income.

Fiscal 2009 Forecast• Software development and system operation services for major construction
equipment makers will continue to drive growth.
• Will expand overseas development support on systems for major construction
equipment makers.
large scale projects from major manufacturers.
• Expect wider demand for large-scale• Will focus on major companies and major projects associated with services for the
Asahi Kasei Group.
• Will carve out sales channels and invest management resources in thedevelopment of new products in the medical systems business.
• Will continue to seek enhanced productivity and quality and cut costs
costs, whichshould push revenues up over the level achieved in fiscal 2008.

(Millions of yen)
Fiscal 2007
Net sales
Operating income
Recurring profit
Net income

16,600
1,200
1 200
1,200
620

Fiscal 2008 Fiscal 2008 Fiscal 2009
(planned)(actual)(forecast)
18,00017,97320,000
1,200
1,355
1,360
1 200
1,200
1 356
1,356
1 360
1,360
630
716
730

copyright © 2008 IT Holdings Corporation(Millions of yen)
Fiscal 2007
Net sales
Operating income
Recurring profit
Net income (loss)

10,460
250
220
(70)

Fiscal 2008 Fiscal 2008 Fiscal 2009
(planned)(actual)(forecast)
10,6709,930
10,800
600
910
500
600
900
470
520
540
470
12

Status of Principal Subsidiaries (TIS Group, as of March 31, 2008)
Systems Engineering Laboratory Co., Ltd.
The TIS Group holds 51% equity. The company has experience building IBM iseries systems.

Fiscal 2008 Results• Sales from SE services, the packaged software business and the informationequipment business were in line with estimates. Sales of new package releases
and information equipment were particularly brisk, supporting improved businessperformance.

Fiscal 2009 Forecast• Will improve profitability in the SE services business by selecting orders more
carefully and executing meticulous project management.
• Will establish a presence in new business fields, such as security and informationsharing platforms, and then expand service profiles to elicit greater interest in
system operation and maintenance services and thereby boost profits.
profits(Millions of yen)
Fiscal 2007
Net sales
Operating income
Recurring profit
Net income

2,811
105
107
36

Fiscal 2008 Fiscal 2008 Fiscal 2009
(planned)(actual)(forecast)
3,050
3,279
3,300
120
169
160
120
166
160
59
94
65

copyright © 2008 IT Holdings Corporation

13

Fiscal 2009 Forecasts

copyright © 2008 IT Holdings Corporation

14

Full-Year Performance Outlook (IT Holdings)(Millions of yen)

Consolidated
1st half

Net sales

Fiscal 2008 (actual)

Fiscal 2009 (forecast)AmountComposition
2nd half Full year

AmountComposition Amount2nd half Full year

1st half

YOY change%

152,278

170,134

322,412100.0%

160,000

180,000

340,000

100.0%

17,5885.5%

Outsourcing andnetwork

－

－

－

－

58,50061,500120,000

35.3%

－

－

Software development

－

－

－

－

81,50097,000178,500

52.5%

－

－

Solution services

－

－

－

－

16,50018,00034,500

10.1%

－

－

Other business

－

－

－

－

3,500

3,500

7,000

2.1%

－

－

Operating income

2,553

17,42019,973

6.2%

8,000

14,00022,000

6.5%

2,027

10.1%

Recurring profit

2,563

17,384

19,947

6.2%

8,300

13,70022,000

6.5%

2,053

10.3%

Net income

1,198

7,476

8,673

2.7%

3,900

7,100

11,000

3.2%

2,327

26.8%

Note: Fiscal 2008 amounts are simple
p totals combining
g the consolidated results of TIS and the consolidated results of INTEC Holdings.
g IT Holdings
g has used
these totals in the calculation of year-on-year changes.
copyright © 2008 IT Holdings Corporation

15

Full-Year Performance Outlook (TIS Group)(Millions of yen)

Fiscal 2008 (actual)

Fiscal 2009 (forecast)AmountComposition
2nd half Full year

1st half

AmountComposition
Amount
2nd half Full year%

95,592

103,669

199,261

100.0%

102,000

111,000

213,000

100.0%

13,738

6.9%

Outsourcing and network

39,92140,92280,84440.6%

41,00041,00082,000

38.5%

1,156

1.4%

Software development

42,43250,22392,65546.5%

49,00058,000107,000

50.2%

14,345

15.5%

Solution services

11,296

10,73022,026

11.1%

10,50010,50021,0009.9%( 1,026 )( 4.7 ) %Other business

1,942
,

1,793
,

3,735
,

1.8%

1,500
,

1,500
,

3,000
,

1.4%

( 735 ) ( 19.7 ) %Operating income (loss)(1,077)

11,50910,432

5.2%

4,300

7,700

12,000

5.6%

1,568

15.0%

Recurring profit (loss)( 640 )

11,81011,170

5.6%

5,000

7,600

12,600

5.9%

1,430

12.8%

( 1,300 )

5,454

4,153

2.1%

2,100

3,900

6,000

2.8%

1,847

44.5%

TIS Group(note)

1st half
Net sales

Net income (loss)

YOY change

Note: Figures
Fig res undernder “Fiscal 2009 (forecast)” are combined amo
amounts
nts based on anticipated performances by
b companies undernder TIS’ consolidated umbrellambrellaas of March 31, 2008.

TIS
1st half
Net sales(Millions of yen)

Fiscal 2008 (actual)

Fiscal 2009 (forecast)AmountComposition
2nd half Full year

AmountComposition
Amount
2nd half Full year

1st half

YOY change%

45,95451,45897,412100.0%

51,00060,000111,000

100.0%

13,58813.9%

Outsourcing and network

15,427

16,06031,48832.3%

16,50016,50033,000

29.7%

1,511

4.8%

Software development

23,521

28,50252,023

53.4%

28,00037,00065,00058.6%

12,977

24.9%

Solution services

7,005

6,895

13,900

14.3%

6,500

6,500

13,00011.7%( 900 )

( 6.5 ) %Operating income (loss)( 4,330)

5,944

1,614

1.7%

1,000

3,500

4,500

4.1%

2,886

178.8%

Recurring profit (loss)( 3,927 )

5,893

1,966

2.0%

1,600

3,400

5,000

4.5%

3,034

154.3%Net income (loss)( 2,403
2 403 )

2 875
2,875

471

0 5%
0.5%

1 000
1,000

2 000
2,000

3 000
3,000

2 7%
2.7%

2 529
2,529

536 9%
536.9%

copyright © 2008 IT Holdings Corporation

16

Full-Year Performance Outlook (INTEC Holdings)(Millions of yen)

INTEC Holdings(note)

1st half
Net sales

Fiscal 2008 (actual)

Fiscal 2009 (forecast)AmountComposition
2nd half Full year

AmountComposition
Amount
2nd half Full year

1st half

YOY change%

56,686

66,465

123,151

100.0%

58,00069,000127,000

100.0%

3,849

3.1%

Outsourcing and network

－

－

－

－

17,50020,50038,000

29.9%

－

－

Software development

－

－

－

－

32,50039,00071,500

56.3%

－

－

Solution services

－

－

－

－

6,000

7,500

13,500

10.6%

－

－

Other business

－

－

－

－

2,000
,

2,000
,

4,000
,

3.1%

－

－

Operating income

3,630

5,911

9,541

7.7%

3,700

6,300

10,000

7.9%

459

4.8%

Recurring profit

3,203

5,574

8,777

7.1%

3,300

6,100

9,400

7.4%

623

7.1%

Net income

2,498

2,022

4,520

3.7%

1,800

3,200

5,000

3.9%

480

10.6%

Note: Fig
Figures
res under
nder “Fiscal 2009 (forecast)” are combined amounts
amo nts based on anticipated performances by
b companies undernder INTEC Holdings’ consolidated umbrellambrella asof March 31, 2008.
(Millions of yen)

INTEC
1st half
Net sales

Fiscal 2008 (actual)

Fiscal 2009 (forecast)AmountCompositionp
2nd half Full year

AmountCompositionp
Amount
2nd half Full year

1st half

YOY change%

44,662

53,834

98,496100.0%

47,00057,000104,000 100.0%

5,504

5.6%

10,71818,415
10,7304,799

10,80823,63014,387
5,010

21,52642,044
25,116
9,809

21.9%
42.7%
25.5%
10.0%

10,50020,00012,0004,500

12,00024,50015,0005,500

22,50044,50027,00010,000

21.6%
42.8%
26.0%
9.6%

974
2,456
1,884
191

4.5%
5.8%
7.5%
1.9%

Operating income

2,803

4,906

7,709

7.8%

3,100

5,400

8,500

8.2%

790

10.2%

Recurring profit

2,350

4,554

6,904

7.0%

2,550

5,050

7,600

7.3%

696

10.1%

Net income (loss)(1,039)

2,769

1,730

1.8%

1,290

2,710

4,000

3.8%

2,269

131.2%

Outsourcing services
Software development
System integration
Network

copyright © 2008 IT Holdings Corporation

17

Full-Year Operating Income Analysis for IT Holdings(100 million yen)

TIS increase
INTEC Holdings increase

28.9
199.7

IT Holdings
Fiscal 2008

copyright © 2008 IT Holdings Corporation

4.6

220.0

(13 2)(13.2)±0 0±0.0

Decreases by
TIS subsidiaries

Other

IT Holdings
Fiscal 2009

* The fiscal 2008 amount is the combined total of consolidated results posted by TIS and INTEC Holdings.

18

Operating Environment Highlights
Status of Japan’s Information Services Industry（Millions of yen)

Positive Factors
Special finance-related demand
Megabank integration and large-scale system configuration will probably ease up in
2008. Favorable trends in reconfiguration of platform systems for life insurers andfront end system development for members of the finance industry should keep thefront-end
market growing until 2009.
Continued investment in globalization, especially by the manufacturing sector
There will be a need to reconfigure corporate systems, primarily those forg, distribution and sales and marketing,g, and ppromote respective
pmanufacturing,connectivity. This is sure to spur interest in various enterprise application systems,
including product lifecycle management, ERP and CRM.
Diversification in methods to provide services
SaaS, a service-style architecture, can deliver results for mid-sized businesses. Use isstill rather exclusive but should see increased interest
interest. Demand is bound to rise forjointly executed outsourcing services typical of shared regional bank centers.
Negative Factors
Sluggish growth in IT investment among client companies
g dampen
p the enthusiasm of companiespto pursuepITEconomic conditions mightinvestment, including the allocation of funds to new projects.
Clear differences in projects for client companies
Seeking to secure the best results possible through steady investment and minimize
the risks inherent in large-scale projects, some client companies may prioritize
projects that other client companies do notnot. Projects with a low priority rating may
still be important but they will not receive the necessary funds for execution.
Continued downward trend in engineering prices
Since finance-related development projects will peak in 2008, the average price foryengineeringgg services could return to a low level.
systemcopyright © 2008 IT Holdings Corporation

Japan’s IT Services Industry
G
Growthth F
Forecastt

15,000,000

10.0%
9.0%

13 000 000
13,000,000

8 0%
8.0%
6.9%

6.8%

7.0%
6.2%

5.8%

11,000,000

5.6%

5.3%

6.0%
5 0%
5.0%

9,000,000

4.0%
3.0%

7,000,000

2.0%
1.0%

5,000,000

0.0%
2006

2007

Net sales (total)

2008

2009

2010

2011

YOY sales growthNote: Compiled by IT Holdings from Gartner’s
2007 second-half IT service industry
projections

19

Client Trends by Industry Sector — Part 1
Finance Industry
Sector

General Industry Trends

Impact on IT Holdings Group

Banking• System investment has resumed in wake of business realignment, including megabank integration.
• New system development is required, paralleling looser intra-industry rules and agency restrictions.
• Data center and outsourcing needs are growing.
• Development of next-generation standard platform systems for the finance industry is moving forward.

Investments by major clients to upgrade platform systems
are at a high level, but will begin to taper off. However,many system investment themes remain and these should
keep the Group’s services in high demand.

Credit Card

• Operating environment is changing, following revision of the Money-Lending Law.
• Legislative revisions increasingly require system response, but system investment budgets are being
squeezed by lower profitability.
• Next-generation system upgrades matched to new services and system integration, following industry
realignment will remain urgent priority.
realignment,
priority• Projects to upgrade the platform systems of major credit
card companies are heading toward convergence.
• While some existing clients are holding back on system
upgrades, the need to investment remains strong, andthis should buoyy demand for engineeringgg services.

Insurance• Demand is strong for the development of new applications to standardize insurers’ business processes
and make them more efficient, to enable insurers to create and provide new insurance products overthe Internet, and to improve the quality of services extended to clients through such access points as
contact centers.
• Growing need for new system configuration, following government guidance and tougher rules.
• Rising interest in BPO and system configuration to deal with unpaid premiums.

Big clients are likely to embark on full-scale IT
investment projects. Efforts to enhance the sector-specificexpertise of consultants as well entry into such areas aspwill payp y off and contribute nicelyy tosolution development
overall performance.

Leasing• Capital spending, which had been strong until last year, is now retreating.
• Demand is particularly lackluster for mainstay information and communications equipment,
equipment
and year-on-year leasing transaction volumes have fallen for nine consecutive months, since June 2007.
• A change in the application of accounting standards for leasing facilities, effective from the fiscal year
ending March 2009, has muddied the outlook even more.

Trends among big clients have fluctuated wildly, but
stronger partnerships have helped to pinpoint investment
needs quickly, and this should lead to stable demand andresults.

Securities

revamped following revision of the industry systemsystem.
• Systems are being revamped,• New products require system response.
• Dematerialization of stock certificates requires system response.
• IT investment is essential for the industry to address market changes,
but deteriorating profitability levels will hamper the ability to execute required system responses.

Each company is beginning to take a specific position,
positionprioritizing measures to address either deteriorating
profits or IT investment needs.

Notes: 1. The information in this slide applies
ppto the IT investment trends of our clients,, groupedg p byy industryy sector,, and mayy differ from g
general conditions.
2. The impact on the Group is a prediction based on information available to management as of May 16, 2008. Because such predictions may be influenced by unforeseen factors, such as changes in the business environment,
management does not guarantee that the anticipated impact will actually materialize.
3. References: Nihon Keizai Shimbun and Gartner.

copyright © 2008 IT Holdings Corporation

20

Client Trends by Industry Sector — Part 2
Sector

General Industry Trends

Impact on IT Holdings Group

Assembly-based
Manufacturing(Construction
equipment)

Solutions aimed at honing an internationally competitive edge and rationalizing
operations are attracting more attention. Greater effort extended toward supply chain
management, product data management, accelerated integration of production andsales systems, and optimization of global supply chains.

• Qualica will expand its support to major construction
equipment makers seeking to develop systems overseas.
• IT investment by key clients will keep order level high.
No drop from the plateau is expected.

Assembly-based
Manufacturing(Electric
appliances)li)• All-out sales battles in swing ahead of Beijing Olympics.
• Continued growth in sales of thin TVs.
• Domestic shipments of white goods—refrigerators, washing machines and othertypically white-colored household appliances—favorable, and big-ticket items
spurring demand.
demand• Some market watchers sense a consumer spending cooldown, due to the high yen
and low stock prices.

A large increase in orders was recorded up to fiscal 2008,
but it is unclear if the momentum can be maintained. Ahigh yen and low stock prices could weaken the sales
potential of special demand prompted by the Summer
y p
Olympics.

Processing-based
Manufacturing

Price of naphtha—key raw material in petrochemical products—soaring along withprice of oil,oil thereby squeezing profits.
profits

Development of systems ordered previous to fiscal 2009
should continue at a full-scale
full scale pace
pace.

Commerce,
Distribution(Retailing)• Trend toward greater investment in information systems to ensure timely response to
consumer needs.
• Market is growing, thanks to frontline demand in the value chain, such as store
systemt overhauls,
h l as wellll as a shift
hift towardtd open systems,tefforts
ff t tot enhancehbackb koffice efficiency, such as inventory control, and approaches to carve out new sales
channels.

• Within the commerce, distribution (retailing) sector, theGroup has particular expertise for retailers, who happen
to be quite keen to invest in IT right now.
Dtt storest
are ini theth midst
id t off sectort realignmentlit• Department
and are actively investing in IT to facilitate sharedpurchasing and handle more store-brand credit cards inissue.

PublicCorporations

government–led
led IT strategy entered new phase,
phase public budgets• Although national government
are generally too tight for IT investment.
• Municipal mergers have caused a convergence of IT investment in regional offices,
so overall IT spending should remain stable.

The Group should benefit from stable IT investment,
investment
especially from regional governments in Hokuriku, theregion bordering the Sea of Japan.

Notes: 1. The information in this slide applies
ppto the IT investment trends of our clients,, groupedg p byy industryy sector,, and mayy differ from g
general conditions.
2. The impact on the Group is a prediction based on information available to management as of May 16, 2008. Because such predictions may be influenced by unforeseen factors, such as changes in thebusiness environment, management does not guarantee that the anticipated impact will actually materialize.
3. References: Nihon Keizai Shimbun and Gartner.

copyright © 2008 IT Holdings Corporation

21

Management Philosophy,
Business Direction and Management
Strategy of IT Holdings

copyright © 2008 IT Holdings Corporation

22

IT Holdings Management Philosophy

Management Philosophy
The IT Holdings Group seeks to be a corporate citizen whose activities, namely, theprovisioni i off servicesiutilizingtili i IT,
IT matcht h its
it status
t t as a leading
l di corporatet group, andd willill
strive to raise corporate value, supported in this effort by the high regard of all its
stakeholders, including clients and shareholders as well as employees and their families.

We will cultivate a vibrant corporate culture that encourages companies andindividuals under the Group umbrella to work toward higher goals and embrace
new challenges, and thereby ensure corporate growth.
We will always provide our clients with our very best, through excellent quality
and technology built on the composite strengths of the Group.
We will uphold high corporate morals and fulfill our social obligations.

copyright © 2008 IT Holdings Corporation

23

Formulating a Medium-term Management Plan (Roadmap)
Formulate medium-term management plan, which will starts from April 2009
Dec.
2007

Feb.
2008

Apr.
2008

May
2008

Basic
B
i
agreement

Approval at
extraordinary
shareholders’meeting

Establish
newcompany

Mar.
2009

Mar.
2010
For fiscal 2011,,
ending March 31, 2011
Net sales: ¥400 billion
Operating income: ¥40
billionMar.
2011
Accelerate p
pacetoward net sales of¥500 billion andoperating income of¥50 billion

Formulate and implement account plan

Key
IssuesCombine technology andmarketing divisions
Promote sharing of back office
operations
Streamline/amalgamate peripheral
and redundant activities

Promote medium-term management plan

Integrate information systems
Determine basic strategy for
personnel system
Redefine the new ggroupp structure

copyright © 2008 IT Holdings Corporation*Source: Interim Report on IT Holdings Business Integration, announced on January 31, 200824

Formulating a Medium-term Management Plan
Business Direction• Picture the type of organization that the IT Holdings Group seeks to become and draft a medium-term management planwith concrete measures to facilitate the transformation process.
• Group companies will reflect the content of the medium-term management plan in the creation of their own management
plans,leffective
ff i fromffiscalfi l 2010.
2010

MeasuresFirst Half Prepare draft of medium-term

management plan

Key Points• Secure industry position• Promote business synergies
y g• Enhance management efficiency• Expand presence overseas

copyright © 2008 IT Holdings Corporation

Second Half Explain draft version to Group companies

and exchange information

Finalize the medium-term management plan for
IT Holdings
g as well as the individual pplans ofGroup companies designed in line with themeasures stated in the former.

25

Objective: Promote Cross-Selling
Creating and implementing account plans

Business Direction
Utilize overall Group capabilities to position IT Holdings as an IT partner to management at client companies.

MeasuresFirst Half

Second Half Designate target sectors and concentrate efforts at clientsin these sectors

 Create account teams

 Develop top sales promotion and marketing activities→ Presentations for management at client companies
Pt cross-selling
lli off top-sellingt
lli products
d t andd→ Promoteservices→ Utilize consulting function within the Group to offer
clients strategic solutions that surpass theadvantages
g afforded byy current productspandservices Create plans suited to each account Establish a consultation monitoring structure Identify flagship accounts (3 industries, 8 sectors)• Finance (banking, insurance, credit cards)• Manufacturing (assembly and processing)• Distribution (traders, consumer goods, retail)

Assumed Annual Growth of IT Services Market

Achieve balance between target sectors—forte fields—and growth sectors

2008
8.2%
7.7%
8.0%

2009
6.7%
5.5%
6.4%

Assembly-based manufacturing
Processing-based manufacturing

6.8%
5.9%

6.2%
5.9%

Industry average

6 2%
6.2%

5 8%
5.8%

Banking
Insurance
Finance, including banking and insurance

Note: Based on Gartner’s anticipated scale of IT services market in Japan in the second half of 2007 by industry and best-case scenarios.
copyright © 2008 IT Holdings Corporation

26

Objective: Promote Cross-Selling
Integrating marketing techniques

Business Direction
Distribute information, personnel and ideas between operating companies, promote business models that elicit
maximum synergies, and implement measures that ensure the desired results from business models.

Measures(Concentration and Promotion of Groupwide Marketing Efforts)
First Half

Second Half Establish cross-selling model unique to IT Holdings→ Completed initial selection of key solutions,
including EC Center for Bugyo, SynCube, Thin Client
servers, Kaisoku-Searcher, IDM (YUITO SOKUTO)
and F3 (F-Cube) Implement groupwide marketing plans→ TIS, INTEC and Agrex will have a joint display at
FIT 2008, an IT expo aimed at financial institutions
that will take place in Tokyo in October 2008.
→ IT Holdings will have a presence at RetailTech
Japan 2009, a specialized trade show on information
systems for the retail sector scheduled for March
2009.

 Revitalize marketing perspective with groupwide
activities
i ii→ Introduce new products in May.
→ Open Group Solution Forum in June.

 Present product and service cross-selling proposals toflagship accounts→ Promote top-selling products and services
 Undertake personnel exchanges→ Cultivate an atmosphere of collaboration, startingwith jointly executed projects and new businesspursuits
pursuits.

copyright © 2008 IT Holdings Corporation27

Objective: Promote Cross-Selling
Shared operation of data centers

Basic Direction
Systemize the services of the Group and establish a framework that allows Group companies to select forte fields andoffer solutions tailored to client needs.

MeasuresFirst Half ReevaluateR
l t theth service
i menu→ Resource planning→ Service content, pricing and service levelagreements New menu and structure for cross-selling→ Create new menu
→ Create marketing tools→ Increase number of marketing representatives at
each operating company

Second Half BeginB i consideration
id ti off value-addedl
dd d plansl→ Disaster recovery→ Green IT→ Thin Client data center→ BPO→ SaaS Promote cross-selling with new service menu
→ Groupwide campaign

 Resource status at operating companies and sharing ofpand action pplans
expansion→ Function: Specialized data centers, standard andshared data centers, high-specification data centers→ Regions: In Kanto, surrounding Tokyo, 7; in Chubu,
surrounding Nagoya, 2; in Kansai, surrounding
Osaka, 3; and five other centers, for a total of 17.
copyright © 2008 IT Holdings Corporation28

Objective: Higher Quality and Efficiency
Promoting shared back-office operations and amalgamation of peripheral and duplicate
businesses
Basic Direction
The Group’s headquarter-based administrative function and support services will facilitate shared operations and theamalgamation of peripheral and duplicate businesses. The goal is to maximize merits of scale to reduce costs and ensure
standardization consistent with the formation of an internal control system.

Mid-term Promotion Plan
Operating companies under IT
Holdings umbrella

IT Holdings
Shared businesspromotion andsupervisory functions

Supportpp
Shared administrative support
centerBy fiscal 2011, ended March 2011,
integration and concentration of operations
will have cut costs by about ¥1 billion overthe fiscal 2008 level.

Accounting • Labor • Centralized purchasing •Facilities management • Insurance agency •Source of key administrative personnel • Shipping •Employee welfare • Advertising agency

MeasuresFirst Half Limit flow of cash outside the Groupp by
y utilizingg theexpertise of Group companies.
 Review peripheral and duplicate businesses.
 Inventory operations, pinpoint activities that need improvement,
then promote standardization and greater efficiency.
 Establish administrative system.
copyright © 2008 IT Holdings Corporation

Second Half

Prepare to implement shared services
Expect to set up new company forthis purpose in fiscal 2010, ended
March 201029

Objective: Higher Quality and Efficiency
Underpinned by Group production technology strategy
Basic Direction
Medium-term Direction
Maximize groupwide profits and establish the industry’s best production platforms that—• maintain the integrated quality of the Group but also fully demonstrate the independence of each Group company;• are applicablepp
to a wide range
g of pprojects—fromjsmall to large
g scale—by
y anyy employee;p y• facilitate cooperation among Group companies right away, regardless of the hour, and deliver high quality and sophisticatedtechnology; and• earn client trust, present peace-of-mind and raise international competitiveness
Guided by this medium-term direction
direction, management will define methods in fiscal 2009 to pinpoint current status and promote
Group activities and determine approaches to successfully address priority issues.

MeasuresFirst Half

Identify the status of Group company and share thisinformation→ Problems at systemydevelopmentpsites and requestsq
for improvement→ Status of production platform promotion structure
and issues to be resolved



Establish promotion structure for Group production
platforms→ Make strategic planning more effective by utilizing
experts more intensively→ Accelerate problem-solving
problem solving efforts by sharing
resources→ Prioritize activities that yield good results

copyright © 2008 IT Holdings Corporation

Second HalfAct on high-priority issues→ Those directly linked to quality and productivity
improvements,p, such as the establishment ofquality standards and benchmark tools→ Those that reinforce technological capabilities andenhance the outcome of personnel exchanges, suchas better training programs and wider use of
information portals→ Those that use shared techniques for visualizing
project status to avert problematic projects
 Address new technology before the competition does
→ Exploreltechnologies
h l i connectedd to R&D activities
i ii→ Execute verification tests, such as virtualization
techniques and IPv6, on new technologies

30

Objective: Higher Quality and Efficiency
By consolidating information systems

Basic Direction
Establish a management information system that quickly relays management information about the Group.
Create systems that foster a sense of unity among members of the Group.

MeasuresFirst Half

Second Half Build a groupwide network.
→ Lay the groundwork for smooth communication
pprocesses• Interconnected systems for e-mail andteleconferencing• Standardized extension numbers

 Establish a system to monitor the business performanceof the entire Group.
→ Devise a systemythat qquickly
y identifies and analyzes
ynumerical data, based on data from accounting
systems Create a structure to facilitate information-sharing within
the Group→ Share management and technology-related
information

 Formulate a plan for establishing a management
information system→ Consolidated accounting systems, both fiscal
accounting and management accounting

 Review and analyze business systems used at Group
companies to build a better management information
systemcopyright © 2008 IT Holdings Corporation

31

Cautionary Statement

All content described in these materials is based on information available to management
regarding the IT Holdings Group—that is, IT Holdings and the subsidiaries under its
umbrella—as of the presentation date and reflect somewhat objective assumptions deemed
reasonable at this time. Please be advised that various factors may cause future results to be
substantially different from expectations.

copyright © 2008 IT Holdings Corporation

32