Consolidated Financial and Business Results
for the 1st Half of FY09 (Ending March 2010)

Faith, Inc.
Nov 13, 2009111

Agenda

1.
••
•
2.

Consolidated Financial Results for the 1st Half of FY2009(Ending March 2010)
Highlights of Consolidated Financial Results
Results of the Contents BusinessResults of the Electronic Money Business
Full-Year Forecast of Consolidated Financial Results for the FY2009(Ending March 2010)

3. Business Strategies• Faith's Business Concept• Creation of New Contents Distribution <1>-<6>222

Consolidated Financial Results
for the 1st Half of FY09 (Ending March 2010)333

1H Highlights of Consolidated Financial Results
Consolidated net sales for the 1H of FY09 increased 4.1% year on year to ¥26,322 million led by thecontinuous growth in the electronic money business. Operating profit was ¥747 million, down 17.7%
year on year, recurring profit was ¥690 million, down 6.9% year on year, and net profit of ¥157
million, 45.1% year on year decrease due to the decline in sales of the ringtone business.
Profit : million yen

Net sales : million yen
28,0002,800

21,0002,100

14,0001,4007,00070000
FY04 1H

FY05 1H

FY06 1H

FY07 1H

FY08 1H

FY09 1H-7,000-700

Net sales

EBITDA

Operating profit

Recurring profit444

Results of the Contents Business during FY2009 1HNet
sales in the content business totaled ¥5,004 million, down 24.1% year on year, and operating profit
コンテンツ事業の売上高は、着信メロディ事業の減収等により、前年同期比24.1％減のdecreased 47.1% year on year to ¥387 million due to the decline in sales of the ringtone business and5,004百万円となり、営業利益は、前年同期比47.1％減の387百万円となりました。
otherfactors.

Profit : million yenNet sales : million yen

9,000

3,000

8,000

2,500

7,000

2,000

6,000
5,000

1,500

4,000

1,000

3,000
2,000500

1,00000
FY04 1H

FY05 1HNet sales

FY06 1H

FY07 1H

EBITDA

FY08 1H

FY09 1H

Operating profit

555

Results of the Electronic Money Business during FY2009 1H
Net sales achieved continuous growth driven by the increase in settlement amount mainly in the online
game category. Net sales in the Electronic Money Business increased 15.0% year on year to ¥20,701
million. Operating profit increased by 122.8% year on year to ¥334 million due to an increase in thesettlement amount and other factors.

Profit : million yen

Net sales : million yen

420

21,000360

18,000300

15,000240

12,0009,000

1806,000120

3,000

6000-3,000

FY04 1H

FY05 1H

FY06 1H

FY07 1H

FY08 1H

FY09 1H-6,000-60-120

Net sales

EBITDA

Operating profit

666

Consolidated Balance Sheet (year-on-year change)
Reduced ¥1 billion of liability with interest and increased equity capital by ¥1.1 billions

Improve capital ratio by 3.7 points (from 43.8% to 47.5%)■End of March 2009■End of September 2009

Short-term loans 2 billion

Cash equivalent 13.5billion

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

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

Fixed liabilities 2.5 billion

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

Investment securities 1.7billion

Fixed assets 8.4 billion

Net assets 14.4 billion

Total assets 30.5 billion yen

Short-term loans 2 billion

Total
liabilities
15.9 billion
includesLiabilitywithinterest
4.1 billion

Cash equivalent 15.6billion

Trade notes andaccounts payable
5.5 billion

Totalliabilities
14.6 billion

Current liabilities
12.7 billion

Includesliabilitywith
interest
3.1 billion

Long-term loans 1 billion
Fixed liabilities 1.9 billion

Accounts and notes
receivable 4.8 billion
Current assets 21.8 billion
Tangible fixed assets 0.4billion
Intangible fixed assets
4.5 billion
Investment securities 2.9billion

Fixed assets 8.4 billion

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

Total assets 15.6 billion

Total assets 30.3 billion yen
777

Highlights of Business Development
during the First Half of FY09888

Highlights of Business Development during FY2009 1H

Content Distribution Business 1●Launched cooperative program with “Short Shorts Film Festival &Asia” authorized by the Academy Awards to expand the distribution
business of new contents created by integration of music and shortfilm.
●Expanded the video distribution service utilizing NFRM™ forSoftBank mobile in addition to NTT DOCOMO. （Near Field RightsManagement®）●Tied-up with WILLCOM Inc. to develop home information devices
equipped with “XGP”, a high-speed mobile data transmission
technology, and regional revitalization services utilizing the device.
●Launched the first application development system in Japan for
iPhone / iPod touch under the brand of “COOK”.

999

Highlights of Business Development during FY2009 1H

Content Distribution Business 2●Brave started download sales of the high-vision 3D-CG materials at“Creators Lab”, the creators support package.
●Improved “Pocket Karte”, a personal medical recording system, byadding search function of 160,000 medical institutions such as
hospitals, clinics and dentists.
●Launched “UTAMO”, a Karaoke application service for iPhone.
●Improved “KASIMO”, an automatic lyric display service for iTuneusers, by adding a new download function.
●Organized a world-wide audition of Presley songs on “viBirth” incelebration with the 55 anniversary of Elvis Presley and the firstanniversary of “KORG DS-10”.
●Released original DVD package containing one and only birthday songby popular TV characters, “Gachapin and Mook”.
●Developed various popular characters including “Sento-kun” and“Hikone-no-Yoi-Nyanko”, regional PR characters and “QP” dressedin 47 costumes representing prefectures, both on mobile and PC.

101010Highlights of Business Development during FY2009 1H

Electronic Money Business●WebMoney launched interpersonal transaction
services of electronic money, “Petit-Kampa” and“Soku-Furi”.
●WebMoney held an event, “Natsu messe. 2009” foronline game users.
●WebMoney started CM distribution widget,“manna”, in cooperation with AIDIA Inc.

111111

Launch of interpersonal WebMoney Transaction Services"Petit-Kampa" enables
individual users to donate inWebMoney to creators or social
action works.
<Suitable users>● Creators who distribute their own
music or CG design●Bloggers who post news and events●People who works on social activity
programs"Soku-Furi" provides function
for interpersonal WebMoneytransaction by embedding asettlement cashier on individual
website or blog.
<Suitable usage>●Payment on e-mail newsletters,
weblog, Podcast, or variety of pay
services and purchase on Internet
auction121212

Development of New Advertisement Media

Launched the service of beta version of commercial film distribution widget,“manna”, which enables viewers to save WebMoney according to theplayback.
▼ manna player

131313

Full-Year Forecast of Consolidated
Financial Results for the FY2009

141414

FY09 Financial Forecast for the Business Results
Fractional increase is expected in net sales due to the expansion of the Electronic Money
business covering the expected decrease in ringtone business. Profits are expected todecrease due to the fall in revenue from ringtone business and the cost for ongoinginvestments on the system construction, the production and the procurement of contents.
Net sales : billion

Profit : billion

330

220

1

1000-2FY09(P-1lan)

40

FY08

4FY
0750

FY
065

FY0560

FY046-10-20

Net sales
EBITDA
Operatingprofit
Net profit
151515

FY09 Consolidated Financial Forecasts by Segment(million yen)

16

1616

Faith's Business Concept

171717

Business Concept
Contents

NetworkHardware

Record labels

NGN

Karaoke maker

Broadband mobile

TV station

XGP

PC
Mobile phone
Digital appliances
Car navigation
Gaming device
STB
iPhoneTicketing device：

Film company

ServerServer

Mobile Wimax

Game maker

DTTV

Medical institution
Comedy industry：(flat-rate packet：

system for mobile)

Endusers

181818

Multi-Platform and Multi-Content Strategies
Multi-Content

Multi-Platform

UserMusicFilm

PC

Mobile phone

GameSTBTVDVDGame

Information

Car navigationsystem

PDA

Ticketing device

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

191919

Expansion of Digital Contents Business Domain

FilmMusic
Comics

Ceremonial
occasionsGambleAdvertisement

Game
Novel

Qualification
Shopping
SportsMedical/Health

Education
20

20
20

Creation of New Contents Distribution

2121
21

Distribution Platform

222222Creation of New Contents Distribution <1>
Tied-up with WILLCOM and developed home information device equipped with “XGP”,
high-speed data transmission, and regional revitalization program utilizing the device.

●Home information device equipped with “XGP”:
Set-top box type device which provides TV screen with various information regarding
regional information for daily living.

●Regional revitalization services:
Through XGP base station, deliver various information and entertaining contents
including contingency plan, regional information, medical information to each home.
Other services, such as delivering local community publications, broadcasting local
assembly, accepting application for public courses and provision of services tied-up
with schools and hospitals are also included.
Concluded with WILLCOM, Inc. and WILLCOM OKINAWA, Inc. on comprehensive collaboration agreement forregional revitalization, to improve te live of Kin-cho of Okinawa prefecture.

Equipped withXGP

Disaster information
Regional information
Health information

Household-use TV

Home information
deviceLocal government
232323

Medical/Health Information

242424Creation of New Contents Distribution <2>
Equipped with additional function to search approximately 160,000 of hospitals, clinics anddental offices on “Pocket Karte”, an electronic medical recording service.
●Enables users to search medical institutions at an outside location.
●Refine users' search by location, nearest transportation and department to visit.
●One click transition to retrieval screen of medical institutions just after confirmation ofthe own health information.
*The number of "Pocket Karte" users reached 10,000.

25

25
25

iPhone26

26
26

Creation of New Contents Distribution <3>
Application delivery for “iPhone and iPod touch”

Recorded the top sales
in the music category at App Store

27

27
27

Creation of New Contents Distribution <4>
Series of application Development and support for “iPhone and iPod touch” under thebrand of “COOK”.

“COOK” publisher“COOK” promotion

Support for magazine publisher topublish electronic books for“iPhone/iPod touch”

Promotional support for world-wide
distribution of music and video<Advantages>- Acquire world-wide subscribers- Interactive linkage with various online
services such as Twitter and Facebook- Risk-free on inventory and logistics<Advantage>“COOK” promotion enables direct
promotion to world-wide users free frominventory and logistics.

282828

Music + Video

292929Creation of New Contents Distribution <5>
Established a new award category, “Music Short Creative Award”, at “Short Short Film
Festival & Asia”
Tied-up with “Short Short Film Festival & Asia”, the film festival authorized byAcademy Award and established “Music Short Creative Award”. Launchedcompletely new program of creating video clips.

303030Creation of New Contents Distribution <5>
Established a new award category, “Music Short Creative Award”, at “Short Short FilmFestival & Asia”
Business Scheme

List of Musical Artists

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

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

31

31
31

TV + Internet + Mobile Phone

3232
32

Creation of New Contents Distribution <6>
Launched a media integrated TV program, “MusicBirth+”“MusicBirth+”, a TV
program, created byintegration of TV, Internetand mobile
Nonconventional musicprogram realized by one-stop
service, including training andmanagement of artists,
distribution and promotion of
their music, and providing
direction for viewers to thewebsite.

333333Creation of New Contents Distribution <6>
Launched a media integrated TV program, “MusicBirth+”■Linkage of TV and Internet at “MusicBirth+”

34

34
34

Summary35

3535

Faith Group Realignment
Post-realignment

Brave,Inc.

WebMoney
Corporation

GoodyPoint, Inc.

Faithギガネットワークス
Wonderworks, Inc.
363636Creation of New Content Distribution SystemUsers

Various contents

373737Creation of New Content Distribution System
MultiContent

Multi-Platform

UserMusic

FilmPCMobile phone

GameTVDVDSTBGameInformation

Car navigationsystem

PDA

Ticketing device

38

38
38

Appendix

393939

1H Consolidated Financial Results by Segment(million yen)

40

40
40

FY09 Consolidated Financial Forecasts by Segment(million yen)

*Either of forecasts for net sales, operating profit, recurring profit or net sales have not modified at theannouncement of the financial statements for FY09 1H.

41

41
41

Amortization of Goodwill(million yen)

FY082Q

FY09

Full year

Full year(Plan)

2Q

FY10(Plan)

FY11(Plan)

FY12(Plan)

FY13(Plan)

3673

36737373

67

34

1,062

2,131

1,076

2,1512,151

380

2620Brave131333MVP

24---

Media Complex

711--

Others

60

69

9

9

1,168

2,291

1,122

2,236

WebMoney
Faith Wonderworks

Total-------------

2,227

456

93

54

424242

FY09 1H Consolidated Net Sales (year-on-year basis）(billion yen)

25.2 billion

FY08 2Q

Content business

Decrease in revenue from ringtone solution

Electronic Moneybusiness

Growth of settlement amount-1.58+2.7-0.08

Others26.3 billion

FY09 2Q051015202530434343

FY09 1H Operating Profit (year-on-year basis)(million yen)

FY08 2Q

907-344

Content businessElectronic Moneybusiness

Growth of settlement amount
Cost reduction by selection of business+184+0Others

747

FY09 1Q
0100

200

300

400

500

600

700

800

900

1,000

444444

FY09 1H Recurring Profit (year-on-year basis)(million yen)

741

FY08 2Q
Decrease in operating profit-160-9Decrease in interest received+18

Decrease in interest paidDecrease in investment loss
on equity method+84+16O thers

425690

FY09 2Q

400500600

700

800454545

FY09 1H Net Profit (year-on-year basis)(million yen)
FY08 2Q

287-51-136+108+36-95+142

Decrease in recurring profit
Decrease in gain on sale of investments in securities
Gain on sale of subsidiaries
Gain on reversal of allowance for doubtful accounts
Decrease in reversal of subsidiaries losses
Decrease in loss on revaluation of investments in securities
Decrease in amortization of goodwill+294+202-65-382

Decrease in loss from disposal of business
Other extraordinary profit or loss
Increase in income tax es-183

Loss of minority shareholders

157

FY 09 2Q

0100

200300400500600

7008004646
46

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

4747
47