May 10, 2018
(Translated from the Japanese original)
Company Name:
Representative:
Stock Listing:Stock Code:Contact:
Phone:TIS Inc.
Toru Kuwano, President
First Section of the Tokyo Stock Exchange
3626
Masakazu Kawamura, Department Manager
of Corporate Management Dept.
+81-3-5337-4569 (in Japan, 03-5337-4569)

Notice Regarding a Formulation of Medium-Term Management Plan (2018 – 2020)
TIS Inc. (hereafter, “TIS” and “the Company”) hereby announces that the Board of Directors
formulated Medium-Term Business Plan (2018-2020) and embarked on this three-year blueprint infiscal 2019, ending March 31, 2019.
Details
1. Positioning of Medium-Term Management Plan (2018-2020)
Taking advantage of the shift to a new management structure in July 2016, TIS formulated Group
Vision 2026 and began working toward a corporate ideal looking 10 years down the road This vision isdefined by the catchphrase “Create Exciting Future” and emphasizes efforts to use advanced
technologies and know-how to realize business reform and market creation. Toward this end, theCompany drafted Medium-Term Management Plan (2018-2020) to facilitate structural transformation
with a sense of speed and thereby build a foundation to underpin the success of Group Vision 2026.
The TIS INTEC Group will strive to ensure sustainable growth and higher corporate value in themedium to long term through steady implementation of Medium-Term Management Plan (2018-2020).
2. Outline of Medium-Term Management Plan (2018-2020)(1) Slogan“Transformation to 2020”— Achieving structural transformation as a corporate family and taking the lead in finding
solutions to social issues —(2) Basic Policy(i) Sustainable profit growth(ii) Emphasis on employee self-fulfillment(iii) Concentrate on core businesses(iv) Shift to prior investment style of business development(v) Expand global business(3) Key Performance Indicators(i) Strategic Domain Sales Ratio(ii) Operating Income(iii) Operating Margin(iv) ROE

50％¥ 43 billion
10％
12％

1

(4) Numerical Targets
Net Sales
Fiscal 2021, ending
March 31, 2021
(estimate)(For reference)
Fiscal 2018, ended
March 31 2018(actual)Operating
IncomeNet Income
Attributable to
Owners of the
Parent Company

ROE¥430.0 billion¥43.0 billion¥29.0 billion

12.0%¥405.6 billion¥32.7 billion¥20.6 billion

9.9%(5) Other(i) Change in Reporting Segments
TIS changed its management system to promote structural transformation and changed its
reporting segments from a management approach perspective, effective from the fiscal year
ending March 31, 2019. New reporting segments comprise the Service IT Business, BPO,
Financial IT Business, Industrial IT Business and Other Business.
Before changes
IT Infrastructure Services
Financial IT Services
Industrial IT Services
Other Business

After changes
Service IT Business
BPO
Financial IT BusinessIndustrial IT Business
Other Business(ii) Basic Policy on Return to Shareholders
Through the medium-term management plan, TIS will work toward a more appropriate capital
structure and improve capital efficiency, by emphasizing growth investments, maintaining asound financial position and reinforcing return to shareholders. In line with its policy for returnto shareholders, TIS will raise the total return ratio yardstick to 40%, from 35%, and then aim
for a dividend ratio of 30% by fiscal 2021 through stable dividend growth.
(iii) Basic Policy on Treasury Stock Holdings
TIS set the upper limit on treasury stock holdings to 5% of total number of issued shares, withexcess of this amount cancelled.
Attachments:
Briefing Materials for Medium-Term Management Plan (2018-2020)
END

2

TIS INTEC Group
Medium-Term Management Plan (2018-2020)
May 10, 2018

Copyright © 2018 TIS Inc. All rights reserved.

Group Vision 2026
Taking advantage of the shift to an operating holding company in July 2016, TIS formulated a new Group vision for the future(announced in May 2017) to mobilize the capabilities of Group executives and employees alike and take corporate value higher.

2026 Corporate Ideal“Create Exciting Future”
Utilize advanced technologies and know-how
to realize business innovation and market creation
Seeking Position on Global Stage• Be seen by leading companies in different industries as having anappealing presence, always trusted as a strategic partner• Always embrace reform in existing industries and markets, andearn reputation as market-creating innovator• Transcend the limits of an IT enterprise; be a leading company
with innovative market concepts• Proudly demonstrate high profile and showcase solid standing as acorporate group chosen by clients, society, employees—everyone

IToffering
services

Frontier
marketcreationbusiness
Advanced
technologies

Strategic Domains• Strategic Partnership Business: Lay both a revenue base and atechnology/know-how base
• IT Offering Services: Prior-investment business functioning as
pillar of profit• Business Function Services: Recognized as Group forte, driver ofgrowth• Frontier Market Creation Business: Driver of explosive growththrough creative destruction of prevailing walls

Businessfunction
services

Strategic
partners
hipbusiness

Copyright © 2018 TIS Inc. All rights reserved.

TIS INTEC Group management resources2

Position of Medium-Term Management Plan (2018-2020)
Medium-Term Management Plan (2018-2020) will guide us in pursuit of structural transformation with a sense of speed to build
a foundation for Group Vision 2026 success and expansion of strategic domains.

2016

Medium-Term Management Plan
(2018-2020)

2026

Business Domains in 2016

Strategic Domains in 2026
Frontier Market
Creation BusinessBusiness
CreatorSupporting clients’businesses

Marketable
services

Evolution ofstrategic domains

Network
infrastructureservices

IT Offering
Services

Business
Function
Services

BPO services
IT system
configurationand operation

Specific
responses

Provide IT
engineeringexpertise

IT domains
Strategic domain
ratio(net sales basis)

Strategic Partnership
Business

Service domains

IT domains

Service domains

Fiscal 2018

Fiscal 2021

Above

35%

50%

70%

Copyright © 2018 TIS Inc. All rights reserved.

3

Looking Back on Previous Medium-Term Management Plan

[Billions of yen]

Exceeded numerical targets in all categories. Progress on many measures, based on basic concepts. Despite some issues still toaddress, Group achieved growth overall.

Net Sales

Numerical Targets(Fiscal 2018)
Operating Income

Basic Concepts

Profit Emphasis

405.6

32.7

• Steadily improve profitability, matched to
expanding business results• Work to prevent appearance of unprofitableprojects, and continual theme to keep at low level

8.1%

IT Brain

Actual• Wider demand for value-added creation style
responses, along with assignment solutions
geared to client requests, will fuel expansion of
consolidated sales.
• Shift toward market-cultivating style services
requires greater sense of speed.

30.0

400.0

7.5％
OperatingMarginTargets

Targets

ActualNet Income Attributableto Owners of Parent

ROE

9.9%

20.6
16.0

• Steadily leverage measures aimed at optimizing
Group capabilities, including transition into
operating holding company.

8.0％

5.1％
Net income to
net sales ratio(Achieved a year ahead of schedule)

Portfolio Management

4.0％

Targets(Achieved a year ahead of schedule)

ActualCopyright © 2018 TIS Inc. All rights reserved.

Targets

Actual4

Progress Made Through Previous Medium-Term
Management Plan: IT Brain
Actual results+¥6.2 billion

Actual results+¥20.6 billion
Value-added creation style
Target of
the plan

Value-added creation

Market-cultivating style
Target of
the plan

Sales growth:¥15 billion

Sales growth: ¥18 billion

Expand solutions business
Expandglobal business

Large-scaleorders inforte fields

Promote big projects

Industry platformbusiness(own packages, services)

Proposal business

Client insight–driven

Reducedincome due toheightenedcompetition

Target of
the plan

Sales growth:¥17 billion

Pillar of
growthMarket innovation–driven

Expand demand from existing clients

Higheroutsourcing
demandAssignment solutions
geared to client requests

Provide BPO
services

Value-added creation style• Capture big projects from card industry and public sector• Expand scale of energy-related business
Market cultivating style• Reinforce forte fields — emphasize payment settlement (PAYCIERGE) and
IoT (CareQube)• Expand capabilities through external connections — contribute capital toCorporate Venture Capital (CVC) establishment, CardInfoLink (CIL) andother opportunities• Expand business in ASEAN region through M&As, such as the move to turn
PromptNow into a consolidated subsidiary

Assignment solutions

Actual results+¥28.7 billion
Copyright © 2018 TIS Inc. All rights reserved.

5

Progress Made Through Previous Medium-Term
Management Plan: Portfolio Management
Results of Key Activities
Promote total
optimization ofGroup
operations

Integrate/
centralize sharedfunctions within
GroupRealize higher
level ofadministrative
management• Implemented shift to operating holding company to strengthen Group governance• Executed transfer of businesses (national health insurance, electricity and gas sectors) between TIS ⇔ INTEC• Promoted concentration of domestic and overseas BPO operations under AGREX• Prioritized integration of systems with highly effective components to expand scope of shared systems withinGroup• Integrated offices in Tokyo, Osaka and Nagoya• Realized full Group rollout of CMS, improved capital efficiency of Group overall• Conducted review of strategic stockholdings and data centers, improved asset efficiency• Promoted project to pursue possible introduction of IFRS
• Reviewed business segments with eye toward breakdown better matched to new management structure• Strengthened response to taxation topics (BEPS response), mainly at overseas Group companies• Promoted enhanced IR content through production of integrated report, effective from fiscal 2016
• Organized and consolidated internal control management systems, and brought unified system under GroupInternal Control Committee supervision• Emphasized efforts to encourage women to be more active in workplace, seeking to build career-path diversity*Four companies under Group umbrella received highest level certification under “Eruboshi” system, based on
the Act Concerning the Promotion of Women's Career Activities.

Cultivate
corporate culture
with sense ofsolidarity• Debuted unified Group logo in July 2016
• Formulated Group Vision 2026, and worked to foster widespread awareness of vision content• Published first Group newsletter

Copyright © 2018 TIS Inc. All rights reserved.

6

Understanding the External Environment and Key Issues Going Forward

External EnvironmentMacroenvironment

Domestic factors include shrinking population, fewer children and more seniors, smaller working population, low economic growthand diversifying workstyles.
Overseas factors include emerging market growth, globalization and increasingly borderless markets.

IT industry(including
BPO)

Factors include elimination of industry barriers, acclerating shift toward networks, reduced profitability in contracted development oflabor-intensive systems, change in multi-level subcontracting structure, increasing oligopolization through M&A activity as a means
to survive heightened competition, and a flood of foreign companies into the domestic market.

CustomertrendsChanges in concept of industry, IT use as a condition of business, accelerating overseas expansion by Japanese companies, a pushtoward production of systems in-house, and wider demand for outsourcing due to labor shortage caused by a population with fewer
children and more seniors.

Technology
trends

Factors include greater use of AI and mainstream application of IoT in labor-intensive industries, superhigh-speed communication,
larger volumes of data transmitted/received, and fusion with virtual reality.

Key Issues

•
•
•
•

Redirect from existing businesses to new domains, shift investment and essential personnel toward new domain creation.
Efficient earnings growth in current business domains with concentration of management resources into core businesses.
Accelerate area development in ASEAN region.
Create environment where diverse employees feel comfortable in their jobs, and realize environment where people are
motivated to tackle challenges• Carefully develop human resources who act as role models to spur reforms within the Group.

To realize sustainable growth and higher corporate value,
we must stay ahead of major changes in society and, through constant transformation of the Group,
promote structural renewal and establish a resilient management foundation.
Copyright © 2018 TIS Inc. All rights reserved.

7

Outline of Medium-Term Management Plan (2018-2020)

Transformation to 2020
— Achieving structural transformation as a corporate family and taking the lead in finding solutions to social issues—Company where diverse humanresources, reliable, proud andcarrying a sense of solidarity,

Increase high-value-added quality(boost value of technology/social
research results) throughBudget for growthinvestment to fuelstructural transfmoration

approach work
enthusiasticallyvalue chain reform¥80 billion
in 3 years¥430 billion
Operating income ¥43 billion
Operating margin
10 %Net sales

Structuraltransformation
to deliver ratio of 50%
from strategic domain sales
ASEAN Region

Becometop classgroup united in IT
Copyright © 2018 TIS Inc. All rights reserved.

Through enhanced
management
efficiency

ROE

12%

Become corporate group that contributes

solutions toenvironment/social issues
through business activities
8Basic Policy/Key Performance Indicators
Key Performance Indicators(Fiscal 2021)

Basic Policy

Emphasis on
employeeselffulfillment

Sustainableprofitgrowth• With solutions to social issues derived
through business activities, establish
structure generating medium- to-long-term
benefits for society as well as profits tosustain corporate presence• Achieve cost reduction through enhanced,
more efficient headquarters function• Create environment, culture and programs
that motive employees to work hard
• Build human resources portfolio that
supports structural transformation, andoptimize deployment throughout Group

Strategic Domain Sales Ratio

50%
Operating Income¥ 43 billion

Constant transformation, with sense of speed

Operating Margin
Concentrateon corebusinesses• Actively invest to rev up growthengines• Improve value provided to clients,
reinforce existing fields throughproductivity innovation

Shift to priorinvestment
style ofbusinessdevelopment

Expandglobalbusiness• Proactively propose solutions to• Become top-class IT group inmarkets/clients and transform structure to
ASEAN region
realize business creation• Hone global strengths,• Pursue strategically directed, robustemphasizing payment
investment, mainly through M&A andsettlement/banking/ERP
service investment
solutions

Copyright © 2018 TIS Inc. All rights reserved.

10%
ROE

12%

9

Toward Further Improvement in ROE
Seek more appropriate capital composition and enhanced capital efficiency, with efforts to promote growthinvestment, maintain financial health and strengthen return to shareholders—all in the right balance.
Promote growth investment
 Pursue growth investment activity, such as prior investment and M&As, morerobustly. Envision maximum ¥80 billion in investments over three years. Seek
50% contribution from strategic domains and operating margin of 10% throughstructural transformation.

Promotegrowthinvestment

Maintain financial health

MaintainfinancialhealthStrengthen
return toshareholders

Picture of ROE Success

9.9%

ROE
12.0%

(Fiscal 2018)(Fiscal 2021)

 Keeping in mind goal to maintain A rating, ensure equity ratio above 50% andallow debt-to-equity ratio around 0.5 times.

Strengthen return to shareholders
 Raise total return ratio yardstick to 40%, from 35%, and then aim for payout
ratio of 30% by fiscal 2021 through stable dividend growth.
 Set upper limit on treasury stock holdings to 5% of total number of issued
shares, with excess of this amount cancelled.

Net income
ratio

Total asset
turnover ratio

Financialleverage
Copyright © 2018 TIS Inc. All rights reserved.

5.1%

6.7%

(Fiscal 2018)(Fiscal 2021)

1.15(Fiscal 2018)

Improved profits throughprogress on structuraltransformationin business assets
Slight drop Increase
paralleling growth(Fiscal 2021)

1.70

Slight rise

(Fiscal 2018)(Fiscal 2021)

investments
Greater improvement inequity ratio offset by new
acquisition of interestbearing debt
10

Structural Transformation Strategy
Promote structural transformation that includes new set of values and systems to achieve sustainable growththrough expansion of strategic domains
Current

Desired Status

Values, style

Target emphasis

Speed, flexibility

Perspective

Customer-oriented

Social issue-oriented

Approach

Mission-accomplished style

Theory-driven proposals

SystemStandardized

Designed to matchbusiness characteristics

Business structure

Labor intensive

Revenue scheme

Man-month units

Structural
Transformation

Knowledge intensive
Various billing systems

Fiscal 2018
Actual Results

Fiscal 2021
Targets

Strategic domain sales¥142 billion¥215 billion

Strategic domain ratio

35%

50%

Copyright © 2018 TIS Inc. All rights reserved.

11

Structural Transformation Strategy: Desired Status and Promotion Measures (Create/Transform/Expand)
1. Strategic Partnership Business

3. Business Function Service

For clients at the top of their industry, we will draw on industry foresight andbusiness knowledge that other companies cannot match—our businesstools—to explore and promote business strategies with clients and underpin
business basics

We will combine industry and business knowledge accumulated within theGroup and utilize advanced technologies to anticipate client needs andprovide business functions as services to enhance their value chains.

Desired Status
Building strong business partnerships to help clients expand
operations by jointly exploring business strategies andidentifying and solving business-related concerns

Desired Status
Complementing IT Offering Service with new businesses toenhance efficiency, mainly through automation, and providing
high-value-added services to clients

Promotion Measures• Help solve clients’ management concerns through hypotheses and proposals• Demonstrate composite strengths of Group; utilize advanced technologies
and forte products• Build closer client connections at each level, hinging on management class• Launch joint projects with business partners

Promotion Measures• Take on responsibility for clients’ value chain and contribute to businessexpansion• Escape from labor-intensive business through greater use of machines andautomation• Add business services to Group’s IT Offering Service• Utilize and provide access to Group’s market channels

2. IT Offering Service

4. Frontier Market Creation BusinessWe will combine leading-edge technologies and know-how accumulated as acorporate group to create and quickly provide IT solution services that
anticipate client needs.

We will utilize Group technology, operating know-how and customer bases
to create new markets and business models matched to evolving industry andsocial needs and develop businesses for these markets on our own.

Desired Status
Allowing TIS INTEC Group strengths to blossom under IT
Offering Service banner; switch from labor-intensive style tonon-price competition, knowledge-intensive style

Desired Status
Creating new markets that become pillars of business for theGroup

Promotion Measures• Establish schemes/systems emphasizing speed• Build eco-systems in cooperation with business partners• Utilize and provide access to Group’s marketing channels

Promotion Measures• Team up with clients to pursue new business opportunities• Demonstrate innovation through creative alliances with business partners• Encourage business creation using business ideas of individuals

Copyright © 2018 TIS Inc. All rights reserved.

12Structural Transformation Strategy: Promoting Service-Style Business[Billions of yen]

Turn service-style business—at the heart of IT Offering Service—into growth engine and vigorously leverage
global business growth by expanding accumulated strengths, taking a robust approach to investment andemphasizing open innovation.
Numerical Targets for Service-Style Businesses
Operating Income

Net Sales

100.6

120.0

13.00

[Estimate][Estimate]

8.13

8.1%

Fiscal 2018

Fiscal 2021

10.8%
OperatingMarginFiscal 2018

Fiscal 2021

Key Themes
Payment
Industry Platform

Respond to diversification in retail payment methods and take on role linking individuals and companies
Turn know-how into services, integrate with other growth engines, and build industry-standard digital business platform

ERP

Promote thorough application of asset-building, scale-out model for enhanced level of best practices

AI

Expand AI business and also add AI to all types of Group services to contribute to overall growth of Group

IoT

Mobilize resources inside and outside the Group for creating IoT platform

Other leading-edge
technologies

Drive value-added level higher through robust use of leading-edge technologies, including blockchain, robotics and XR.

Copyright © 2018 TIS Inc. All rights reserved.

13

Retail Payment Settlement Business Strategy
Digital Banking Platform Concept–Making banks closer and more personal through API connection–

PAYCIERGE2.0

1. Promote wallet service based on token service

Provides safe, secure, convenient services
For a cashless society
Stores/
users

JCN
CAFIS
e-money

Major payment networks
connected

Mastercard

Banking account system(real accounts)
Card platform system
Various wallet platformsystems(XXXPay)
Shared point system
Regional point system• Authentication/approval API• Usage details API• Real-time transaction API

WalletEVO• Affiliated merchant web API

Loyalty

・ CLO service• Data usage API

Other APIs

Security• Alert service• Control service

Core systems connectedCore systems• Wallet service(Zengin IC/payWave)

Copyright © 2018 TIS Inc. All rights reserved.

Brand API Service
・ Brand token
・ Checkout

2. Multi-payment gateways• QR-gateway connection• Instant payment gateway connection• Thin client settlement gateway connection• Real-time account connection• Update system API connection Token service• Credit API connection• IoT settlement service

Access point service

Developers Portal

FintechventureTurn service into open
API

• IoT settlement service

3. Payment settlement back-officeAPI-basedAPI
Settlement back-office API suite

Payment settlement 1. Token service
networks
VISA

to Japan!

3. Propose credit SaaS-type service as follow-up to
debit/prepaid services (anticipate service-sharing stylebusiness expansion)

PAYCIERGE services

Legacy service

IoT settlement!

2. Promote services, such as QR settlement, based on
Easy payment
multi-payment gateway (connects to overseas brands
method for visitorsand domestic XXXPay)

FintechventureInternet

FintechventureBank
Nonbank
Transportation/stores(all Pay)
Railways (ticket gate)
Cars
XXXPayOverseas brand QR
codes: Alipay, Glab,truemoney

14

Global Strategy
Leverage business domain expansion and strategic investments to become top-class IT group in ASEAN region.
Step 1: Expansion in China

Step 2: Three-point expansion in Thailand, Singapore, Vietnam

Step 3: Expand global business in ASEAN region
through capital and business alliances andaccelerate area development+ Acquire and invest in promising products
and the most advanced technologies
Development Points in China/ASEAN• Prioritize areas of retail payment settlement, banking and ERP,
and emphasize greater cooperation between locations• Invest in promising products and the most advanced technologies
in the West (Europe/U.S.), China and ASEAN• Actively leverage strategic investments and expand portfolio• Work to develop and expand scope of global human resources

Recent Key M&A and Investment Results
PT Anabatic Technologies Tbk

Beijing

Net sales: ¥38.5 billion

Client base

July 2015: Capital and business alliance (28% equity = equity-method affiliate)
Indonesia-listed, top-tier IT company iin Indonesia

Solution

MFEC Public Company Limited

Client baseTianjin
Shanghai
Wuhan

Bangalore

Tokyo
（Head
Office）

Hong Kong
YangonHanoi
ManilaBangkok
Ho Chi Minh
Kuala Lumpur
SingaporeLocal
subsidiary
Representative
officePortfolio
investments

Net sales: ¥10.2 billion

April 2014: Capital and business alliance (20% equity = equity-method affiliate)Thai-listed, leading provider of enterprise IT solutions

Solution

I AM Consulting Co., Ltd.

Client base

Net sales: ¥2.2 billion

June 2014: Turned into consolidated subsidiaryThai-based consulting group producing total SAP-related IT solutions

PromptNow Co., Ltd.

Solution

Net sales: 260 million

May 2016: Turned into consolidated subsidiary
Leading FinTech player with mutliple proprietary mobile services for financial institutions

Solution

Shanghai CardInfoLink Data Service Co., Ltd. (CardInfoLink)
Jakarta

Copyright © 2018 TIS Inc. All rights reserved.

September 2017: Capital and business alliance (10% equity)
FinTech company developing presence in China and around the world, with particularstrength in QR code payment settlement services

Solution* Net sales for fiscal ended December 31, 2017, converted at exchange rate prevailing at year-end.

15

Strategies for Enhanced Management Practices and Improved Efficiency
Stronger Corporate Governance• Higher independent outside director ratio: New structure where of the nine directors in total, three are independent outside directors(planned introduction June 26, 2018)• Greater diversity in Board of Directors: Appoint first female executive (independent outside director) (planned appointment June 26, 2018)• Ensure objectivity and transparency in decision-making process related to director appointment andcompensation: Established Nomination Committee and Compensation Committee (majority of committee members
are independent outside executives)

Promote Enhanced Function and Greater Efficiency at Headquarters• Promote Headquarters function enhancement project “G20” through TIS and INTEC: Make services and IT more efficient, mainly through integration of Group’s core systems: Centralize functions, mainly by absorbing shared service subsidiary through merger(planned for July 1, 2018)• Strengthen role of public relations in corporate branding• Enhance legal affairs and intellectual property management• Run project to consider introduction of IFRS (ongoing)

Reinforce Steps to Ensure Corporate Sustainability• Elicit greater motivation among executives and employees to boost corporate value

Independent outside director ratio
One-third (three out of nine)
Appoint first female director(Independent outside director)
Nomination Committee
Compensation Committee

Headquarters function
enhancement project “G20”Integrate Group’s core systems
Cut headquarters‘ costs by 10%

Performance-linked stockcompensation plan

: Introduce performance-linked stock compensation plan for directors and other executives: Introduce trust-type employee stock ownership incentive plan
• Strengthen perception of social quality in business activities: Set up Corporate Sustainability Committee (decided): Formulate Group Compliance Declaration and Group Code of Conduct
Copyright © 2018 TIS Inc. All rights reserved.

Trust-Type Employee Stock
Ownership Incentive Plan
Corporate Sustainability
Committee

16Investment Strategy
Pursue growth investment activity, such as prior investment and M&As, more robustly to fuel transformation of businessstructure. Envision maximum ¥80 billion in investments over three years.
Investment Policy
Software investment to create new services(¥17 billion)

Key Investment Objectives (envisioned)• Investment into development of own services• Allocate fixed percentage of business profits for investment andconstantly sharpen competitive edge

• Develop skills of human resources who will realize switch to strategic
Investment in human resources to fuelstructural transformation (¥8 billion)

domains and advanced technology fields• Build human resources portfolio that facilitates best possible deployment
throughout Group

Investment in R&D to acquire advanced
technologies (¥5 billion)• Pursue research into advanced technologies anticipating trends• Rev up open innovation

Investment to grow strategic domains(¥50 billion, including M&A)

• Invest in new companies to capture know-how and promote services• Increase investment into alliance companies (higher shareholding ratio)
Investment Management Policy

Fine-tune investment management practices
to capture appropriate return from robust investment activity
Carefully select investment targets, based on investment efficiency index and investment cost, andtoughen up rules for exit management
Copyright © 2018 TIS Inc. All rights reserved.

17

Basic Policy on Return to Shareholders[Billions of yen]

• Raise total return ratio yardstick to 40%, from 35%, and then aim for dividend ratio of 30% by fiscal 2021 through stabledividend growth.
• Set upper limit on treasury stock holdings to 5% of total number of issued shares, with excess of this amount cancelled.

総還元性向
Total
return ratio

40%

Payout ratio
配当性向
40.1%

35.3%
35％

Total return ratio (yardstick)
31.9%

30％

30.5%

40%
(up from 35%)

22.7%

21.9％

11.60

Payout ratio (yardstick)

2.90(by March 31, 2021)

19.0%

4.47

16.6%

9.35

6.28

4.21

5.19
2.85

1.59

2.09

2.87

3.09

3.42

Fiscal 2016

Fiscal 2017

Fiscal 2018

8.70
5.14

Total dividends
Copyright © 2018 TIS Inc. All rights reserved.

Fiscal 201930％
Upper limit on treasury
stock holdings at 5%(excess cancelled)(New Medium-Term
Management Plan)
Fiscal 2020

Fiscal 2021

Acquisition of treasury shares
18

Human Resources Strategy
Employees are huge source of power driving the Group’s growth. Prioritize effots to help employees achieve career goals.
Strive to create framework and corporate culture in which diverse human resources can thrive by boosting motivation andreinforcing human resource management.
Boost motivation through constantcycle of self-fulfillment

Imagine an
ideal
Highermotivation

Cycle ofself-fulfillment

Realizegoals

Declare/
share

Solve
issuesSelectively develop model employees tofuel transformation of the Group

Create framework and systems toachieve optimum deployment of
human resources within the Group

Kind of employees who fuel structuraltransformation• Account managers and service managers whodrive activity in strategic domains• Consulting personnel who formulate businessstrategies with clients• Service production staff who can turn industry
knowledge and business know-how into products• In-house entrepreneurs who can plan, launch andpromote new businesses• High-level engineers who support activities instrategic domain through quality and productivity

Visualize
human
resources
information

Establish
human
resources
portfolio

Establish
Group humanresources
system

Set up Human Resources SBU at TIS. Vigorously promote measures described in personnel manifest.
⇒ Plan to promote best practices to all Group companies.
Human resources business unit has three-point mandate:
1. Create company where motivation level is high, and quickly and vigorously work toward this fromsystem and environment perspectives.
2. Achieve optimized deployment of human resources while providing an environment conducive toself-fulfillment of career goals.
3. Ensure thorough labor-related compliance and create safe and pleasant company atmosphere.

Raise
motivation

Enhancecapabilities ofdiverse personnel

Improve
corporate value
Copyright © 2018 TIS Inc. All rights reserved.

19

Numerical Targets[Billions of yen]

Net Sales

Operating Income

43.0

430.0
405.6

[Estimate][Estimate]

32.7

10.0%
8.1％

Fiscal 2018

Fiscal 2021

Fiscal 2018

Net Income Attributable to
Owners of the Parent Company

Fiscal 2021

ROE

29.0

12.0%

[Estimate]

9.9%

20.6

Operatingmargin[Estimate]

6.7％
5.1％

Net income to
net sales ratio

Fiscal 2018
Copyright © 2018 TIS Inc. All rights reserved.

Fiscal 2021

Fiscal 2018

Fiscal 2021
20

Change in Reporting Segments to Promote Structural Transformation
TIS changed its management system to promote structural transformation and restructured Service Strategy
Sector and Industry Strategy Sector. Consequently, TIS changed its reporting segments from a management
approach perspective, effective from the fiscal year ending March 31, 2019. Note that the Company has also
started disclosing order information related to operations.
Key Points Regarding Change in Segments• Service IT created as business unit, facilitating visualization of progress in structural transformation into service-style business,
which is positioned as future core operations.

• BPO created as business unit, promoting business through high-level BPO combining service know-how and use of advanced
technologies• Data center business positioned as IT platform supporting SI business and service-style business, and integrated into eachsegment.
New
Reporting Segments

Strategic domains
fueling growthService IT
Business

Business providing knowledge intensive style IT services that turn TIS’ own
service and industry know-how into universalized, template-oriented solutions.
(Includes default configuration, and ERP)IT Offering
Services

BPO

Business using extensive service and IT know-how to provide BPO, including
marketing and sales services and office and contract operations.

Business
Function
Services

Financial IT
Business

Business drawing on business and operating know-how specific to financial sector
to make operations more high-value-added, expand application of IT to operations
and support the execution of operations using IT.

Industrial
IT BusinessBusiness drawing on business and operating know-how specific to industries otherthan finance to make operations more high-value-added, expand application of IT
to operations and support the execution of operations using IT.

*In addition to the above, there is an ”Other” segment.
Copyright © 2018 TIS Inc. All rights reserved.

Strategic
Partnership
Business

21

Medium-Term Management Plan (2018-2020)
Anticipated Changes in Net Sales and Operating Income (Key Segments 1)
Service IT
Net Sales

BPO

Operating Income

120.0
100.6

13.0

[Estimate][Estimate]

8.1

8.1％

Operating Income

Net Sales

38.2

43.0

3.0

[Estimate][Estimate]

10.8%

1.6

Operatingmargin

7.0%
4.3％

Fiscal 2018

Fiscal 2021

Fiscal 2018

Fiscal 2021

Business Growth Strategies, Focus Points• With priority allocation of management resources toward
growth engines and use of advanced technologies, expand
business (IT Offering Services) through shift towardbusiness anticipating prior investment by clients• Watch for changes in structure of payment settlementbusiness and expand prior investment style services not
only for debit and prepaid card transactions but for credit
card transactions as well
Copyright © 2018 TIS Inc. All rights reserved.

[Billions of yen]

Fiscal 2018

Fiscal 2021

OperatingmarginFiscal 2018

Fiscal 2021

Business Growth Strategies, Focus Points• Improve gross profit ratio on existing entry services
through BPO concentration effect and businessrestructuring• Expand business and boost profitability (Business
Function Service) through more sophisticated BPO
drawing on shift to high-level, combined BPO and use offorte business knowledge and advanced technologies.
22Medium-Term Management Plan (2018-2020)
Anticipated Changes in Net Sales and Operating Income (Key Segments 2)
Financial IT
Net Sales
106.6

100.0

Industrial IT

Operating Income

11.3[Estimate][Billions of yen]

12.0

Operating Income

Net Sales
176.4

185.0

14.5

[Estimate][Estimate][Estimate]

11.5

12.0%
10.6％ Operating

7.8%

marginFiscal 2018

Fiscal 2021

Fiscal 2018

Fiscal 2021

Fiscal 2018

Fiscal 2021

6.5％

OperatingmarginFiscal 2018

Fiscal 2021

Business Growth Strategies, Focus Points

Business Growth Strategies, Focus Points• Expand business (Strategic Partnership Business) by• Expand business (Strategic Partnership Business) bystrengthening connection to extensive client base of credit cardcompanies, banks and insurers, and creating business together• Increase provided value by utilizing Mode2 and other digital
innovations as well as AI and other advanced technologies, andboost profitability by promoting measures, such asenhancement innovation activities, to improve productivity
Copyright © 2018 TIS Inc. All rights reserved.

strengthening connection to extensive client base in industry
and public sectors, and creating business together• Increase provided value by utilizing Mode2 and other digital
innovations as well as AI and other advanced technologies,
and boost profitability by promoting measures, such asenhancement innovation activities, to improve productivity
23

Seeking Greater Improvement in Corporate Value• July 2016: Shifted to operating holding company structure• May 2017: Formulated and announced Group Vision 2026
• April 2018: Embarked on new medium-term
management plan

• April 2008: Group established

Medium-Term
Management Plan
(2009–2011)

Medium-Term
Management Plan
(2012–2014)

Medium-Term
Management Plan
(2015–2017)

Group management
emphasizing independenceof each company

Overall optimizationof the Group andgreater sense of unity

Portfolio management, ina project sense, blending
exceptional businesses
and key strengths into asingle approach

Established

Medium-Term
Management Plan
(2018–2020)
Structuraltransformation

9.9％
7.4％
6.0％

7.0％
4.8％
¥338.3 billion

8.1％¥405.6 billion

ROE

Group
Vision
2026

12.0%
10.0%

Operatingmargin¥430 billion

Net Sales

5.9％¥361.0 billion¥327.4 billion

1.5％

Fiscal
2009

Fiscal2012

Copyright © 2018 TIS Inc. All rights reserved.

Fiscal2015

Fiscal2018

Fiscal
2021

2026
24

Underlying Concepts of Group Logo
The logo defines the TIS INTEC Group as a tightly knit team of individual players, powered forward by the different sets of expertise that each brings to thegame. It features two corporate colors— “ocean blue” and “intelligent gray”—representing, respectively, new challenges that we are constantly tackling andsolid technological foundations that underpin our business.
Brand Message “Go Beyond”
The brand tagline, “Go Beyond,” embodies our constant quest into the beyond in search of new challenges. It represents our firm commitment as a group to
delivering solutions that are always one step ahead, not only solving clients’ problems but anticipating and meeting their own customers’ needs, too.

Cautionary Statement
・ All forward-looking staprojections, are based on information available to management regarding the TIS INTEC Group—that is, TIS and the subsidiaries
under its umbrella—as of the presentation tements described in these materials, including performance date and certain assumptions deemed reasonable atthis time. No intent is implied of promise by the Company to achieve such forward-looking statements. Indeed, various factors may cause future results tobe substantially different from the assumptions presented in these materials.
・ TIS changed its reporting segments from a management approach perspective, effective from the fiscal year ending March 31, 2019. Fiscal 2018 figures arerecalculated based on the new reporting segments.