First Quarter FY2011 Financial Results

May 16, 2011
World Intec Co., Ltd.
JASDAQ (2429)

1
Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

The Tohoku Pacific Offshore Earthquake
World Intec extends its deepest sympathies to all victims of
the Great East Japan Earthquake.
No employees of the World Intec Group were injured by this disaster.
The head office, regional offices and local sales offices are working
together to collect donations, provide supplies and support recovery
activities other ways.
We have launched the Job “Solidarity” Project and have started conducting
activities to help earthquake victims find jobs.

Possible upcoming negative effects of the earthquake① Suspension of manufacturing activities due to the earthquake and tsunami
damage in eastern Japan and to the nuclear power station crisis② Disruption in the lives of residents of other areas of Japan caused by supply chain
problems③ Negative impact on corporate activities caused by limitations on electric power
consumption
Earnings were high in the first quarter because of gains from the sale of real estate.
However, there is no change to the 2011 forecast because of uncertainties about
how much the earthquake will affect sales and earnings.
Copyright © WORLD INTEC CO.,LTD. All Rights Reserved2Overview of the First Quarter FY2011 (1): Progress in Business
Human resources outsourcing Business;
Until the earthquake, this business was performing better than one year earlier as sales werehigher to major customers in the factory bujiness and new customers were added in the R&D
sector. The earthquake had only a negligible effect on first quarter performance.
In the second quarter, performance will be affected by the smaller number of working days
because of Golden Week holiday and by effects of the earthquake, including planned
blackouts. We expect demand to increase starting in the third quarter in association withreconstruction activities.

Information Technology & Telecommunications business;
Sales were higher than one year earlier as steady growth in smartphone sales produced anincrease in the total sales volume of cell phones.
Earnings decreased because a higher cost of sales ratio caused by higher procurement prices
and an increase in sales agent fees caused SG&A expenses to increase. In response, we areworking on improving profit margins.

Real Estate business;
Land and buildings initially purchased for condominium sales in 2012 were sold for economic
reasons because buyers offered prices that produced higher earnings than would be
generated by developing and selling the properties as condominiums.

Other businesses;
Sales were down in the parts and materials procurement business as lower production volume
caused orders from overseas bases to fall.
Sales and earnings were down at Geographic Information of Kyushu, Inc. compared with 2010
when results benefited from extra demand created by emergency employment measures.
Copyright © WORLD INTEC CO.,LTD. All Rights Reserved3

Overview of the First Quarter FY2011 (2): Results of Operations
Special items ;Most significantly, the real estate business posted first quarter sales that were equal
to sales planned for the entire year. This was mainly because of the completion ofsales at the Minami-Motomachi project.
Effect of the Great East Japan Earthquake
The effect on first quarter performance was negligible because the earthquake
occurred on March 11.
There was an extraordinary loss (¥119 million) for consolation payments to victims ofthis disaster.
The earthquake may negatively affect human resources operations, which will also
be affected by the smaller number of second quarter business days because of theGolden Week holiday.
(We plan to announce a revised 2011 forecast as we monitor progress made in thesecond quarter.)

Consolidated sales ;Real estate sales (¥1,323 million) made a big contribution and posted consolidated
sales of ¥9,806 million (up 28.1% YoY)

Consolidated operating income；
Gains on real estate sales (¥338 million) made a big contribution and posted aconsolidated operating income of ¥487 million (up 214.9% YoY)
Copyright © WORLD INTEC CO.,LTD. All Rights Reserved4Consolidated Business Results
There has been a steady recovery until March 2011 since the bottom that followed the Lehman
shock. However, January and February savings were used up due to the Great East Japan
Earthquake. Sales of real estate for sale resulted in a 28.1% increase in sales and an improvementin the operating margin to 4.9%.
(Operating margin; %)(Sales: Million yen)
14,000

15.0%
13.0%

12,00011.0%
10,000

9.0%
7.0%

8,000

5.0%
6,000

3.0%
1.0%

4,000

-1.0%
2,000
-3.0%
0

-5.0%
06/ 1Q

2Q

3Q

4Q

07/ 1Q

09/ 1Q

2Q

3Q

4Q

10/ 1Q

2Q

Net sales

7,700

8,525

8,673

9,950 10,523 11,412 11,725 12,835 12,445 13,107 12,230 10,984 7,533

7,194

6,959

7,406

7,652

Operating margin

2.2%

3.8%

2.2%

2.9%

2.8%

1.0%

3.6%

2.0%

-0.1%

2Q

3.7%

3Q

2.1%

4Q

5.4%

08/ 1Q

2.9%

2Q

5.0%

3Q

3.0%

4Q

-2.6% -2.0%

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

3Q

4Q

11/ 1Q

7,926

7,886

8,644

9,806

1.7%

-0.6%

1.2%

5.0%

5

World Intec Group (12 Consolidated Subsidiaries)
World Residential Co., Ltd.
Nichimo Real Estate Co,. Ltd.
(Real Estate business)
Condominium business & Condominium Managementbusiness
Real Estate Consulting business & Contract business2 othercompanies(Information Technology &Telecommunications business)
OA equipment sales & mobile phone sales
Call center

GEOGRAPHICINFORMATION OF(Software
Development business)
KYUSHU,INC.
Map information sales
Software development, disabled
persons’ employment support
Electronics And Ecology Co., Ltd.
(Repair business)(Human
Resources-related business)
Repair service, dispatch service
Contract work

Advan Co.,Ltd.
(Education business)
PC school operations & software sales
Website production

VEC Co., Ltd.
(Human Resources-related
business)
Temporary staffing of human resources forconstruction

WORLDEXPERTS Inc.
(Human Resources-related
business)
Comprehensive human resources
service & business consulting
Education consulting

Real Estatebusiness
13%
Information
Technology &Telecommunicati
ons Business
21%
Other
businesses
7%

World Intec Co., Ltd.
(Human Resources-related business)(Purchasing
business)

Human
Resources
Outsourcing
business
59%

Factory business……Temporary staffing of manufacturers,
Contract work
Technology business…..Temporary staffing of engineers
R&D business…….Temporary staffing of scientists
CB business…….. Temporary staffing of sales personnel

WORLD INTEC TAIWAN CO., LTD.
(Human Resources-related business)
Temporary staffing of manufacturers, staff
agencyFY12/11 1Q
consolidated sales ¥9,806 million

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

6Consolidated Financial Summary for the First Quarter FY2011
Sales

Human
resources
outsourcing

Real estate

Profits

OperatingincomeOrdinary
income(Consolidated)(Million yen)
Net sales
Operating income
Operating margin
Ordinary income
Ordinary income margin

Net income
Net income margin

In the factory business, sales to current customers increased.
In the R&D business, sales increased as aggressive recruiting of new college
graduates combined with a market recovery resulted in a competitive advantage.
Land and buildings at the Minami-Motomachi Project were sold as is at very favorable
terms.
Higher sales in the human resources outsourcing business contributed to growth inearnings.
Earnings were much higher because of real estate operating income (about ¥340 million).
Earnings were down in other businesses because of lower sales at Geographic Informationof Kyushu, Inc.

FY12/10 1Q(Jan.-Mar) actual

FY12/11 1Q(Jan.-Mar) actual

YoY
ChangePct. change

7,652

9,806

2,154

28.1%

154

487

332

214.9%

2.0%

5.0%

-

-

209

608

398

190.2%

2.7%

6.2%

-

-

126

431

305

242.1%

1.6％

4.4%

-

-

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

7

Business Summary by Segment
FY12/10 1Q(Jan.-Mar) actual(Million yen)
Factory business

709

22.5%

161

191

30

18.7%

5.1%

5.0％

－

－

1,409

1,395

-14

-1.0％

87

101

13

15.9％

6.2%

7.2％

－

－

Net sales

502

558

55

11.1％

Operating income

33

65

31

94.2％

6.6%

11.6％

－

－

1,749

2,016

267

15.3％

13

6

-6

-50.1％

0.7%

0.3％

－

－

Net sales

－

1,323

1,323

－

Operating income

－

338

338

－

－

25.5％

－

－

Net sales
Operating income
Operating margin

Operating margin
Information Technology &Telecommunications BusinessNet sales
Operating income
Operating margin

Real Estate business

Pct. change

3,856Operating margin

R&D businessChange3,146

Net sales
Operating income

Technology business

YoY

FY12/11 actual

Operating margin
Other businesses

Net sales

844

656

-187

-22.2％(FY12/10=various services)

Operating income

86

18

-67

-78.5％

10.2%

2.7％

－

－

7,652

9,806

2,154

28.1％

Elimination or corporate

-227

-234

-6

－

Operating income

154

487

332

114.9％

2.0%

5.0％

－

－

Operating margin
Total

Net sales

Operating margin

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

8Human Resources Outsourcing Business; Pct. of Sales by Region
World Intec operates mainly in Kyushu but also covers all otherareas of Japan. Although World Intec did not suffer as much direct
earthquake damage as at competitors, there are concerns about thepossibility of negative effects caused by supply chain disruptions.
FY10 1Q (end of March)

FY11 1Q (end of March)

Sales: ¥5,057 million

Sales: ¥5,809 million

Tohoku11%
Kyushu
36%

Kanto
20%

Kanto
15%

Tohoku6%
Kyushu
35%

Tokai
13%
Tokai
6%
Kansai2%

Chugoku25%

Kansai6%
Chugoku
25%

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved9First Quarter of 2011 BS/CF(Million yen)
End of Dec. ’10

Current assets

FY12/11 1Q Change %(Million yen)

Comments

FY12/10 1Q FY12/11 1Q

12,566
3,405

9.2%
7.7%

Operating cash flow

-46

-576

Cash and deposits

11,505
3,162

Notes and accounts receiv abletrade

3,571

3,534

-1.0%

Investing cash flow

-30

-135

Real estate f or sale in process

3,829
942
1,861
682

4,648
979
1,944
673

21.4% Real estate development
3.9%
4.4%
-1.3%

Free cash flow

-76

-711

Financing cash flow

-214

953

121

121

0.0%

Cash & cash equivalents
at end of year

3,220

3,409

1,057

1,149

8.7%

13,367
6,445

14,511
7,913

8.6%
22.8%

Notes and accounts
pay able-trade

496

540

8.9%

Short-term debt
Accrued expense

2,397
2,212

4,109
1,953

Accrued income tax andothers305

119-61.0%

OthersFixed liabilities
Long-term debt
Total net assets

1,035
2,077
1,761

1,192
1,400
1,070

15.2%
-32.6%-39.2%

4,843

5,197

7.3%

Shareholders’ equity ratio %

36.2%

35.8%

-

Total liabilities and equity

13,367

14,511

8.6%

OthersFixed assets
Tangible fixed assets
Intangible fixed assets
Investments and otherassetsTotal assets
Current liabilities

71.4% Real estate purchase fundDue to increases in clients and the no.
-11.7% of employ ees【 Operating cash flow】 -¥576mn
Income before income taxes¥527mnIncrease in real estate for sale -¥771mn
Decrease in accrued expense -¥259mn【 Investing cash flow】-¥135mn

Acquisition of investment securities-¥100mn【 Financing cash flow】¥953mnIncreases of short and long-term debts¥1,021mn
Dividends paid -¥68mn

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

10Businesses and Plan for FY2011

11
Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

Human Resources Outsourcing Business
Factory business: Growth over one year earlier was driven by the automobile (up127.2%) and semiconductor (up114.4%) sectors but performance has weakened
since the earthquake. Will reach a decision about the outlook based on April-May
Chemical
performance.
Electronic
deviceCars

Precision

OthersMedicine

Electronic
deviceCars

Precision

OthersChemicalMedicine

Technology business: Larger number of workers because of stepped up recruiting activities in fourth
quarter of 2010
Performance benefited from increasing needs associated with semiconductor equipment and with publicsector outsourcing projects in Kyushu. Performance has weakened since the earthquake. Expect anotherrecovery to begin in the second half of the second quarter.
Jan. 2010

Mar

Jun

Dec

Mar. 2011

No. of workers

1,197

1,150

1,234

1,289

1,349

Operating rate

97.8%

98.0%

99.0%

99.7%

97.8%

R&D business: Steady growth in the number of workers
Focusing on capturing new projects by supplying workers with highly specialized skills
Jan. 2010

Mar

Jun

Dec

Mar. 2011

No. of workers

327

337

356

366

376

Operating rate

98.8%

92.9%

96.3%

95.4%

95.2%

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

12

Information Technology & Telecommunications Businesse-support group, a consolidated
subsidiary
Kyushu’s largest seller of cell phones(au, SoftBank)
Smartphone sales are very strong

Sales

Sales volume

2,200

80,00070,0002,000

60,0001,800

50,0001,600

40,00030,0001,400

20,000

1,200

10,0001,000

0FY12/10 1Q

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

FY12/11 1Q

13

Real Estate Business (1); Consolidated Subsidiary World Residential
Philosophy: “Contributing to localities by bringing people and culture together andcreating communities”
Establish a brand that clearly distinguishes World Intec from large companies: the World Residential Series.
Develop condominiums with extensive safety measures while respecting the culture of historic neighborhoodsof central Tokyo.
The primary product is “condominiums for families” to meet real demand for residences in the “Tokyo area.”
The supply of condominiums after the 2008 Lehman shock is only half of the peak of 80,000 units.
The condominium supply in 2011 is estimated at 50,000 units; the contract signing ratio is climbing because
the supply is in line with real demand.

No. of condominiums sold per month

Condominium contract ratio(Source: Apr. 14, 2011 Real Estate Economic Institute Co., Ltd. report)

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

14Real Estate Business (2); World Residential Series
Plan sales of 4 buildings in fiscal 2011 (post sales in fiscal 2012)
Obanajyaya: Begin sales in FY11 2Q 67 units (Katsushika-ku, Keisei line)
Kanamachi: Begin sales in FY11 2Q-3Q 44 units (Katsushika-ku, Keisei line & JR)
Ebaranakanobu: Begin sales in FY11 4Q 42 units (Shinagawa-ku, Tokyu)
Monzennakacho: Begin sales in FY11 4Q 24 units (Koto-ku, Tokyo Metro)

Kanamachi, Katsushikaku

Sold land &buildings in March
2011

Minami-motomachi,
Shinjuku-ku

Nakanobe,
Shinagawa-ku

Obanajyaya, Katsusika-ku

Monzennakacho,
Koto-ku

Begin sales in
FY11 4Q

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

Begin sales in
FY11 2Q

Begin sales in
FY11 4Q

15

Summary of FY2011 Consolidated Business Results
In 2011, World Intec is focusing on building a strong
foundation for more progress in 2012.
(Consolidated)(Million yen)

Net sales
Operating income
Operating margin
Ordinary income
Ordinary income
marginNet income
Net income margin

FY12/10
actualFY12/11 1H
forecast

FY12/11 2H
forecast

YoY

FY12/11
forecast

Pct.
changeChange32,10918,593

17,50236,095

3,985

12.4%

344

279

160

439

94

27.2%

1.1%

1.5%

0.9%

1.2%

－

－

487

307

158

465

-22

-4.6%

1.5%

1.7%

0.9%

1.3%

－

－

58

178

-128

50

-8

-14.0%

0.2%

1.0%

-0.7%

0.1%

－

－

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

16Summary of FY2011 Business Forecasts by Segment
FY12/10 actual(Million yen)
Factory businessNet sales

2,354

16.7%

704

185

582

767

63

8.9%

5.0%

2.4%

6.6%

4.7%

-

-

5,964

2,988

3,106

6,094

130

2.2%

369

154

186

340

-29

-7.9%

6.2%

5.2%

6.0%

5.6%

-

-

2,082

1,143

1,244

2,386

304

14.6%

131

92

127

219

88

67.2%

6.3%

8.0%

10.2%

9.2%

-

-

8,046

4,036

3,365

7,401

-645

-8.0%

165

120

100

220

55

33.3%

2.1%

3.0%

3.0%

3.0%

-

-

52

1,329

０

1,330

1,277

-

-160

76

-425

-349

-189

-

-308%

5.7%

-

-26.3%

-

-

1,828

1,378

1,019

2,397

569

31.1%

19

110

16

126

107

563.2%

1.0%

8.0%

1.6%

5.2%

-

-

32,10918,593

17,50236,095

3,985

12.4%

Elimination or corporate

-884

-458

-426

-884

0

―

Operating income

344

279

160

439

94

27.2%

1.1%

1.5%

0.9%

1.2%

-

-

Net sales

Net sales
Operating income
Operating margin
Net sales
Operating income
Operating margin
Net sales
Operating income
Operating margin

Other businesses(FY12/10=various services)

Net sales
Operating income
Operating margin

Total

YoY
Pct. change

16,488Operating margin

Real Estate businessChange8,768

Operating income

Information Technology &Telecommunications Business

FY12/11 forecast

7,720

Operating margin

R&D business

FY12/11 2H
forecast

14,134

Operating income

Technology business

FY12/11 1H
forecast

Net sales

Operating margin

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

17

For more information
World Intec Co., Ltd.
Akihiko Omoto
Public Relations and Investor Relations Department Corporate
Planning DivisionTEL+81-93-533-0540

E-MAILirinfo＠witc.co.jp

URL

http://www.witc.co.jp/

No information in this presentation is provided for the purpose of soliciting purchases orsales of World Intec stock. Furthermore, opinions, forecasts and other information notbased on historical facts represent the judgments of World Intec at the time thispresentation was prepared. World Intec does not guarantee the accuracy of thisinformation and may revise this information at any time without prior notice. World Intecand other providers of this information assume no responsibility whatsoever for any losses
incurred in association with the information in this presentation.
Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

18