USEN Corporation

Summary of Second Quarter of Fiscal YearEnding August 2015
March 31, 2015

Contents

1. Results of Operations…………………………

P2

2. Financial Indicators…………………………

P7

3. Operating Highlights…………………………

P12

4. Second Quarter Topics…………………………

P18

5. Disclaimer…………………………

P21

-1-

|| Results of Operations || Second Quarter Financial Highlights• First half sales were higher than one year earlier as growth in sales in the music
distribution and others segments offset a small decrease in business systems sales.

• Operating income decreased slightly because of expenses for activities that included
measures aimed at growth in the future. Ordinary income increased as interest
expenses declined along with debt, but a decrease in extraordinary gains resulted
in a small decline in net income.
Net Sales
Billion yen

■売上高

34.49

＋0.4%

Operating Income■営業利益

Ordinary Income

Billion yen■経常利益

Billion yen

Net Income■当期純利益Billion yen

34.62

5.22 ▲0.5% 5.19

4.80 ＋2.0% 4.89
4.05 ▲0.7% 4.02

FY14-2Q
2Q

FY15-2Q
2Q

FY14-2Q
2Q

FY15-2Q
2Q

FY14-2Q2Q

FY15-2Q
2Q

FY14-2Q
2Q

FY15-2Q
2Q

FY8/2014

FY8/2015

FY8/2014

FY8/2015

FY8/2014

FY8/2015

FY8/2014

FY8/2015* Monetary amounts are not rounded; percentages are rounded to the nearest tenth.

-2-|| Results of Operations || Second Quarter Financial Highlights
Business Segment Sales
・音楽配信事業・ICT事業・業務用システム事業

Music Distribution
Billion yen

・その他

ICT Services

Business Systems
Billion yen

OthersBillion yen

Billion yen

＋0.7%
20.02

20.16
individual

7.99

▲2.8%

7.77
4.85

commercial＋1.1%

4.90＋17.0%
1.68

1.96

FY14-2Q
2Q

FY15-2Q2Q

FY14-2Q
2Q

FY15-2Q
2Q

FY14-2Q
2Q

FY15-2Q
2Q

FY14-2Q
2Q

FY15-2Q
2Q

FY8/2014

FY8/2015

FY8/2014

FY8/2015

FY8/2014

FY8/2015

FY8/2014

FY8/2015

Sales higher due to growth incommercial sales; sales toindividuals down slightly

Sales one year earlier benefited
from a one-time increasein demand.

Sales increased due toincrease in the number ofservices provided(Ref.) USEN uses commercial sales and consumer sales as one of its performance indicators.
* In FY8/2014, there was a sales deduction of ¥50 million for inter-segment transactions.
* In FY8/2015, there was a sales deduction of ¥180 million for inter-segment transactions.

-3-Sales up due to growth of themarketing support business

|| Results of Operations || Second Quarter Financial Highlights
Business Segment Operating Income
・音楽配信事業

Music Distribution
4.59

▲1.5%

・業務用システム事業

ICT Services

Business Systems

Billion yen

・その他・ICT事業

Billion yen

OthersBillion yen

Billion yen

4.52

＋1.8%
0.94

0.96

▲1.0%

FY14-2Q

2Ｑ
FY8/2014

FY15-2Q

2Ｑ
FY8/2015

Mainly the result of expenditures,
including for growth-orientedactivities

0.370.37

FY14-2Q
2Ｑ

FY15-2Q
2Ｑ

FY14-2Q
2Ｑ

FY15-2Q
2Ｑ

FY8/2014

FY8/2015

FY8/2014

FY8/2015

Earnings up despite lower sales
due to improving profitability

Basically unchanged fromone year earlier* In FY8/2014, there was an operating income deduction of ¥520 million for inter-segment transactions.
* In FY8/2015, there was an operating income deduction of ¥520 million for inter-segment transactions.

-4-▲0. 18▲0. 142Ｑ
FY8/2014

2Ｑ
FY8/2015

Basically unchanged fromone year earlier

|| Results of Operations || Second Quarter Performance vs. Forecast

FY Forecast

2Q Actual

Progress

（A）

（B）

（B÷A）

Net Sales

70.00

34.62

49.5%

Operating Income

8.60

5.19

60.4%

Ordinary Income

8.00

4.89

61.2%

Net Income

6.00

4.02

67.2%

Billion yen

Sales were generally as expected but earnings werehigher than the forecast at all levels in second quarter.

-5-

|| Results of Operations || Quarterly Consolidated Performance
Billion yen
250

50

Net Sales
200

16.6

16.6

17.4

17.4

17.0

17.4

Operating Income

17.9

16.8

Net Income

17.1

17.4

150 ～30～

2.3

100

1.3

1.9

1.4

2.9

2.6

2.4

1.950402.52.01.9

1.4

1.4

1.6
1.2

2.5

2.6

1.9

2.020

100.5001Q FY8/2013 2Q FY8/2013 3Q FY8/2013 4Q FY8/2013 1Q FY8/2014 2Q FY8/2014 3Q FY8/2014 4Q FY8/2014 1Q FY8/2015 2Q FY8/2015

Second quarter sales, operating income, and net income increased fromprevious quarter, but about the same as one year earlier.
* All figures are not rounded.

-6-|| Financial Indicators || Cash Flows
Billion yen

16.2

15.6

14.0
10.0

12.2

Operating CFFree CF

10.5
6.1

5.7

1.6

2.8

1.83.60▲0.5
FY8/2012

Total CF▲1.0
FY8/2013

FY8/2014

2Q FY8/2014

2Q FY8/2015

5.7▲2.9▲3.86.1▲2.5▲3.6* Free CF = Operating CF + Investing CF ; Total CF = Free CF + Financial CF

14.0
Investing CF ▲ 4.0
Financial CF ▲ 10.5

Operating CF

15.6
▲ 3.3
▲ 10.516.2▲ 5.6▲ 8.6

Free cash flows increased ¥800 million as operating cash flows increased ¥400 million andinvesting cash out flows decreased. Cash used in financing activities, including loan repayments,
was down slightly. The result was a ¥1,000 million increase in total cash flows from one year earlier.
-7-|| Financial Indicators || Leverage Ratio
Billion yen , Times

Debt
EBITDA

42.7

Leverage ratio

32.3
25.0
16.9

23.7
17.0

16.5

21.4
16.9

17.0

2.5
2.0
FY8/2012

FY8/2013

1.5

1.4

1.3

FY8/2014

1Q FY8/2015

2Q FY8/2015* EBITDA = Operating income + Depreciation + Depreciation of goodwill* EBITDA is for the most recent 12-month period* Leverage ratio = Debt / EBITDA for past 12 months

EBITDA was steady, remaining about the same as one year earlier.
The leverage ratio decreased to 1.3 times as debt continued to decline.

-8-|| Financial Indicators || Equity Ratio
Billion yen , %Assets

73.3

67.4

Equity67.1

67.3～～ ～～～ ～

65.4

～～ ～～
31.7%

35.8%

21.3

23.4

28.9%
20.2%
11.9%

8.7
FY8/2012

Equity ratio

19.4

13.6

FY8/2013

FY8/2014

1Q FY8/2015

2Q FY8/2015* Equity = Net assets – Stock acquisition rights

Total assets were down ¥1.7 billion from the end of the first quarter because

depreciation （including the goodwill） was more than capital expenditures.
In addition, equity increased because of second quarter net income ofabout ¥2 billion. The result was an equity ratio of 35.8%.

-9-|| Financial Indicators || Return on Equity
Net Income/Sales Ratio
9.7%
9.6%

Asset Turnover Ratio

Financial Leverage

9.6%

7.1%

0.88

5.0%

0.97

1.03

1.03

1.06
11.0

6.3

FY8/2012

FY8/2013

FY8/2014

1Q FY8/2015 2Q FY8/2015

FY8/2012

FY8/2013

FY8/2014

1Q FY8/2015 2Q FY8/2015

FY8/2012

FY8/2013

4.1

3.63.2

FY8/2014

1Q FY8/2015

2Q FY8/2015

Return on Equity
48.7%

FY8/2012

43.3%

40.6%

FY8/2013

FY8/2014

36.2%

32.6%

1Q FY8/2015

2Q FY8/2015* Return on equity (ROE) = Net income/Sales ratio x Asset turnover ratio x Financial leverage* Sales and net income are for the last 12-month period and assets and equity are the averages of the amounts at the ends of the current and previous FY

The net income/sales ratio and asset turnover ratio remained high in the first half.

The ROE was also high, although there was a small decrease caused by a decline
in financial leverage (improvement in financial soundness) as debt was lowered.
- 10 -|| Financial Indicators || Return on Assets
Billion yen , %Total Assets

76.9～

70.3

～

10.7%

10.3%

8.2

7.2

FY8/2012

FY8/2013

67.3

Ordinary Income

Return on Assets

67.1

65.1

～12.4% ～12.4% ～13.0%
8.2

8.4

1Q FY8/2015

2Q FY8/2015

8.3
FY8/2014* Ordinary income return on assets (ROA) = Ordinary income / Average FY assets x 100* Ordinary income is for the last 12-month period.
* Assets are the average of the amounts at the ends of the current and previous FY.

Ordinary income is steady and the ROA is improving slightly
because of total assets decreasing.

- 11 -

|| Operating Highlights （Music Distribution） || A New Supplementary Service
Launch of “Kokoro no Clinic“, a mental health ASP service, on February 5, 2015
Sound Design for OFFICE (http://www.usen.com/sound_design/), which USEN started inFebruary 2013, meets the needs of companies for using music to improve workplaceenvironments for helping workers maintain a healthy mental balance.
In Japan, the requirement for workforce stress checks is expected to increase awareness ofthe importance of mental health. USEN’s new ASP service is a comprehensive service thatcovers everything from the stress checks mandated by the amended Industrial Safety andHealth Act to e-learning and organizational diagnosis activities.

- 12 -

|| Operating Highlights （Business Systems） || Sales Composition■Quarterly Sales
Billion yenOthers

HospitalBusiness Hotel

Boutique Hotel

4.58

4.06

4.06

3.62

4.24
3.88

3.75

4.07
3.69

3.23

1Q FY8/2013 2Q FY8/2013 3Q FY8/2013 4Q FY8/2013 1Q FY8/2014 2Q FY8/2014 3Q FY8/2014 4Q FY8/2014 1Q FY8/2015 2Q FY8/2015○Second quarter sales in all three major sectors■Year on Year
2Q FY8/2014

2Q FY8/2015～５％～５％

Boutique HotelBusiness Hotel
HospitalOthers～３０％～５５％～１５％～１５％4.24 Billion yen- As in prior years, second quarter sales were higher
in all three major sectors.

～２５％
～５０％

were higher than in the first quarter.

- Small decrease in segment sales from one year ago
because of one-time increase in demand in the second quarter,
mainly in the hospital sector.

4.07 Billion yen- Hotel sectors sales increased from one year ago.
- 13 -

|| Operating Highlights （ICT Services） || Sales Composition■Quarterly Sales
Billion yenOthersCommission
2.31

2.30

MobileNetwork/Option
2.41

2.40

2.38

2.43

2.46

2.48

2.43

2.46

1Q FY8/2013 2Q FY8/2013 3Q FY8/2013 4Q FY8/2013 1Q FY8/2014 2Q FY8/2014 3Q FY8/2014 4Q FY8/2014 1Q FY8/2015 2Q FY8/2015■Year on Year
2Q FY8/2014～５％～５％～１０％○Sales higher following the first quarter decline.
2Q FY8/2015～５％～５％～１０％Network/Option
MobileCommission
Others- Segment sales increased mainly because of steady growthin the core network/option services category.
- Small declines in commission and mobile sales.
- Competition remains intense, but aiming for more growth

～８０％

～８０％

in sales by adding services and products, chiefly involving
the cloud, to enlarge the line-up.

2.43 Billion yen

2.46 Billion yen- 14 -

|| Operating Highlights （Others） || Marketing Support Sales Performance■Quarterly Sales

Billion yen

0.64

0.68

0.58

0.34

0.36

0.38

0.42

0.48

0.46

0.52

1Q FY8/2013 2Q FY8/2013 3Q FY8/2013 4Q FY8/2013 1Q FY8/2014 2Q FY8/2014 3Q FY8/2014 4Q FY8/2014 1Q FY8/2015 2Q FY8/2015○Current service line-up is performing well, focusing on increasing added value.
USEN’s “Hitosara” gourmet website is performing well and sales of services bundled withthose of other companies were strong. To offer more added-value services, focusing on services
for inbound tourists (see next page), SNS tie-ups, services for specific activities, and services
for businesses other than the restaurant sector.

- 15 -|| Operating Highlights （Others） || New service of Sales Support Segment
On February 2, 2015, USEN started “SAVOR JAPAN”, an English-language gourmet
website for foreigners who visit Japan. The website supplies information about 2,000
chefs in Japan, including their best-known cuisine.
Website Features
１、A focus on areas and food categories that most interest foreigners
The website has a searching method that makes it easy for foreigners to locate
restaurants in places they are likely to visit (sightseeing areas, etc.) and the typesof food they are likely to seek.

２、Original articles and other information“SAVOR JAPAN” is full of original information, including English-languagetranslations, about subjects that interest foreigners visiting Japan. For example,
foreigners can use the website to locate restaurants with a sunken heat table orthat serve early-spring Japanese vegetables.

３、Confidence from seeing who prepares meals“SAVOR JAPAN” includes the information about chefs that is posted on USEN’s“Hitosara” gourmet website. Information is translated into English and arranged
for the convenience of foreigners who are interested in the culture of Japanesecuisine and want to learn more about the people who prepare these meals.

４、Restaurant amenity icons for easy use by foreigners
Search result and restaurant pages include icons for eight restaurant amenities
that interest foreigners: English-language menu, English-speaking employees,
free Wi-Fi, karaoke, late-night operation, no smoking, acceptance of special
requests about food, and availability of forks and knives.

- 16 -

|| Operating Highlights （Others） || New service
Launch of “Dental Concierge”, a service for dentists, on December 1, 2014
Helps dentists attract people efficiently by combining a dentist search portal site and a reservation tool
designed specifically for dental offices

A support service for dentists,a market sector with a very highbackground music utilization rate
For dental offices
A portal site for locating dental officesthat can be used from a PC or smartphone
and a reservation management tool
created for dentists
For the public“Dental Concierge” makes it easy to findinformation for about 68,000 dental offices
throughout Japan, including addresses,
nearby stations and other items.
People can quickly locate a dentist neartheir home, workplace, school or other place.

- 17 -|| Second Quarter Topics ||>> Music Distribution
December 2014

Announcement of USEN Music Distribution 2014 ranking>> Marketing Support (“Hitosara”)
February 2015

The “Hitosara x Table for Two” Meal Donation Program
The number of meals for children in Africa and Asia funded bythis campaign is now more than 50,000.

- 18 -

|| Second Quarter Topics || Music Distribution
December 9, 2014 – Announcement of USEN 2014 Music Ranking
The winning song in the J-POP category was “Let It Go, Ari-no-mama-de” by Takako Matsu
and the winning song in the Western music category was “Happy” by Pharrell Williams.
Winners received plaques from USEN president Kimimasa Tamura (far right in photo below)- 19 -

|| Second Quarter Topics || “Hitosara” Gourmet Website
January 31, 2015 – Meals for needy children in Africa and Asia funded by“Hitosara x Table for Two” topped 50,000“Hitosara x Table for Two”, a meal donation program linked to USEN’s “Hitosara” gourmet
website, surpassed 50,000 meals at the end of January. “Hitosara” is the first gourmet
website that has a charitable donation program in which reservations made using the site
generate donations. USEN remains dedicated to using this program to support activities inAfrica and Asia for feeding children in need.

- 20 -|| Disclaimer ||This presentation was prepared by using numbers and other data that are
believed to be reliable. However, USEN makes no guarantee that thisinformation is accurate or complete.
Statements about USEN’s plans, strategies and other items that are not historicalfacts are forward-looking statements that are based on the judgments ofmanagement using currently available information. Actual results of operations
may differ from these statements for a number of reasons.
This presentation was prepared solely for the purpose of providing informationthat can be helpful for making investment decisions. No information in thispresentation is provided for the purpose of soliciting an investment.

- 21 -