Briefing on Financial Resultsfor FY2015

February 8, 2016
Future Architect, Inc.
Copyright ©2016 by Future Architect, Inc. Japan

Contents

1. Earnings Results for FY2015

2. Topics Related to FY2015

3. FY2016 Forecast
Copyright ©2016 by Future Architect, Inc. Japan1. Earnings Results for FY2015

Copyright ©2016 by Future Architect, Inc. Japan

Consolidated Earnings Highlights

Future Architect, Inc. which designs management and IT.

• Consolidated net sales(higher for 5th consecutive year; record high for 3rd consecutive year)
The IT Consulting Business performed strongly in Japan. eSPORTS saw sales go
steadily while Micro CAD contributed to the consolidated earnings, allowing Future
Architect to post record high net sales for the 3rd consecutive year.

・ Consolidated income (a record high for 3rd consecutive year)
The improving profitability of the IT Consulting Business contributed to rising income
with the result that operating income, ordinary income and net income posted record
highs for the 3rd consecutive year.

・ Orders received
Orders received remained robust as the Company won orders from manyclients in diverse sectors comprising not only distribution/services but alsofinancial services and manufacturing
Copyright ©2016 by Future Architect, Inc. Japan-4-

Consolidated Results for FY2015(Million yen)

FY2015Results

Compared withprojected results
FY2015
Plan

ChangeFuture Architect, Inc. which designs management and IT.

Year-on-year comparison
FY2014
Results

ChangeNet sales

35,29335,250+0.1%

34,424+2.5%

Operatingincome

4,869

4,800

4,342

13.8%

13.6%

+1.4%

+12.1%

4,836

4,830

4,325

Ordinary income
margin

13.7%

13.7%

+0.1%

Net income

2,659

2,770

2,220

7.5%

7.9%

-4.0%

Operating income
MarginOrdinary
incomeNet income margin

Copyright ©2016 by Future Architect, Inc. Japan

-5-

12.6%

12.6%

6.4%

+11.8%+19.8%

Consolidated Balance Sheets(Million yen)

Future Architect, Inc. which designs management and IT.

End of Dec. 2015

End of Dec. 2014

Current assets

17,696

16,662+1,033

Non-current assets

5,132

5,040

+92

Total assets

22,82821,702+1,126

Current liabilities

5,082

5,800

-718

Non-current liabilities

1,445

1,426

+18

Total liabilities

6,527

7,226

-699

Total net assets

16,301

14,475+1,825

Shareholders’ equity ratio

70.6%

65.8%

+4.8pts

End of Dec. 2015

End of Dec. 2014

Change

9,650

8,552

+1,097

323

479

-156

1,729

1,494

+235

Decrease in accounts payable - other

742

1,049

-307

Decrease in income taxes payable

1,243

1,361

-118

Increase in retained earnings

13,756

12,012+1,744Main changes(Million yen)

Current assets:

Increase in cash and deposits

Non-current assets:

Decrease in buildings and structures
Increase in investment securities

Current liabilities:

Net assets:

ChangeCopyright ©2016 by Future Architect, Inc. Japan-6-

Consolidated Cash Flows

Future Architect, Inc. which designs management and IT.

FY2015 Results

FY2014 Results

Net cash provided by (used in) operating activities

2,878

3,114

-236

Net cash provided by (used in) investing activities

-749

-676

-72

Net cash provided by (used in) financing activities

-941

-749

-191

Effect of exchange rate changes on cash and cash
equivalents

-45

33

-78

Increase (decrease) in cash and cash equivalents

1,142

1,721

Cash and cash equivalents at beginning of theperiod

8,614

6,892

Cash and cash equivalents at end of the period

9,757

8,614

(Million yen)

Main changes(Million yen)

Operating CF:

Investing CF:

Financing CF:

ChangeFY2015FY2014

ChangeIncome before income taxes

4,688

4,260

+427

Increase (decrease) in accounts payable - other

-314

222

-537

Income taxes paid
Purchase of shares of subsidiaries resulting inchange in scope of consolidation
Purchase of investment securities-2,063-1,777

-286

-248

-317

+68

-348

-109

-238

-915

-714

-200

Cash dividends paid

Copyright ©2016 by Future Architect, Inc. Japan-7-

Consolidated Results by Segment(Million yen)

Future Architect, Inc. which designs management and IT.

Year-on-year
ChangeFY2015 Results

FY2014 Results

Net Sales

35,29334,424+2.5%

IT Consulting
Package & Service
New Media & Web Service
Corporate Revitalization
Other
Adjustments

21,589
4,355
4,913
4,473
-38

21,693
4,014
4,258
4,472
-13

-0.5%
+8.5%
+15.4%+0.0%-

Operating Income

4,869

4,342

+12.1%IT Consulting
Package & Service
New Media & Web Service
Corporate Revitalization
Other
Adjustments

4,647
319
-105
+10
-38
52

4,011
341
-13
-35
-0
39

+15.9%-6.5%-

Note: Segment changes were made in FY2015, and figures for FY2014 were adjusted to reflect those changes.
Copyright ©2016 by Future Architect, Inc. Japan-8-

Consolidated Orders Received and Backlog by Segment
Future Architect, Inc. which designs management and IT.

Orders received(Million yen)
FY2015FY2014

BacklogYear-onyearchangeFY2015FY2014Year-onyearchangeIT Consulting Business

22,546

20,664

+9.1%

7,134

5,919

+20.5%

Package & Service
Business

4,131

4,352

-5.1%

942

1,393

-32.3%

374

305+22.5%

6912+440.0%27,051

25,322

+6.8%

8,146

7,325

11.2%

New Media & Web Service
Business
Total

Notes 1: eSPORTS and Uoei are not included in the above table, since they are not engaged in production on orders.
2: Segment changes were made in the first quarter of FY2015, and figures for FY2014 were adjusted to reflect thosechanges.

Copyright ©2016 by Future Architect, Inc. Japan-9-

Trends of Half-Yearly Consolidated Results
Future Architect, Inc. which designs management and IT.

20,00018,000

売上高
Net Sales
Operating income
営業利益

16,000

4,000
3,600

16,000
受注高
Orders received
Backlog
受注残高
14,0003,200

12,00014,0002,800

12,0002,400

10,000

2,000

8,000

8,000

1,600

6,000

6,000

1,200

10,000

4,000
4,000

800

2,000
2,000
0

400

2013.1H 2013.2H 2014.1H 2014.2H 2015.1H 2015.2H

Copyright ©2016 by Future Architect, Inc. Japan00

2013.1H2013.2H2014.1H2014.2H2015.1H2015.2H- 10 -

Results by Segment (IT Consulting Business)
Future Architect, Inc. which designs management and IT.

 At Future Architect, net sales grew in the fourth quarter of FY2015 as new
projects got off to a strong start after the completion of existing projects. Its
income rose thanks to the improving profitability of projects.
 Future Inspace performed solidly as it put its new organizational structure on a
firm footing.
Trends of orders received and backlog

Trends of net sales and operating income
30,0006,000

25,0004,647

21,69320,000

Other
FIS

4,011

5,000

21,58925,00022,546

Orders
受注高
received
Backlog
受注残高

20,66420,000

Other
FIS

4,000
15,00015,00010,0003,000
FutureFuture

5,000

10,000

2,000
1,000

0

5,919
5,000

0
2014年
FY20140

2015年
FY2015

Copyright ©2016 by Future Architect, Inc. Japan

7,134

FY20142014年- 11 -FY20152015年

Results by Segment (Package & Service Business)
Future Architect, Inc. which designs management and IT.

 At FutureOne, package software implementation performed strongly. However,its sales and operating income declined as it overhauled low-margin projects.
 Micro CAD achieved net sales and operating income in line with expectations
due to strong sales of its comprehensive intellectual property management
system.
Trends of orders received and backlog

Trends of net sales and operating income
5,000

500

6,000

4,355
4,000

4,014

Other

Other

MCAD

341

400
319

3,000

5,000

Orders received
受注高
Backlog
受注残高

4,352

4,131

4,000
300
3,000

2,000

FutureOne

Future
One

1,000

200
2,000
100

0

0

2015年
FY2015

Copyright ©2016 by Future Architect, Inc. Japan

942

1,000

0
2014年
FY2014

1,393

FY20142014年- 12 -FY20152015年

Results by Segment (New Media & Web Service Business)
Future Architect, Inc. which designs management and IT.

 eSPORTS saw increase in net sales because of robust sales of sports, outdoor, andfitness gear. However, its profit margin declined, affected by the intensifying competition incustomer loyalty point schemes, the rising use fee for platform and a weaker yen, among
other factors.
 For the fourth quarter of FY2015, Tokyo Calendar achieved operating profitability on asingle quarter basis as its advertising revenues grew while monthly page views of its
website exceeded the 10 million mark.
Trends of net sales and operating income
6,000

500

Net sales
売上高
Operating income
営業利益

5,018
400

5,000
4,258

300

4,000

3,000

200

148
83

2,000

100

0

1,000

FY2014
2014年

FY2015
2015年

Note: Since the said business involves many M&A deals, goodwill is recorded. However, amortization of goodwill is not taken into
consideration to make year-on-year comparison simple.
Copyright ©2016 by Future Architect, Inc. Japan- 13 -

Results by Segment (Corporate Revitalization Business)
Future Architect, Inc. which designs management and IT.

 The Corporate Revitalization Business posted a higher gross profit margin as thesegment reduced product disposals and inventories by using IT to rigorously manage
data on sales, purchases and inventories.
 The progress of the above-mentioned efforts led to improved cash flows.

Trends of net sales and operating income
6,000
4,472

Net sales
売上高
Operatingincome
営業利益

4,473

150

4,000

100

2,000

50
10
0

0

FY 2014年-2,000-35-4,000

Copyright ©2016 by Future Architect, Inc. Japan

FY2015
2015年
-50

-100

- 14 -

Consolidated Analysis of Changes in Net Sales
Future Architect, Inc. which designs management and IT.

(Million yen)
Increase in net salesof Package & Service
Business: +341

Increase in net
sales of Corporate
Revitalization
Business: +1
Difference between“adjustments” of
FY2015 and those of
the previous year: -25

34,424

Decrease in net salesof IT Consulting
Business: -103 (note)

Increase in net
sales of New Media& Web Service
Business: +655

FY201435,293(+2.5%)FY2015

Note: Despite its strong performance in Japan, the IT Consulting Business as a whole posted lower net sales as sales
declined at overseas subsidiaries of the Company.
Copyright ©2016 by Future Architect, Inc. Japan- 15 -

Consolidated Analysis of Changes in Operating
IncomeDecrease in operating
income of Package &Service Business: -22

Future Architect, Inc. which designs management and IT.

Increase in operating
income of Corporate
Revitalization
Business: +45

Decrease in operating
income of New Media &Web Service Business: -91

4,342

Increase inoperating income of
IT Consulting
Business: +636

FY2014
Copyright ©2016 by Future Architect, Inc. Japan

Differences between“other” and“adjustments” of
FY2015 and those of
the previous year: -24(Million yen)

4,869(+12.1%)FY2015- 16 -

Sales Analysis of IT Consulting Business (Excluding Procured Articles) (1/3)
Future Architect, Inc. which designs management and IT.

Trends of sales by industry

FY20133,870(23.0%)

2,913(17.3%)FY20143,596(19.2%)

3,452(18.5%)FY2015

4,664(24.9%)

4,037(21.5%)

Service

Copyright ©2016 by Future Architect, Inc. Japan

5,044(29.9%)

5,022(29.8%)

6,387(34.2%)

5,242(28.1%)

5,020(26.8%)

Distribution- 17 -

Financial

5,037(26.8%)

Manufacturing

Million yen

Sales Analysis of IT Consulting Business (Excluding Procured Articles) (2/3)
Future Architect, Inc. which designs management and IT.

Trends of sales by phase

FY2013

5,682(33.7%)

2,279(13.6%)FY2014

6,638(35.5%)

1,245(6.7%)FY2015

3,899(20.8%)

3,736(19.9%)

Grand design

Copyright ©2016 by Future Architect, Inc. Japan

6,105(36.2%)

2,783(16.5%)

7,672(41.1%)

3,123(16.7%)

7,945(42.4%)

3,179(16.9%)

Design- 18 -Development

Maintenance/
operation

Million yen

Sales Analysis of IT Consulting Business (Excluding Procured Articles) (3/3)
Future Architect, Inc. which designs management and IT.

Trends of sales composition ratios based on customer company size

FY2011

12.1%

23.1%

FY2012

14.3%

23.9%

FY2013

10.0% 13.2%

FY2014

7.3%

FY2015

9.6%

15.6%

17.8%

44.0%

25.0%

51.8%

12.9%

64.2%

19.3%

21.8%

Less than 100
million yen

61.0%

3.8%

49.3%

Over 100 million to less than
500 million yen

Copyright ©2016 by Future Architect, Inc. Japan

Over 500 million to less than
1,000 million yen- 19 -

Over 1,000
million yen

Million yen

2. Topics Related to FY2015

Copyright ©2016 by Future Architect, Inc. Japan

Press Releases

Future Architect, Inc. which designs management and IT.

Major press releases: 26 / year・

19-Bank-related-Distribution-related-Securities-related-Manufacturing-related

(8)
(8)
(1)
(2)

・
・
・

Copyright ©2016 by Future Architect, Inc. Japan2
2
3- 21 -

Topics

Future Architect, Inc. which designs management and IT.

1. SKYBANK cloud service
2. Distribution & retail cloud service
3. Food manufacturing integration system
4. Global ERP
5. Tokyo Calendar web service

Copyright ©2016 by Future Architect, Inc. Japan- 22 -

1. SKYBANK cloud service

Future Architect, Inc. which designs management and IT.

Expansion of consulting function for corporations, marketing for individuals, and direct banking
Sales activities
Selectingtargetcompanies
forpromotions
Sales informationSfinfrastructure

Financing clerical work

Post-management

Feasibility

Visit
plan

Acceptingapplication
Personal
loan

Screening,
circulation

Contract

Execution

Customer
information

Suppliers andcustomers

Shareholders

Assets held

Financial affairs

Officer

Guarantor

Liabilities

Managing
concerned
items

Monitoring

Transaction
situation
Transaction
history

Automaticcollaboration
on execution
information

Accounting system• Convert the loan provision system, one of three primarybanking services (deposit, foreign exchange and loan
services), into a cloud-based service• Integrate banking functions for personal customers withthose for corporate customers• Conduct planning of tablet- and Fin-Tech-linked service
Copyright ©2016 by Future Architect, Inc. Japan- 23 -

1. SKYBANK cloud service•

Future Architect, Inc. which designs management and IT.

(launched in December 2012)
Introduced cloud service for the results of the construction of loan sales systems atover 10 banks- All-inclusive system from sales support to loan execution (operation reform model)- Offered short-term implementation and low cost features under the standard service model- Improved clerical work efficiency substantially through a shift from a silo-based system andpaper-based formats(With regard to clerical support for sales of assets on deposit, sales outlet clerical work
load was reduced by 30% and headquarters operational work load by 50%)
- Currently also deploying tablet functions and Fin-Tech-linked functions•

Won orders from five banks within three years- Won orders from two banks for a future cloud model and from three banks for a templatemodel

Copyright ©2016 by Future Architect, Inc. Japan- 24 -

2. Distribution and retail cloud service

Future Architect, Inc. which designs management and IT.

Conventional type individual
connection model

Cloud service

Apparel maker

Retailer (EC channel)

Apparel maker

FS

Company A

FS

Company A

IL

Company B

IL

Company B

MG

Company C

MG

OI

Company D

OI

SL

Company E

SL

…

…

…

OmnibusCore

Retailer (EC channel)

Company C
Company D
Company E…

• Future’s cloud service supporting the customer’s omni-channel strategy-

Provides product/inventory information sharing service and order placement/taking service for diverse
sales channels (offline stores and EC shopping malls)
Allows each manufacturer to connect to multiple retailers
Allows each retailer to connect to multiple manufacturers
Operational launch starting with the apparel industry

Copyright ©2016 by Future Architect, Inc. Japan- 25 -

2. Distribution retail cloud service

Future Architect, Inc. which designs management and IT.

OmnibusCore (OC) (launched in September 2015)• Supports the customer’s omni-channel strategy- Provides the manufacturer with product/inventory information service and orderplacement/taking service that are shared for diverse sales channels (offline storesand EC shopping malls)- Provides the retailer with product/inventory information from multiple manufacturers
regardless of whether for offline stores or EC shopping malls, as well as orderplacement/taking service• Future’s cloud service (Future Omnibus Cloud)- Short-term implementation and low cost operation- Within five months, the provision of this service to 16 apparel brands and 10 retailers
was determined(TSI Holdings, Shueisha, Lumine, Rakuten, etc.)

Copyright ©2016 by Future Architect, Inc. Japan- 26 -

3. Food manufacturing integration system

Future Architect, Inc. which designs management and IT.

SPS new mission-critical systemPlanmanagement

Sales
management

Allocation
management

Logistics
management

Profitmanagement

Forecastmanagement

Production
management

Accounting
management

Mastermanagement

Headquarters

Tokyo

Kansai

Copyright ©2016 by Future Architect, Inc. Japan

Chubu

Shikoku- 27 -• Began operation on November 24, 2015
• Business management reform from sales focus toprofit focus• Visualize profit structure simply from a wholecompany perspective• All-inclusive operational system from demand
forecast to sales, and from manufacturing to logistics• Support for manufacturing & wholesaling of fresh
daily delivery foods (three times a day)

3. Food manufacturing integration system

Future Architect, Inc. which designs management and IT.

Company-wide operational reform for five years from 2011
• Business management reform from sales focus to profit focus• Rebuilding of operational processes from perspective of total optimization• All-inclusive operational system from demand forecast to sales, and frommanufacturing to logistics• From region-based systems (Tokyo, Chubu, Kansai, Shikoku) to a systemcommon to all units of the company• A total migration to an open system from the mainframe which has
continued to be used for more than 40 years• Operational launch on November 24, 2015

Copyright ©2016 by Future Architect, Inc. Japan- 28 -

4. Global ERP

Future Architect, Inc. which designs management and IT.

• Operation results of ERP system for manufacturers-

Brightree Solutions•

Southeast Asia subsidiary (based in Malaysia: SAP Platinum Partner)•

The first company in APJ (Southeast Asia and Japan) to run “SAP S/4HANA”“SAP APJ Partner Excellence Award 2016
for SAP S/4HANA –First Customer to Go Live“•

Sapporo Holdings Ltd./ integrated sales support system: ORACLE Siebel CRM•

Dunlop Sports Co., Ltd./ mission-critical system:

Copyright ©2016 by Future Architect, Inc. Japan- 29 -ORACLE JDEdwards E1

4. Global ERP

Copyright ©2016 by Future Architect, Inc. Japan

Future Architect, Inc. which designs management and IT.

- 30 -

5.

Tokyo Calendar web service

Future Architect, Inc. which designs management and IT.

Full-scale overhaul of “Tokyo Calendar Website”(February 2015)• Achieved 10 million monthly page views in November 2015
- Growth of over 1,500% in 10 months- Media service based on foods- Disseminating daily highly reliable life style information such as
restaurant information database, restaurant reservation site, and gourmet
food information• Develop into a web service company- Shift from publishing to web service- Provide diverse media services based on
Future’s IT infrastructure

Copyright ©2016 by Future Architect, Inc. Japan- 31 -

5.

Tokyo Calendar web service

Monthlymagazine

Web
media

EC

New
services

Multimedia platform

Copyright ©2016 by Future Architect, Inc. Japan

Future Architect, Inc. which designs management and IT.

• Monthly page views of 10 million andgrowth of 1,500%• Shift to a web service company•’s IT infrastructure service
foundation- 32 -

3. FY2016 Forecast

Copyright ©2016 by Future Architect, Inc. Japan

Measures for FY2016

FutureFutureArchitect,
Architect, Inc.
Inc. which
whichdesigns
designsmanagement
management
andandIT.IT.

• Business management and IT (operational reform and technology)- Comprehensive IT service comprising business consultation, systemconstruction and maintenance/operation- Next-generation real-time architecture, IoT, AI and big data
• Cloud solution- SKY cloud: A highly-specialized cloud service-, SKYRETAIL, SKYLOGI, SKYXXX• Asia- SAPplus IT service• 2WAY- Advanced original service utilizing IT

Copyright ©2016 by Future Architect, Inc. Japan- 34 -

Consolidated Full-year Forecasts for FY2016
Future Architect, Inc. which designs management and IT.

(Million yen)

FY2015Results
for thefirst half

FY2016
Forecasts
for thefirst half

Net sales

17,033

17,980Operatingincome

2,093

2,400

12.3%

13.5%

2,102

2,410

Ordinary
income margin

12.3%

13.5%

Net income

1,197

1,355

7.0%

7.5%

Operatingincome margin

Ordinary
incomeNet income
marginCopyright ©2016 by Future Architect, Inc. Japan

Year-onyearchange+5.6%+14.6%+14.6%+13.2%- 35 -FY2015Full-year
results

FY2016Full-year
forecasts

35,29337,000

4,869

5,200

13.8%

14.3%

4,836

5,220

13.7%

14.4%

2,671

2,880

7.6%

7.8%

Year-onyearchange

+4.8%

+6.8%

+7.9%

+8.3%

Dividends

FutureFutureArchitect,
Architect, Inc.
Inc. which
whichdesigns
designsmanagement
management
andandIT.IT.

• Change the Company’s dividend payout ratio standard from at least
30% of non-consolidated earnings to at least 35% of consolidated
earnings• Final dividend for FY2015 was set at 13.50 yen, up from 9.50 yen a year ago.
• For FY2016, an ordinary dividend of 25 yen per share is to be paid.

FY2014(Actual amount paid)

FY2015(Planned)

Per shareordinary dividend: 17 yencommemorative dividend: 2 yen
Consolidated
payout ratio: 38.2%
Non-consolidated
payout ratio: 37.4%

Per share: 23 yen

Copyright ©2016 by Future Architect, Inc. Japan

Consolidated
payout ratio: 38.6%- 36 -FY2016(Planned)
Per share: 25 yen

FutureFutureArchitect,
Architect, Inc.
Inc. which
whichdesigns
designsmanagement
management
andandIT.IT.

The summary report of operating results, supplementarymaterials, briefing materials and other various IR materials
are also available on the Company’s website.
http://www.future.co.jp/ir/
Investor Relations, Future Architect, Inc.
Tel: +81-3-5740-5724
Fax: +81-3-5740-5820
E-mail: ir@future.co.jp
The forecasts in this material are based on currently available information; actual results may differ from such forecasts
depending on the future direction of the Japanese economy and the IT service industry. It should be noted that the Company does
not guarantee or promise the accuracy of these forecasts.
In this material, the figures in the summary report of operating results, etc. described in units of thousand yen, are stated in unitsof million yen. Hence, a disparity may be found in some of the totals and differences. For detailed figures, please refer to thesummary report of operating results.

Copyright ©2016 by Future Architect, Inc. Japan- 37 -