Annual Results for the Fiscal Year
Ended March 31, 2017 (FY 2016)
May 10, 2017

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Annual Results for FY 2016

Contents
1. Overview of FY16 Results

・・・2(6) NTT Group (Access/Network)

・・・16(1) Performance Figures

・・・3(7) NTT Group (Mobile)

・・・17(2) Orders Received

・・・4(8) NCCs

・・・18(3) Net Sales

・・・5(9) Urban Infrastructure・・・19(4) Operating Income

・・・6(10) SYSTEM-SOLUTIONS・・・20(5) Cash Flow・・・8(11) Improved Productivity

・・・27

2. Plans for FY17・・・9(1) Medium-Term Forecast for Projects

・・・10(2) Performance Figures

・・・11(3) Orders Received and Net Sales

・・・12(4) Operating Income

・・・14(5) Investment Trends of Major Telecom Carriers

・・・15

－1－

3. Raising Shareholders’ Value

・・・30(1) Payment of Dividends

・・・31

Annual Results for FY 2016

1. Overview of FY16 Results(1) Performance Figures(2) Orders Received(3) Net Sales(4) Operating Income(5) Cash Flow

－2－

Annual Results for FY 2016

1. Overview of FY16 Results(1) Performance Figures◆ Orders received, sales and profits all increased due to strong orders received from telecom carriers◆ Net sales were in line with the plan, but operating income hit a new high

■ Overview of FY16 results (consolidated)

(¥bn)

FY15

FY16

FY16

ActualPlan

ActualYOY

Compared to
plan

A

B

C

C/A

C/B

Orders received

300.4

305.0

324.1

108%

106%

Net sales

287.4

300.0

298.8

104%

100%

108%

102%

101%

100%

113%

104%

116%

106%

113%

104%

Gross profit
SG&A expenses
Operating income
Ordinary income
Net income(12.5%)

35.7(6.0%)

17.3(6.4%)

18.4(6.4%)

18.5(4.2%)

12.1(12.5%)

37.6(5.9%)

17.6(6.7%)

20.0(6.7%)

20.2(4.4%)

13.3(12.9%)

38.4(5.9%)

17.6(7.0%)

20.8(7.2%)

21.4(4.6%)

13.7

Notes: All amounts less than ¥100m are disregarded. Figures in parentheses are ratio to net sales.

－3－

Annual Results for FY 2016

1. Overview of FY16 Results(2) Orders Received◆ Up YOY due to rises in all segments, particularly orders received from NTT Group◆ Grew at a sluggish pace in Urban Infrastructure and SYSTEM-SOLUTIONS, but increased comparedto the plan, thanks to strong orders received from telecom carriers■ YOY (consolidated)○ Access○ Network○ Mobile

NTT Group+14.3■ Compared to plan (consolidated) (¥bn)

〇 ＮＩ
● ＳＩ

SYSTEMSOLUTIONS
+0.3

NCCs
+8.5

Urban
Infrastructure

NCCs
+4.7

○ Access○ Network○ Mobile

SYSTEMSOLUTIONS
-5.8

Urban
Infrastructure
-14.3

324.1

● ＳＩ
● ＮＩ

324.1

+0.4

300.4

○Telecommunications
facilities○ Civil engineering● Electricity supply● Waste-treatment plants

305.0

＋19.1

＋23.7

FY15 Actual

NTT
Group
+34.2

○ Civil engineering●Telecommunications
facilities● Electricity supply● Waste-treatment plants

FY16 Plan

FY16 Actual○Reason for increase ●Reason for decrease

FY16 Actual
Note: All amounts less than ¥100m are disregarded.

－4－

Annual Results for FY 2016

1. Overview of FY16 Results(3) Net Sales◆ Up YOY due to increases in all segments◆ Almost in line with the plan as sales to telecom carriers saw a recovery in sluggish growth in Urban
Infrastructure and SYSTEM-SOLUTIONS■ YOY (consolidated)■ Compared to plan (consolidated) (¥bn)
NCCs
-0.7

〇 ＳＩ
〇 ＮＩ

NCCs
+0.1

NTT
Group
+7.8

287.4

○ Access○ Mobile

SYSTEMSOLUTIONS-2.3

SYSTEMSOLUTIONS
+1.9

Urban
Infrastructure
+1.6

300.0

298.8

NTT
Group
+13.3
○ Access○ Mobile○Telecommunications
facilities○ Electricity supply● Waste-treatment plants

Urban
Infrastructure
-11.7

298.8

●Telecommunications
facilities● Electricity supply● Civil engineering● Waste-treatment plants

-1.2

＋11.4

FY15 Actual

● ＳＩ
● ＮＩ

FY16 Actual

FY16 Plan

FY16 Actual○Reason for increase ●Reason for decrease
Note: All amounts less than ¥100m are disregarded.

－5－

Annual Results for FY 2016

1. Overview of FY16 Results(4) Operating Income◆ Up YOY thanks to increases in sales and measures for productivity improvement◆ Marked a record high as measures for productivity improvement and improved operating efficiency
offset underperformance■ YOY (consolidated)■ Compared to plan (consolidated) (¥bn)

Improved operating
efficiency and sales mix+1.1
Up due toincrease in sales+1.4
Improved
Productivity
+1.5

18.4

Improved operating
efficiency and sales mix+1.6
Down due todecrease in sales-0.2

Others
- 1.6

20.8
20.0

● Deteriorated costs insome projects● Stronger marketing, etc.

-1.1

20.8

● Deteriorated costs in someprojects

＋0.8

＋2.4

FY15 Actual

Improved
Productivity+0.5

Others

FY16 Actual

FY16 Plan○Reason for increase ●Reason for decrease

FY16 Actual

Note: All amounts less than ¥100m are disregarded.

－6－

Annual Results for FY 2016

1. Overview of FY16 Results
Reference: Trends in Group company profitability◆ Profits also reached a record high in Group companies■ Trends in operating profits over the past five years (consolidated/non-consolidated)(Ratio of consolidated to
non-consolidated profits)

(1.6)

(1.7)
207
20.7

180
18.0

6.7

(1.8)

(1.8)

(1.9)
208
20.8

183
18.3

184
18.4

8.3

8.3

8.3

(¥bn)

9.6

Group companies
Exeo alone

11.3

12.4

10.0

10.1

11.2

FY12

FY13

FY14

FY15

FY16

Notes: Ratio of consolidated to non-consolidated profits = operating profits from consolidated projects ÷operating profits from non-consolidated projects. All amounts less than ¥100m are disregarded.

－7－

Annual Results for FY 2016

1. Overview of FY16 Results(5) Cash Flow
◆ Stable cash flow
■ Cash flow (consolidated)

(¥bn)

FY14

FY15

FY16

Cash at beginning of FY

16.2

24.2

16.0

Operating activities

23.1

5.3

15.5

Investing activities

-2.8

-13.9

-6.0

Financing activities

-12.3

0.3

-10.2

Cash at end of FY

24.2

16.0

15.2

Note: All amounts less than ¥100m are disregarded.

－8－

Annual Results for FY 2016

2. Plans for FY17(1) Medium-Term Forecast for Projects(2) Performance Figures(3) Orders Received and Net Sales(4) Operating Income(5) Investment Trends of Major Telecom Carriers(6) NTT Group (Access/Network)(7) NTT Group (Mobile)(8) NCCs(9) Urban Infrastructure(10) SYSTEM-SOLUTIONS(11) Improved Productivity－9－

Annual Results for FY 2016

2. Plans for FY17(1) Medium-Term Management Plan (FY16–FY20) : Concept of Growth(¥bn)

 Expand engineering peripheral businesses by combining existing
technologies and services
 Provide total solutions to ICT and IoT-related business Expand business through M&A and alliances

4,000
400

3,500
350

SYSTEMSOLUTIONS◇IoT solutions◇Geo solutions （Mesh Beacon）

300
3,000

New solutions
HEMS, Smart meters
Data Center Project

2,500
250

■Tokyo redevelopment work

(NEXCO, disasterprevention wireless etc.)

2,000
200

1,500
150

◇New energy (Energy Viewer) Vietnam projects◇ MS CloudODA projects in Southeast Asia
Philippines Project■Reduction of above-street wiring

Public projects

Overseas projects

Response to aging public infrastructure(Waste-treatment plants,
water and sewage, etc.)

700 MHz Band TV
reception measures

KDDI synchro (Hokkaido) ■SB FY16–17PJ
Indoor Project■700 MHz

Urban■Response to inbound (cameras, signage, etc.)

Infrastructure■Shift to CATV FTTH (8K-compatible)■ Railway communication （New Haneda Line, etc.)

NCCs■KDDI synchro■5th generation

NTT Group(Mobile)■ＬＴＥ-Advanced

100
1,000
■ NTT maintenance expansion

NTT Group(Access/Network)■ Maintenance of aging facilities accompanying measures for easing burden for ensuing years

500
50■ Hikari collaboration

Start of Medium-Term Management Plan
0

FY14

FY15

FY16

FY17

－10－

FY18

FY19

FY20
Annual Results for FY 2016

2. Plans for FY17(2) Performance Figures◆ Targeting record high sales and profits backed by a wealth of ongoing
construction jobs
■ Plans for FY17 (consolidated)

(¥bn)

FY16
Actual
A

FY17
Plan
B

YOY
B/A

Orders received

324.1

330.0

102%

Net sales

298.8

320.0

107%

Gross profit
SG&A expenses
Operating income
Ordinary income
Net income attributableto ow ners of parent(12.9%)

38.4(5.9%)

17.6(7.0%)

20.8(7.2%)

21.4(4.6%)

13.7(12.9%)

41.3

107%

(5.7%)

18.3

104%(7.2%)

23.0

110%(7.4%)

23.6

110%(4.9%)

15.7

114%

Notes: All amounts less than ¥100m are disregarded. Figures in parentheses are ratio to net sales.

－11－

Annual Results for FY 2016

2. Plans for FY17(3) Orders Received and Net Sales◆ Make up for reduced NTT Group orders through urban infra and SYSTEM-SOLUTIONS◆ Increase income through lucrative carried-over projects and steady accumulation of orders■ Orders received (consolidated)● Access● Network● Mobile■ Net sales (consolidated)(¥bn)

〇 700 MHz Band TV reception measures〇 Waste-treatment plant〇 Tokyo redevelopment work

○700 MHz Band TV reception measures〇 Tokyo redevelopment work

NTT
Urban
Group Infrastructure
-22.2
+17.3

330.0

SYSTEMSOLUTIONS
+9.8

324.1

NCCs
+1.3

Urban
Infrastructure+8.7● Access〇 Mobile〇 ＳＩ〇 ＮＩ〇 Global

NTT
Group

NCCs
+7.7

320.0

SYSTEMSOLUTIONS

+5.3
○ ＳＩ
○ ＮＩ

-0.3

298.8
＋21.2

+5.9

FY16 Actual

FY17 Plan

FY16 Actual○Reason for increase ●Reason for decrease

FY17 Plan
Note: All amounts less than ¥100m are disregarded.

－12－

Annual Results for FY 2016

2. Plans for FY17
Reference: Status of projects carried over
◆ Projects carried over increase significantly and reach an all-time high■ Balance of projects carried over to next period by fiscal year (consolidated)

(¥bn)

143.5

117.9

FY13

118.3
103.7

105.4

FY14

FY15

FY16

FY17

Note: All amounts less than ¥100m are disregarded.

－13－

Annual Results for FY 2016

2. Plans for FY17(4) Operating Income◆ Hit a new high due to higher sales and measures for productivity
improvement, despite rising operating expenses■ Operating income (consolidated)● Stronger marketing● Expenses for integration of bases, etc.

Elimination ofprojectswith deficit+1.1

Up due toincrease in sales+2.7
Improved
Productivity
+1.0

(¥bn)

Others-1.5

Sales Mix,
etc.
-1.1

23.0
20.8

+2.2

FY16 Actual

FY17 Plan

Note: All amounts less than ¥100m are disregarded.

－14－

Annual Results for FY 2016

2. Plans for FY17(5) Investment Trends of Major Telecom Carriers■ NTT DoCoMo■ NTT East/West
690.7

263.0

FY13

703.1
626.6

224.0

FY14

583.4

547.9

661.8

510.0

177.0

156.0

153.0

FY15

FY16

FY17 Plan

387.8

406.7

FY13

FY14

(¥bn)

595.2

FY15

FY16

FY17 Plan

合計

LTE-related■ SoftBank
667.7

571.8

739.4

531.4

519.4

530.0

583.7

479.1
344.3

FY13

570.0

365.4

Optical fiber■ KDDI

597.1

FY14

412.5

338.0

325.0

330.0

FY15

FY16

FY17 Plan

合計

FY13

FY14

FY15

320.5

TBA

FY16

FY17 Plan

MobileNote: Trends in FY14 or later include UQ mobile.

Notes: FY13 figures is totals for mobile and fixed-line communications.

On Japanese standards in FY13, and on IFRS in the years after FY14.

FY14 or later give figures for domestic communications business.
(Source: Figures released by the telecommunications carriers)－15－

Annual Results for FY 2016

2. Plans for FY17(6) NTT Group (Access/Network)◆ The Hikari collaboration has resulted in continued demand for FTTH
◆ The Group as a whole is promoting measures for greater efficiency■ Net sales of NTT Group(fixed-line network, consolidated)■ NTT facilities management (fixed-line related)【Net sales (consolidated)】
(¥bn)

10

(¥bn)

5

0

FY13

127.2
113.1

111.8

117.7

FY14

FY16

FY15

FY17 Plan

114.0■ Trend in Number of FTTH Subscribers(Total of NTT East and West)

1,805

1,872
27

1,926

10,000s of

1,996

2,076 subscribers

Collabo469

Hikari
854

1,845

1,457

Flets
Hikari

FY13

FY14

FY15

FY16

1,142

FY17
Plan

FY13

FY14

FY15

FY16

FY17 Plan(Source: Created by Kyowa Exeo, based on NTT presentation material)－16－

Annual Results for FY 2016

2. Plans for FY17(7) NTT Group (Mobile)◆ LTE-Advanced construction work volume remains high◆ Mobile traffic continues to increase■ Net sales of NTT Group(mobile network, consolidated)■ NTT DoCoMo Network Development
2014

2015

2020

2016

Effective
(¥bn)

５Ｇ

speed
Up to １Gbps

54.0
49.6
46.3

48.7

Furthersophistication

50.6

682Mbps
500Mbps
370Mbps

300Mbps
225Mbps

PREMIUM
4G
Servicelaunch375Mbps 3.5GHz band
FDD

256ＱＡＭ
4×4ＭＩＭＯ

256ＱＡＭ

TDD＋FDD■ LTE Base StatisonsTotal no. of LTE
base stations:138,100

161,900

ＰＲＥＭＩＵＭ ４Ｇ

69,700
FY13

FY14

FY15

FY16

FY17

Japan’s fastest682Mbpsservice
now available in 120 cities

ＰＲＥＭＩＵＭ 4G-enabledbase stations:22,800

Plan

FY15

FY16
Note: Created by us based on NTT DoCoMo presentation material.

－17－

Annual Results for FY 2016

2. Plans for FY17(8) NCCs◆ Orders received in Hokkaido area surge by winning orders for a combination of
construction and maintenance of KDDI facilities◆ Construction jobs for traffic are proceeding at full pace
■ Net sales of NCCs (consolidated)■ Trial consolidation of KDDI construction andmaintenance orders[Value of orders received in Hokkaido area]

In FY 2016, it started
with Hokkaido.

(¥bn)
44.1
36.6

FY15

FY16

EXEO orders

31.0
23.2

■ Planned number of specified base stations with 3.5GHz

23.3

50000

40,004

40000
30000

ＳＢＭ

20000
10000
FY13

FY14

FY15

FY16

15,471

ＫＤＤＩ

4,188

0
FY17

16/3

Plan

17/3

18/3

Note: Created by us based on documents from the Telecommunications
Bureau of the Ministry of Internal Affairs and Communications－18－

Annual Results for FY 2016

2. Plans for FY17(9) Urban Infrastructure◆ Electrical construction and power pole elimination related to Tokyo metropolitan area
redevelopment remain strong◆ 700 MHz Band TV reception measures proceed at full pace
■ Urban Infrastructure net sales (consolidated)■ Status of Large Redevelopment* The graphs by completion year refer to the number of office buildings
with floor space of 10,000 m² or more in 23 wards, Tokyo.

206

173
161
Number of buildings

138

132

(¥bn)

115

(¥bn)

Floor space(in 10,000s of m²)

92

85
23
21

76.0
65.5

67.9

65.7

18

17

18
10

67.3

13
8

5
3

FY2015FY2016FY2017FY2018FY2019FY2020

FY2021 FY2022～ Undecided

Source: Created by Kyowa Exeo, based on ”Nikkei Real Estate Market Report”
June 2016 issue.

■ 700 MHz Band TV reception measures

FY13
FY12

FY14
FY13

FY15
FY14

FY16
FY15

Booster
installation
work

FY17
FY16
Plan
Plan

TV

Construction areas of theCompany

Kanto and Koshinetsu
Note: Created by us based on the HP of Association of 700MHz Frequency Promotion－19－

Annual Results for FY 2016

2. Plans for FY17(10) SYSTEM-SOLUTIONS◆ Expand BPM Solutions Business◆ Focus on new solutions such as IoT and cloud■ SYSTEM-SOLUTIONS net sales(consolidated)■ Expansion of BPM Solutions Business

(¥bn)

45.0

35.2

37.8

Develop

39.7

33.6

Identification of issues

Visualization of redundant processes

Automation of tests
Process analysis
CA Technologies

FY13

FY14

FY15

FY16

FY17
Plan

Promotion of introduction of BPM

Consulting
business－20－

Annual Results for FY 2016

2. Plans for FY17
Reference: Performance and future initiatives of new solutions¥5.6bn

6
5
4
3
2
1
0

¥1.3bnNew energy field
・ Energy management service

FY16

・ Transportable lithium battery
・ Smart meter

FY17 Plan

6
5
4
3
2
1
0

¥3.0bn¥1.4bnFY16

FY17 Plan

Launched survival power supply (March 2016)

・Expand business in theStarted supplying cloud services to new power

Philippines

businesses (July 2016)

・Participate in business in

16

Global, other 14

Vietnam
・Overseas infrastructure
projects

12・ Okinawa

10・ International, etc.

8

Received¥2.6bnSolutions field・ Mesh-type beacon

EXBeacon:network solutions

Begin commercializing mesh-

6

type beacon network

4

infrastructure/sensor(Construction site/office）

2

network）

EXTravel: Released in 2016

0・ Guide application

Oyama Meguri Guide,(tourism/disaster)

Yamanouchi Navi

¥3.2bnFY17 Plan

Cloud/security
field・ Thin client/virtual field

FY16

FY17 Plan・Cloud integration engineering in partnership with Microsoft

Development of（indoor positioning¥5.1bn

FY16
6
5
4
3
2
1
0

¥13.0bn

Orders・ Security infrastructure
・ Educational apps
Computerized parking spacecertification system－Enrichment of lineup of solutions in corporate communication and
IoT fields, capital and business tie-up with Nextgen

－21－

6
5
4
3
2
1
0

¥0.2bnFY16¥1.2bnFY17 Plan

Annual Results for FY 2016

2. Plans for FY17
Reference: Energy Viewer◆Energy management service for small and medium-sized corporations (high voltage small lot)
◆B2B2X business model. Middle B mainly targets electric power companies.
Cubicle[Energy Viewer features]High-voltage power receiving equipment
Temperature■ Cost saving realized by one-stop services

・ Electricity usage data

sensor(Outdoor)

IPC device

Temperatureof EXEO covering equipment manufacturing

・ Temperature data
・ Control data

Energy Viewer
cloud

Option unit

sensor■ Energy saving without sacrificing
amenities by monitoring room temperature(Indoor)■ Always reduce electric consumption of air-Contact connection
External air

GW device

to construction and operation

conditioning through control 24 hours per day,conditioning unit

365 days per year.
CT sensor■ Respond to all air-conditioning equipment

Visualization

Option unit

manufacturers. The manufacturers’ warrantyDistribution board
Contact connection
External air

Implementation

also continues.
Analysisconditioning unit

<Benefits of introduction>◇Customers (small and medium-sized corporations)
Realization of energy saving with no impact on business, such as the maintenance of amenities and reduced burdens on employees due to automated control.
◇Electric power companies
Added value such as acquiring customers in electric power selling and preventing withdrawal. Appeal of a power company with less expensive electricity, instead of acompany with low unit price－22－

Annual Results for FY 2016

2. Plans for FY17
Reference: Cloud Integration Engineering*

Cloud Business
Existing Telecommunications
Infrastructure Business

Cloud Integration Engineering

Development of the market for sound solutions for enterprises and the expansion of the IoT solutions lineupGroupware

Storage

Mail

Cloud PBX

Authentication

IoT

Serverprocessing

Big Data (1) State of activities/Analysis

Azure

Cloud platform

Internet(2) Gained approval from Microsoft Japan (only 6 companies in Japan) Mar. 2017 Approved as Skype Operations Framework Offers Partner(6 companies elected in Japan)

Carrier IP-NW

MobilePSTN

Optical-fiber
cable

LTE

LTE Optical-fiber
cable(3) Capital and business tie-up with Nextgen
 Feb. 2017 Entered into a capital and business tie-up for the purposeof improving the sound communications environment for enterprises.
(4) Train cloud engineers
Train 2,000 Microsoft cloud engineers by 2019 (as of March 31, approx.
600 engineers had acquired qualifications).
Train about 100 engineers to earn the high-level qualifications MCSE
Communication or MCSA Office365 (the largest number of engineers
with such qualifications in Japan).

IoT-NW
Unified communication/Thin clientssensorEfforts for sound solutions for enterprises in collaboration with Microsoft
Japan (mainly consulting for small enterprises at the beginning)-Approx. 20 orders received, approx. 70 business deals inprogress-Actual results: Assessment and partial introduction, etc.
（leading transport companies, manufacturers and local core
medical institutions, etc.）
 IoT
Visualize and analyze field engineering in real time by enhancing
sensor networks including LPWA.

・・*Offer nationwide, unified, one-stop engineering, including cloud
implementation alongside existing network engineering－23－

Annual Results for FY 2016

2. Plans for FY17
Reference: Begin commercializing and providing mesh-type beacon network solutions[Point 2]
Enable the achievementof various objectives suchas sensor network, indoor
positioning infrastructure
and remote monitoring
and control with a single
platform.

[Point 1]
Provide the “Exbeacon
platform” that combines
the design andconstruction of a radio
wave space in order tobuild an optimum network
environment for eachtarget facility.
Example of introduction into office: Management of employees’ sitting positions

Example of introduction into construction site: Management of workers’ entrance,
exit and locations
East

10 persons

North

South

0 person

10 persons
6 personsWestern warehouse

0 person

2 persons

2 persons

Number of persons currently staying inside 20 persons

East side warehouse

West

－24－

Annual Results for FY 2016

2. Plans for FY17
Reference: Global business initiatives ■ MG Exeo sales trends（¥100m）

15

VietnamPhilippines

10
50IndonesianTake charge of the
Makati area, in addition
to two long-standing
Metro Manila areas

FY12

FY13

FY14

FY15

FY16

FY17 Plan

MG Exeo (Philippines) as a base fordevelopment in Asia including ASEAN
・Development of ICT technology educators in the Philippines

Philippines→ Spread to other SE Asian countries

Orders received as a local company that has undertaken comprehensive
service projects in three Manila suburbs for 26 years

・Train global staff in the Philippines(One-year local stay)

Send trainees from Japan

・Optical-fiber
access from SMART (¥60m)
Philippines
・Orders received for IP integration system from NTT Comware(consulting)・Entry/exit management system at new Bohol airport(¥20m)
・Win projects of building SMART Wi-Fi (several thousand
access points)(First group sent in Oct. 2015 (completed); second group in Oct.
2016 (in the middle))
Trial implementation of Indonesian FTTH projectcommenced business investment in Vietnam.

・Provision of ICT solutions in airports in the Philippines
・Terrestrial digital construction (adoption of Japanese system ISDB-T)

Targeting various projects using government ODA

・Further expansion of comprehensive service project areas

・Airport ICT・Carrier network consulting

・Industrial complex ICT・Carrier data center ICT

・Data center ICT

－25－

etc.
Annual Results for FY 2016

2. Plans for FY17
Reference: Entry into the Vietnamese market
As part of the measures for strengthening the overseas business, concluded an agreement toacquire shares of a new company of the IBS (In-Building System) Business in Vietnam.
IBS Business:Abbreviation for In-Building System Business. It isa business model for receiving facility usage fees
Sharedfrom telecom carriers by having multiple mobile

antennas

operators use communications facilities such as
shared antennas in a large building by constructing
them on your own account.

POI*
Company C

Company B

Company A

Mobile phone network* POI：Point of Interface－26－

Signing ceremony with a local partner
Annual Results for FY 2016

2. Plans for FY17(11) Improved Productivity◆ FY16 targets achieved◆ Continued measures to improve profits

Improvement■ Enhanced profitability through cost reductionsＦＹ

FY2014

Aims
Results

FY2015FY2016¥1.5bn¥1.0bn¥1.0bn(cumulative ¥5.0bn)(cumulative ¥6.0bn)

FY2017 Plan
¥1.0bn(cumulative ¥7.0bn)(cumulative ¥8.0bn)－¥2.0bn¥1.0bn¥1.5bn(cumulative ¥7.0bn)(cumulative ¥8.0bn)(cumulative ¥9.5bn)

Note: Amount of improvement represents cost reductions relative to FY10.

■ Recent principal measures

Measures

Area◇Review of access, network, and engineering construction systems
Functional◇Expansion of shared company work consignments

integration◇Group-wide unification of audits, MS tasks ◇Reorganization of Group access companies in Kanto area

◇Construct common bases for system◇Continue to improve business flow andsystems through BPR◇Integrated cross-departmental systems ◇Improved business flow and systems through BPR
Reorganization◇Merger of subsidiary security companies ◇Merger of subsidiary access companies in Kansai/Chugoku regionsof Group◇Merger of subsidiary mobile companies ◇Merger of subsidiary access companies in Tohoku region

companies◇Merger of major subsidiaries (WAKO and Ikeno) ◇Merger of subsidiary network companies◇Sendai General Engineering Center (9 bases → 1) ◇Kagawa Technical Center (5 bases → 1)
Consolidation of ◇Ishioka General Technical Center (4 bases → 1)
bases

◇Koshin branches (5 bases → 1)

◇Hyogo General Technical Center (5 bases → 1)

◇Kansai branches （11 bases → 1)*(planned for Oct. 2017)◇Fujisawa Technical Center （2 bases → 1)*(planned for Nov. 2017)

Resource◇Resource shift to mobile/solutions area

sharing◇Group-wide cross-sectional projects (mobile, 700 MHz TV reception measures, Data Centers, etc.)－27－

Annual Results for FY 2016

2. Plans for FY17
Reference: Measures for business improvement projects■ Increased operational efficiency by using IT
 Paperless information sharing between
desk and construction sites
 Real-time in-house inspection throughphoto shooting by smartphone
 Gain an understanding of the progress
and utilization status at each site on themap.
 Efficient safety patrol using GPS, etc.
■ Common base of systems
 Standardize cross-division operational processes as acommon framework by BPR.
 Develop systemization in series, including a new
procurement system, for the purpose of increasing operating
efficiency.
 Reduce IT costs by eliminating redundant systems.
－28－

Annual Results for FY 2016

2. Plans for FY17
Reference: Measures for work style reform■ Example of reducing overtime work through a work shift system at the technical center

Effect of reducing
overtime work by
up to four hours
per person per day■ Certified as a Health and Productivity Management Organization
The Ministry of Economy, Trade and Industries certifies“corporations that work strategically on the health control of
employees from a management perspective” as Health andProductivity Management Organizations for the purpose ofvisualizing them.

－29－

Annual Results for FY 2016

3. Raising Shareholders’ Value(1) Payment of Dividends－30－

Annual Results for FY 2016

3. Raising Shareholders’ Value(1) Payment of Dividends◆ Annual dividend up ¥4 YoY to ¥50◆ Targeting 3% DOE and continued stable mid- to long-term dividend rise
■ Total shareholder return■ Dividend history (per share)(Total dividends + total acquisition of treasury stock)

24

32

38

46

￥50

Total dividends
Total acquisition of treasury stock
8.7
5.4

FY13

FY14

FY15

FY16

■ Acquisition of treasury stock￥4.7bn

FY14

FY15

FY16

EPS

147
￥3.0bn

ROE

123

125

145

11.6％
8.7％
FY13

FY14

FY15

FY16

FY17 Plan■ EPS/ROE

5.0
3.0

7.3

FY17 Plan
FY13

3.0

6.1

FY17 Plan

FY13

－31－

FY14

8.2％
FY15

8.9％
FY16

￥165

9.6％
FY17 Plan

Annual Results for FY 2016

Disclaimer Regarding Forward-Looking Statements

Management of the Company has made estimates and assumptions
relating to financial forecasts based on information available as of thereporting date. Actual results could differ from those estimates.

3-29-20 Shibuya, Shibuya-ku,
Tokyo 150-0002 JAPANhttp://www.exeo.co.jp/overseas/index.html
TEL: (81)3-5778-1073
FAX: (81)3-5778-1228－32－

Annual Results for FY 2016