Information Meeting For Financial
Results For FY2010

February 10, 2011
Future Architect, Inc.

Copyright ©2011 by Future Architect, Inc. Japan

Meeting Agenda
1. Overview of Earnings for FY2010
2. Summary of FY2009
3. Topics for FY2010
4. FY2011 Plans
5. Future Outlook
6. Questions & Answers

Copyright ©2011 by Future Architect, Inc. Japan-2-

1. Overview of Earnings for FY2010

Copyright ©2011 by Future Architect, Inc. Japan

Overview of FY2010
1. Both consolidated and non-consolidated profits marked the highest levels due toappropriate project management and efficient cost management, despite decreases
in both consolidated and non-consolidated net sales.
– Consolidated Net sales:
Operating income:Ordinary income:Net income:¥22,639 million, (record high¥3,141 million (record high¥3,281 million (record high¥1,591 million (record high¥28,174 million:¥3,046 million:¥3,162 million:¥1,525 million:

2008)
2007)
2007)
2006)

– Non-consolidated Net sales: ¥14,290 million, (record highOperating income:¥3,039 million (record highOrdinary income:¥3,108 million (record highNet income:¥1,480 million (record high¥19,225 million:¥2,891 million:¥3,118 million:¥1,405 million:

2008)
2008)
2007)
2006)

2. On a non-consolidated basis, earnings results continued to be strong particularly inthe second half thanks to a rise in orders received from new clients, despite a fall in
net sales. In and after fiscal 2011, net sales are expected to increase.
3. On a consolidated basis, earnings results weakened in the first half, but recovered
after the second half. The amount obtained by subtracting non-consolidated profits
from consolidated profits turned positive from negative.
4. By thoroughly controlling delivery periods, quality of services and man-hours throughenhanced project management, the profit margin markedly improved.
Operating income margin:
Consolidated: to 13.9% from 11.1%Non-consolidated: to 21.3% from 17.7%
Copyright ©2011 by Future Architect, Inc. Japan-4-

FY2010 Consolidated Results(Millions of yen)
Net sales

Operating income
Operating income
marginOrdinary income
Ordinary income
marginNet income
Net income
marginCopyright ©2011 by Future Architect, Inc. Japan

FY2009Results

FY2010Results

23,65822,639

2,618

3,141

11.1%

13.9%

2,704

3,281

11.4%

14.5%

1,204

1,591

5.1%

7.0%
-5-

Year-on-year(Change)

95.7%

119.9%

121.3%

132.1%

FY2010 Non-consolidated Results(Millions of yen)

FY2009Results

FY2010Results

15,40014,290IT consulting
HW procurement
Package & Service

14,605249
546

12,986776
526

Operating income
Operating income
margin

2,726

3,039

17.7%

21.3%

Ordinary income
Ordinary income
margin

2,768

3,108

18.0%

21.7%

Net income
Net income margin

1,046

1,480

6.8%

10.4%

Net sales

Copyright ©2011 by Future Architect, Inc. Japan-6-

Year-on year
(Change)

92.8%

111.5%

112.3%

141.5%

Quarterly Trends in Net Sales and Profits (Consolidated)

2,000

 The profit structure improved steadily (the profit-earning structure
improved and such trends have taken hold).
 Furthermore, the ongoing rise in orders received is expected to lead tohigher sales.

8,000

1,800
1,600

6,692

7,000

6,291

1,400

5,757

5,392

5,650

5,281

904 931

1,000
800

932

736776

600

1,183
1,128

5,181

1,200

419 400

523

560
476

495

603

6,050 6,000

951

5,000
4,000

651

3,000
2,000

400
1,000

200
0

0
1Q 2009

2Q 2009

3Q 2009

Operating income

Copyright ©2011 by Future Architect, Inc. Japan

4Q 2009

1Q 2010

Ordinary income-7-

2Q 2010

3Q 2010

Quarterly net sales

4Q 2010

FY2010 Consolidated Results by Segments
Corporate Revitalization Business
New Business Cultivation Business

IT Consulting BusinessResults(Millions of yen)

Net sales(Millions of yen)

4,558

Operating income-40

Package & Service Business(Millions of yen)
Net sales
Operating income

Copyright ©2011 by Future Architect, Inc. Japan

Results
4,415
170

-8-

Results

Net sales

13,981

Operating income

2,995Orders Received and Backlog by Segment (Consolidated)
Orders received(Millions of yen)BacklogYear-on year
(Change)2010

IT Consulting Business

13,05815,491118.6%

3,131

4,670

149.2%

Package & Service Business

3,447

4,257

123.5%

598

697

116.4%

2748

174.6%

2

6

304.4%

16,534

19,797

119.7%

3,731

5,374

144.0%

Corporate Revitalization Business /New Business Cultivation BusinessTotal orders received

Trends in orders received (excluding those in Corporate
Revitalization Business and New Business Cultivation Business)

7,000,000

6,000,000

6,000,000
IT Consulting
Business
Package &Service Business
Total

4,000,000
3,000,000

2010

Trends in backlog (excluding that in Corporate Revitalization
Business and New Business Cultivation Business)

7,000,000

5,000,000

2009

Year-on year
(Change)2009

2,000,000

5,000,000
4,000,000
3,000,000
2,000,000
1,000,000

1,000,000

0
20
2Q 09
20
3Q 09
20
4Q 09
20
1Q 09
20
2Q 10
20
3Q 10
20
4Q 10
20
10

1Q

20
0
1Q 9
20
1
2Q 0
20
1
3Q 0
20
1
4Q 0
20
10

20
09

4Q

20
09

3Q

2Q

1Q

20
09

0

Copyright ©2011 by Future Architect, Inc. Japan-9-

IT Consulting
Business
Package &Service Business
Total

Balance Sheets (Consolidated)(Millions of yen)

End of Dec.2009

End of Dec.2010

Current assets

8,140

10,2742,133

Fixed assets

4,416

3,657

-759

Total assets

12,557

13,931

1,374

Currents liabilities

2,449

3,171

721

265

98

-167

Total liabilities

2,715

3,269

553

Total Net Assets

9,841

10,662820

Total liability and assets

12,55778%

13,931
77%

1,374
—

Non-current liabilities

Shareholders’ equity ratio

ChangeMain reasons for the change Increase in cash and deposits (End of FY2009: 3,785 million yen; End of FY2010: 5,233 million yen)
 Increase in notes and accounts receivable (End of FY2009: 2,301 million yen; End of FY2010: 2,941 millionyen) Increase in income tax payable, etc. (End of FY2009: 365 million yen; End of FY2010: 880 million yen)
 Increase in retained earnings (End of FY2009: 6,975 million yen; End of FY2010: 7,836 million yen)

Copyright ©2011 by Future Architect, Inc. Japan- 10 -Cash Flows (Consolidated)(Millions of yen)

FY2009FY2010ChangeCash flows from operating activities

2,834

2,163

-671

Cash flows from investing activities

-999

170

1,170

Cash flows from financing activities

-871

-762

108

Effect of exchange rate changes oncash and cash equivalents

8

-3

-12

Changes in cash and cash equivalents

972

1,567

594

2,612

3,585

972

3,585

5,153

1,567

Cash and cash equivalents at beginningof the period
Cash and cash equivalents at end of theperiodMain reasons for the change Depreciation and amortization (FY2009: 501 million yen; FY2010: 248 million yen)
 Increase (decrease) in accounting receivable (FY2009: 3,296 million yen; FY2010: -642
million yen)
 Purchase of investment securities (FY2009: -795 million yen; FY2010: —) Net increase (decrease) in short-term borrowings (FY2009: -602 million yen; FY2010: —)Copyright ©2011 by Future Architect, Inc. Japan- 11 -

2. Summary of FY2010

Copyright ©2011 by Future Architect, Inc. Japan

Summary of FY2010
Industry trends
Net sales at the information service business for 2010 continued to decrease
from a year earlier in general, although the fall gradually came to a halt in thesecond half.
Companies conspicuously postponed IT investments, as revealed bycomparing the surveys conducted in September and December on the amountof their investments in software (2010 plan).

Group
Net sales dropped, while orders received and backlog including orders fromnew clients picked up.
The level of outsourcing costs remained almost as planned due to theimplementation of thorough cost control, and the utilization rate of employees
continued to be high, resulting in lower excessive costs.
Favorable results from cooperation within the Group increased in smart
phone-related projects including operation services.

Copyright ©2011 by Future Architect, Inc. Japan- 13 -IT Consulting Business

FutureArchitect,Inc.

Copyright ©2011 by Future Architect, Inc. Japan- 14 -

FutureFinancial
Strategy
Corp.

ＡＢＭ

Main Results [IT Consulting Business](million yen)

2009

2010

Net Sales

15,19813,981

Operating
Income

2,790

2,995

 Steady flow of orders including those fromnew clients
 Realization of thorough project control
 High utilization rate of employees

SteadySteady flow
flow ofof orders
orders including
including those
those fromfrom newnew clientsclients
 Orders received increased mainly in the second half, as a result of active order-taking activities
in 2009.
 Of our projects for new clients, several projects expanded to the level of over 100 million yen.

Realization
Realization ofof thoroughthorough projectproject control
control Our projects, centering on the two main projects, were carried out smoothly in general.
 Delivery periods, quality of services and person-hours were thoroughly controlled by enhancing
project management.
 Management of the progress and issues of projects was made more efficient and visualized
through the use of the project management system.

Continuation
Continuation ofof aa highhigh utilization
utilization rate
rate ofof employees
employees
 The rate was low early in the year, but continued to be high in and after the second quarter.
Copyright ©2011 by Future Architect, Inc. Japan- 15 -

Analysis of Sales from IT Consulting Business[Non-consolidated] (1/2)
Nonconsolidated

TrendsTrendsin
insalessalesby
byIndustry
Industry

32.9%

2008

38.9%

2009

45.1%

28.8%

2010

42.6%

38.5%

-

5,000
Serviceサービス

Copyright ©2011 by Future Architect, Inc. Japan

17.5%

18.3% 7.8%

17.7%

10,000Distribution
流通- 16 -

10.7%

1.2%

15,000Financial
金融

Other
その他

20,000
millionyen
百万円

Analysis of Sales from IT Consulting Business[Non-consolidated] (2/2)
Nonconsolidated

TrendsTrendsin
insalessalesbybyphase
phase

2008

17.5%

19.9%

2009 12.6%

24.6%

13.8%

30.4%

2010

-

5,000
グランドデザインGranddesignCopyright ©2011 by Future Architect, Inc. Japan

57.5%

50.7%

43.2%

12.1%

12.6%

10,000設計
Design- 17 -

5.1%

15,000開発

Development

Operations,
etc
保守運用他

20,000百万円
millionyen

Package & Service Business

FutureArchitect,Inc.
SBD
Copyright ©2011 by Future Architect, Inc. Japan- 18 -

AscendiaInc.

Elm
Corporation

Main Results [Package & Service Business](million yen)

2009

2010

Net Sales

4,213

4,415

Operating
Income-16170

 Increase in favorable results from cooperation
within the Group Preparation for exploring a new core market
 Preparation for the provision of existing products
through cloud service(with alliances with outside companies in view)

Tool
Tool && ERP
ERP businessbusiness forfor midsize
midsize companies
companies (Future(Future Architect,
Architect, Inc.
Inc. SBD,
SBD, Former
Former MBS
MBS Unit)
Unit) Owing to the measures for increasing inquiries implemented in FY2009, the number ofbusiness meetings increased.
 Secured a new market even under the tough business conditions.

Business
Business solution
solution forfor midsize
midsize companies
companies andand SMEs
SMEs (Elm(Elm Corporation)
Corporation)
 Earnings recovered due to drastic enhancement of sales functions.
 Functions of existing products were reinforced, and they were improved for cloud service
support.

Outsourced
Outsourced development,
development, Regional
Regional BusinessBusiness (Ascendia(Ascendia Inc.)Inc.)
 Businesses on consignment were strong because of a recovery in orders received,
resulting in earnings substantially exceeding the initial targets.
 Operation services in cooperation with Future Architect, Inc. were (continuously)
strengthened and expanded.
Copyright ©2011 by Future Architect, Inc. Japan- 19 -

Corporate Revitalization Business /New Business Cultivation Business

Uoei
ShotenCorporation

Copyright ©2011 by Future Architect, Inc. Japan- 20 -

Zakura Inc.

Main Results [Corporation Revitalization Business/New Business
Cultivation Business](million yen)

2009

2010

Net Sales

4,559

4,558

Operating
Income-103-40

 Strengthening of marketing abilities throughthe renovation of outlets
 Establishment of a strong earnings structure Improvement of operational efficiency
through the promotion of IT measures

Strengthening
Strengthening ofof marketing
marketing abilities
abilities throughthrough thethe (small-scale)(small-scale) renovation
renovation ofof outlets
outlets
 The oldest outlet Kameda Store was renovated. This helped sales rise about 30% from ayear ago. Back rooms were renovated to improve productivity and enhance cross-soldproducts.

Establishment
Establishment ofof aa strong
strong earnings
earnings structure
structure The gross margin continued to improve.
 Cash flows turned positive.

Improvement
Improvement ofof operational
operational efficiency
efficiency throughthrough thethe promotion
promotion ofof IT
IT measures
measures Subject items (daily articles and beer) for automatic ordering systems expanded. This helped thestock-out rate decline to 0.7% from 6.2%.
 Distribution BMS (new EDI system) was introduced. This helped the slip entry time reduce by 40%.
Copyright ©2011 by Future Architect, Inc. Japan- 21 -

3. Topics for FY2010

Copyright ©2011 by Future Architect, Inc. Japan

Deepening of Cooperation with SG
Holdings Group

Copyright ©2011 by Future Architect, Inc. Japan

Progress of Alliance with SGH
1. Orders received for new projects (other than F-cube)
In addition to accounting and billing systems for cargo transportation and related
operations, in which we have engaged so far, we received orders for new projects
relating to the contact center and performance assessment.
The SGH Group intends to optimize its group-wide IT structure by applying theprivate cloud base, which was established in the F-Cube project, to other systems.

2. Construction of iDC and cooperation
The SGH Group plans to establish a new data center or enhance its existing data
center facility, whose capacity has reached its limits, taking into account the
integration and reorganization of IT assets dispersed nationwide and the externalsales business in the future.
The SGH Group will establish an iDC and the cloud service base at the abovementioned data center in cooperation with Future Architect, Inc. Both entities alsoplan to cooperate in selling to third parties.

3. Support for the establishment of logistics cloud services
The SGH Group will sell one of Japan’s most advanced logistic solutions it owns to
outside companies.
In relation to the above, the Group and Future Architect will cooperate to establish
the cloud platform and provide solutions to outside companies.
Copyright ©2011 by Future Architect, Inc. Japan- 24 -

Projects for SGH Group Following F-Cube

Future Architect will construct systems for performance assessment and the contact center of Sagawa
Express Co., Ltd. on the existing SGH platform (private cloud base), which Future Architect established in
the F-Cube project, seeking to ensure its flexible scalability and reasonable infrastructure investments.
Future Architect will also proactively use the above established platform for the SGH Group’s missioncritical systems.

Up to now: Inconsistent
operations of applications
Cargo

Performance assessment(information system)

From now on: Seeking overall consistency throughintroduction of the concept of common platform
Use of a common
platform, if applicable,
as much as possible

Business
system group

Cargo

Performance assessment(information system)

Accounting/Billing Contact center

Common component middleware
layer (virtualization, parallelization,
message exchange, OS, etc.)

Accounting/Billing

Contact center

Copyright ©2011 by Future Architect, Inc. Japan

Information system base(human resources, rules,
hardware, security, etc.)- 25 -

SGH common
platform
Scalable andflexible
platform

Construction of iDC and Cooperation; Expansion of
Logistics Cloud Services
Logistics business
operators

Applications(business
systems)

Ordering and orderacceptance business
operators

Warehouse business
operators

Order
acceptance for
Shipping
mail orderinstructions(websiteestablishment)

Receivinginspection

Order dataacquisition

Deliverycheck;
PickuprequestInventory

Checking
onwarehouse
work

Shipment
inspection

Transport/delivery business
operators

Managementof vehicles
and services

Preparationof invoices

Cargo
tracking

Receiptagencyservice

SettlementPricecalculation,
adjustments
and claims

Platform and common functions(virtualization, parallelization, message exchange, BI, etc.)
OS

OS

OS

OS

OS

OS

OS

Infrastructure
layer
Hardware Hardware Hardware

HardwareHardware Hardware Hardware

iDC, communications, electricity, security, etc.

Copyright ©2011 by Future Architect, Inc. Japan- 26 -

FutureArchitectand SG
systems

Construction
support by
FutureArchitectaccording toneeds
Concept of
SG system
data centerExamples of New Projects for Midsize Logistics
Companies(Standardization of architecture system establishment; Model
projects that focus on efficiency)

Copyright ©2011 by Future Architect, Inc. Japan

Overview of Company A and Background to its Project[Outline of the Client]Operates
Operates 550
550 specialty
specialty shops
shops selling
selling shoes,
shoes, clothing,clothing, etc.
etc. throughout
throughout Japan
Japan (with(with sales
sales
totaling
about
100
billionyen)
totaling about 100 billion yen)AA first-rate
first-rate company
company thatthat continuallycontinually achieves
achieves double-digit
double-digit percentage
percentage growth
growth despite
despiteslow
consumption
slow consumption

Problems facing the clientThe
The client’s
client’s existing
existing systemsystem base
base cannot
cannot support
support its
its planplan toto establish
establish 70
70 outlets
outlets perper
year
year with
with anan ambition
ambition toto eventually
eventually open
open 1,000
1,000 outlets
outlets inin total.
total.
The
The client’s
client’s current
current operations
operations must
must bebe mademade leaner
leaner andand moremore efficientefficient before
before itit cancanachieveits
growthstrategy.
achieve its growth strategy.
The
The client’s
client’s systemsystem operation
operation team
team continues
continues toto suffersuffer fromfrom vendor
vendor lock-in.
lock-in.

[Challenge for Future Architect]Quickly establish simple shop systems that support the multiple-shop modelTo
To rideride out
out thethe year-end
year-end busy
busy period,
period, we
we needneed toto establish
establish aa high-quality
high-quality systemsystem andanddeliver
it
in
a
short
time.
deliver it in a short time.
We
We needneed toto strengthen
strengthen Company
Company A’s
A’s uniqueunique strategic
strategic functions
functions while
while eliminating
eliminating
unnecessaryfunctions.
unnecessary functions.
Copyright ©2011 by Future Architect, Inc. Japan- 28 -

Productivity-Increasing Measures that Realized Short-term
Delivery and High Quality
 Making full use of the results of architecture examination by Future Architect andconstruction scheme of Future Architect Designing 20% of the functions to support strategy and 80% of the functions to increase
productivity
 Further advancement of conventional unit component-type development to create a groupof business components

Source1
From made-to-ordersystems to semiorder-made systems

2
3

About 15 lines

Integrating multiple
components into one

 Installation of standard applications that feature one-third the codes of conventional
applications (very high productivity). (Unnecessary functions provided by packages
sometimes make unnecessary work for the client.) Implementation of automatic testing
Copyright ©2011 by Future Architect, Inc. Japan- 29 -

New Development of CRM Solution

Copyright ©2011 by Future Architect, Inc. Japan

Spread of lisnar+ to Many Industries
Lisnar+ (a system for collecting and utilizing customers' opinions) is a solution that uses theopinions of various customers to improve businesses, products and services and thereby
strengthen and maintain CS/ES.
At first, lisnar+ was developed for and introduced to the financial industry.
In 2010, lisnar+ was adopted by a leading department store (in the retail industry) for its “Want Slip
System” and by the Ministry of Health, Labor and Welfare as a system for its call center “People’s
Voices.” Thus, lisnar+ began to be operated at both entities. This is first real step toward lisnar+
being introduced in many industries.

Field
concessions
Complaints

Information
leakage

Administrative
accidents

Call center

Awarenessandcompliments

Division
responsible forcustomer service
Copyright ©2011 by Future Architect, Inc. Japan

Corporate planning
division

Risk management
division

Employees'
opinions

Products and services
division- 31 -

Future Development of lisnar+
Support for visualization of service quality using IT
 Unlike the conventional “excessive” CRM, lisnar+ collects and uses customers’ opinions, centering
on client services.
 The new solution using lisnar+ powerfully supports the visualization and standardization of service
quality.
 To further spread the use of lisnar+, we are preparing various functions so that it can efficiently
collect and use customersʼ opinions.

Examples of optional functions
 Diversification of input
devices  Globalization 

Support for the acceptance of image andvoice data, and of data from mobile handsets
Support for multi-language entry andautomatic translation

 Diversification of collection
channels 

Support for Web crawler and e-mailQuick provision of high-quality systems that meet corporate needs.
 With lisnar+, we will be able to provide customization proposals that meet corporateneeds.
 We will further provide systems through brain engine and cloud service.
 Using component functions, we will quickly provide high-quality solutions to companies’
problems regarding the collection and use of opinions.
Copyright ©2011 by Future Architect, Inc. Japan- 32 -

Support for Business Expansion of
Existing Clients

Copyright ©2011 by Future Architect, Inc. Japan

Outline of the Client Company B is Japan’s largest voluntary chain which focuses on retailing and consists ofoperators of mini-supermarkets and privately-run shops.
 Company B sales are increasing steadily amid a slowdown in sales in the supermarket
industry, and the number of its member shops stood at about 1,800 (as of August 2010).
 Future Architect has supported Company B in its system innovation since 2005.
Management strategy

Unique FSPBusiness alliance(M&As)
2009

Promotion of fresh
produce
Establishment of strategic
partnership with Future
Architect, making
information armament thecore management
strategy
2005

2010

2008
2007

Launch of the FSP system(OneToOne marketing)Launch of alliancepartners’ systems
Launch of the fresh
produce promotion center
Launch of new systems (backbone, logistics,
management and information systems)

Company B’s Unique FSP Measures and Future
Architect’s Efforts Company
Company B’s
B’s uniqueunique FSP
FSP measures
measures Provision of services for loyal customers that meet individual needs
 Full use of IT, such as POS systems and information analysis systems
 Linkage with its own points card system Challenges
Challenges Company
Company B
B mustmust overcome
overcome toto realize
realize FSP
FSP measures
measures Establishment of a mechanism to analyze sales information
 Installation of KIOSK terminals designed to notify each member of privilege exclusive to him/her
 Introduction of POS systems designed to show selling prices exclusive to each member
By developing hardware also, Future Architect is
responding to these clients’ needs.
Countermeasures for ISDN
using shops were needed.
Countermeasures against interference inwireless LAN communications were needed.
Costs and installation places were limited.
Advertisements needed to be shown on 3-inch
leaflets so that the elderly could easily read them.
KIOSK terminal- 35 -

Leaflet that meets eachmember’member’s needs

4. FY2011 Plans

Copyright ©2011 by Future Architect, Inc. JapanFY2011 Plan (Consolidated)(million yen)

FY2010Results

FY2011Plan

Net sales

22,63924,500Operatingincome

3,141

3,400

Operatingincome margin

13.9%

13.9%

Ordinary income

3,281

3,450

14.5%

14.1%

1,591

1,950

7.0%

8.0%

Ordinary
income margin

Net income
Net income
marginCopyright ©2011 by Future Architect, Inc. Japan- 37 -

Year-on-year(Change)108.2%

108.2%

105.1%
122.5%

FY2011 Plan (Non-consolidated)(million yen)

FY2010Results

FY2011
Plan

Year-on-year(Change)

Net sales

14,29015,500108.5%

Operatingincome

3,039

3,200

21.3%

20.6%

105.3%

3,108

3,250

21.7%

21.0%

1,480

1,850

10.4%

11.9%

Operatingincome margin

Ordinary income
Ordinary income
marginNet income
Net income
marginCopyright ©2011 by Future Architect, Inc. Japan- 38 -

104.6%
124.9%

Policy for Returning Profits to Shareholders (Dividends)
Dividends for FY2010

Dividends for FY2011 (planned)

Yen 1600

1,200 yen

1,500 yen

(Actual AmountPaid for fiscal 2009)(Dividends payout ratio 37.0%)(Dividends payout ratio 37.0%)

69.2%

(yen)

30.5%

30.9%

950

950

2006

2007

Copyright ©2011 by Future Architect, Inc. Japan

1,600

2008

Ordinary dividends
Payout ratio

67.8%
37.0%

37.0%

1,200

1,500

2010

2011

1,600

2009

- 39 -

5. Future Outlook

Copyright ©2011 by Future Architect, Inc. Japan

Growth Strategy

Copyright ©2011 by Future Architect, Inc. Japan

Basic Strategies
To strengthen our strategic partnerships with the clients,
beyond just providing IT solutions
To simplify our services provided; to standardize various
methodologies and architectures, development methods, andsuch like among markets of Japan and the rest of Asia
To enhance services for midsize companies and small andmedium-sized enterprises
To increase development productivity by between 200% and400%

Copyright ©2011 by Future Architect, Inc. Japan- 42 -

Outsourcing

Contracts
In-houseorganizations

Externalorganizations

Close relationships

In-house core

New companies are devising IT solutions in-house.
Only highly specialized PKGs and solutions will survive.
Relationships with closely related customers are being
strengthened.

Copyright ©2011 by Future Architect, Inc. Japan- 43 -

Japan and Rest of Asia
Matured Japanese market
Future Architect’s track records,
intellectual property and know-how

Growing Asian markets
Robust IT demand There is a big business opportunity
in Asia.

Current IT
marketIT market
in 3 years

Japan

12 trillion
yen

12 trillion
yen

Asia

12 trillion
yen

17 trillion
yen

Source: CCID &IDC Japan
Copyright ©2011 by Future Architect, Inc. Japan- 44 -

Hybrid Approach

Japan

Asia

Copyright ©2011 by Future Architect, Inc. Japan

Non-ERP

Non-ERP- 45 -ERP

ERP

Expansion of Businesses in Asian Markets
Exploration of markets with entrepreneurship
Use of a framework that increases competitiveness and productivity
Provision of products and solutions that feature multi-language support andmulti-currency support
Establishment of win-win relationships with companies growing rapidly in Asianmarkets
Introduction of Japan’s advanced know-how and solutions to the rest of Asia
Asia

Japan

Global ERP
SAP, EBS

Component-type
development

New packages for
Asian markets(Future Architectʼs know-how
and intellectual property)
Multi-language
supportMulti-currency
supportNew packages for
midsize companies
Global ERP
SAP, EBS

Copyright ©2011 by Future Architect, Inc. Japan- 46 -

Creation of New Business Opportunities
Full-scale entry into the field of ERP business in addition to
the component-type development businessHybrid approach by using component-type development
and ERPEnterprise market

Global ERP
business

Component-type development
50 billion yen
Midsize company
market10 billion yen
Small and medium
enterprise market

Copyright ©2011 by Future Architect, Inc. Japan- 47 -

Enhancement of Businesses for Markets of
Midsize Companies and SMEs
To integrate Future Architect’s smart business division and ELM
Corporation into a new company named Future One
To release the new product “Future One” which uses integrated
software packages that have been scattered among groupcompanies
To launch new products that are based on an architecturecommon throughout the whole of Asia
Enterprise market
50 billion yen

Future One

Midsize company market(new company)

10 billion yen
Small and medium enterprise market

Copyright ©2011 by Future Architect, Inc. Japan- 48 -

Small and Medium-Sized Enterprise Market
Provision of accounting and other various functions as cloudservices

Enterprise market

Midsize company
marketSmall andmedium-sizedenterprise market

Cloud services

Copyright ©2011 by Future Architect, Inc. Japan- 49 -

Phased business expansion in accordance with
the needs of domestic and other Asian markets
Solution type

2011

2012

Introduction to
Japanese market
Introduction to other
Asian markets

2013

Development of Future
Architect’s proprietarycomponent-type systems

To maintain high earnings
in Japan through more
efficient and stabledevelopment of such
systems using know-how
and intellectual property

Global ERP(SAP, Oracle)

To start up this business inboth Japan and the rest of
Asia at an early stage as
much as possible

Solutions for new SMEs
(New packages and cloudservice)

Copyright ©2011 by Future Architect, Inc. JapanTo develop within 2012
packages that incorporate
its know-how and areintended to be introduced
overseas, and introduce
them at an early stage as
much as possible

Product
development
period- 50 -

2015

30 billion yen

10 billion yen

Enterprise market

Markets of midsize
companies andSMEs

10 billion yen
10 billion yen
Operating income

Copyright ©2011 by Future Architect, Inc. Japan- 51 -

Asia

Reference

Copyright ©2011 by Future Architect, Inc. Japan

Financial Topics
 Increase (decrease) in net sales
Item
Net sales

2009

2010

15,400IT consulting(millions of yen)(millions of yen)

14,6052009

2009 Y-o-Y ratio

14,29012,98620102009 Y-o-Y ratio

92.8%

Cost of sales

14,605

12,986

88.9%

88.9%

Subcontract expenses

2,964

1,725

58.2%

HW Procurement

249

776

311.6%

Balance: value added*

11,64011,261

96.7%

Package & Service

546

526

96.4%

Average number of consultants

670

646

96.4%

Net sales per consultant

23.0

22.1

96.2%

Average sales per consultant

21.8

20.1

92.3%

Average number of consultants

670

646

96.4%

Average value added per consultant

17.4

17.4

100.4%* Value added = Net sales – Cost of sales – Subcontract

 Changes in cost of sales
Category(millions of yen)
2009

2010

2009 Y-o-Y ratio

IT consulting service

8,692

6,935

79.8%

Labor expenses

4,192

4,125

98.4%

Subcontract expenses

2,964

1,725

58.2%

Others

1,535

1,085

70.7%

215

636

294.8%

316

280

88.5%

9,225

7,852

85.1%

Cost of sales of HW procurement
Cost of sales of Package & Service
Total Changes in selling, general andadministrative expenses
Expense item

expenses Shareholder composition

Overseas
shareholders
4%

Financial
institutions
8%
Financial
instruments firm
1%(millions of yen)
2009

Selling, general and administrative expenses

2010

2009 Y-o-Y ratio

3,449

3,398

98.5%

Personnel expenses

1,930

1,962

101.6%

Strategic expenses

462

284

61.5%

R&D expenditures

2049

235.4%

Depreciation expenses

102

45

43.9%

Employee training expenses

261

107

41.1%

Recruiting expenses

77

82

106.6%

Copyright ©2011 by Future Architect, Inc. Japan

Individuals,
others54%

Generalbusiness
corporate33%- 53 -

Note

The forecasts in this material are based on currently
available information; actual results may differ fromsuch forecasts depending on the future direction of theJapanese economy and the IT service industry.
It should be noted that the Company does not guarantee
or promise the accuracy of these forecasts.

Copyright ©2011 by Future Architect, Inc. Japan- 54 -

Copyright ©2011 by Future Architect, Inc. Japan- 55 -