Briefing on Financial Results for
the Second Quarter of FY2017

August 1, 2017
Future Corporation

Copyright ©2017 by Future Corporation

Contents

1. Earnings Results for the Second
Quarter of FY2017
2. Topics Related to the Second
Quarter of FY2017
3. Future Outlook for the Second
Half of FY2017
Copyright ©2017 by Future Corporation-2-

1. Earnings Results for the Second
Quarter of FY2017

Copyright ©2017 by Future Corporation-3-１．Earnings Results for the First Half of Fiscal 2017 －(i) Earnings Highlights(Million yen)Compared with projected
results
FY2017
Results forthe first half

FY2017 Planfor the first half

Net sales

17,265

OperatingincomeYear-on-year comparison

ChangeFY2016
Results for the
first half

Change17,710-2.5%

17,225

0.2%

1,912

1,835

1,937

(10.4%)-1.3%(Operating income margin)(11.1%)

4.2%

Profit attributableto owners ofparent

1,487

1,171

1,129

(8.6%)(6.6%)

27.0%(Profit margin)

Copyright ©2017 by Future Corporation-4-(11.2%)(6.6%)

31.7%

1. Earnings Results for the First Half of Fiscal 2017－(ii) Analysis of Earnings Results (Net Sales and Operating Income)
18,051

17,033

18,26017,225

16,427

17,265Net
sales

2014.2H 2015.1H 2015.2H 2016.1H 2016.2H 2017.1H

2,776

2,466
2,093

1,937

1,705

1,912

Operatingincome2014.2H 2015.1H 2015.2H 2016.1H 2016.2H 2017.1H
Copyright ©2017 by Future Corporation-5-(Million yen)

1. Earnings Results for the First Half of Fiscal 2017－(ii) Analysis of Earnings Results（Orders Received and Order Backlog）

12,678 12,847

14,204

15,686
12,136 12,625

Ordersreceived2014.2H 2015.1H 2015.2H 2016.1H 2016.2H 2017.1H

11,148
7,325

7,644

8,146

7,670

7,648

Order
backlog2014.2H 2015.1H 2015.2H 2016.1H 2016.2H 2017.1H
Copyright ©2017 by Future Corporation-6-(Million yen)

1. Earnings Results for the First Half of Fiscal 2017－(ii) Analysis of Earnings Results (Balance Sheets)(Million yen)

Net assets: 17,331

Net assets: 18,411○Major increase/decrease in
assetsTotal assets: 23,063

Total assets: 24,289+1,225

Notes and accounts receivable trade: +503Work in process: +251
Property, plant and equipment: +543
Goodwill: +1,215
Software: +505Investment securities: +297
Cash and deposits: -2,771○Major increase/decrease inliabilities

Total liabilities: 5,732

Total liabilities: 5,878+145

End of Dec. 2016

End of Jun. 2017

Copyright ©2017 by Future Corporation-7-

Accounts payable - other : +621
Other current liabilities : +340
Accounts payable - trade : -187
Income taxes payable: -595

1. Earnings Results for the First Half of Fiscal 2017－(ii) Analysis of Earnings Results（Cash Flows）* Refer to Appendix (iii) on Page 35(Million yen)
Balance of cash and cash equivalents

10,810Net cash provided by (used in) operating
activities

1,776

8,989

407

2016.1H○Major changes ininvesting CF

Net cash provided by (used in) investing
activities

Increase in disbursement
due to purchase ofproperty, plant andequipment: -205
Increase in disbursement
due to acquisition of
intangible assets: -403
Increase in disbursement
due to acquisition of thesubsidiary: -1,681
Increase in disbursement
due to purchase ofinvestment securities : -299

2016.1H

2016.1H

2017.1H

Net cash provided by (used in) financing
activities

2017.1H

2016.1H

2017.1H

-683

-609

-34

-2,566

Copyright ©2017 by Future Corporation2017.1H-8-〇 Major changes inoperating CF
Income before income taxes
and minority interests: +357
Decrease in proceeds due to afall in notes and accounts
receivable - trade: -920
Increase in disbursement
reflecting a decline in notes andaccounts payable - trade : -330
Increase in disbursement forother operating items: -501

1. Earnings Results for the First Half of Fiscal 2017

－ (iii) Results by Segment（IT Consulting & Service Business)(Million yen)

Net sales
12,4532016.1H

Operating income

14,2882,001

2017.1H

2016.1H

2,050

2017.1H・ Boost in net sales backed by orders from new customers including retailers, newspaper companies,

Future Architect, Inc.

and logistics companies.
・ Engaged in development of financial cloud computing systems at multiple banks in the Tokyo
metropolitan area. Launched a project to upgrade transaction systems of foreign currency trading firm.
・ Completion of a project accounting for large portion of net sales in the same period of fiscal 2016.

YDC Corporation

・Acquired at the beginning of fiscal 2017. Positive momentum in development of systems centered on
manufacturing business under entrusted contract, as well as license sales of in-house products.

FutureOne, Inc.

・Steady growth in project orders received mainly from medium-sized firms.
・Increase in license sales of in-house package software products to other companies.

Copyright ©2017 by Future Corporation-9-1. Earnings Results for the First Half of Fiscal 2017ー (iv) Sales Analysis (Trends of Sales by Industry)

Trends of sales by industry(Million yen)
Serviceサービス
2015.1H

2,064(23.1%)

2,468

2016.1H(25.5%)

2,157

2017.1H(19.9%)

1,899(21.3%)

2,532(26.2%)

Distribution
流通

Financial
金融

Manufacturing
製造

2,744

2,207

(24.8%)(30.8%)

2,431(25.1%)

2,650

3,461

(30.4%)(24.5%)

2,245(23.2%)

2,726(25.2%)

Note: The above figures reflect total numbers combining sales in Future Architect and YDC,
and proceeds from the maintenance/operation projects transferred from Future Architect toFuture Inspace. Figures of procured goods and their maintenance are not included.

Copyright ©2017 by Future Corporation- 10 -

1. Earnings Results for the First Half of Fiscal 2017ー (iv) Sales Analysis (Trends of Sales by Industry)

Trends of sales by phase(Million yen)Grand design
グランドデザイン
2015.1H

1,749(19.6%)

2016.1H

1,866(19.2%)

2,606

2017.1H(23.7%)

1,847(20.7%)

1,069(11.1%)

1,224(11.1%)

Design設計

3,814(42.8%)

5,232(54.0%)

5,094(46.4%)Development
開発

Maintenance/operation
保守運用

1,504

(16.9%)

1,509(15.6%)

2,070(18.8%)

Note: The above figures reflect total numbers combining sales in Future Architect and YDC,
and proceeds from the maintenance/operation projects transferred from Future Architect toFuture Inspace. Figures of procured goods and their maintenance are not included.

Copyright ©2017 by Future Corporation- 11 -

1. Earnings Results for the First Half of Fiscal 2017ー (iv) Results by Segment (New Media & Web Service Business)(Million yen)

Net sales
2,601

2016.1HTokyo Calendar Inc.

eSPORTS Co., Ltd.

CodeCamp Inc.

Copyright ©2017 by Future Corporation

Operating income

3,088

2017.1H

2016.1H

2017.1H

-152

-175

・Boost in monthly page views from 30 million as of December 2016 to 40 million as of June 2017.
・ Focused on in-house production of video content, and achieved sales growth in web-based advertisement
activities.
・ Launched event activities and released application software products through collaboration with
Matchalarm Inc. which was incorporated as a subsidiary of the Future Group at the end of March 2017.
・ The goal is to post a surplus for the full year.
・ Sales growth backed by positive momentum in sales of outdoor and fitness training goods of private brands.
・ Decline in operating income due to lower gross profit margin and increased transport costs.

・Sales growth in online programing education services.
・Services of offering programing education and outplacement for job seekers contributed to a boost in sales.
・Upfront investments in recruitment of personnel and disbursement for advertisement led to the succeeding
operating loss.

- 12 -

1. Earnings Results for the First Half of Fiscal 2017

－ (v) Analysis of Changes in Net Sales(Million yen)
Corporate
Revitalization
Business+486+1,834
IT Consulting
Business

New Media &Web Service
Business-2,272OthersAdjustments

0-9

17,225

17,2652016.1H

2017.1H

Copyright ©2017 by Future Corporation- 13 -

1. Earnings Results for the First Half of Fiscal 2017

－ (vi) Analysis of Changes in Operating Income(Million yen)+48
IT Consulting
Business-22
New Media &Web Service
Business

Corporate
Revitalization
Business-23

OthersAdjustments

-18

-9

1,937

1,912

2016.1H

2017.1H

Copyright ©2017 by Future Corporation- 14 -

２．Topics Related to the Second
Quarter of FY2017

Copyright ©2017 by Future Corporation

２.TopicsーFuture AI•••

Offering of comprehensive services covering AI’s application to operations, technicaldesign, and creation of effective results
Services ranging from design to formulation and operations of AI through analysis ofimages, speeches, and statistics
Selection of cutting-edge technologies in deep learning, machine learning, etc., anddevelopment of algorithm

Speech analysis of “customers’
voices”
Automatic analysis ofcustomers’ voices received orally
or by telephone and email
Improvement in product design,
sales strategy, and service quality

Cyber metrics
Quantification of professional
baseball players’ behavioral
indicators
Application to a draft system,
development of players, andstrategy for games

Demand forecast/production
plan

Automatic placement oforders at stores

Formation of models for over 8
million decision making
variables

Automatic calculation of
optimal volumes and timing
for placing orders

Execution of optimal
production based on advanced
essential forecast

Automation of store
operations and minimizationof opportunity losses- 16 -

Analysis of voucher images
Automation in reading
hand-written vouchers
Automation in input of
numerical values, andimprovement in precision,
better than humanoperations

２.TopicsーFuture IoT••••

Cloud-based IoT platform service
Real-time analysis and management of big data collected from production equipment oroperating processes, by connecting to networks
Contribution to improvement in traceability, quality control and productivity
Service to be launched at major factories of USHIO INC. at home and abroad

Actions for
improvement

Dashboard
Understandingof progress

AnalysisreportPreparation of an
improvement plan
Product development

Identification ofissuesAI
Investigation of
production data

Future IoT
Operatinginformation,
recipes, process
data, etc.

Maintenance Plants
ProcurementRawmaterials

Defective
products

Claims/inquiries

Finishedgoods- 17 -

２.TopicsーSecurity
•
•

•
•

Offering of Future SIEM application services which provide real-time analysis of
security threats
Real-time visualization of a broad range of security threats conducted by internal orexternal organizations, such as unauthorized use or access, data falsification,
intrusion of computer virus, information leakage, and disruption of services
Intuitive grip of security information with graphical displays
Launch at securities firms and local government institutions which demand tightsecurity

Cyberattacks

Confidential
information

Rapidly increasing
external threats

Graphical display of security information
Real-time analysis of threats  Emergency response(Future SIEM)- 18 -

２.TopicsーFinTech (Electronic money)
•
•

•
•

Cloud-based point management and prepaid electronic money system (Future Pay)
Implementation of the system at over 10 companies including large retailers, home
improvement stores, etc., subsequent to the launch of point management system at
Lawson convenience stores
Assurance of high-speed stability at the same level of systems by financial
institutions
Improvement in customer convenience through a direct linkage with POS systems
and smartphones

Future Pay Cloud API

Payment terminals

Special POS

Payment
terminal

Online services

Settlement
terminal

TabletPOS

Smartphone
applications- 19 -

Ｅ commerce

Pointexchange

Automatic charge

２.TopicsーThe Mainichi Newspapers Group••••As a strategic partner, initiated the development of a next-generation core system
Drastic reform of existing operation which has 145-year history since foundation
Transformation from paper-based production business to digital data-based and real-time
information businessContribution to business revitalization in overall media industry and creation of value-added
activities
Current paper-based operations and systems

紙とデジタルを融合させた業務とシステム

Operations and systems combining both paper and digital forms

ＦｕｔｕｒｅＴｏｄａｙ“Combination of paper-based form and digital form” Complementary relation maximizing the strengthof each form
Cycles of utilizing information obtained from readers (responses, feedback, interest, and curiosity) tomake articles
Pursuit of technical evolution; pursuit of “whenever, wherever, and immediately”

Core operation flows centered on creation of pages
Concept: “Articles printed on paper can be viewed in digital form.”“Making pages” is theprinciple in operational flows
across reporters/news
desks, proofreading, andediting.

TechnologyNewsreportdesks

Materials
to create
news
pages

News
reportdesks
Advertis
ement

Proof
reading

Readers’ responses
and feedback
Readers’ interest andcuriosityNew
means(future)

Paper
Editing

Digitalediting

External
sales ofnews
articlesDigital

Sales
store

Webbased
readers

Newspaper
readers

Integrated
materials

DigitalExternal salesof news
articles- 20 -

Advertis
ement

Paper

Sales
Store

Newspaper
readers
Web-based
readers

Articles provided in digital form and paper-based form are mostly
the same, so reading either will suffice.

Achieving the goal of“delivering news articles”
shall be the principle forall staff of The Mainichi
Newspapers.

Digitalediting

Speedy delivery of news
Complementary usage by linking digitalbased and paper-based forms
Delivery of sufficient volume of highquality articles

Sales

Proof
reading

Editing
Technology

Sales2. TopicsーLarge apparel manufacture
•
•
•
•
•

Initiation of the system reconstruction project, as a strategic partner
Project scope covering all system areas including sales management, production
procurement, accounting, stores, EC, CRM, etc.
Automation, mechanization, and labor saving in operations with the full application of AI
Enhancement of the omni-channel strategy, such as client management independent fromsales channels, and sharing of stocks
Monitoring of development of standard platform targeting mid-sized apparel manufactures
物流
センタ

物流
センタ

EC

Logistics centers

物流
センタ

Manufacture

Procurement

Logistics
Collection

PlantsAnalysis物流
センタ
Headquarters

Copyright ©2017 by Future Corporation

Application

Sales

Analysis

Accounting- 21 -

物流
センタ
Stores
物流・・・
センタ
CRM

2. TopicsーSKYBANK/KeyMan•••

Customer groups to which the Company offers
customer relations and lending systems andservices tailored for banks
New orders received from 3 banks
Expansion of services to total 26 banks nationwide

Copyright ©2017 by Future Corporation- 22 -

2. Topicsー(iv) Tokyo Calendar– Continued growth in Web users• May 2016: 20 million PV• December 2016: 30 million PV• June 2017: 40 million PV– Use of the IT analysis platform helped boost sales ofmonthly magazines••

Analyzed needs of Web readers and released special issues
highlighting critical areas
The average sales volume of the Special Issue-Shinjuku (April) andthe Special Issue-Meguro (May) increased by 26.5% from theaverage sales volume of the February and March issues.

– Rapid increase in customers using smartphone applications (foriOS and Android)••

Shift in viewers from Web-browser based to smartphone applications
Offering of personally optimized contents and functions by using thepreference analysis database

Copyright ©2017 by Future Corporation- 23 -

2. Topicsー(iv) Tokyo Calendar– Strategic usage of video content• Successful formulation of in-house video production scheme• Decision on diversion of the McDonald’s (Japan) video advertisement to its TV
commercials– As first step on life-events support services, launched the application TOCALEDATE service in June
• Acquisition of Matchalarm Inc. at end of March• The implementation of the Media + Services strategy through the promotion
activities by Tokyo Calendar helped accelerate business growth

Copyright ©2017 by Future Corporation- 24 -

３．Future Outlook for the Second
Half of FY2017

1. Major Strategy
2. Target Numbers for Fiscal 2017

Copyright ©2017 by Future Corporation

Major Strategy of IT Consulting & Service Business
Consulting• Analysis of legacy systems by using FutureFormula and enhancement ofrenovation• Operations of customer-oriented Strategic System Organizations through long-term
partnership• Development of next-generation IT (next-generation architecture including big data,
IoT, AI on real-time framework basis)• Obtaining of new orders through strategic alliances among Future Architect, YDC,
and MCAD, and enhancement of new projects such as launch of smart factory

Cloud services• Proactive implementation of cloud services with highly specialized applications
Industry-based cloud series, OmnibusCore, Future Pay, Future AI, Future IoT• Expansion of security services

Copyright ©2017 by Future Corporation- 26 -

Major Strategy of FutureOne
Bolster ability to secure new orders from medium-sized companies, and achieve recoveryof earnings results

Strategy for the second half of fiscal 2017
ERP direct sales business•

Acquired orders from 14 companies in the first six months by targeting medium firms with annual
revenue of approximately 10 billion yen• Continued appeal of strengths in terms of requirement specifications and cost advantage (including
maintenance support fees)• Offering customers the option of using public cloud platforms (AWS & MS-Azure) as well asavailability for onsite platforms.

ERP partner business• Launched collaborative activities with IBM, NEC, Hitachi, Dell, and their group companies, in addition tocollaboration with Fujitsu• Initiated collaborative work with independently-operated system companies representing regional areas
including the Nagoya area

Bolstering of in-house products• Customized ERP, InfiniOne: Strengthening of trade business modules• Software Robotics (RPA): Initiated an examination of a cloud
platform for small- and medium-sized companies

Handling of other companies’ products• Launch of services on non-customized ERP, SAP Business ByDesign

Copyright ©2017 by Future Corporation- 27 -

Major Strategy of Tokyo Calendar
Goal: robust growth in net sales and profits

Formulate a service platform
Services for supporting life events (dating, marriage, birth, work
promotion, etc.) by using web-based media effectively

Advance toward a participatory communication platform
Shift from the current platform focused on offering of content tousers to a new platform centered on communication among users,
where authorized users can post lifestyle content, restaurant
reviews, etc.

- 28 -

Major Strategy of eSPORTS
Product expansion and reinforcement of branding• Broadening of product categories in health (fitness training), casual bags,
pharmaceuticals (daily items)• Strengthening of product groups which are little affected by changes in weather andare in high demand by customers• Opened a new store, Ra*F style, specializing in casual bags
Research and development of a new service, Pokegym (online fitness service)• Target customers, shifting from corporations to individuals. Study customers’
awareness of services in light of welfare and benefits• Will further enhance fitness programs available via smartphone. The iPhone
application is under development

Building of system infrastructure to promote growth
Enhance the formation of scientific and systematic environment which is capable ofdata preparation, price surveys, operation analysis, customer responses, etc. (by alsousing Future Group’s resources and know-how)
Forging of a firm management base to achieve net sales of 10 billion yen
Establish a solid management base with development of human resources, by using
Future Group’s know-how- 29 -

Management of security,labor, finance, andpersonal information

3-2. Full-year Forecast for FY2017- (i) Trends and Plan for Net Sales and Operating Income

30,049Net
sales

34,424 35,293 33,653

36,8302014

2017

23,292 23,353

2011

2012

2013

4,342

Operatingincome(Million yen)

2015
4,869

(Forecast)

4,500
3,642

3,352

2,929

2016

1,935

2011
Copyright ©2017 by Future Corporation

2012

2013

2014

- 30 -

2015

2016

2017

(Forecast)3-2. Full-year Forecast for FY2017-(ii) Comparison with Earnings Results of the First Half (Progress)(Million yen)

Full- year
forecast for
FY2017FY2017 Results
for the first half

Percentage ofprogress

Net sales

36,83017,265+46.9%

Operating income(Operating income
margin)

4,500

1,912

(12.2%)(11.1%)+42.5%

2,735

1,487

(7.4%)(8.6%)

Profit attributable toowners of parent(Profit margin)

Copyright ©2017 by Future Corporation- 31 -+54.4%

Appendix.

Copyright ©2017 by Future Corporation- 32 -

Appendix.－(i) Balance Sheets
End of Jun. 2017

End of Dec. 2016

Current assets

17,814

19,159-1,345

Non-current assets

6,475

3,904

+2,570Total assets

23,603
4,457+1,225Current liabilities

24,2894,550

Non-current liabilities

1,327

1,274

+53

Total liabilities

5,878

5,732

+145

Total net assets

18,411

17,331+1,079

74.6%

75.0%

-0.4pts(Million yen)

Shareholders’ equity ratio

Main changes(Million yen) Current assets：

Cash and deposits

Non-current assets： Property, plant and equipment
Goodwill
Software
Current liabilities：
Net assets：
Copyright ©2017 by Future Corporation

Income taxes payable
Retained earnings- 33 -

Change+92

End of Jun.
2017
8,989

End of Dec.
2016
11,761

952
1,565
838
288
15,731

408
350
333
883
14,802

Change-2,771＋543+1,215
＋505
-595
+928

Appendix.－(ii) Cash Flows(Million yen)

FY2017 Results
for the first half

FY2016 Results
for the first half

ChangeNet cash provided by (used in) operating activities

407

1,776

-1,369Net cash provided by (used in) investing activities-2,566-34-2,531

Net cash provided by (used in) financing activities

-609

-683

+73

Effect of exchange rate changes on cash and cash
equivalents

-3

-5

+1

Increase (decrease) in cash and cash equivalents-2,771

1,053-3,825

Cash and cash equivalents at beginning of theperiod11,7619,757+2,004

Cash and cash equivalents at end of the period

8,989

10,810-1,820First half of
FY20172,236First half of
FY2016
1,879

209

1,130

-920

-433

-103

-330

Purchase of investment securities

－

-299

-299

Purchase of shares of subsidiaries resulting inchange in scope of consolidation－-1,681-1,681

-558

-603

+44

Main changes(Million yen)

Operating CF：

Profit before income taxes
Decrease (increase) in notes and accounts
receivable - trade
Increase (decrease) in notes and accounts
payable - trade

Investing CF：

Financing CF：
Copyright ©2017 by Future Corporation

Cash dividends paid

- 34 -

Change+357

Appendix. - (iii) Results by Segment
First half of
FY2017First half of
FY2016Year-on-yearchangeIT Consulting & Service

14,28812,453+1,834

New Media & Web Service

3,088

2,601

+486

0

0

－

-111

-102

-9

IT Consulting & Service

2,050

2,001

+48

New Media & Web Service

-175

-152

-22

Other

-29

-11

-18

Adjustments

67

76

-9

(Million yen)

Net sales

Other
Adjustments
Operating income

Copyright ©2017 by Future Corporation- 35 -

Appendix.－ (iv) Orders Received and Backlog by Segment(Million yen)Orders received

IT Consulting & Service
Business
New Media & Web Service
Business
Total

BacklogFirst half of
FY2017First half of
FY2016Year-onyearchangeFirst half of
FY2017First half of
FY2016Year-onyearchange15,126

11,815+3,311

10,8687,537+3,331

560

321

+238

279

133

+145

15,686

12,136+3,55011,1487,670+3,477Note 1: eSPORTS is not included in the above table because it does not engage in order-based production.

Copyright ©2017 by Future Corporation- 36 -

The summary report of operating results, supplementary materials,
briefing materials and other various IR materials are also available on
the Company’s website.
http://www.future.co.jp/hd-ir/
Investor Relations, Future Corporation
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 ©2017 by Future Corporation- 37 -