Information Meeting Materials
for the First Two Quarters of the Fiscal Year ending March 31, 2012

November 2, 2011

Copyright © 2011 IT Holdings Corporation

Fiscal 2012 Performance Highlights: First Two Quarters
Fiscal 2012 Full-Year
Full Year Performance Forecasts
Updatepon Keyy StrategiesgNote: Fiscal 2011 segment results contained some calculation errors, which have since been addressed. Please refer to our supplementarymaterials for corrected consolidated performance figures.

Copyright © 2011 IT Holdings Corporation

1

Fiscal 2012 Performance Highlights: First Two Quarters• Despite concerns, particularly lackluster economic conditions in Europe and accelerating yen
appreciation, we saw signs of a change for the better, precipitated by a more positive client perspective
toward IT investment.
• Net
N t sales,
l operatingti incomeiandd recurring
i profit
fit exceededd d iinitial
iti l expectations,t ti
thanksth k tot favorablefblordering activity and a concerted effort to cut costs.
• We implemented structural reforms to establish a more resilient management structure. The measurestaken will certainly
y producep
goodgresults in the end but caused temporarypy expensespduringg the periodpinreview, which were booked as an extraordinary loss.
ITHD, Consolidated(Millions of yen)

Fiscal 2012
First Two Quarters

Difference from
Original Estimate

YOY Change

Net sales
Operating income

154,682

＋0.4%

＋2.1%

4,683

＋0.3%

＋56.1%

Recurring income

4,679

－1.7%

＋67.1%

N t iincomeNet(1 469)(1,469)－－New order volume
during the term

89 18889,188＋13 5%＋13.5%

Order backlog at theend of the term

60,589Copyright © 2011 IT Holdings Corporation2＋17.5%The revised forecasts for the firsttwo quarters of fiscal 2012 wasannounced on October 4, 2011.

Fiscal 2012 Performance Results: First Two Quarters (Millions of yen)
(Actual)154,009

 Net Sales
Demand for industrial IT services got a boost from favorable
interest by the manufacturing and distribution sectors inparticular. This offset sluggish demand for financial IT services
and pushed net sales higher than in the corresponding period ayear ago and above initial expectations as well.

 Operating Income
The increase in net sales was complemented by successful
cost-reduction efforts, which compensated for start-up
investment at GDC Gotenyama. Operating income grew overthe corresponding period a year ago and exceeded earlier
expectations as well.

Fiscal 2011
First Two Quarters

Fiscal 2012
First Two Quarters(Actual)
4 667
4,667

(Actual)
4 683(Original 4,683
estimates)
3,000

Fiscal
2011
Fiscal 2011
First
Fi
t
Two
T
Quarters
QtFirst Two Quarters(Actual)
1,004

 Net Income
Several Group companies relocated their offices to a central
point,
loss
off about¥1.8
i generating
i an extraordinarydilb¥1 8 billion.
billi
The implementation of a special career-change support
program paralleling corporate structural reforms at TIS led toan extraordinary loss of about ¥4.4 billion. These events
incomesignificantly eroded net income.

Copyright © 2011 IT Holdings Corporation(Original (Actual)estimates) 154,682
151,500

Fiscal 2011
First Two Quarters

3

YOY change：＋0.4％
Difference
from original
estimates：＋2.1％

YOY change：＋0.3％
Difference
from original
estimates：＋56.1％

Fiscal
2012
Fiscal 2012
First
Fi
Two
T
Quarters
Q
First Two Quarters(Original estimates)
1,000

Fiscal 2012
First Two Quarters

YOY change：(2.47) billion
Difference
from original
estimates：(2.47 billion)(Actual)(1,469)Fiscal 2012 Sales and Income by Principal Segment,
First Two Quarters
Financial IT Services

IT Infrastructure Services(Actual)55,52855 528(Actual)34,858(Original (Actual)estimates))
55 18055,18054,700(Millions of yen)

(Actual)
3,863(Millions of yen)

(Actual)(Original 3,640 YOY change：
estimates)
2,100

YOY change：－7.5％
Difference fromoriginal
i i lestimates：－2.0％(Actual)
1,640

－5.8％
Difference fromoriginal
estimates：＋73.3％

estimates)
800

Net sales: Demand for services related to business
continuity
ti it planslandd disasterdi t recovery remained
i d brisk,bikwhile demand among financial-sector clients retreated.
Operating income: Successful cost-cutting efforts
compensated for start-up investment in GDC
Gotenyama, surpassing operating income target.

Net sales: Large investment project for major lifeiinsurercame full
f ll circle,
i l andd IT investment
i
t
t for
f credit
dit
card companies was flat.
Operating income: Cost reductions offset impact oflower sales, pushing results above operating incometarget.

4(A t l)(Actual)(Original
estimates)
400

YOY change：＋0.09 billion
Difference
from original
estimates：－0.77billion－25.6％(473)
Difference fromoriginal
Fiscal 2011
Fiscal 2012
estimates：
First
Two
QuartersFirst
Two Quarters＋52.5％

2011年3月期
2012年3月期
Fiscal 2011
Fiscal 2012
第2四半期（累計）第2四半期（累計）First
Two Quarters First
Two Quarters

Net sales for each segment include intersegment sales.

YOY change：＋7.6％
Difference fromoriginal
i i lestimates：＋6.9％

Fiscal 2011
Fiscal 20122011年3月期
2012年3月期
First
Two Quarters 第2四半期（累計）First Two Quarters
第2四半期（累計）(Actual)
1 219 YOY change：(O i i l 1,219(Original

Fiscal 2011
Fiscal 20122011年3月期
2012年3月期
First
Two Quarters First
Two Quarters
第2四半期（累計）第2四半期（累計）Copyright © 2011 IT Holdings Corporation

64,700Fiscal 2011
Fiscal 20122011年3月期
2012年3月期
First Two Quarters 第2四半期（累計）First Two Quarters
第2四半期（累計）Fiscal 2011
Fiscal 20122011年3月期
2012年3月期
First
Two Quarters
Two Quarters
累計） First
累計）
第2四半期（
第2四半期（Operatingincome(Original
estimates) (Actual)
32 23332,90032 900 32,233

YOY change：－0.6％
Difference fromoriginal
i i lestimates：＋0.9％

Net sales

Industrial IT Services(Original (Actual)(Actual) estimates),
69,18464 28464,284(Actual)(378)
Net sales: Dramatic improvement, thanks toconsiderable
id bl iincrease iin smallll andd midsized
id i d projects
j t
for the distribution and service sectors.
Operating income: Higher sales and successful costcutting efforts failed to neutralize income-squeezing
developments, especially the appearance of
the anticipatedunprofitablep
pprojects,j, which preventedpp
improvement in operating income.

Fiscal 2012 Net Sales and Operating Income Analysis, First
Two Quarters (YOY Comparison)
Net Sales(Billions of yen)
154.68154.00IT Infrastructure
－0.34

Other
－0.59
Financial IT－2.62

Inter-segment－0.67

Industrial IT＋4.90

First Two Quartersof Fiscal 2011

First Two Quartersof Fiscal 2012

Operating Income(Billions of yen)

4.68

4.67
IT IInfrastructure
f t t
Financial IT
－0.22
－0.42

Industrial IT＋0.09First Two Quartersof Fiscal 2011
Copyright © 2011 IT Holdings Corporation

Other
＋0.44

Inter segment
Inter-segment＋0.12First Two Quartersof Fiscal 2012
5

Fiscal 2012 Two-Quarter Order Status
An increase in demand for industrial IT services, especially for the manufacturing and distribution sectors, buoyed orders during the first two quartersof fiscal 2012 and expanded the order backlog as of September 30, 2011.
 Progressive shift away from emphasis on existing financial-sector clients and large projects in favor of newly cultivated clients in industrial sectors
and more small and midsized projects.

First Two Quarters of Fiscal 2012

First Two Quarters of Fiscal 2011

(Millions of yen)

(Millions of yen)Orders received
during the term
78,553

Net sales
for the term
76,551

Orders received
during the term
89,188Order backlog
at the beginningof the term
49,569Order backlog
at the endof the term
51,571

Order backlog
at the beginningof the term
47,967＜Orders received during the term＞

52,310(Millions of yen)

89 187 YOY change：＋13.5％
89,18713 5％61,030Order backlog
at the endof the term
60,589＜ Order backlog at the end of the term ＞(Millions of yen)

78,553

Net sales
for the term
76,566（Industrial IT ：＋16.7％）（ Financial IT ：＋7.3％）

60,58951,57132,017

39,664

Industrial IT
26,242First Two Quartersof Fiscal 201128,157

Industrial IT

Financial IT

19,553First Two Quartersof Fiscal 2012

First Two Quarters
off Fiscal
Fi l 2011

Order volume, end-of-order backlog and net sales apply to Software Development only.
Copyright © 2011 IT Holdings Corporation

YOY change： ＋17.5％＋17 5％（Industrial IT :＋23.9％）（ Financial IT ：＋7.0％）

620,924

Financial IT

First Two Quarters
off FiFiscall 2012

Quarterly Order Status (From Fiscal 2011 to Fiscal 2012)
Orders received during the term(Millions of yen)

38,51925,37640,03326,93444,73044,91825,48328,55939,00423,79644,27032,471
Industrial IT

13,14313,09915,208First
Quarter
第1四半期

SecondQuarter
第2四半期

Third
Quarter
第3四半期

Financial IT

19,247

16,359FourthQuarter
第4四半期

First
Quarter
第1四半期

11,798
SecondQuarter
第2四半期

2011年3月期
Fiscal 2011

Third
Quarter
第3四半期

FourthQuarter
第4四半期

Fiscal 20122012年3月期

Order backlog at the end of the term(Milli(Millions
off yen))57,02831,80625,222First Quarter
第1四半期末51,57132,01757,89861,83060,58939 09239,092

39,66447,96735,95029,738Industrial IT
Financial IT

19 553
19,55321 94821,94818 22918,22922 73822,73820 92420,924

SecondQuarter
第2四半期末Third
Quarter
第3四半期末FourthQuarter
第4四半期末First
Quarter
第1四半期末SecondQuarter
第2四半期末2011年3月期
Fiscal 20112012年3月期
Fiscal 2012

Quarterly order volume, end-of-quarter backlog and quarterly net sales apply to Software Development only.
Copyright © 2011 IT Holdings Corporation

Third
Quarter
第3四半期末7

FourthQuarter
第4四半期末Fiscal 2012 Performance Highlights: First Two Quarters
Fiscal 2012 Full-Year
Full Year Performance Forecasts
Updatepon Keyy Strategiesg

Copyright © 2011 IT Holdings Corporation

8

Understanding the External Environment:
Business Conditions and IT Investment Trends by Industry Sector
 Clients’ attitude toward IT investment appears to be recovering, with an emphasis on enterprise
resource planning.
【Fi
i l Sectors】
S】【Financial• In the credit card and consumer finance sectors, clients remain reluctant to apply funds for IT
investment, since they have already addressed their need for IT services required to meet new laws andbudgets have been squeezed by lackluster personal spending. But we anticipate higher demand forservicestotheoff existingafter
fiscall year.
it enhancehth efficiency
ffi i
i ti systemstft theth secondd halfh lf off theth currentt fi• IT investment by banks is generally favorable. Existing clients continue to ask for peripheral systems
following system integration. Also attracting new clients.

Remain cloudy【Industrial Sectors】• IT investment is acquiring a forward-looking aspect, as several years of restraint give way to new
upgrades especially in the processing-based
processing based manufacturing sector and service sector
interest in upgrades,
sector, anddemand for ERP-related services rebounds.
• The number of projects seems to be growing, but scale is decreasing. Efforts are being directed into a
new kind of business model designed to maintain profitability.

Sunny【Public Sectors】
g y preparednessp py,• Demand will increase from national and local ggovernment offices for emergency
systems,
particularly contingency planning and disaster prevention information platforms.
• Reduced budgets will likely exacerbate price competition.

Sunny breaks

These trends may differ from general industry trends since management’s assumptions also take into consideration the status of IT investment byclients of the ITHD Group.
Copyright © 2011 IT Holdings Corporation

9

Fiscal 2012 Full-Year Performance Forecast Highlights• Considering such factors as the favorable order volume and backlog as well as first-half
performance, we have raised expectations for net sales, operating income and recurring profit.
• Net
N t iincome reflects
fl t theth bbookingki off extraordinarytdilosseslon temporarytexpenses accompanyingimeasures designed to establish a more resilient management structure.
(About ¥6.2 billion booked in first half; about ¥1.4 billion to be booked in second half)• No change
g to the dividend forecast (¥18(
perp share at yyear-end).
)

ITHD, Consolidated(Millions of yen)

Fiscal 2012
Full year

YOY Change(Revised Forecasts)

Difference ffrom
Diff
Original EstimatesN t salesNetl

325 000
325,000

＋0 6%
＋0.6%

＋5 5%
＋5.5%

Operating income

14,000＋9.2%＋27.3%R
Recurringi incomei

13 50013,500

＋6 9%
＋6.9%

＋28 6%＋28.6%Net income

2,000－66.6%－42.9%

Copyright © 2011 IT Holdings Corporation

10

Fiscal 2012 Full-Year Performance Forecasts(Millions of yen)

(R i d(Revised(Actual)323,173

 Net Sales
As in the first half, favorable demand for industrial IT
services will probably buoy net sales overall. Demand
for financial IT services is also likely to rally.

Fiscal 20112011年3月期
Full
Year
通期
 Operating Income
Higher-than-expected operating income in the first half
and a string of reductions in personnel costs following
structural reforms should lead to operating income that is
not only better than originally forecast but also an
improvement over the previous fiscal year.

(Actual)12,818

Fiscal2011年3月期
年 2011
月期
Full
Year
通期
(Actual)5,985

 Net Income
Drastic measures designedgto establish a more resilient
management structure will cause the Company to post an
extraordinary loss (about ¥4.4 billion on a special careerchange support program and about ¥3.2 billion on officerelocation and centralization).

Copyright © 2011 IT Holdings Corporation(Original estimates)
estimates) 325,000
308,000

YOY Change：
＋0 6％
＋0.6％
Difference from
Original Estimates ：＋5.5％

Fiscal 20122012年3月期
Full
Year
通期
(Original
estimates)
11,000(Revised
estimates)
14,000YOY Change：＋9.2％
Difference from
Original Estimates ：＋27.3％

Fiscal2012年3月期
年 2012
月期
Full
Year
通期
(Original
estimates)
3,500
3 500

(Revised YOY Change：
66.6％
6％
estimates)
ti t ) －66
Difference from
2,000
Original Estimates :－42.9％Fi l 2011
Fiscal2011年3月期
Full
Year
通期
11

Fi l 2012
Fiscal2012年3月期
Full Year
通期Fiscal 2012 Full-Year Performance Forecasts:
Sales and Income by Principal Segment
IT Infrastructure Services(Actual)110,916(Revised(Original
estimates)
ti t )
estimates)
109,700 110,000

Financial IT Services(Actual)72,665(Revised(Original(Og a estimates)
estimates)
67,80066,400(Millions of yen)

2011年3月期
Fiscal2011
Full通期Year(Actual)8,132(Revised
estimates)(Original 7,000
estimates)
5,600

OperatingOiincome(Millions of yen)

2011年3月期
Fiscal 2011
Full通期Year

2011年3月期
Fiscal2011
Full通期Year

2012年3月期
Fiscal 2012
通期
Full
Year

2012年3月期
Fiscal 2012
通期
Full
Year

(Original
estimates)
2,000

2011年3月期
Fiscal 2011
通期
Full
Year

2012年3月期
Fiscal 2012
通期
Full
Year

Net sales for each segment include intersegment sales.
Copyright © 2011 IT Holdings Corporation

YOY change:％＋7.0％
Difference
from original
estimates:＋12.4％

2011年3月期
Fiscal2011
Full通期Year

12

YOY change:－0.6％
Difference
from original
estimates:＋95.0％

2012年3月期
Fiscal2012
Full通期Year(Original
estimates)(Revised
3,900(Revised
estimates)
3,900(Actual)
3,923

YOY change:－13.9％
Difference
from original
estimates:＋25.0％

2012年3月期
Fiscal2012
Full通期Year

134,500

YOY change:
6.7％
－6.7％
Difference
from original
estimates:＋2.1％

YOY change:
0.8％
－0.8％
Difference
from original
estimates:＋0.3％

Net sales

Industrial IT Services(Revised
estimates)g(Actual) ((Original
151,200
141,294 estimates)

estimates)
3,000
YOY change:＋84.6％
Difference
from original
estimates:－23.1％(Actual)1,625

2011年3月期
Fiscal2011
Full通期Year

2012年3月期
Fiscal 2012
通期
Full
Year

Revisions to Fiscal 2012 Full-Year Forecasts
Operating Income(Billions of yen)

Reversal fromrisk ofearthquake
Increase indisastersales and
＋0.90
productivity
Specialcareer-change
supportprogram
Cost
Reduction of
Head Office

11.00

14.00

＋1.74
Other risk
－0.85

＋1.80

Earnings＋1.11
recovery of
GDC gotenyama＋0.10
Effects from
unprofitableprojects during
the first half
period－1
1.80
80
Fiscal 2012
Revised Estimates

Fiscal 2012
Original Estimates

Copyright © 2011 IT Holdings Corporation

13

Thoughts on Fiscal 2012 Dividends
Basic Policy
ITHD makes the long-term,
comprehensive return of profits toshareholders a top management
priority.

We aim to maintain astable return of profits tog ashareholders and target
consolidated payout
benchmark of 30%.

ManagementMt seeks
k tto enrichi h internal
i tlreserves given performance results
and financial status and ensure theCompany’s ability to pursue businessexpansion opportunities
opportunities.

Thoughts on Fiscal 2012 Dividends

Changes in Dividends per Share
Annual¥32• In accordance with basic policy, management intends to pay a yearend dividend of ¥18 per share.
• Because of the extraordinary loss caused by unplanned structuralreforms, a huge disparity between the expected payout ratio and basic
policy will emerge, but the situation atypical.

Annual¥32

Annual
¥32

20

20

32

・Anticipating positive effects from structural reforms, management
predicts
di t a quantum
t
leap
l
in
i performancefresultslt fromffiscalfi l 2013
onward, and will therefore retain the original dividend plan.

35.9%

28.9%

12

Fiscal 2009

Fiscal 2010

Interim dividends

79.0%（plan）
Annual ¥18

46.9%

12
Fiscal 201118
Fiscal 2012

Year-end dividends

Payout ratio

Year-end dividend p
per share: ¥18 (p(planned))

Copyright © 2011 IT Holdings Corporation

No interim dividend was distributed in fiscal 2009—the Company’s first fiscal
year—becausebtheh bbooks
k ffor thishi inauguralil term had
h d not yet closed.
l d TheTh yearend dividend included a ¥5 per share bonus.

14

Fiscal 2012 Performance Highlights: First Two Quarters
Fiscal 2012 Full-Year
Full Year Performance Forecasts
Updatepon Keyy Strategiesg

Copyright © 2011 IT Holdings Corporation

15

Fiscal 2012 ITHD Group Management Policy

1. Redefine Group structure• Quickly establish a business foundation for the new TIS created through the three-company merger.
• Restructure INTEC subsidiaries.
• Achieve a smooth start for the new shared services company and deliver results.

2. Strengthen Group business foundation and revenue structure• Eliminate projects in the red.
red
• Reinforce revenue management and pinpoint profitability status more quickly.
• Promote business practices laterally within the Group through application of new management
approaches.

3. Extend top lines and expand stock business• Reinforce
R i fmarketingk ti capabilities
biliti andd bbuild
ild a wider
id clientli t base.
b• Utilize cloud business and data centers to underpin development and growth of business continuity plan
(BCP) business.

4. Build a presence—invest—in activities with the potential to become services and solutions in themedium term

Copyright © 2011 IT Holdings Corporation

16

Medium- to Long-term Growth Forecast

Lackluster Period

Recovery,Recovery New Growth Period

Fiscal 2012
Addressing the Paradigm Shift• Promote drastic cost-cutting• Emphasize establishment of more
resilient management structure

Fiscal 2013
Start new medium-term
medium term business plan

Drafting Medium-term Business Plan to Run from April 2012 through March 2015
Key Points:(1) Switch to a business model matched to the paradigm shift in the industry.
(2) Establish a strong financial platform to sustain start-up investment.
(3) Demonstrate comprehensive capabilities through optimum deployment of Group resources.
(4) Implement a resilient revenue structure that facilitates new business and customer development eventhe operating environment is less than inviting.
Copyright © 2011 IT Holdings Corporation

17

Fiscal 2012 Update on ITHD Group Management Policy (1/10)
Strengthen Group businessfoundation and revenue
structure

Redefine Group structure

Extend top lines and expand
stock business

Build a presence—invest—in activities with the potential
to become services and solutions in the medium term

Promote function-specificstreamlining, integration and realignment offunction specific streamlining
Group companies from a perspective of sharper competitive capabilities
matched to major changes in the operating environment

CentralizeCt li common functions
fti
withinithi thethGroup from an efficiency perspective

Operating companies

Special function companies(Services for the Group)

ITHD
Shared services company

IT Service
Force

TIS

Realignment hinging on TIS
and INTEC subsidiaries

SORUN
Business transfer
Oct 2011

TIS Solution Link
(Previous CST)
On-site outsourcing
services at client sites

INTEC

AJS

Merger Oct 2011

AJS
SoftwareSorun Pure

Management

Reinforce businesstie-upstie
ups

TIS System
yService

NEXWAY

Merger Apr 2012 (planned)

Q i
Qualica
Other groupcompanies

Special subsidiary

Merger Apr 2011

Merger Apr 20111

Focus on specific large- account clients

Merger Apr 2011

Nippon System
INTEC Systems
S tInstitute, Inc. Gijutsu Co. Ltd

UFIT

SystemySupportWeb Office

BPO focus
Chuo
SystemAgrex
NEOAXIS

IUKStrive to leave unprofitable projects behind and focus on redefining Group structure.
Copyright © 2011 IT Holdings Corporation

18

Fiscal 2012 Update on ITHD Group Management Policy (2/10)
Redefine Group structure

Strengthen Group businessfoundation and revenue
structure

Extend top lines and expand
stock business

Build a presence—invest—in activities with the potential
to become services and solutions in the medium term

Relocate Group Offices to Central Point
Nine Group companies, with about 7,000 employees—60% of which work in the Tokyo area—
relocated in a move that cuts office space by 25%.
Objective
T promoteTot more efficient,
ffi i t more effective
ff ti GroupG
operationsti• Enhance contact by making communication processes smoother and proactive.
• Strengthen Group governance.
• Reduce overall costs
Companies Involved in the Move
ITHD, TIS, Qualica, AJS, IUK, Chuo System, TIS Leasing, SorunPure, BM Consultants
Schedulegg December 2011 and runningg throughg February
y 2012.
Gradual relocation of offices beginning
Address
17-1, Nishi-Shinjuku 8-chome, Shinjuku-ku, Tokyo
Sumitomo Fudosan Shinjuku Grand Tower, 14th to 26th floors
Relocation-related expenses of about ¥3.2 billion will be booked as
extraordinary loss, with about ¥1.8 billion in the first half and about ¥1.4 billion
in the second half of fiscal 2012.
The relocation will have a reduction effect of about ¥900 million on fixed costs.

Extraordinary loss
About ¥3.2 billion(fiscal 2012)

Fixed cost reduction
About ¥900
million/year (fromfiscal 2013 onward)

Copyright © 2011 IT Holdings Corporation

19

Fiscal 2012 Update on ITHD Group Management Policy (3/10)
Redefine Group structure

Strengthen Group businessfoundation and revenue
structure

Extend top lines and expand
stock business

Build a presence—invest—in activities with the potential
to become services and solutions in the medium term

TIS has accelerated implementation of merger steps and is accomplishing the integration process faster than originally planned.
plannedApril 1, 2011
Organization • Organizational structures of the three head offices
merged.
mergedal structure• In principle, organizational structures of divisions
also combined, but some corporate lines remain
separate.

Personnel
system• Office rules, health insurance plans and hiring
practices consolidated.
• Personnel and retirement/pension systems used byeach company prior to merger still in force until
new TIS versions are formulated.

April 1, 2012
Implemented
I ld Oct.
O 2011Moved
M d up• New personnel system will be in place.
• Basic design of new personnel system completed infirst half

Gradual• Offices in the Tokyo area reorganized and personnel relocation/centralization
Moved upreassigned
i d inall
i ll divisions—namely,
di i il headh d office
ffi
beginning Dec. 2011
administration, financial IT services and industrial* Coinciding with office integration of other ITHD
and public sector IT services business segments.
Group companies• Offices in the Osaka area consolidated.

Offices

Administrati • Practices and approaches used by merging
companies
i integratedid intoi
TIS’ accounting
i systemon• All internal systems of merging companies
integrated into TIS’ existing systems.

Procurement • Procurement methods used by each company prior

Subsidiaries• Integrate salary systems• Planned communication tool renovation

to merger, including those for partners, suppliers
and indirect material buyers, remain separate.

Gradually being
integrated• Recently merged shared services company andspeciali l subsidiary
b idi
under
d ITHD control
t l are realigned.
li dOct. 2011
On-site outsourcing
services transferredto subsidiary

Copyright © 2011 IT Holdings Corporation• Offices in the Tokyo area will be consolidated.
• Offices
ffi
in
i the
h Nagoya area will
ill beb consolidated.
lid d• Begin transition to systems and services
conformingfi to theh next ITHD group system willillcommence.

and business procedures.

Internal
systems• Divisional organizational structures will becompletely merged.

20• Begin transition to new systems hinging on thenext ITHD group system will commence.

Moved up

Apr. 2012
System operation
subsidiaries merge

Moved up

• Procurement methods will be integrated undercentralized procurement structure.

• Integration of system operation subsidiaries willcommence.

Fiscal 2012 Update on ITHD Group Management Policy (4/10)
Redefine Group structure

Strengthen Group businessfoundation and revenue
structure

Extend top lines and expand
stock business

Build a presence—invest—in activities with the potential
to become services and solutions in the medium term

TIS is moving forward on structural reforms to draw out and maximize the merger effect.

Copyright © 2011 IT Holdings Corporation

21

Old UFIT divisions

Public and aerospace

Implementingpg drastic review of p
personnel systemyand deployment
p y
A special career-change support program—essentially, early retirement—
attracted 514 employees. The program prompted an extraordinary loss ofabout ¥4.4 billion, mainly for special retirement allowances and rehiringsupport services, but will eventually have the effect of cutting fixed costs
by about ¥3.6 billion per year.

I
Industrial

Decision made to merge TIS System Service Inc. and System Support
Co., Ltd.
The merger of these two companies responsible for the Group’s system
operation services will centralize capabilities.

Old SORUN
divisions

Financial
F

Transfer on-site services to TIS Solution Link
TIS transferred its on-site services, in which a provider resides permanently
with the client,client to a subsidiary,
subsidiary formerly CST Co.,
Co Ltd.,Ltd which was
subsequently renamed to better reflect its centralization of functions.

Old TIS divisions
C
Creditcard

Accelerating post-merger fusion measures
The divisional headquarters structure that the three merged companies had
startedd was revampedd six
i months
h aheadh d off schedule.
h d l Divisional
Di i i l
headquarters defined by industry are in place, effective October 2011.
Efforts are being directed toward maximizing the reinvigorated clientbase now comprising about 3,000 companies and working to extend toplines as quickly as possible.
possible

On October 1, 2011, the on-site outsourcing business(net sales: about ¥2.5 billion; operating income: about¥400 million) was transferred.
TIS

TIS Solution Link
(formerly CST)
Became structure with
about 700 people on staff

Planned merger in April 2012 to centralize
system operation services.
System
Support

Extraordinary loss
About ¥4.4 billion(first half of fiscal2012))TIS System
Service

Fixed cost reduction
About ¥3.6 billion/year(from second half offiscal 2012)

Fiscal 2012 Update on ITHD Group Management Policy (5/10)
Redefine Group structure

Strengthen Group businessfoundation and revenue
structure

Extend top lines and expand
stock businessCorporate Themes• Progressive shift away from emphasis on existing financial-sector clients and large projects.
• Focus on newly cultivated clients in industrial sectors and more orders for small andmidsized projects.

Build a presence—invest—in activities with the potential
to become services and solutions in the medium term

Two-Quarter Order Volume(Millions of yen)

Measures to Strengthen Group’s Key Business Capabilities
TIS• Established a sales innovation committee, under the direct supervision of the president.
Project
P j t teams*t* formedfd tot tackle
t kl importantit t themesthandd quickly
i kl actt on suggestions.
ti(*Emphasis on cross-sales promotion, solution business promotion, data center businesspromotion and consideration of business roles and capabilities. )• Reinforced data center projects. Drive business promotion activities forward through ap ysystemyhingingg g on a data center business ppromotion committee.
companywide
INTEC• By order of the president, a concerted effort was made to visit customers more often,
whether for marketing or development purposes, and an emphasis was placed on securing a
steady flow of projects
projects.
• Efforts were directed toward recovering new products and services for which development
or investment had wrapped up. This includes F3, Kaisoku Searcher, CIVION-7th andMCFrame.
• Formed alliances with manufacturers and took a companywide approach to marketing data
center operations as a disaster response method.
Qualica• Consolidated corporate marketing capabilities, rotated staff and added more sales
representatives to the marketing force.
force• Hired more local staff at offices in China and established an indirect sales network.
Copyright © 2011 IT Holdings Corporation

22

Year-on-year change: +13.5%

89,18889 18878,553
61,03052,31026 242
26,24228,157First Two Quartersof Fiscal 2011

First Two Quartersof Fiscal 2012

Industrial IT
Financial IT
Only pertains to Software Development segment.

Fiscal 2012 Update on ITHD Group Management Policy (6/10)
Redefine Group structure

Strengthen Group businessfoundation and revenue
structure

Extend top lines and expand
stock business

Build a presence—invest—in activities with the potential
to become services and solutions in the medium termgppg inquiriesqgyg, newly
y built data centers.
Heightenedinterest in disaster recoveryy and business continuityy plansspurring
about energy-saving,
GDC Gotenyama

INTEC Manyo Square

Location

Shinagawa-ku, Tokyo

Takaoka, Toyama Prefecture

Construction

Hybrid aseismic isolation structure

Base-isolation structure

Energy-saving,enhanced energy
efficiency

Use of outside air for cooling, geothermal energyuse, use of rainwater, solar power generation,
green power procurement, LED lights, highefficiency equipment, sensor-controlled automatic
lighting, rooftop garden, exterior greenery

Power supplied to lighting equipment through solar power
generation, sensor-controlled automatic lighting, optimized
lighting using bright-light sensors, LED lights, well wateruse, rainwater use for rooftop garden, exterior matched toneighborhood, noise and insulating sashes

Other featuresg efficiency
y of 1.36 ((design
g value))
Power usage

Within Hokuriku Electric Power service area,, adjacentjtoHokuriku Shinkansen Shin-Takaoka Station (provisional
name)

GDC Gotenyama: Natural light (solar tracking
panels)Copyright © 2011 IT Holdings Corporation

GDC Gotenyama: Solar power generation
monitor23

INTEC Manyo Square: Rooftop garden, solar panels

Fiscal 2012 Update on ITHD Group Management Policy (7/10)
Redefine Group structure

Strengthen Group businessfoundation and revenue
structure

Extend top lines and expand
stock business

Asia Taking on New Status for ITHD Group
Vietnam

India

Thailand

Vietnam

China

Offshore developmentp

Build a presence—invest—in activities with the potential
to become services and solutions in the medium term

Examples of ITHD Group’s business development in China• AToMsQube (Cloud-oriented production control system)

ASEAN
markets

China’s manufacturing industry (Komatsu-affiliated factory, generalcustomers)→ In six months, two companies have put the system on line and seven are
introducing it into their operations.

China△Softwaredevelopment business○Service-oriented
business○Packaged softwaredevelopment○Data center business• TastyQube (Business support system for restaurant sector)
Localization completed. One customer has tentatively committed to test use.
→ In Japan, the system has been adopted by 130 companies covering more
shops.
than 3,000,pBusiness market• Packaged software business
My Home Designer series (Home and office design tool)• China, the core geography of our overseas development
activities, has already shifted away from its status as a hub
for offshore development and is increasingly a market forour services.

Shacho no Migite (“President’s Right Hand”) (Sales control system, ideal forwholesale sector)→ Cumulative sales in Japan exceed 70 packages; Chinese version on salenow.

• Packaged softwaredevelopment and service-orientedfiibusinesses are becoming easier to promote than systemdevelopment in the market.

Copyright © 2011 IT Holdings Corporation• Tianjin Data Center customers
Chinese companies: Members of finance sector, public-sector organizations
Japan-affiliated companies: Mostly service providers.

24Fiscal 2012 Update on ITHD Group Management Policy (8/10)
Redefine Group structure

Strengthen Group businessfoundation and revenue
structure

Extend top lines and expand
stock business

Build a presence—invest—in activities with the potential
to become services and solutions in the medium term

Solution in the Spotlight
SkyWare: Solution using augmented reality
Generic name of information platform that distributes contents to mobile devices with augmented reality technology and global
pposition systemylocator data capabilities.
p
Adopted by City of Saku, Nagano Prefecture; NTT Docomo, Inc.; Fukushima Prefecture Gokusho Community Promotion
Council; and others

FeaturesUsing augmented reality technology, which adds icons to the map screen and digital data to scenery shots captured through themobile device’s camera, this solution provides sightseeing information, such as historical background and insider’s perspectives.

Pictures in the public domain at http://www.tis.jp/service_solution/skyware
MAP screen

Copyright © 2011 IT Holdings Corporation

AR screen25

Fiscal 2012 Update on ITHD Group Management Policy (9/10)
Redefine Group structure

Strengthen Group businessfoundation and revenue
structure

Extend top lines and expand
stock business

Build a presence—invest—in activities with the potential
to become services and solutions in the medium term

Solution in the SpotlightF3 (F Cube) Mobile Shield Center Service
This service enables financial institutions to utilize customer information, including personal information, outside its branches and not
onlyy facilitates proposal
p p
activities that have to date only
y been available to customers visitingg a branch but also allows access to
information outside the confines of a branch. This capability reduces the weight of administrative work.
Adopted by The Hokkoku Bank, Ltd.

F3 (F Cube) Mobile Shield Center Service
F3 (F Cube) SeriesThis integrated customer relationshipmanagement (CRM) solution for financial
institutions makes it possible to achieve
scalability and streamlined system
implementation by turning systems, such as
those for CRM, safes force management andcall center operations, into service functions
and creating components out of service units.
The series has sold to more than 90 financial
institutions, and holds a majority share of theregional bank market.

Copyright © 2011 IT Holdings Corporation

26

Fiscal 2012 Update on ITHD Group Management Policy (10/10)
Redefine Group structure

Strengthen Group businessfoundation and revenue
structure

Extend top lines and expand
stock business

Build a presence—invest—in activities with the potential
to become services and solutions in the medium term

Solution in the SpotlightCall Crayons: Cloud service that shows where on the website the customer is when he/she makes a call
Uses PhoneCookie® technology, patent pending, to fuse the Internet and phone.
Adopted by Rakuten Travel, Inc.; major personnel-based media companies; major online service providers; and others

Features
When a customer contacts a call center,, Call Crayons
yidentifies the area of the website where the caller has called from. This enables
the client company to fine-tune improvements in service efficiency and proposal-making capabilities.

Merits of the Internet
Convenient, efficient, dataoriented, super-fast

Merits of the Phone
Friendly, comfortable, familiar
The operator and the user share a screen, so
the conversation can start on the assumptionof an topic presented there.

Web systemfor customers

RakutenTravelAn integrated Internet and phonesolution that enhances the customer
customercompany relationship
Copyright © 2011 IT Holdings Corporation

27

Systemfor call center

Stress-freeconversation.
Stress free conversation
Facilitates response to lots of calls at the sametime—enhanced efficiency.
Improves call turnover through smoother guidance
process—higher sales.
* Rakuten Travel example
http://callcrayons.jp/project/case/index.html

Cautionary Statements• In these materials, ITHD is abbreviated ITHD.
• All statements described in these materials are based on information available to management regarding the
ITHD Group—that is, ITHD and the subsidiaries under its umbrella—as of the presentation date and reflect
somewhat objective assumptions deemed reasonable at this time. Various factors may cause future results to be
substantially different from the assumptions presented in these materials.