Information Meeting Materials
for the First Quarter of the Fiscal YearEnding March 31, 2021
August 6, 2020

© 2020 TIS Inc.

Contents

Fiscal 2021 First Quarter: Financial Highlights

Fiscal 2021 Performance Forecast
Reference Materials- All statements described in these materials are based on information available to management regarding the TIS INTEC Group—that is, TIS and thesubsidiaries under its umbrella—as of the presentation date and certain assumptions deemed reasonable at this time. No intent is implied ofpromise by the Company to achieve such forward-looking statements. Indeed, various factors may cause future results to be substantially different
from the assumptions presented in these materials.
- Amounts for each three-month quarter are calculated by subtracting data for the respective period from the cumulative total.
- Segment sales include intersegment sales.
- The Company carried out a three-for-one common stock split on April 1, 2020. The impact of said stock split is reflected in “Net income per share”
and "Dividends per share" presented for fiscal 2021.
- Due to a shift from business based on expert service know-how specific to the financial sector to knowledge-intensive business using a template ofgeneral, financial sector know-how, transactions with certain clients were booked under Financial IT Business in fiscal 2020 and under Service IT
Business in fiscal 2021. Pages affected: 5, 8, 12, 15 and 16© 2020 TIS Inc.

2

Fiscal 2021 First Quarter: Financial Highlights

Fiscal 2021 Performance Forecast
Reference Materials© 2020 TIS Inc.

3

Fiscal 2021 Fist Quarter: Performance Highlights (YOY change)
・Sales and income down slightly year on year, largely because new order activity stalled due tospread of COVID-19.
First Quarterof Fiscal 2020

First Quarterof Fiscal 2021

100,990

100,399-590[-0.6%]

Operating Income

8,059

7,678-381[-4.7%]

Operating Margin

8.0%

7.6%-0.4P－Net Income Attributable toOwners of the Parent Company

6,106

5,527-578[-9.5%]Net Income to Net Sales Ratio

6.0%

5.5%-0.5P－[Millions of yen]
Net Sales

YOY change

Extraordinary income : ¥5 million (YOY change -¥41 million)
Extraordinary loss
: ¥448 million (YOY change +¥309 million)© 2020 TIS Inc.

4

Fiscal 2021 Fist Quarter:
Sales and Income for Key Business Segments (YOY change)
First Quarterof Fiscal 2020

First Quarterof Fiscal 2021

Net Sales

28,35930,148+1,789[+6.3%]

Operating Income

1,224

1,144-79[-6.5%]

Operating margin

4.3%

3.8%

-0.5P

－Net Sales

7,861

8,280+419[+5.3%]

Operating Income

415557+142[+34.3%]Operating margin

5.3%

6.7%

+1.4P

－Net Sales

26,60325,721-882[-3.3%]

Operating Income

3,077

2,774-302[-9.8%]

Operating margin

11.6%

10.8%

-0.8P

－Net Sales

45,301

43,473-1,827[-4.0%]

Operating Income

3,266

3,104-162[-5.0%]

Operating margin

7.2%

7.1%

-0.1P

－[Millions of yen]
Service ITBusinessBPO

Financial ITBusinessIndustrial ITBusiness

YOY change-Service IT Business: Despite challenging demand situation for ERP-related services, sales up, mainly due to wider demand for
payment-related services. Income down, reflecting effect of new subsidiary consolidation.
-BPO: Sales and income up, owing to higher demand for call center operations and operations related to special cash payments.
-Financial IT Business: IT investment at core client companies was firm but sales and income fell, mainly due to project delays
caused by sluggish corporate activity.
-Industrial IT Business: Sales and income down, reflecting trend toward reduced IT investment, primarily among small andmedium-sized companies.
© 2020 TIS Inc.

5

Fiscal 2021 Fist Quarter:
Operating Income Analysis, Increase/Decrease Reasons (YOY change)
・Profitability continued to improve but operating income fell year on year, mainly owing to theimpact of higher selling, general and administrative expenses caused by introduction of better
benefits for employees
Improved
profitability*＋0.47

Increased SGAExpenses*-0.71[Billions of yen]

8.05
Decreased
sales
-0.13

Actual*Excludes effect due to change from costof sales to SGA expenses, paralleling
efforts to enhance organizational
management (cost of sales down ¥0.35billion, SGA expenses up ¥0.35 billion)[-4.7%]Of which, effect of
new subsidiaryconsolidation, etc.
was -¥0.2 billion

Gross profit margin% [YOY change +0.9 points]

23.1

1st Quarter of
Fiscal 2020
Prior investment costs for promoting structural transformation:
Down ¥0.4 billion (YOY change)✓ Software investment to create new services✓ Investment in human resources to fuel structural transformation Costs related to✓ Investment in R&D to acquire advanced technologies
Brand-related costs incurred to ensure quick recognition in market:
Up ¥0.8 billion (YOY change)© 2020 TIS Inc.

-0.38

7.67

1st Quarter of
Fiscal 2021
Changes in SGA Expenses
Fiscal 2020 First Quarter (Actual)

14.40

Enhanced organizational
management+0.35

Effect of new subsidiaryconsolidation, etc.

+0.22

Other decrease+0.49

Fiscal 2021 First Quarter (Actual)

15.46

6Fiscal 2021 Fist Quarter: Sales by Client Sector
・Favorable sales to credit card companies and solid demand from manufacturers, but sales tobanks a challenge. Also saw reactionary drop in sales to other financial services companies and topublic sector.
[Millions of yen]

25,659 25,371
17,297First Quarter of Fiscal 2020

18,284First Quarter of Fiscal 2021[-1.1%]

10,647[+5.7%]

Credit card

ｶｰﾄﾞ

7,720 6,496

6,929

6,951

[-15.9%][+0.3%]

Banking

Insurance

銀行等

10,553
5,244 4,306[+0.9%]

Other finance

その他金融

Assembly-based
組立系製造manufacturing

First Quarter of Fiscal 2020
3.3%
8.0%
17.1%

25.3%

7.7%

8.4%

Financial sector: 36.8%
Public sector: 8.0%
© 2020 TIS Inc.

8,846[+4.0%][-17.9%]

保険

Net Sales
Breakdown
by Client
Sector8,503

Processing-based
ﾌﾟﾛｾｽ系製造
manufacturing

Creditｶｰﾄﾞcard
Banking
銀行等

7,729 7,737

8,029[-15.4%][+0.1%]
Distribution

Service

流通6.9%

Distribution
流通

5.2%

10.5%

4.9%
6.8%

Othersその他

Industrial sector: 51.9%
Other sectors: 3.3%

25.3%

Serviceｻｰﾋﾞｽ
Public公共institutions

公共3,3214,965[+49.5%]
Others

その他

First Quarter of Fiscal 2021

Otherfinance
その他金融

7.6%

Public institutions

ｻｰﾋﾞｽ

Insurance
保険

Assembly-based
組立系製造
manufacturing
Processing-based
ﾌﾟﾛｾｽ系製造
manufacturing

6,791

7.7%

18.2%

Net Sales
Breakdownby ClientSector

8.8%

Financial sector: 35.9%
Public sector: 6.8%

6.5%
6.9%
4.3%

10.6%
Industrial sector: 52.4%
Other sectors : 4.9%
7Fiscal 2021 Fist Quarter: Order Status (Software Development)
・Order volume decreased significantly for Financial IT Business and Industrial IT Business, primarily
because marketing activities to pick up new projects became difficult under states of emergency.
Service IT Business covered the drop in ERP demand with favorable payment-related demand topost an increase in order volume.
First Quarterof Fiscal 2020

First Quarterof Fiscal 2021

Orders received during first quarter

56,62349,804-6,819[-12.0%]Service IT Business

14,34015,068+727[+5.1%]

Financial IT Business

12,9909,770-3,219[-24.8%]Industrial IT Business

29,29324,965-4,327[-14.8%]Order backlog at end of first quarter

79,26476,410-2,853[-3.6%]

Service IT Business

16,293

18,619+2,326[+14.3%]Financial IT Business

22,242

22,722+480[+2.2%]

Industrial IT Business

40,72935,068-5,660[-13.9%][Millions of yen]

© 2020 TIS Inc.

YOY change8

Fiscal 2021 First Quarter: Financial Highlights

Fiscal 2021 Performance Forecast
Reference Materials© 2020 TIS Inc.

9

Assumptions in Fiscal 2021 Performance Forecast—Dealing with impact from COVID-19 pandemic—
Assumptions in Fiscal 2021 Performance Forecast *No change from content disclosed May 12, 2020
• Currently, not possible to realistically predict when COVID-19 will be stamped out, making it difficult toestimate business results.
• Performance forecast for fiscal 2021 will be calculated on assumption of reduced impact from COVID-19
pandemic from second quarter, with economic activity gradually recovering, so that TIS INTEC Group’sbusiness environment normalizes from third quarter.
• Possibility that performance forecast will change, based on actual status of COVID-19 pandemic.

・First-quarter consolidated results:
Aware that progress generally in line with full-year performance forecast
・View of business environment:
Direction uncertain but no change from details noted above

No change to fiscal 2021 full-year performance forecast
The forecast disclosed for the first two quarters of fiscal 2021
is based on various factors, including first-quarter status.
Reference: Status of TIS INTEC Group’s business activities
・The impact of COVID-19 is already affecting some marketing activities, such as product and service ideas for new clients.
But in May, when the government lifted the state of emergency, business activities resumed and, with creative methods tomeet non-face-to-face, marketing activities gradually improved.
・The trend toward reduced IT investment is strong from a short-term perspective, but interest in IT investment to promote
digital processes will remain high over the medium to long term, with inquiries gradually increasing.
© 2020 TIS Inc.

10*No change

Fiscal 2021: Performance Forecasts• COVID-19 pandemic likely to affect business results through second quarter, leading to lower
sales and income year-on-year.
• Will maintain management policy on profitability emphasis and hold operating income margin to10%[Millions of yen]

Fiscal 2020
ActualFiscal 2021
Estimate

YOY change

Net Sales

443,717440,000-3,717[-0.8%]

Operating Income44,839

44,000-839[-1.9%]

Operating Margin

10.1%

10.0%

-0.1P

－

Net Income Attributable toOwners of the Parent Company

29,411

29,500+89[+0.3%]Net Income to Net Sales Ratio

6.6%

6.7%+0.1P－

Net Income per Share (Yen)

116.78117.86+1.08[+0.9%]

ROE

12.5%

11.8%*-0.7P－*ROE for fiscal 2021 is a calculated value.

© 2020 TIS Inc.

11

*No change
Fiscal 2021: Sales and Income for Key Business Segments [Forecast][Millions of yen]
Service IT
BusinessBPO

Financial ITBusinessNet Sales

Fiscal 2020Actual

Fiscal 2021
Estimate

YOY change

125,518

131,500+5,982[+4.8%]

Operating Income

8,198

8,500+302[+3.7%]

Operating Margin

6.5%

6.5%±0.0P－

Net Sales

33,69933,500-199[-0.6%]

Operating Income

2,622

2,600-22[-0.8%]

Operating Margin

7.8%

7.8%±0.0P－

Net Sales

114,472

115,000+528[+0.5%]

Operating Income

14,93615,300+364[+2.4%]

Operating Margin

13.0%

13.3%+0.3P－

202,701

194,000-8,701[-4.3%]

19,15917,900-1,259[-6.6%]

9.5%

9.2%-0.3P－Net Sales

Industrial IT
Operating IncomeBusiness
Operating Margin- Service IT Business: Anticipate higher sales and income year on year as clients’ investment in IT, such as payment services and thecloud, generates demand that offsets negative factor involved in bringing new companies into Group as consolidated subsidiaries.
- BPO: New orders may be impacted by prevailing challenges, but changes in the business environment will probably have only
minimal overall impact. Nevertheless, expecting slightly lower sales and operating income.
- Financial IT Business: Will capture IT investment demand from core clients, emphasize value-added services and improve
productivity, which should underpin higher sales and income.
- Industrial IT Business: Anticipate negative effect from reduced IT investment by clients in manufacturing sector and small andmedium-sized companies, causing drop in sales and income.
© 2020 TIS Inc.

12

Fiscal 2021: Operating Income Analysis, Increase/Decrease Reasons[Forecast]• Expect to maintain year-on-year par on a performance basis excluding such factors as the impact of
newly consolidated subsidiaries.
• Will maintain investment that contributes to future growth, while promoting enhanced cost-control,
which includes sustained approaches to boost productivity and the results of “G20” project to elevatehead office functions.
Performance-based

44.83

Decreasedsales-0.95

YOY change

Increased SGA
expenses*+0.65[Billions of yen]

Others
Improved(Impactof newly
profitability*
consolidated+0.31
subsidiary)*Excludes effect due to change from cost
-0.84

44.00

-0.83

[-1.9%]

of sales to SGA expenses, paralleling
efforts to enhance organizationalmanagement (cost of sales down ¥1.5billion, SGA expenses up ¥1.5 billion)

Gross profit margin
Target 24.3% [YOY change +0.4 points]
Fiscal 2020
Anticipated prior investment costs for promoting structural transformation:
Up ¥1.1 billion (YOY change)✓ Software investment to create new services✓ Investment in human resources to fuel structural transformation Costs related to✓ Investment in R&D to acquire advanced technologies
Anticipated brand-related costs incurred to ensure quick recognition in market:
Up ¥0.5 billion (YOY change)© 2020 TIS Inc.

Fiscal 2021
Changes in SGA Expenses
Fiscal 2020 (Actual)

61.05

Enhanced organizational
management-1.50

Effect of new subsidiaryconsolidation, etc.

+1.09

Other decrease-0.65

Fiscal 2021 (Forecast)

63.00

13

Fiscal 2021 First Quarter: Financial Highlights

Fiscal 2021 Performance Forecast
Reference Materials© 2020 TIS Inc.

14

Fiscal 2021 Fist Half:
Sales and Income for Key Business Segments [Forecast][Millions of yen]

Fiscal 2020
First Half

Fiscal 2021
First Half

YOY change

Net Sales

216,296

210,000-6,296[-2.9%]

Operating Income

19,10017,500-1,600[-8.4%]

Operating Margin

8.8%

8.3%

-0.5P

－Net Income Attributable toOwners of the Parent Company

13,266

12,000-1,266[-9.5%]Net Income to Net Sales Ratio

6.1%5.7%-0.4P－Net Sales

59,86764,000+4,133[+6.9%]

Operating Income

2,457

2,500+43[+1.8%]

Operating Margin

4.1%

3.9%-0.2P－

16,221

16,700+479[+3.0%]

Operating Income

993

1,200+207[+20.8%]Operating Margin

6.1%

7.2%+1.1P－Net Sales

55,45653,000-2,456[-4.4%]

Operating Income

6,925

6,400-525[-7.6%]

Operating Margin

12.5%

12.1%-0.4P－Net Sales

99,41391,000-8,413[-8.5%]

8,512

7,400-1,112[-13.1%]

8.6%

8.1%

-0.4P

－Key Business Segments
Service ITBusiness

Net Sales
BPO

Financial IT
Business

Industrial IT
Operating Income
Business
Operating Margin© 2020 TIS Inc.

15

Fiscal 2021 Second Half:
Sales and Income for Key Business Segments [Forecast][Millions of yen]

Fiscal 2020
Second Half

Fiscal 2021
Second Half*

YOY change

Net Sales

227,420230,000+2,580[+1.1%]

Operating Income

25,73926,500+761[+3.0%]

Operating Margin

11.3%

11.5%+0.2P－Net Income Attributable toOwners of the Parent Company

16,14417,500+1,356[+8.4%]Net Income to Net Sales Ratio

7.1%

7.6%+0.5P－Net Sales

65,65067,500+1,850[+2.8%]

Operating Income

5,741

6,000+259[+4.5%]

Operating Margin

8.7%

8.9%+0.2P－Net Sales

17,47816,800-678[-3.9%]

Operating Income

1,629

1,400-229[-14.1%]

Operating Margin

9.3%

8.3%

-1.0P

－

Net Sales

59,01662,000+2,984[+5.1%]

Operating Income

8,010

8,900

+890

[+11.1%]

Operating Margin

13.6%

14.4%+0.8P－

103,287

103,000-287[-0.3%]

10,646

10,500-146[-1.4%]

10.3%

10.2%

-0.1P

－Key Business Segments
Service ITBusinessBPO

Financial ITBusinessNet Sales

Industrial ITOperating IncomeBusiness
Operating Margin© 2020 TIS Inc.

16

TIS INTEC Group Logo Underlying Concepts
The logo portrays the TIS INTEC Group as a tightly knit team, powered forward by the different sets of expertise that each member brings to thetable. It features our two main corporate colors: “ocean blue” for the new challenges that we are constantly tackling, and “intelligent gray” for thesolid technological foundations that underpin our business.

Brand Message “Go Beyond”
The brand tagline, “Go Beyond,” embodies our constant quest into the beyond in search of new challenges. It represents our firm commitment asa group to delivering solutions that are always one step ahead, not only solving clients’ problems but anticipating and meeting their own
customers’ needs too.