Information Meeting Materials
for the Fiscal Year Ended March 31, 2016
May 10, 2016

Copyright © 2016 IT Holdings Corporation All rights reserved.

Fiscal 2016 Financial Highlights
Fiscal 2016 Progress on Key Strategies
New Management Structure, Management Direction, Priority Measures

Fiscal 2017 Performance Forecast
Progress on Integration and Reorganization
Reference Materials

Copyright © 2016 IT Holdings Corporation All rights reserved.

1

Fiscal 2016: Performance Highlights[Millions of yen]

• Higher sales and income year -on-year, thanks to successful efforts to expand business activities and improve profitability against afavorable business backdrop.
• Net sales and operating income exceeded expectations. Net income attributable to owners of the parent copany came in slightly below
target, reflecting impact from reversal on deferred tax assets following tax system revision.

Net Sales ¥ 382,689 million

Operating Income ¥ 24,436 million

YOY change: + 21,664 million [+ 6.0%]
Compared with estimate: +¥ 12,689 million [+ 3.4%]

YOY change: + 3,315 million [+ 15.7%]
Compared with estimate: +¥ 936 million [+ 4.0%]

382,689 370,000

361,025[Estimate]+21,664[+6.0%]Net income
millionattributable to owners ¥ 12,678
of the parent company
YOY change: + ¥ 2,403 million [+ 23.4%]
Compared with estimate: - ¥ 122 million [- 1.0%]

12,678 12,800

24,436 23,500
21,121[Estimate]+3,315[+15.7%]

10,275[Estimate]+2,403[+23.4%]¥117.40
5.9%

OperatingmarginNet Income
per Share¥145.22

6.4%
income to2.8% Netnet sales ratio

Fiscal 2015

Fiscal 2016

In fields where IT investment is showing an
uptrend, accurate identification of client needs
fueled a year-on-year increase in sales, with results
exceeding expectations.

Fiscal 2015

Fiscal 2016

Higher sales and successful efforts to boost
profitability neutralized the effects of tighter IT
investment budgets and reduced scale of businessamong some existing clients, absorbing the impactof unprofitable projects and pushing operating
income up year-on-year and beyond initial target.

Copyright © 2016 IT Holdings Corporation All rights reserved.

Fiscal 2015

3.3%

Fiscal 2016

Net income attributable to owners of the parent
company up year-on-year, paralleling higher operating
income. Fell slightly short of target, owing to impact
from reversal of deferred tax assets. Factors influencing
income included booking of gain on sale of investment
securities and impairment loss accompanying review ofstrategies for data center operations.

2Fiscal 2016: Net Sales and Operating Income Analysis[Billions of yen]

Net Sales

382.68361.02IT Infrastructure
Services+ 7.72[118.20Æ125.92]

Financial IT
Services- 0.02

Industrial IT
Services+ 13.64[79.54Æ79.51][166.35 Æ 180.00]

Other+ 1.42

Inter-segment- 1.11+21.66[14.66Æ16.09][- 17.74 Æ- 18.85][+6.0%]

Fiscal 2015

Fiscal 2016

24.43

Operating Income
Other+ 0.49[2.15 Æ 2.64]

21.12
IT Infrastructure
Services+ 1.74[7.17 Æ 8.92]

Financial IT
Services- 2.18Industrial IT
Services+ 2.92[5.54 Æ 3.36][7.04 Æ 9.97]

Fiscal 2015
Copyright © 2016 IT Holdings Corporation All rights reserved.

+3.31

Inter-segment+ 0.34[+15.7%][- 0.81 Æ- 0.47]

Fiscal 2016
3

Fiscal 2016: Sales and Income for Key Business Segments
IT Infrastructure Services

Financial IT Services[Millions of yen]

Industrial IT Services

Net Sales ¥125,929 million

Net Sales ¥ 79,519 million

Net Sales ¥180,000 million

YOY change: +¥ 7,729 million [+ 6.5%]
Compared with estimate: +¥ 3,929 million[+ 3.2%]

YOY change: - ¥24 million [- 0.0%]
Compared with estimate: - ¥481 million [- 0.6%]

YOY change: +¥ 13,643 million [+ 8.2%]
Compared with estimate: +¥9,000 million[+ 5.3%]

125,929122,000

118,200

79,519 80,000

79,543[Estimate][Estimate][Estimate]+7,729[+ 6.5%]

Fiscal 2015

+ 13,643[ + 8.2%]-24[-0.0%]

Fiscal 2016

180,000 171,000

166,357

Fiscal 2015

Fiscal 2016

Fiscal 2015

Fiscal 2016

Operating Income ¥ 8,924 million

Operating Income ¥ 3,361 million

Operating Income ¥ 9,972 million

YOY change: + ¥1,745 million [+24.3%]
Compared with estimate: + ¥2,124 million [+31.2%]

YOY change: - ¥ 2,188 million [- 39.4%]
Compared with estimate: - ¥2,639 million [- 44.0%]

YOY change: + ¥ 2,923 million [+ 41.5%]
Compared with estimate: + ¥1,272 million [+14.6%]

8,924
7,179 + 1,745[ + 24.3%]

6.1%

Operatingmargin

5,549
6,800

-2,188[-39.4%]7.1%

7.0% Operating
marginFiscal 2015

Fiscal 2016

Stable demand for data center and BPO services,complemented by successful M&A activity, pushed
segment sales higher year-on-year, and this, alongwith effective cost-cutting, helped offset theappearance of some low-profit projects and areduction in the size of orders.

[Estimate]

3,361[Estimate]

Fiscal 2015

4.2%
Fiscal 2016

Trend toward greater IT investment was generally
favorable across the client base, but effect of tighter IT
investment budgets at some existing clients held
segment sales to year-on-year par. Unprofitableprojects compounded the situation, leading to a steep
drop in operating income.

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9,972

6,000
7,049
+ 2,923[+ 41.5%]

4.2%

OperatingmarginFiscal 2015

8,700
[Estimate]

5.5%
Fiscal 2016

Demand was brisk, mainly for energy-related IT
services, as electric power system reform spurred IT
investment activity. Higher sales starting point, alongwith successful efforts to boost profitability, fueled
growth in sales and income.
*Segment sales include intersegment sales.

4Fiscal 2016: Sales by Client Sector[Millions of yen]

84,43377,53553,743 54,442

49,455[+8.9%]

45,785[+1.3%]

27,86725,444

26,33924,972

23,31220,406[+9.5%][+5.5%][-12.5%]

Banking

Insurance

Other finance

29,891[+8.0%]

15,376[+0.3%]

Credit card

36,60334,960 35,06131,775 32,702

13,604[+2.9%][+22.5%][+13.0%]Assembly-based Processing-based
manufacturing manufacturing

Fiscal 2015

Fiscal 2015

Distribution

ServicePublic institutions

OthersFiscal 2016

Credit card

Fiscal 2016

Banking

3.8%
8.3% 14.9%
21.5%

Net Sales
Breakdown by
ClientSector

7.0%
6.9%
6.4%

8.8%
12.7%
9.7%
Financial sector: 35.2 %Public sector: 8.3 %Industrial sector: 52.7 %Other sectors: 3.8%

Copyright © 2016 IT Holdings Corporation All rights reserved.

Insurance
Other finance
Assembly-based
manufacturing
Processing-based
manufacturing
Distribution

4.0%
9.6% 14.2%
22.1%

Net Sales
Breakdown by
ClientSectorServicePublic institutions
Others

7.3%
6.9%
5.3%

8.5%
12.9%
9.2%
Financial sector: 33.7 %Public sector: 9.6 %Industrial sector: 52.7 %Other sectors: 4.0 %5Fiscal 2016: Order Status[Millions of yen]

• Order volume moved in a positive direction, spurred by demand for energy-related IT services. Posted year-on-year increase,as contribution from partial booking of large development projects for clients in credit card sector absorbed reactionary drop inlarge projects for public-sector clients secured in the third quarter of the previous fiscal year.
• Order backlog at year-end was down just a bit year-on-year, despite increase in order volume.

Orders received during fiscal year
¥ 207,345 million

Order backlog at year-end¥ 69,961 million

YOY change: +¥7,503 million [+3.8%]

YOY change: - ¥1,134 million [-1.6%]

207,345

199,842

71,095+7,503[+ 3.8%]

Fiscal 2015
Financial IT Services

73,861

69,226+4,635[+6.7%]

Fiscal 2015

Fiscal 2016

69,961-1,134[-1.6%]

Fiscal 2016

Fiscal 2015

Industrial IT Services

Financial IT Services

133,483

130,616+2,867[+2.2%]

Fiscal 2015

Fiscal 2016

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25,79623,983+1,813[+7.6%]

Fiscal 2015

Fiscal 2016

Fiscal 2016
Industrial IT Services
47,111

44,164-2,947[-6.3%]

Fiscal 2015

Fiscal 2016

*Order volume and backlog at term-end and net sales apply to Software Development only.

6Changes in Orders Received[Millions of yen]

110,457[+ 27.7%]

94,233[+5.7%]

85,11986,24886,472[- 0.4%][- 8.5%][+ 1.6%]

46,680[+ 4.3%][- 1.6%][+ 3.6%]58,09544,76751,171

98,648[+ 10.4%]

89,385[+ 17.2%][+ 1.1%]

108,697

49,57747,731[- 3.1%][+ 2.3%]53,36961,621[+ 6.1%][+ 11.8%][+ 15.2%]

49,466[+ 10.1%]

33,94839,568[- 20.0%][-17.4%]

1st Half
2nd Half
Fiscal 2013

36,895[+ 8.7%]

1st Half
2nd Half
Fiscal 2014

41,654[+ 5.3%]52,362[+ 41.9%]

1st Half
2nd Half
Fiscal 2015

Second quarter of first half

Fourth quarter of second halfFirst quarter of first half

Third quarter of second half

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45,279[+ 8.7%]47,076[- 10.1%]

1st Half
2nd Half
Fiscal 2016

* Orders received during the term apply to Software Development only.
* Percentage figures in columns indicate increase or decrease from the previous term.

7

Changes in Orders Received[Millions of yen]

Financial IT Services
32,06333,304[+13.9%][- 4.7%]

15,705[+ 33.1%]

21,434[+ 9.7%]

19,129[+ 21.8%]

11,870[- 23.0%]

11,684[- 28.6%]

16,358[- 0.0%]

1st Half
2nd Half
Fiscal 2013

30,813[- 3.9%]33,11330,816[- 0.6%][+ 0.0%]20,469[- 4.5%]17,029[- 11.0%]

12,644[+ 6.5%]

13,786[+ 18.0%]

1st Half
2nd Half
Fiscal 2014

62,169[+ 1.9%]51,816[+ 2.5%]29,062[-10.5%]
33,107[+ 15.9%]

29,737[+ 19.6%]
22,079[- 14.0%]

1st Half
2nd Half
Fiscal 2013

55,43453,359[- 10.8%][+ 3.0%]58,568[+ 5.7%]27,551[- 5.2%]

29,108[- 2.1%]30,701[+ 11.4%]

27,883[- 15.8%]

24,251[+ 9.8%]27,867[- 0.1%]

1st Half
2nd Half
Fiscal 2014[+ 16.0%]
23,207[+ 13.4%]
15,203[+ 20.2%]

72,048[+ 35.0%]
34,889[+ 19.9%]
37,159[+ 53.2%]

1st Half
2nd Half
Fiscal 2015

Second quarter of first half

Fourth quarter of second halfFirst quarter of first half

Third quarter of second half

Copyright © 2016 IT Holdings Corporation All rights reserved.

32,431[+ 7.9%][+ 5.2%]

1st Half
2nd Half
Fiscal 2015

Industrial IT Services

41,43038,41018,414[+ 8.1%]
14,017[+ 1.7%]25,900[+ 11.6%]

15,530[+ 2.2%]

1st Half
2nd Half
Fiscal 2016

66,217

67,266[+ 13.1%][- 6.6%]

34,955[+ 13.9%]

35,720[+ 2.4%]31,262[+ 12.2%]

31,546[- 15.1%]

1st Half
2nd Half
Fiscal 2016

* Orders received during the term apply to Software Development only.
* Percentage figures in columns indicate increase or decrease from the previous term.

8

Fiscal 2016: Balance Sheets and Interest-bearing Debt

[Millions of yen]

• Made headway on asset reduction, mainly through a review of data center assets and stockholdings based on capital policy.

¾ Balance Sheets

As of March 31, 2016

¾Assets: ：- ¥9,356 million

As of March 31, 2015

Liabilities
155,955

Liabilities
157,062
Assets345,851

Assets336,495

Net Assets
188,789

Net Assets
180,539¾ Interest-bearing Debt
58,86953.3%

46,158 46,741
52.5%

29,21149.9%¾Liabilities ：- ¥1,107 million• Current liabilities: + ¥ 13,842 million[Includes income taxes payable (¥ 8,858 million)]• Fixed liabilities: - ¥ 14,948 million[Includes deferred tax liabilities (- ¥ 10,280 million) andlong-term loans (- ¥ 8,133 million)]¾Net Assets ：- ¥8,250 million

52,114
43,248• Current assets ：+¥26,216 million[Includes cash and deposits (+¥17,530 million) and notes
and accounts receivable (+ ¥ 5,848 million)]• Fixed assets: - ¥ 35,573 million[Includes investments in securities (- ¥ 22,051 million) andtangible fixed assets (- ¥ 16,184 million)]• Shareholders’ equity: + ¥ 8,175 million• Other total comprehensive income - ¥ 16,026 million¾Equity Ratio ：52.5% [-0.8%]¾Interest-bearing Debt：¥46,158million[-¥5,956million]

18.8%
As
of March 31, 20142014年3月末

15.1%

13.7%

As2015年3月末
of March 31, 2015

As2016年3月末
of March 31, 2016

Interest- bearing debt
有利子負債
Equity ratio
自己資本比率Cash and deposits
現預金Interest-bearing debt ratio
有利子負債比率

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9

Fiscal 2016 Financial Highlights
Fiscal 2016 Progress on Key Strategies
New Management Structure, Management Direction, Priority Measures

Fiscal 2017 Performance Forecast
Progress on Integration and Reorganization
Reference Materials

Copyright © 2016 IT Holdings Corporation All rights reserved.

10

Status of Progress on Third Medium-term Management Plan
Third Medium-termManagement Plan
Basic Concepts

ProfitEmphasis

IT Brain(Expand valueadded business)

Portfolio
Management

Fiscal 2016 Group Management Direction and Results
Management with even greater emphasis on profitability
1. Emphasize ROE as a key performance indicator and strive to boost
corporate value⇒Operating income margin hit 6.4%, ROE moved to 7.0%.
2. Improve profitability from business activities by raising productivity⇒Regrettably, number of unprofitable projects rose. Situation recognizedas major issue of concern within the Group.
3. Shift to management emphasizing return on invested capital⇒Promoted review of data center assets and stockholdings based on
capital policy
Broaden value-added services that contribute to clients’ business expansion
1. Sharpen forte strengths and prime the growth engine⇒Concentrating BPO business at home and abroad under AGREX(in progress)
2. Promote proposal-type business (value-added business)⇒Greatly expanded energy-related IT services
3. Promote industry platform business (market-cultivating business)⇒Extended scope of applications for remote surveillance/preventative
maintenance system CareQube(See page 13 for example of application to IoT/forestry IT)
Seek overall optimization within the Group and highlight businessportfolio management
1. Take first step toward business portfolio management⇒Laid out integration and restructuring plan to create business portfolio
2. Promote reforms in corporate governance⇒Drafted and instituted basic policy on corporate governance
3. Promote integration and consolidate shared Group functions⇒Office consolidation: Nagoya is next (summer 2016), following success inTokyo and Osaka

Copyright © 2016 IT Holdings Corporation All rights reserved.

Going Forward—Key Points

Ensure total commitment
to profitability focus(Work toward ROE of 8%)

Optimize overall Groupcapabilities, utilizing
operating holding company
structure
Expand value-added
business

Sort out business portfolio
Develop and attract
human resources suited tobusiness model
11

Status of Progress on Third Medium-term Management Plan
–Redefining Business Structure
Business Direction for Third Medium-term Management Plan

Examples of activities in value-added creation style approach• Large orders captured, and still being captured, from credit cardcompanies and public sector clients• Scale of activities expanded in energy business, particularly EneLink,and digital integration business• Lines of cooperation strengthened among Group companies to meetneeds of specific clients• Seed money invested in AI business start-up

Copyright © 2016 IT Holdings Corporation All rights reserved.

Examples of activities in market cultivating style approach• Expanded scale of business in the payment settlement market withPAYCIERGE brand• Invested in new company in cloud-type system services business forclients in construction industry• TastyQube introduced into operations at more than 10,000 stores intotal• TIS signed capital and business alliance agreement with PT AnabaticTechnologies Tbk, an IT company listed in Indonesia

12Reference: Wider scope of applications for CareQube, remotesurveillance/preventative maintenance system utilizing IoT
Actual application of CareQube expanding Production equipment makers: Beverage filling machines, paper-making equipment, metal-working equipment, industrial-use kitchen equipment, industrial
waste-processing systems, automated warehouses
 Movable machinery makers: Forestry equipment, work vehicles used at height, agricultural machinery, construction machinery, road construction vehicles,
special-purpose vehicles
 In-house facilities:
Automotive components production facilities, casting machines, industrial waste-processing systems

Application to Light Visualization Network by Light, a Forestry Equipment Handler— Contributing to visualization in forestry operations —Concerns that forestry workers have aboutmachinery and materials management• Don’t notice breakdown/unusual condition of equipment• Can’t pinpoint status of operating equipment• Can’t position equipment in best place

System features• Enables operators to gather machinery operation data and positioning information
remotely• Enables operators to determine timing for equipment maintenance• Information-gathering terminal has excellent anti-shock and anti-vibration features

Enhancing efficiency through remote monitoring offorestry equipment in operation
Cloud
Centralized control

Operatinginformation for eachpiece of equipment

Timber yard
where bucked
logs are piled

Next steps

Information on
all equipment in
operation

Remote operation
monitoring-Equipment
maintenance-Hour meter-Operating times/day
or month-Actual operatingtime/day or month-Maintenanceinformation
Forestry company -Warning

office-Create forestry supply chain
through visualization of bucking
operations-System to ensure safety andpeace of mind of forestry
workers

Wood-chipping facility

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13

Increase business
management efficiency

Boost capital/asset
efficiency

Fiscal 2016: Progress on Key Strategies
Category

Theme

Increase administraive(support) efficiency

Comment

×Pursuing discussions in line with nextstage of Group formation○

Office consolidation in Nagoya set forJuly 2016

・ Improve capital efficiency△

Raise level of capital management ongroupwide basis

・ Improve asset efficiency○

・ Investment strategies△

Reviewed stockholdings, based on
capital policy, and data center
operations△

All logos to be unified from July 2016○

Introduced indicators linked to ROE△

Promoting projects toward IFRS
implementation○

Analyzed response to base erosion andprofit shifting (BEPS) initiative○

Expect to issue integrated reportfrom fiscal 2017△

Focused on steps to promote
greater activity by women in theworkplace・Integrate/consolidate offices

Boost capital/asset
efficiency

Improve PR
efforts and raise
brand profile

Fiscal2016
Grade

Strategies/Approaches

Fiscal2015

Fiscal2016

Fiscal2017

Fiscal2018

・ Standardize administrative
processes
Increase administrative ・ Expand shared systems
groupwide
efficiency
Integrate/consolidate
sharedfunctions
within theGroup

Integrate/centralize
shared functions
within the Group・ Improve public relations efforts
Raise Group awarenessand raise brand profileand cultivate sense of・ Enhance in-houseunity
communication
・ Introduce new key performanceindicators (ROE, ROIC)・ Raise level of accounting andGreater sophistication inrevenue control capabilities
accounting, taxation and・ Tackle local accounting andfinance
Realize higher
taxation topics (overseas)level ofadministrative Shareholder structure ・ Stabilize shareholder structure
management
・ Enhance corporate governanceand IR practices
and IR practices
・ Embrace diversity inGroup human resources employment practices
strategy
・ Train and utilize humanresources
Management withprofitability emphasis

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Other areas

Osaka Nagoya (Overseas)

14

Fiscal 2016 Financial Highlights
Fiscal 2016 Progress on Key Strategies
New Management Structure, Management Direction, Priority Measures

Fiscal 2017 Performance Forecast
Progress on Integration and Reorganization
Reference Materials

Copyright © 2016 IT Holdings Corporation All rights reserved.

15

New Management Structure
New Representative• Pesident and Representative Director :Toru Kuwano• Planned date of appointment: June 24, 2016
New Management Structure• 10-director structure (includes three external
directors)• 5-member structure for Audit & Supervisory
Board (includes three external members)(New) TIS

Noteworthy Features of New Management Structure(1) Group management leveraging benefits of operatingholding company structure• Optimum placement of human resources within the Group• Stronger cooperation between business segments(2) Enhanced corporate governance• Better monitoring capabilities for the Board of Directors• Increase number of outside Audit & Supervisory Board
members to three, from two*After affiliation of ITHD and TIS on July 1, 2016

Candidates for Board of Directors and Audit & Supervisory Board Members-Audit & Supervisory Board Member:-Chairman and Representative Director:
Norio Maenishi
Takuho Shimodaira-President and Representative Director:-Audit & Supervisory Board Member:
Toru Kuwano
Katsuhiko Ishii-Representative Director :-External Audit & Supervisory Board Member:
Mitsushi Nishida-Director:
Josaku Yanai
Taigi Ito
-Part-time Director: Katsuki Kanaoka-External Audit & Supervisory Board Member:-Part-time Director: Shigeki Kusaka
Muneaki Ueda
-Part-time Director: Yoshiyuki Suzuki-External Audit & Supervisory Board Member:-External Director:
Shingo Oda-External Director:
Yoshinobu Ishigaki
Sadahei Funakoshi-External Director:
Kouichi Sano

Group corporate planning division
Copyright © 2016 IT Holdings Corporation All rights reserved.

INTEC Inc.
Candidates for Board of Directors
and Audit & Supervisory Board Member-Chairman and Representative Director :Katsuki Kanaoka-President and Representative Director :Shigeki Kusaka-Representative Executive Vice President:
Yoshiyuki Suzuki-Executive Vice President:
Tomoki Sato
-Senior Managing Director:
Katsuya Hirai-Managing Director
Tadayasu Ueno
-Part-time Director:
Norio Maenishi-Part-time Director:
Josaku Yanai-Audit & Supervisory Board Member: Seiichi Noguchi-Audit & Supervisory Board Member: Yoshie Otaki-Part-time Audit & Supervisory Board Member:
Takuho Shimodaira

16

Management Direction (1)MissionWork toward blended corporate group, as TIS INTEC Group, and promote portfolio management
With market- and client-oriented perspective,• quickly solve internal management issues, and• as a cohesive group, contribute externally to digital management at client companies.
Leverage features of operatingholding company structure

Overall optimizationof Group capabilities

Strive to build structure that derives maximum value from management resources available within the Group• Reinforce forte capabilities in businesses showcasing competitive excellence• Raise level of excellence even higher in regions where Group enjoys comparative advantage over industry rivals and in
businesses, such as BPO, and connect organically with existing businesses.

Key Strategies
Cultivate corporate culture withsense of solidarity• Establish Group vision• Strengthen Group brand power

Generate frontline energy andbuild a business portfolio• Train and keep human resources in management
positions who bring capabilities well suited to thebusiness model• Improve and expand added-value/marketcultivating businesses

Establish new Group governance• Promote best practices• Apply Corporate Governance Code• Enhance internal controls

Underpinned by the new management structure of the TIS INTEC Group, we will raise corporate value.
Copyright © 2016 IT Holdings Corporation All rights reserved.

17

Management Direction (2)Given the huge change in client needs that now characterizes the IT services industry, our goal will be to accelerate efforts
to promote portfolio management under the TIS INTEC Group banner.

Environment surrounding IT services industry

Accelerate efforts to promote portfolio management• Today, IT connects countless companies in the corporate world toeach other as well as companies to customers, all in real time. The
trend toward “digital management” is gaining steam, and clients’requirements are changing as they look beyond existing
improvements to the future and the potential to realize businesses
geared to forward-looking perspectives.

• With clients becoming more selective in their choice of IT service
providers, we run the risk of rapidly losing our competitive edge if we are
not in the top provider group under each business model.

• We, ourselves, are keen to move beyond simply providing clientswith systems, and seek to work alongside clients and move forward
together to achieve success.

• We will take an inventory of current management resources within theGroup and then select-and-concentrate to identify priority resources. We
will boldly invest in segments with growth potential.
• We will prioritize the capabilities of employees as a management resource
to respond flexibly to the changing market environment. We will augment
the training budget and promote new approaches to work.

Desired Growth Cycle
New business investment

Provider selection by clientsBusinesses where the Group enjoys acompetitive advantage, namely, status as top
corporate group in the industry

Improve profitability in applicablebusinesses

Lateral application across applicable industries

Reinforce training and redesign approaches to work to enable employees
throughout the Group to maximize their capabilities
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18

Priority Measures (1)1. Steadily undertake big projects
Big projects will be driver of profit growth during Third Medium-term Management Plan. Highest priority projects will draw on composite capabilities.
⇒ Establish corporate risk monitoring structure different from usual to enhance responsiveness. Apply standardized development platform approach.

2. Reduce unprofitable projects
Huge problem for the Group and eradication is urgent issue.
⇒ Work at early-stage identification of unprofitable projects through such processes as regular “project health checks.”

3. Restructure data center business
Flexible responses to fast-paced changes in the business environment, such progress in cloud computing and increasing commoditization, aregenerating new business opportunities.
⇒ Write off impairment losses, mainly conventional data center assets. Reinforce position as service centers.

4. Promote service-style businesses
Crucial factor in successful business restructuring underpinned by value-added creation style and market-cultivating style services.
⇒ Buds of growth steadily appearing, highlighted by EneLink for the energy sector and remote monitoring/preventative maintenance system
CareQube

5. Promote global businesses
With the domestic IT services market maturing, efforts to extend range of business pursuits essential for long-term growth.
⇒ Accelerate business development with focus on ASEAN local markets through M&A opportunities. Also seek to streamline operations within theGroup.

6. Get more involved, with focus on field of "fintech"—integrating finance and information technology—IoT and AI
Ability to respond to advance of new technologies and emerging industry currents is essential to support clients in their embrace of digital management.
⇒ Promote business development through presence in such fields as online settlement (payment market). Establish corporate venture capital systemthat facilitates fast, strategic investment activity, and offer new forms of added-value through business synergy with venture firms.
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19

Priority Measures (2)— Expand and promote services that create added value• The TIS INTEC Group will have a business portfolio noted for competitiveness, notably, INTEC’s customer relationshipmanagement product (F3) for clients in the finance industry and IoT responses from QUALICA.
⇒ Draw on huge advantages to fuel aggressive investment in growth fields, such as financial technologies and IoT.
• Will secure position as representative system integrator in Japan in payment settlement field. Utilize ability to visualize andimplement business concepts from many years of experience to identify market trends and application techniques that support
competitive superiority. Accelerate business development.

Perception of Business Development in Payment Settlement Sector
Traditional Credit Card Market

Market Creation Players in Growth Domains:
Steady stream of new entries from other industries
Human Resources
Training

Human Resources
Training
Human Resources
Training

Handle platform systems
for multiple credit cardmajorsApplied investment in
new technology
Developed CreditCube,original solution based on
know-how acquired
through big projects.

Application to servicestyle businesses
Developed DebitCube+and PrepaidCube+ toreflect diversification in
payment settlement needs

Investment matched tochanging businessenvironment
Tie in "fintech" andutilize Apigee forapplication programinterface responseGroup Excellence: About 1,400 system engineers under Group umbrella with experience in payment settlement services and IT
Copyright © 2016 IT Holdings Corporation All rights reserved.

20

Priority Measures (2)— Expand and promote services that create added value• Offer one-stop access to rich assortment of payment settlement solutions, from front to back office.
• Anticipate needs, such as diversifying payment settlement requirements and increasingly multifunctional payment terminals,
and establish No.1 service-style business model.
• Promote robust market cultivation by forming capital and business alliances with local companies in growth markets.
Diversification of
payment settlement requirements

Increasingly
multifunctional
m-commerce,
e-commerce growth payment terminals

Cards Smartphone

Terminals

Greater use ofmobile devices,cloud computing

EC

Expanding fringes
of affiliated stores

Front office
Back officee-money
Loyalty points

Payment
settlement
network

IssuerConsolidate know-how accumulated over many years inserving credit card and consumer finance companies toreinforce business development in payment settlement sector
Enter e-money sector through alliances
Goals are to —• establish No.1 settlement solution• turn a profit on new services, and• create No.1 service-style business model

Payment
agencyAcquirer
Brand network

Bangkok
Provided above solutions and know-how to local companies in which
an equity stake taken to encourage local market cultivation
1) Bangkok, Thailand
MFEC Public Company Limited (PromptNow Co., Ltd.): 18%
stake (majority shareholder status)
2) Jakarta, Indonesia
Anabatic Technologies: 20% stake (equity method affiliates)
Copyright © 2016 IT Holdings Corporation All rights reserved.

Singapore
Jakarta21

Priority Measures (3)— Efforts to prevent occurrence of unprofitable projects• Promote best practices within the Group and strive to keep occurrence of unprofitable projects to between 1.0% and 1.5% of
software development sales.

Corporate-level risk management/process optimization• Head office system design x Frontline implementation capabilities = Fewer unprofitable projects(Head office) Will focus on high-risk projects and selectively monitor, follow-up and support activities• Strengthen project risk monitoring• Take part in/support project management divisions(Frontline) Small-scale and maintenance projects, in particular, will be checked out on premises and stick to a process
where measures have been drawn up to address issues

Enhanced engineering capabilties• Turning well-honed production technology into
solutions (C2J, reactive systems)• Better upstream engineering
Synthesis with Nablarch*

Training for technicians• More extensive and enhanced teaching materials for
project management and engineer training• Boost partner procurement capability

Establish and then enhance standards from groupwide perspective and promote application*Nablarch: TIS’ original Java application development/ implementation platformcomprehensively designed for developing corporate information systems

Copyright © 2016 IT Holdings Corporation All rights reserved.

22

Fiscal 2016 Financial Highlights
Fiscal 2016 Progress on Key Strategies
New Management Structure, Management Direction, Priority Measures

Fiscal 2017 Performance Forecast
Progress on Integration and Reorganization
Reference Materials

Copyright © 2016 IT Holdings Corporation All rights reserved.

23

Understanding the External Environment• Although economic path ahead is uncertain, the business environment should remain favorable, against a backdrop of growing IT
investment needs among clients who are increasingly keen on digital management.
• With the business environment humming with activity, ongoing issues will be to secure human resources to meet demand and to
make project management more efficient.

IT Infrastructure Services

To dateFrom now¾Data center business should continue to benefit from trend toward greater use of cloud services.
Inquiries on appropriate management of My Number system should increase.
¾BPO business should see sustained increase in demand for outsourced administrative services
contributing to improved corporate management.

Financial IT Services¾In the credit card sector, IT investment, especially core system replacement demand, will remainhigh.
¾Among banks, system integration and overhauls by the majors have come to an end, but interestin “fintech” and other IT investment will continue to grow as banks push ahead on business andservice reforms.
¾Introduction of negative interest rates could impact the IT investment trends of financial
institutions.

Industrial IT Services¾In manufacturing, service and distribution sectors, companies will continue to invest in frontoffice IT to sharpen competitive edge, especially in marketing-related pursuits, but temporarylull is a worry, given business sentiment.
¾In the public sector, IT investment directed toward the start of the My Number social security
and tax identification system is coming full circle.
¾In the utilities sector, IT investment following changes in the power system structure should
remain brisk even after the start of fully deregulated sales of power in April 2016. IT investment
to facilitate gas system reform should also expand.
Copyright © 2016 IT Holdings Corporation All rights reserved.

* These trends may differ from general industry trends since management’s assumptions
also take into consideration the status of IT investment by clients

24

Fiscal 2017: Performance Forecasts Highlights[Millions of yen]

• Expect year-on-year increases in sales and income.
• Aim to expand business by responding accurately to clients’ IT investment needs and by steadily executing big projects. Will
also roll out profit-improvement measures, including steps to boost productivity and reduce the number of unprofitableprojects.

Net Sales ¥390,000 million

Operating Income ¥ 26,500 million

YOY change: +¥ 7,311 million [+ 1.9 %]YOY change: +¥2,064 million [+ 8.4%]

390,000

382,689[Estimate]

24,436+7,311[+1.9%][Estimate]

YOY change: +¥2,322 million [+ 18.3%]

15,00012,678+2,064[+8.4%]

6.4%

Fiscal 2016

26,500Net income
attributable to owners ¥ 15,000 millionof the parent company

Fiscal 2017

Anticipate higher net sales, underpinned bybusiness expansion through accurate responses toclients’ IT investment needs and by steady
execution of big projects.

Fiscal 2016

Operatingmargin

6.8%

Fiscal 2017

Expect higher operating income, buoyed by thehigher net sales starting point as well as measures
to boost income, namely, a reduction in thenumber of unprofitable projects and an
improvement in productivity.

Copyright © 2016 IT Holdings Corporation All rights reserved.

[Estimate]+2,322[+18.3%]¥145.22Net Income
per Share

3.3%

Net income to
net sales ratio

Fiscal 2016

¥ 172.56
3.8%
Fiscal 2017

Looking at higher net income attributable toowners of the parent company, thanks to higher
operating income.

25

Fiscal 2017:
Net Sales and Operating Income Analysis [Forecast][Billions of yen]

Net Sales

382.68IT Infrastructure
Services-0.22

Financial IT
Services+3.38[125.92 Æ 125.70][79.51 Æ 82.90]

Industrial IT
Services
+8.70

Other
-3.39
[16.09 Æ 12.70]

390.00Inter-segment-1.14[Estimate]+7.31[+19%][-18.85Æ-20.00][180.00 Æ 188.70]

Fiscal 2016

Fiscal 2017

Operating Income

Industrial IT
Services+ 1.42

24.43[9.97 Æ 11.40]

IT Infrastructure
Services-0.52

Financial IT
Services+ 2.73[8.92 Æ 8.40][3.36 Æ 6.10]

Fiscal 2016
Copyright © 2016 IT Holdings Corporation All rights reserved.

26.50
Other
-1.64

Inter-segment+0.07[2.64 Æ 1.00][-0.47 Æ -0.40][Estimate]+2.06[+8.4%]

Fiscal 201726

Fiscal 2017:
Key Business Segment Performances [Forecast]
IT Infrastructure Services[Millions of yen]

Financial IT Services

Industrial IT Services

Net Sales ¥125,700 million

Net Sales ¥82,900 million

Net Sales ¥188,700 million

YOY change: - ¥229 million [-0.2%]

YOY change: + ¥ 3,381 million [+4.3%]

YOY change: +¥ 8,700 million [+4.8%]

125,929

125,700

82,90079,519[Estimate][Estimate]-229[-0.2%]

Fiscal 2016

[Estimate]+3,381[+ 4.3%]Fiscal 2017

188,700

180,000

Fiscal 2016

+ 8,700[+ 4.8%]

Fiscal 2017

Fiscal 2016

Fiscal 2017

Operating Income ¥ 8,400 million

Operating Income ¥ 6,100 million

Operating Income ¥ 11,400 million

YOY change: - ¥ 524 million [-5.9%]

YOY change: + ¥ 2,739 million [+ 81.5 %]YOY change: +¥ 1,428 million [+ 14.3 %]

8,924

7.1%

6,100

8,400

-524
[-5.9%][Estimate]

Operatingmargin6.7%+2,739+1,428 [Estimate][+14.3%]

5.5%

Operatingmargin[Estimate]

3,361 [+81.5%]

7.4%
4.2%

Fiscal 2016

11,400

9,972

Fiscal 2017

Sales and income are expected to decrease yearon-year, but this due to the impact oforganizational restructuring. In actual fact, sales
and income should increase.

Fiscal 2016

OperatingmarginFiscal 2017

Anticipating higher sales and income year-onyear, buoyed by contribution from big
development projects and fewer unprofitableprojects.

Copyright © 2016 IT Holdings Corporation All rights reserved.

Fiscal 2016

6.0%
Fiscal 2017

Looking at an increase in sales and income yearon-year, thanks to growth accompanying an
overall increase in IT investment as well as a
reduction in unprofitable projects and an
improvement in productivity.
*Segment sales include intersegment sales.

27

Fiscal 2017: Dividend Forecast<Policy on return to shareholders>Will adopt total shareholder return measure (total return ratio) to promote shareholder returns throughdividends and an appropriate capital structure through treasury stock buyback.

Target 35% total return ratio(Stable, continuous dividends + share buybacks)

Annual dividend per share (planned): ¥ 36 (up ¥3 from fiscal 2016)
Changes in Dividends per Share
Annual:¥33
Annual:¥30[Anticipated]

Annual:¥36[Estimate]

Annual:¥25
Annual:¥21

¥24

¥22
35.3%

35.0%

22.7%

20.9%

¥17

¥20
30.4%

27.7%

25.6%

¥8

¥10

¥11

¥12

¥7
Fiscal 2013

Fiscal 2014

Fiscal 2015

Fiscal 2016

Fiscal 2017

¥14
31.4%

Dividends(interim)
中間配当金Dividends(term-end)
期末配当金

Total
return ratio
総還元性向

Copyright © 2016 IT Holdings Corporation All rights reserved.

Payoutratio
配当性向

Details on Treasury Stock Buyback
Announced May 10, 2016
1. Reason for acquisition of own shares
To achieve flexibility in capital policy adapted to changes in theoperating environment, and to improve shareholder returns and capitalefficiency.
2. Details on buyback(1) Class of shares to be acquired: Common stock(2) Total number of shares to be acquired: 1,100,000 (maximum)(3) Aggregate acquisition amount: ¥2,100,000,000 (maximum)(4) Period of acquisition: May 11, 2016 – August 10, 2016(5) Method of acquisition: Market purchase through the Tokyo Stock
Exchange*Total return ratio: Total amount of dividends and treasury stockbuybacks as a percentage of net income.

*Total return ratio: Total amount of dividends and treasury stock buybacks as apercentage of net income.

28

Third Medium-term Management Plan:
Status of Key Performance Indicators[Billions of yen]

Net sales
Progress trending above target in medium-term management plan. Prospects good for reaching fiscal 2018 target.

Operating income
Fiscal 2016 result surpassed target. Fiscal 2017 result may come in slightly below target, owing to increased burden fromselling, general and administrative expenses paralleling revision of tax law. Progress will get back on track in fiscal 2018
toward ¥30 billion medium-term target.

ROE
Improved, paralleling higher performance results. By current calculations, could reach medium-term target of 8.0% by fiscal
2017, a year ahead of schedule.

Net Sales

Operating Income

ROE [Current calculations]
300
30.0

4,000
400.0
[Estimate]

Mid-term[Estimate] management
270
plan
27.0

Mid-term

265
26.5

3,900 management
390.0
3,826
382.6
370.0
3,610
361.0

385.0

plan

Mid-termmanagement
plan

244
24.4
235
23.5

7.0%
6.0%

8.0%

Mid-termmanagement
plan

Mid-termmanagement
plan

Mid-term

211 management
21.0
plan

Mid-termmanagement
plan

Fiscal 2015 Fiscal 2016 Fiscal 2017 Fiscal 2018

8.3%

Fiscal 2015 Fiscal 2016 Fiscal 2017 Fiscal 2018

Copyright © 2016 IT Holdings Corporation All rights reserved.

Fiscal 2015 Fiscal 2016 Fiscal 2017 Fiscal 2018

29

Fiscal 2016 Financial Highlights
Fiscal 2016 Progress on Key Strategies
New Management Structure, Management Direction, Priority Measures

Fiscal 2017 Performance Forecast
Progress on Integration and Reorganization
Reference Materials

Copyright © 2016 IT Holdings Corporation All rights reserved.

30

Overall Image of Integration and Reorganization

Day1
April 2016zSome operations at TIS will be transferred to INTEC and vice versa¾ Transfer from TIS to INTEC : Business activities related to national health insurance
program¾ Transfer from INTEC to TIS : Business activities related to electric power and gas sectors,
overseas business activities

Now

Day1
July 2016z Transition to operating holding company structure through merger of ITHD and TIS
z Corporate name will change from IT Holdings to TIS
z Consolidate group brands: Under TIS INTEC Group bannerBusiness
Realignment
during Gap
between Day 1
and Day 2

Day2

z Businesses/operations under consideration for realignment¾ Bank-related business¾ Regional hubs, local area
subsidiaries¾ IT infrastructure¾ Service platforms¾ BPO businessz Realign and integrate operations under organizational and corporate structures that best
demonstrate business strengths, such as business model and management style

Copyright © 2016 IT Holdings Corporation All rights reserved.

31

Progress to Date
Day1

Day 1
(April 2016)z Completed the following transfer of businesses as of Day 1 (April)(1) Business activities related to national health insurance program (TIS⇒INTEC)¾ TIS transfers ¥1.6 billion in net sales to INTEC(2) Business activities related to electric power and gas sectors (INTEC⇒TIS)¾ INTEC transfers ¥2.2 billion in net sales to TIS
z In overseas business, BPO business in Thailand centralized under AGREX (May)Day 1(July 2016)z Preparations moving steadily ahead.

Business Realignment during Gap between Day 1 and Day 2
Bank-related
businessz Priority on discussions to determine approach to integration of some banking-related
business activities

Regional hubs, local
area subsidiaries

z Select several areas as candidates for integration and reorganizationz Plan to pursue detailed discussions later

IT infrastructurez Considering specific measures to achieve efficient operations at data centers (somemeasures started)

Service platformsz (To be discussed later)

BPO businessz Promoting centralization of domestic and international BPO business under AGREX

Copyright © 2016 IT Holdings Corporation All rights reserved.

32

Toward Day 2
Basic Concepts: (1) Optimized Group Formation

Based onDay 1
statusGroup formation based on multi-company structure
utilizing strengths and special qualities of each company• Through discussions on integration and reorganization, we realized that carelessly combining management styles
and various systems, such as personnel systems, could weaken respective strengths of each company• To prevent erosion of strengths and in fact polish these strengths further, we opted for a Group formation built on
multi-company structure

Implement the following steps to build structure that derives maximum value
from management resources available within the Group

1 Realign and integrate businesses and then apply select-and-concentrate approach to redefine business activities• Resolutely promote realignment and integration of businesses scattered among all companies under Group umbrella¾ In business realignment and integration, find formation that best demonstrates business strengths, based not just upon business model
similarities but also on management styles and personnel expenditure structures• Try to predict management environment of the future and fine-tune businesses currently under the umbrella

2 Establish matrix-style cooperation-inspiring group structure (corporations x business domains)• For businesses best left to Group companies to pursue, a format will be introduced—a system designed to reinforce
connections between businesses and functions—to encourage lateral cooperation among companies under theGroup umbrella

Copyright © 2016 IT Holdings Corporation All rights reserved.

33

Toward Day 2
Basic Concepts: (2) Strengthening Group Management Platformz Efforts to reinforce the Group management platform will parallel efforts to redefine the Group formation.

1

Instill new Group vision• Start fostering corporate culture shared throughout the Group. Cultivate shared sense of values groupwide, establish
a vision, and let these qualities and forward-looking perspective be the unifying force that pulls the wholeorganization together.

2

Promote measures that cut laterally across the Group to improve development and operating productivity• Identify best practices from measures undertaken at each company to boost development and operating productivity,and promote these practices across the Group structure. This will help to improve the value of the services provided
and prevent projects from turning unprofitable.

3

Encourage innovation that draws on groupwide know-how• Encourage innovation that consolidates lead-edge technology know-how, such as IoT, financial technologies, AI androbotics, from Group companies and link the knowledge to new value creation for companies, industry and society

4Integrate head office functions and promote common access to such functions• Push toward integration of head office functions and reinforce Group governance.
• Expand scope of applicable shared services, which have been available to some Group companies already, reducemanagement and indirect costs within the Group, and raise service levels.

Copyright © 2016 IT Holdings Corporation All rights reserved.

34

Toward Day 2
View of Business and Organizational Realignment and Integration• Realign and integrate the businesses of Group companies into a formation that achieves the maximum value out ofmanagement resources, based on such key factors as business model, management style and personnel expense structure.
• In the realignment and integration process, look beyond the current allocation of business at Group companies and build aformation from the perspective of overall Group optimization.

TIS Intec Group

TIS

Intec

Company A

Company B

Company C・・・

By ensuring diversity in management styles and personnel cost structures, we will be able to respondflexibly to changing market conditions, changing client needs and changing competitive forces.
Copyright © 2016 IT Holdings Corporation All rights reserved.

35

Fiscal 2016 Financial Highlights
Fiscal 2016 Progress on Key Strategies
New Management Structure, Management Direction, Priority Measures

Fiscal 2017 Performance Forecast
Progress on Integration and Reorganization
Reference Materials

Copyright © 2016 IT Holdings Corporation All rights reserved.

36

Fiscal 2017 First Half:
Sales and Income for Key Business Segments [Forecast]
Operating Income

Net Sales
185,000

182,683

10,000

9,373

+ 627
[Estimate][+ 6.7%][Estimate]+2,317[ + 1.3%]

Operatingmargin5.1%
First Half of
Fiscal 2016

First Half of
Fiscal 2017

First Half of
Fiscal 2016

IT Infrastructure Services

Financial IT Services<Net Sales>
61,10160,900<Net Sales>-201[-0.3%]First Half of
Fiscal 2016

-101[-1.8%]First Half of
Fiscal 2016

First Half of
Fiscal 2017

Industrial IT Services
86,80085,226[Estimate]+2,707[+7.2%]First Half of
Fiscal 2016

+1,574[+1.8%]First Half of
Fiscal 2017

<Operating Income >
2,700
1,816

[Estimate]+884[+48.7%]

5.6%

4.8%

OperatingmarginFirst Half of
Fiscal 2017

First Half of
Fiscal 2016

[Estimate]+143[+4.4%]First Half of
Fiscal 2016

[Estimate]<Net Sales>
40,400[Estimate]First Half of
Fiscal 2017

Operatingmargin

5,500

5,601

[Estimate]<Operating Income >
3,400
3,257

5.3%

Net income attributable to owners of
the parent company

5.4%First Half of
Fiscal 2017

37,693[Millions of yen]

Copyright © 2016 IT Holdings Corporation All rights reserved.

6.7%
First Half of
Fiscal 2017

First Half of
Fiscal 2016

First Half of
Fiscal 2017

<Operating Income >
3,650
3,405
+245
[+7.2%]

4.0%
First Half of
Fiscal 2016

Operatingmargin[Estimate]

4.2%First Half of
Fiscal 2017

*Segment sales include intersegment sales.

37

Fiscal 2017 Second Half:
Sales and Income for Key Business Segments [Forecast]
Operating Income

Net Sales
205,000

200,006[Estimate]+4,994[+2.5%]

Second Halfof Fiscal 2016

15,063

7.5%

Second Halfof Fiscal 201764,82864,800[Estimate]

OperatingmarginSecond Halfof Fiscal 2016

IT Infrastructure Services<Net Sales>

16,500+1,437[+9.5%]

Financial IT Services<Net Sales>
42,50041,826

7,077+2,423[+34.2%]
Second Halfof Fiscal 2016

Second Halfof Fiscal 2017

Industrial IT Services<Net Sales>
101,900
94,774[Estimate]+7,126[+7.5%]+674[+1.6%]

Second Halfof Fiscal 2017

[Estimate][Estimate]-28[-0.0%]

Second Halfof Fiscal 2016

Net income attributable to owners of
the parent company
9,500

8.0%

Second Halfof Fiscal 2017

[Estimate][Millions of yen]

Second Halfof Fiscal 2016

<Operating Income>Second Halfof Fiscal 2017

<Operating Income>Second Halfof Fiscal 2016

Second Halfof Fiscal 2017

<Operating Income>

5,667

3,400

5,000

-667
[-11.8%][Estimate]

1,545

8.7%

Operatingmargin

3.7%
Second Halfof Fiscal 2016

Second Halfof Fiscal 2017

Second Halfof Fiscal 2016

Copyright © 2016 IT Holdings Corporation All rights reserved.

+1,183[+18.0%]

8.0%

6.9%

OperatingmarginSecond Halfof Fiscal 2017

Second Halfof Fiscal 2016

+1,855 [Estimate][+120.1%]

7.7%

7,750

6,567

Operatingmargin[Estimate]

7.6%

Second Halfof Fiscal 2017

*Estimated amounts for the second half of Fiscal 2016 are calculated by subtracting the first half
estimates from the annual estimates of Fiscal 2016. *Segment sales include intersegment sales.

38Cautionary Statements• In these materials, IT Holdings 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 certain assumptions deemed reasonable at this time. No intent is
implied of promise 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.