Information Meeting Materials
for the First Two Quarters of the Fiscal Year ending March 31, 2011

November 4, 2010

Copyright © 2010 IT Holdings Corporation

Contents

Fiscal 2011 Two-Quarter Highlights
Fiscal 2011 Full-Year Performance Forecast
Progress on Key Strategies for Medium-term
Medium term GrowthThree-Company
ee Co p y Merger
e ge andd Stronger
S o ge GGroup
oup Management
ge e S
Structure
uc u eCopyright © 2010 IT Holdings Corporation

1

Contents

Fiscal 2011 Two-Quarter Highlights
Fiscal 2011 Full-Year Performance Forecast
Progress on Key Strategies for Medium-term
Medium term GrowthThree-Company
ee Co p y Merger
e ge andd Stronger
S o ge GGroup
oup Management
ge e S
Structure
uc u eCopyright © 2010 IT Holdings Corporation

2

Fiscal 2011 Two-Quarter Performance Summary: ITHD (Consolidated)
First Two Quarters of First Two Quarters of
Fiscal 2010
Fiscal 2011

(Millions of yen)
Net sales

146,954YOY Change

Original Estimates

154,009

4.8%

7,055

Difference from
Original Estimate

165,000(6.7)%(10,991)

Outsourcing and network

41.9%

61,62340.5%

62,322

1.1%

699

39.1%

64,500(3.4)%(2,178)

Software development

47.8%

70,30849.7%

76,551

8.9%

6,243

51.2%

84,500(9.4)%(7,949)

Solution services

8.0%

11,798

7.3%

11,292(4.3)%

(506)

7.9%

13,000 (13.1)%(1,708)

Oth b
Other
business
i

2 2%
2.2%

3 224
3,224

2 5%
2.5%

3 843
3,843

19 2%
19.2%

619

1 8%
1.8%

3 000
3,000

28 1%
28.1%

843

Operating income

4.0%

5,805

3.0%

4,667 (19.6)%(1,138)

2.9%

4,800

(2.8)%(133)

Recurring profit

3.9%

5,792

3.1%

4,762 (17.8)%(1,030)

2.9%

4,800

(0.8)%(38)

Net income

2.2%

3 207
3,207

0.7%

1 004 (68.7)%
1,004(2 203)(2,203)

0.5%

800

25.5%

204

External environment

Net sales
Operating income
Noteworthy Developments

Rallying exports and higher production output had prompted a feeling that business conditions were getting better, but
accelerated yen appreciation and fears of a worldwide economic slowdown emerged, creating conditions that obscured the roadahead. As a result, clients maintained their cautious stance toward IT investment, with only a few exceptions.
Despite the contribution from SORUN,SORUN net sales were below target as clients increasingly tightened their IT budgets.
budgets
Efforts to reinforce the business structure, with a focus on cost-cutting, were successful, so even though net sales did not increase
as planned, operating income was generally in line with expectations.
The Company posted an extraordinary loss of ¥2.2 billion on asset retirement obligations.

Net Sales by Client Sector (contribution to total)
Fiscal 2010 First Two Quarters

8.2%

2.3%

Fiscal 2011 First Two Quarters

7.6%

19.7%

17.3%

7.9%

8.9%
10.5%

12.1%

Copyright © 2010 IT Holdings Corporation

5.7%

17.3%
7.9%

17.9%

7 5%
7.5%

6.6%
6
6%
6.5%

7.4%
3

8.5%

14.3%

6.0%

■Credit card
■Banking■Insurance■Other finance■Assembly-based■Assembly
basedmanufacturing■Processing-based
manufacturing■Distribution■Services■Public institutions■OthersReference: Fiscal 2011 Two-Quarter Performance Summary
ITHD (Consolidated, excluding SORUN)(Millions of yen)First Two Quarters of First Two Quarters of
Fiscal 2010
Fiscal 2011

Net sales

146,954YOY Change

Original Estimates

132,874(9.6)%(14,080)

Difference from
Original Estimate

143,270(7.3)%(10,396)

Outsourcing and network

41.9%

61,623

43.5%

57,861(6.1)%(3,762)41.7%

59,810(3.3)%(1,949)Software development

47.8%

70,30846.1%

61,266 (12.9)%(9,042)

48.1%

68,900 (11.1)%(7,634)

Solution services

8.0%

11,798

7.6%

10,059 (14.7)%(1,739)8.2%

11,810 (14.8)%(1,751)

Oth b
Other
business
i

2 2%
2.2%

3 224
3,224

2 8%
2.8%

3 688
3,688

14 4%
14.4%

464

1 9%
1.9%

2 750
2,750

34 1%
34.1%

938

Operating income

4.0%

5,805

3.8%

5,105 (12.1)%

(700)

3.7%

5,356

(4.7)%(251)

Recurring profit

3.9%

5,792

3.9%

5,189 (10.4)%

(603)

3.7%

5,346

(2.9)%(157)

Net income

2.2%

3,207

1.2%

1,597 (50.2)%(1,610)

1.0%

1,416

12.8%

181

The figures above exclude SORUN’s consolidated results and amortization of goodwill in SORUN.

Net Sales by Client Sector (contribution to total)
Fiscal 2010 First Two Quarters

8.2%

2.3%

Fiscal 2011 First Two Quarters

19.7%

17.3%

8.7%

7.9%

8.9%
10.5%

12.1%

Copyright © 2010 IT Holdings Corporation

2.7%

19.3%

17.8%

6.6%
6.5%

8.5%
7.4%

8.3%
9.8%

4

11.7%

5.8%

■Credit card
■Banking■Insurance■Other finance■Assembly-based
manufacturing■Processing-based
manufacturing■Distribution■Services■Public institutions■Others

Fiscal 2011 Two-Quarter Performance Summary:
TIS (Consolidated), INTEC (Consolidated)
TIS, Consolidated(Millions of yen)

Wider push to clients in the financial, manufacturing and service industries.
Provides one-stop access to IT services, from development of platform systems to data center services.
Difference fromFirst Two Quarters of First Two Quarters of
YOY Change
Original Estimates
Fiscal 2010
Fiscal 2011
Original Estimate

Net sales
Outsourcing and network

38.1%

Software development

51.0%

Solution services

10 9%
10.9%

Other business-

Operating income

4.6%

Recurring profit

5.1%

Net income

3 1%
3.1%

INTEC, Consolidated(Milli(Millions
off yen))

44,472
16,95022,692
4 830
4,830
2,024
2,262
1,368

39.0%
50.2%
10 4%
10.4%
0.3%
3.5%
4.1%
0 5%
0.5%

39,38915,37819,785
4 094
4,094
131
1,384
1,610
213

(11.4)%(9.3)%(12.8)%(15 2)%(15.2)%(31.6)%(28.8)%(8 )%(84.4)%(5,083)(1,572)(2,907)
(736)
131
(640)
(652)
(
(1,155)
)

35.7%
53.4%
10 7%
10.7%
0.2%
3.4%
3.4%
0 9%
0.9%

44,00015,70023,500
4 700
4,700
100
1,500
1,510
400

(10.5)%(2.1)%(15.8)%(12 9)%(12.9)%
31.0%(7.7)%
6.6%(46 8)%(46.8)%(4,611)(322)(3,715)
(606)
31
(116)
100
(
(187)
)

Strength in several client sectors, particularly financial, manufacturing, distribution, medical and public service
industries.
First Two Quarters of First Two Quarters ofDifference fromYOY Change
Original Estimates
Original Estimate
Fiscal 2010
Fiscal 2011

Net sales

51,755

Outsourcing and network

38.1%

Software development

50 2%
50.2%

Solution services

7.6%

Other business

4.1%

Operating income

4.4%

Recurring profit

3.5%

Net income

3.8%

48,873

19,705

38.7%

25,956
3,949
2,143
2,286
1,819
1,950

49 9%
49.9%
6.4%
5.0%
3.9%
3.6%
2.3%

(5.6)%

18,928(3.9)%

24,368
3,142
2,434
1,915
1,758
1,117

( )%
(6.1)%(20.4)%
13.6%(16.2)%(3.4%(42.7)%(2,882)
(777)

38.7%

(1,588)
(807)
291
(371)
(61)
(833)

49 4%
49.4%
7.4%
4.5%
4.1%
3.5%
1.8%

51,200(4.5)%(2,327)

19,800(4.4)%(872)

25,300
3,800
2,300
2,100
1,800
900

(3 7)%(3.7)%

(932)
(658)
134
(185)
(42)
217

(17.3)%
5.8%(8.8)%(2.3)%
24.1%“INTEC (consolidated) ” covers INTEC’s non-consolidated results and those of the company’s 12 existing subsidiaries. Chuo System Corporation and IUK Inc., which were put under the direct controlof ITHD in April 2010, are not included in the scope of INTEC consolidation.

Copyright © 2010 IT Holdings Corporation

5

Fiscal 2011 Two-Quarter Performance Summary:
SORUN (Consolidated), UFIT (Consolidated), Agrex (Consolidated)
SORUN, Consolidated(Millions of yen)
Net sales
Outsourcing and network
Software development
Solution services
Other business
Operating income
Recurring profit
Net income

Focus on clients in financial and manufacturing industries but working to achieve good balance of business withorders from the telecommunications and public service industries. Also develops systems for aerospace industry.
Difference fromFirst Two Quarters First Two Quarters of
YOY Change
Original Estimatesof Fiscal 2010
Fiscal 2011g
Estimate
Original
20.8%
73.1%
5.1%
1.0%
2.6%
2.6%
1.2%

22,916
4,757
16,748
1,177
234
606
595
273

21.1%
72.3%
5.8%
0.7%
0.2%
0.3%
(0.5)%

21,135
4,461
15,285
1,233
155
48
59
(107)

(7.8)%(6.2)%(8.7)%
4.8%(33.8)%(92.1)%(90.1)%-(1,781)(296)(1,463)
56
(79)
(558)
(536)
(380)

21.6%
71.8%
5.5%
1.2%
(0.3)%(0.3)%(0.6)%

21,7304,690
15,600
1,190
250
(70)
(60)
(130)

(2.7)%(4.9)%(2.0)%
3.6%(38.0)%
-

(595)
(229)
(315)
43
(95)
118
119
23

SORUN’s results for the first two quarters of fiscal 2010 were excluded from ITHD’ results for that period because the company did not become a subsidiary of the Company until December 2009.
2009

UFIT, Consolidated(Millions of yen)
Net sales
Operating income
Recurring profit
Net income

Agrex, Consolidated(Millions of yen)
Operating income
Recurring profit
Net income
Operating income (loss)

ITHD holds 70.4% equity. Particularly strong in services for credit card and consumer finance companies.
Focuses on outsourcing services.
Difference fromFirst Two Quarters First Two Quarters of
YOY ChangegOriginalg
Estimatesof Fiscal 2010
Fiscal 2011
O i i l Estimate
Original
E ti t
6.1%
6.3%
3.4%

21,953
1,343
1,380
743

5.1%
5.3%
2.1%

18,404935
971
395(16.2)%(30.4)%(29.6)%(46 8)%(46.8)%(3,549)
(408)
(409)
(348)

5.8%
6.0%
0.1%

20,000
1,160
1,190
10

(8.0)%(19.4)%(18.4)%
3850.0%(1,596)
(225)
(219)
385

ITHD holds 50.6% equity. Leader in Japan’s BPO business.
Listed on Tokyo Stock Exchange First Section (securities code: 4799).
First Two Quarters
off FiFiscall 2010

First Two Quarters of
Fi l 2011
Fiscal12,950236
227
33

13,494
290
304
(87)

1.8%
1.8%
0 3%
0.3%

2.1%
2.3%
(0 6)%(0.6)%YOY Change
4.2%
22.9%
33.9%
-

Performance goals in the table above are the initial targets announced prior to the revised forecast dated October 27, 2010,

Copyright © 2010 IT Holdings Corporation

6

544
54
77
(120)

Original Estimates
1.5%
1.5%
(0 9)%(0.9)%

13,400
200
200
(120)

Difference from
Original Estimate
0.7%
45.0%
52.0%
-

94
90
104
33

Net Sales and Operating Income Analysis for First Two Quarters of Fiscal 2011
(YOY Comparison)＜ Net Sales ＞(Billions of yen)
TIS,
Consolidated

INTEC,
Consolidated

SORUN,
Consolidated

UFIT,
Consolidated

Agrex,
Consolidated

Other

154.0
146.9

- 3.5
- 5.1

- 2.9
29

+ 0.5

- 3.0

+ 21.1
21 1
SORUN not yet a subsidiary incorresponding period a year ago, so
impact of consolidation had effect ofincreasing net sales

First Two Quarters of Fiscal 2011

First Two Quarters of Fiscal 2010

＜ Operating Income ＞(Billions of yen)

5.80

TIS,
Consolidated- 0.64
0 64

INTEC,
Consolidated

SORUN,
Consolidated

UFIT,
Consolidated

Agrex,
Consolidated

Other

4.67
- 0.37- 0.44*-0.41+ 0.06+ 0.67*Operating income:+ 0.05*Amortization of goodwill: - 0.49
SORUN not yet a subsidiary incorresponding period a year ago, so
amortization of goodwill is deducted fromSORUN’s contribution to operating income.

First Two Quarters of Fiscal 2011

First Two Quarters of Fiscal 2010
Copyright © 2010 IT Holdings Corporation

7

Fiscal 2011 Two-Quarter Order Status: Software Development
First Two Quarters of Fiscal 2010

First Two Quarters of Fiscal 2011

(Millions of yen)

(Millions of yen)

New order
volumeduring the term
69,808Net sales
for the term
70,308New order
volumeduring the term
78,552

Order backlog Order backlog
at the beginningat the endof the termof the term
52 30852,30852 80852,808Net sales
for the term
76,551

Order backlog Order backlog
at the beginningat the endof the termof the term
51 571
51,57149 57049,570＜New order volume during the term＞＜ Order backlog at the end of the term ＞((Millions of yyen))((Millions of yyen))

78,55269,80818,69921 475
21,475
16,857■Other■SORUN■SORUN,
consolidated

52,30852,30851,571
51,571

15 815
15,815

13 622
13,622■Other■SORUN■SORUN,
consolidated

5,411■INTEC■INTEC■TIS

18,447

24,81625 27425,274

23,517First Two Quartersof Fiscal 2010

18,046

17,722First Two Quartersof Fiscal 2011

Copyright © 2010 IT Holdings Corporation■TIS

17,380,15,158First Two Quarters First Two Quartersof Fiscal 2011of Fiscal 20108

Contents

Fiscal 2011 Two-Quarter Highlights
Fiscal 2011 Full-Year Performance Forecast
Progress on Key Strategies for Medium-term
Medium term GrowthThree-Company
ee Co p y Merger
e ge andd Stronger
S o ge GGroup
oup Management
ge e S
Structure
uc u eCopyright © 2010 IT Holdings Corporation

9

Operating Environment Highlights
Trends by Client Segment(Business Conditions and IT Investment Plans)

Anticipated Scale of Japan’s IT Services Market（（100 millions of yyen））

Finance

110,000

1.2%

1.5%

2.0%

• Credit card, consumer financeSome big companies are pursuing platform system upgrades. But
overall, IT investment is under fiscal pressure, squeezed
primarily by the impact of revised laws and sluggish consumer
spending
spending.
• BankingSome megabanks are investing heavily in IT, paralleling a
recovery in fiscal results.
• Insurance
Corporate attitudes are beginning to divide with respect to IT
investment, due to maturation of the domestic market

1.4%

0.8%

1.0%

0.0%

100,000

-1.0%

-0.8%

-2.0%

Manufacturing
IT investment is picking up, paralleling better business results,
b companies
but
i are beingb i more selective
l i ini theirh i choice
h i off IT
partners and even switching to new providers, depending on theinvestment objective, such as a fine-tuned response to
globalization.

-3.0%
%

90,000-4.0%

Di t ib ti
Distribution

-5.0%
5 0%

Investment in the home market is sluggish, owing to deflation andlackluster consumer spending, but interest in overseas expansion
is boosting demand for IT services outside the home market.

-6.0%

-6.0%
80,000

Energy, Public Sector

-7.0%
2009

2010

2011

2012

Market size

2013

Investment by government agencies and public corporations
remains stable. In energy-related fields, investment efforts are
growing, underpinned by an emphasis on accounting software.

2014

Growth ratio

Compiled
il d byb ITHD fromfGartner’s projections
j i
on Japan’s IT industry
i db servicebyi segment,
released in June 2010.

Copyright © 2010 IT Holdings Corporation

These trends may differ from general industry trends since management’s assumptions also
take into consideration the status of IT investment at the Company’s own clients.
(General reference from Nikkei Shimbun)

10

Status of Principal Clients(Top 10 clients in terms of contribution to net sales in the first two quarters of fiscal 2011)
ClientIndustry

Status of ITHD Group Response

Company A

Credit card

Focusing on maintenance and operation services for upgraded platform system, withrequests for other services, geared to new laws, holding steady.

Company B

Banking

Responding to various requests, including upgrade to peripheral systems, following
completion of large-scale system integration project.

C
CompanyC

Credit card, consumer
financeUpgrade to platform system that started off smaller than expected is moving ahead asplanned, and a full-scale
full scale launch should happen in fiscal 2012.
Demand for existing system operation services is stable, but client is increasingly
reluctant to request other services, such as maintenance.

p yD
Company

Credit card, consumerfifinanceDemand for software development paralleling system integration has settled down, andIT investment pplans are being
g streamlined. Client is keen to cut costs on mainstay
y systemyoperation services.

Company E

ChemicalsClient leaning toward reduced investment in existing systems but considering next
platform system.

Company F

Construction equipment

Specific IT themes have drawn demand for services,
services but client
client’ss IT investment in Japanis on a downtrend overall.
Embedded software development in new domains is still small-scale but client looking toconnect within the group.

Company G

Hardware vendor

Pursuing joint activities,
activities including business alliances in outsourcing,outsourcing but cost
cost-cutting
cutting is apertinent factor in awarding orders.

Company H

Life insurance

Funds initially allocated to a large-scale software development project were redirected
elsewhere before the project reached its peak, which will hold IT investment at thecurrent level.

Company I

Leasing

Conditions in the leasing industry were tough overall, and while demand fordevelopment services is down, demand for system operation services is promising.

Company J

Credit card, consumer
financeDemand, especially for system operation services, is steady. But here is a possibility thatdemand will
ill shrink.
shrinkCopyright © 2010 IT Holdings Corporation

11

Fiscal 2011: Revisions to Full-Year Forecasts: ITHD (Consolidated)
ITHD, consolidated

Original Estimate (May 11, 2010)(Millions of yen)

1st Half

Net sales

2nd Half

165 000
165,000

Outsourcing and network

39.1%

Software development

51.2%

Solution services

7.9%

Other businessb siness

1 8%
1.8%

Operating income

2.9%

Recurring profit
Net income

2.9%

Net sales

Operatingincome0.5%

Full Year

181 000
181,000

64,50036.7%

84,50013,000
3 000
3,000
4,800
4,800
800

52.5%
8.8%
1 9%
1.9%
6.5%
6.2%
2.6%

Revised Estimate (Nov. 2, 2010)
Differences
1st Half
2nd Half
Full Year
1st Half
2nd Half
Full Year(actual)
154 009
154,009
180 991
180,991
335 000 (6.7)% (10,991）
335,000(10 991） (0.0）%(9）(3.2）% (11,000）(11 000）

346 000
346,000

66,50037.9%

95,00016,0003 500
3,500
11,700
11,200
4,700

51.9%

131,000

40.5%
49.7%

179,500
29,000 7.3%
1 9%
1.9%
2 5%
6 500 2.5%
6,500
4.8%
16,500 3.0%
4.6%
16,000 3.1%
1.6%
5,500 0.7%
8.4%

62,32235.9%

76,551
11,292
3 843
3,843
4,667
4,762
1,004

52.5%
9.7%
1 9%
1.9%
6.5%
6.2%
2.5%

64,97838.0%

127,300 (51.2%

171,600 (9.4）%

95,04917,508 8.6%
2 2%
3 457 2.2%
3,457
11,833 4.9%
11,238 4.8%
4,496 1.6%

3.4）%

(13.1）%

28,80028 1%
7 300 28.1%
7,300
16,500 (2.8）%
16,000 (0.8）%5,500 25.5%

First-half results came in below expectations, due to reduced IT investment by clients, but
second-half results should be on target, thanks to positive talks with clients and invigorated
inquiries on projects as well as a year-on-year improvement in order volume for the second
quarter (July through September 2010).
First-half results were along expected lines, and second-half results should also be on track,
supported by solid net sales.

(2,178） (2.3）%(1,522)(

2.8）%(3,700）49(4.4）%

0.1%(7,949）(7,900）9.4%
0.7%(1,708）
1,508( ）
(200）
1
1.2
2
%
12
12.3%
3%
843 ( ）
(43）
800
1.1%
(133）
133
(38） 0.3%
38
4.3）%
(
204
(204）
-

Revised full year estimate, due to actual
first-half results lower than expected. Nochange to second-half forecast.
No change.

Reference: Revisions to Net Sales of Principal Subsidiaries
Net Sales(Millions of yen)

Original Estimate (May 12, 2010)

Revised Estimate (Nov. 2, 2010)

1st Half

1st Half

2nd Half

Full Year

2nd Half

Full Year

Differences
1st Half

2nd Half

Full Year

TIS, consolidated

44,00047,00091,00039,38947,011

86,400(4,611)11(5.1)%(4,600)INTEC consolidated
INTEC,
lid t d51 20051,20058 40058,400109 600
109,600

48 873
48,87358 42758,427107 300
107,300(2 327)(2,327)27(2 1)%(2.1)%(2 300)(2,300)SORUN, consolidated

21,73025,17046,90021,13525,16546,300(595)(5)(1.3)%(600)

UFIT, consolidated

20,00019,00039,00018,40418,99637,400(1,596)(4)(4.1)%(1,600)

Agrex,
g , consolidated

13,40014,90028,30013,494

14,80628,300

94

(94)

-

-

Other

14,67016,53031,20012,714

16,58629,300(1,956)56(6.1)%(1,900)

Copyright © 2010 IT Holdings Corporation

12

Fiscal 2011: Full-Year Forecast (ITHD Consolidated)
Fiscal 2010
(Millions of yen)

1st Half

Net sales

2nd Half

Fiscal 2011
Full Year

146,954

166,902

2nd Half(estimate)

1st Half

313,856

YOY Change
Full Year(estimate)

1st Half

2nd Half

Full Year

154,009180,991

335,000

4.8%

7,055

8.4%

14,0896.7%

21,144

699

0.7%

437

0.9%

1,136

Outsourcing and network

41.9%

61,623 38.7%

64,541 40.2% 126,164 40.5%

62,322 35.9%

64,978 38.0%

127,300

1.1%

Software development

47.8%

70,308 51.3%

85,668 49.7% 155,976 49.7%

76,551 52.5%

95,049 51.2%

171,600

8.9%

6,243 11.0%

9,381 10.0%

15,624

Solution services

8.0%

11,79811798 7.9%

13,22313
223 8.0%

25,02125
021 7.3%

11,29211
292 9.7%

17,50817508 8.6%)
28,80028800 ((4.3)%(506) 32.4%

4,285
4285 15.1%

3 779
3,779

Other business

2.2%

3,224 2.1%

3,469 2.1%

6,693 2.5%

3,843 1.9%

3,457 2.2%

7,300 19.2%

619 (0.3)%

(12)

9.1%

607

Operating income

4.0%

5,805 6.1%

10,191 5.1%

15,996 3.0%

4,667 6.5%

11,833 4.9%

16,500 (19.6)% (1,138) 16.1%

1,642

3.2%

504

Recurring profit

3.9%

5,792

5.9%

5.0%

3.1%

6.2%

4.8%

1,311

1.8%

281

Net income

2.2%

3,207 2.7%

9,927

4,452 2.4%

15,7197,659 0.7%

4,762

1,004 2.5%

11,2384,496 1.6%

(1,030)13.2%

5,500 (68.7)% (2,203)

1.0%

16,000(17.8)%

44 (28.2)% (2,159)

Full-year targets for fiscal 2011 are the revised performance estimates announced on November 2, 2010. Second-half targets are determined by subtracting first-half actual results from second-half estimates.

External environment
Net sales
Operating income

Demand conditions will probably remain difficult because clients need more time to feel that their own situations have fully recovered
and that they have the freedom to resume IT investment at higher levels.
levels
The challenges that characterized the first half will impact the whole fiscal year, but a gradual recovery in order status and the favorable
impact of SORUN’s performance on consolidated results will surely boost net sales over fiscal 2010.
Continued progress in building a stronger business structure, including efforts to trim costs, should keep the Company on track to its
original goal for operating income.

References: New order volume during the term(Millions of yen)
Fiscal 2010
Before the consolidationof SORUN

11,531
10,139ITHD,
consolidated
38,125

9 547
9,547

7 165
7,165
11,33814,504
10,311
13 482
13,482

10,034

1st quarter2nd quarter

Copyright © 2010 IT Holdings Corporation

Fiscal 2011

ITHD,
consolidated
31,683■Other■SORUN,
consolidated■INTEC
■TIS

8,720
ITHD,
consolidated
13,661
38,5196,591
1st quarter

13

7,310
9,982

ITHD,
consolidated
11,61240,034
11,130
2nd quarterReference: Fiscal 2011 Full-Year Forecast
ITHD (Consolidated, excluding SORUN)
Fiscal 2010
(Millions of yen)

1st Half

Net sales

2nd Half

146,954

Fiscal 2011
Full Year

152,868

1st Half

299,822

2nd Half(estimate)

132,874

YOY Change
Full Year(estimate)

155,826

1st Half

2nd Half( )(14,080) 1.9%
288,700 (9.6)%

Full Year( )2,958 (3.7)%(11,122)

Outsourcing and network

41.9%

61,623 40.2% 61,448 41.0% 123,071 43.5%

57,861 38.0% 59,149 40.5% 117,010 (6.1)% (3,762)(3.7)%(2,299) (4.9)%(6,061)

Software development

47.8%

70,308 49.5% 75,727 48.7% 146,035 46.1%

61,266 49.9% 77,774 48.2% 139,040 (12.9)% (9,042) 2.7%

2,047 (4.8)%(6,995)S l i services
Solution
i

8 0%
8.0%

8 1%
8 0%
7 6%
11,79811798 8.1%
12,30612306 8.0%
24,10424
104 7.6%

10 1%
8 9%
(14 7)%
27 7%(1,739)(1739) 27.7%
10,05910059 10.1%
15,71115
711 8.9%
25,77025770 (14.7)%

3 405
3,405

6 9%
6.9%

1 666
1,666

Other business

2.2%

3,224 2.2%

3,388 2.2%

Operating income

4.0%

5,805 5.9%

Recurring profit

3.9%

Net income

2.2%

6,612 2.8%

6,880 14.4%

464(5.8)%

(196)

4.1%

268

8,954 4.9% 14,759 3.8%

5,105 6.9% 10,776 5.5% 15,881 (12.1)%(700) 20.3%

1,822

7.6%

1,122

5,792
5
792 5.7%

8,702
8702 4.8% 14
14,494494 3.9%

5,189
5
189 6.5% 10
10,132132 5.3% 15
15,321321 (10.4)%(603) 16.4%

1 430
1,430

5.7%

827

3,207 2.5%

3,850 2.4%

1,597 2.6%

184 (20.2)%(1,426)

7,057 1.2%

3,688 2.0%

The figures above exclude SORUN’s consolidated results and amortization of goodwill in SORUN.

Copyright © 2010 IT Holdings Corporation

14

3,192 2.4%

4,034 2.0%

5,631 (50.2)% (1,610) 4.8%

Fiscal 2011 Full-Year Forecasts:
TIS (Consolidated), INTEC (Consolidated)
Fiscal 2010

TIS, consolidated(Millions of yen)

1st Half

N t salesNetlFiscal 2011

2nd Half

Full Year

1st Half

2nd Half(estimate)

YOY Change
Full Year(estimate)

1st Half

2nd Half

44 47244,47246 511
46,51190 98390,98339 38939,38947 01147,011(11 4)%
86,40086400 (11.4)%(5 083)(5,083)

1 1%
1.1%

Full Year(5 0)%
500 (5.0)%(4 583)(4,583)

Outsourcing and network

38.1%

16,950 36.9%

17,143 37.5%

34,093 39.0%

15,37832.8%

15,422 35.6%

30,800 (9.3)%(1,572) (10.0)% (1,721) (9.7)% (3,293)

Software development

51.0%

22,692 52.3%

24,335 51.7%

47,027 50.2%

19,78551.5%

24,215 50.9%

44,000 (12.8)%(2,907) (0.5)%

Solution services

10.9%

4,830
4
830 10.8%

5,031
5031 10.8%9,861
9861 10.4%

4,094
409415.3%

7,206
7
206 13.1%

11,30011300 (15.2)%(736) 43.2%

2 175
2,175

14.6%

1 439
1,439

300

-

169

-

300

Other business

-

-

-

-

-

-

0.3%

131 0.4%

169 0.3%-131(120) (6.4)% (3,027)

Operating income

4.6%

2,024 6.5%

3,004

5.5%

5,028

3.5%

1,384 7.9%

3,716 5.9%

5,100 (31.6)%(640) 23.7%

712

1.4%

72

Recurring profit

5.1%

2,262 6.7%

3,114

5.9%

5,376

4.1%

1,610 7.4%

3,500 5.9%

5,110 (28.8)%(652) 12.4%

386 (4.9)%(266)

Net income

3.1%

1,368 4.2%

1,932

3.6%

3,300

0.5%

213 3.9%

1,827 2.4%

2,040 (84.4)%(1,155) (3.3)%

Fiscal 2010

INTEC, consolidated(Millions of yen)

1st Half

Net sales
Outsourcing and network

2nd Half

51,75538.1%

19,705

Fiscal 2011
Full Year57,725
34.6%

19,997

1st Half

109,480
36.3%

Software development

50.2%

25,956 53.8%

31,028 52.0%

Solution services

7.6%

3,949 7.0%

4,054

7.3%

Other business

4.1%

2,143 4.6%

2,646

Operating income

4.4%

2,286 7.6%

Recurring profit

3.5%

1,819

Net income

3.8%

39,702

2nd Half(estimate)

48,87338.7%

18,928YOY Change
Full Year(estimate)

20,572

1st Half

107,300 (5.6)%

58,427
35.2%

36.8%

39,500(3.9)%(2,882)(777)

2nd Half
1.2%
2.9%

56,984 49.9%

24,368 53.1%

31,032 51.6%

55,400 (6.1)%(1,588)

0.0%

8,003

6.4%

3,142 7.3%

4,258 6.9%

7,400 (20.4)%

(807)

5.0%

4.4%

4,789

5.0%

2,434 4.4%

2,566 4.7%

5,000 13.6%

4,376

6.1%

6,662

3.9%

1,915 8.2%

4,785 6.2%

6,700 (16.2)%

7.0%

4,065

5.4%

5,884

3.6%

1,758

7.3%

5.6%

(3.4)%

1,950 2.9%

1,666

3.3%

3,616

2.3%

1,117 3.4%

4,242(105) (38.2)% (1,260)

1,983 2.9%

6,000

3,100 (42.7)%

Full Year702 (2.0)% (2,180)575(0.5)%(202)

4 (2.8)% (1,584)
204 (7.5)%(603)

291 (3.0)%

(80)

4.4%

211

(371)

9.3%

409

0.6%

38

(61)

4.4%

177

2.0%

116

317 (14.3)%(516)(833) 19.0%“INTEC (consolidated) ” covers INTEC’s non-consolidated results and those of the company’s 12 existing subsidiaries. Chuo System Corporation and IUK Inc., which were put under the direct control of
ITHD in April 2010, are not included in the scope of INTEC consolidation.

Copyright © 2010 IT Holdings Corporation

15

Fiscal 2011 Full-Year Forecasts:
SORUN (Consolidated), UFIT (Consolidated), Agrex (Consolidated)
Fiscal 2010

SORUN
(Millions of yen)

1st Half

Net sales

2nd Half

22,916

Fiscal 2011
Full Year

24,06946,985

Outsourcing and network
Software development

73.1%

16,748 70.7%

17,017 71.9%

Solution services

5.1%

5.9%

1,413

5.5%

2,590

5.8%

Other business

1.0%

234 0.8%

187

0.9%

421

Operating income
Recurring profit
Net profit

2.6%

3.9%

937
783
330

3.3%

2.6%
1.2%

1,177

606
595 3.3%
273 1.4%

2.9%
1.3%

10,209

21.1%

4,461

1st Half

Net sales

2nd Half

21,953Full Year(estimate)

23.2%

1st Half

4.6%( )1,096 (1.5)%(685)(6.2)%

(296)

6.9%

377

0.8%

81

17,275 70.3% 32,560 (8.7)% (1,463)

1.5%

258 (3.6)%(1,205)

27.2%

17.0%

440

5,829

22.2%

10,290

1,797

6.5%

0.7%

155 1.1%

265

0.9%

420 (33.8)%(79) 41.7%

78 (0.2)%

(1)

0.2%

6.0%

1,502
1,551
907

3.3%

(92.1)%

60.3%

0.5%

7
232
197

1,233

48
59 6.2%(107) 3.6%

3.5%
1.7%

3,030

4.8%

1,550
1,610 (90.1)%
800

56

(558)
(536) 98.1%(380) 174.8%

Fiscal 2011

20,753Full Year

7.1%

1,543
1,378 0.3%)603 ((0.5)%

Full Year

2nd Half( )46,300 (7.8)%(1,781)

25,16533,765 72.3% 15,285 68.6%

Fiscal 2010

UFIT, consolidated(Millions of yen)

5,452

21.7%

2nd Half(estimate)

21,135

20.8%

4,757

22.7%

1st Half

YOY Change

1st Half

42,706

2nd Half(estimate)

18,404384

565
768 16.8%
577 32.7%

YOY Change
Full Year(estimate)

1st Half

2nd Half

37,400 (16.2)% (3,549) (8.5)%

18,996

Full Year(1,757) (12.4)% (5,306)

Operating income

6.1%

1,343

2.7%

561 4.5%

1,904

5.1%

935

5.2%

985

5.1%

1,920 (30.4)%(408) 75.6%

424

0.8%

16

Recurring profit

6.3%

1,380

2.9%

597 4.6%

1,977

5.3%

971

5.3%

1,009

5.3%

1,980 (29.6)%(409) 69.0%

412

0.2%

3

Net income

3 4%
3.4%

743

6 2%
6.2%

4 7%
4.7%

2 027
2,027

2 1%
2.1%

395

0 9%
0.9%

165

1 5%
1.5%

(46 8)%(46.8)%(87 1)%(87.1)%(1 119)(1,119)(72 4)%(72.4)%(1 467)(1,467)

Fiscal 2010

Agrex, Consolidated(Millions of yen)

1 284
1,284

1st Half

Net sales

2nd Half

12,950Operating income

1.8%

Recurring profit

1.8%

Net income

0 3%
0.3%

236
227

3.1%

33

0 4%
0.4%

Copyright © 2010 IT Holdings Corporation(348)

Fiscal 2011
Full Year

13,6403.1%

560

1st Half

26,590

420

2.5%

418

2.4%

58

0 3%
0.3%

2nd Half(estimate)

13,494

656

2.1%

645

2.3%

91

(0 6)%(0.6)%

16

YOY Change
Full Year(estimate)

14,806

1st Half

2nd Half

Full Year

28,300

4.2%

544

8.5%

1,166

6.4%

1,710

900

22.9%

54

45.2%

190

37.2%

244

290

4.1%

610

3.2%

304

4.0%

596

3.2%

900 33.9%

77 42.6%

178 39.5%

255

(87)

2 1%
2.1%

307

0 8%
0.8%

-

429 3%
429.3%

141 8%
141.8%

129

220

(120)

249

Dividends per Share
Basic Policy

(Yen)

40

• ITHD has made the long-term, comprehensive return of profits
to shareholders a top management priority
priority.
• The Company seeks to maintain stable dividends while taking
into account performance trends, financial status, and the needto enrich retained earnings to support business growth.
•Normally, the Company distributes dividends twice a year: an
interim dividend, at the end of September, and a year-end
dividend, at the end of March.

＜Dividends per Share＞
Annually ¥32.00

30

Commemorative
dividend ¥5.00

20

At year-end¥32 00¥32.0010
0Fi l 2009
FiscalAnnually ¥32.00

Annually ¥32.00((Estimate))

At year-end¥20.00At year-end¥20.00Interim¥12.00Interim¥12.00Fiscal 2010

Fiscal 2011

No interim dividend was distributed in fiscal 2009—the Company’s first fiscal year—
because the books for this inaugural term had not yet closed. However, a year-end
dividend was distributed to shareholders of record.

Reference: Balance Sheet Status
Stat s(Millions of yen)

At Mar. 2010

At Sept. 2010

Current assets

141,967

126,685

Fixed assets

171,109

168,621

Total assets
CurrentCu
e t liabilities
ab t es
Fixed liabilities
Total liabilities

313,077
86,25571,746
158,001

295,30765,666
77,325
142,991

Net assets

155,075

152,315

Copyright © 2010 IT Holdings Corporation

YOY changes

Main Items for Changes

Cash and deposits(7,973), Notes and accounts
receivables ((12,815),,), Inventories +4,333,
Investment securities (5,267),(2,488)
Buildings and structures（net） +3,105(17,770)(20,589) S
Short-termo t te borrowings
bo ow gs (14,415),( , 5), Corporate
Co po ate bonds(4,000)
bo ds( ,000)
5,579 Long-term borrowings +3,037(15,010)
Capital reserve +1,581, Legal reserve (718)(2,760) Minority interests(2,274),
interests(2 274) Net unrealized gains (losses)
on available-for-sale securities(1,357)(15,282)17

Contents

Fiscal 2011 Two-Quarter Highlights
Fiscal 2011 Full-Year Performance Forecast
Progress on Key Strategies for Medium-term
Medium term GrowthThree-Company
ee Co p y Merger
e ge andd Stronger
S o ge GGroup
oup Management
ge e S
Structure
uc u eCopyright © 2010 IT Holdings Corporation18

Progress on Key Strategies (1/2)
Fiscal 2009

Fiscal 2010

Plan Preparation
Flagship account strategy
Expandactivitiesgthroughsynergyfusion

Review meetings forcooperative approach byclient and solution theme

重点施策の進展状況
施進
1/2
Existing
Businesses

Business Development

Overseas
Businesses

Investigation

Manufacturing

Executed in First Two
Quarters of Fiscal 2011

Pursuit(3 companies)

Expansion(9 companies)

9 companies

FinanceAnnouncement of
results(J i order(Jointd results)l )(29 projects/¥2.4 billion)(121 projects/¥5.4 billion)

Build and expand next-generation data
centers (DC)Shinsaibashi gDCPreliminary discussion(38 projects)

Preliminary discussion,
joint seminars,
six exhibitions held.
Unofficial OK and orders
on six projects.
(97 projects / ¥9.3 billion)⇒P.21 for details

Tianjin DC
Takaoka DC

Opened Tianjin DC.
Opened Takaoka DC.
⇒P.22 for details

Expand business presence,
especially in the rest of Asia

Dominant position strategy
in China, specifically,
Opened representative
Tianjin
office in Vietnam
and Beijing, through
SORUN connection

80% of Tianjin DC firststage construction(400 m2)
has been reserved.
⇒P.22 for details

Support clients in their globalization
efforts

Business alliance withBT

IT support for clients’
overseas bases

Suggested Europe VDC toprincipal clients

Solution business

Combine the knowhow and technologies
of TIS and INTEC
into marketable
solutions・ Utilize BT alliance tocultivate cloud telephonybusiness
・ Add to service menu withsolutions aimed at suchtargets as the environment
business
・ Establish department toaddress IFRS

Promoted cloud telephonysolution services
C ll Note
N t (July)(J l )
・Call
・Call Crayon (September)⇒P.23 in details

Create business platform business

Real Cloud Solution(IUK/INTEC Systems
I tit t )Institute)Business platform business(cloud business) ⇒Start withyof services: SaaS,,
three layers
PaaS, IaaS

New
Businesses

Copyright © 2010 IT Holdings Corporation

Fiscal 2012
and Beyond

First Medium-term Management Plan

Preliminary
discussion(35 projects)

Solution Forum

Fiscal 2011 (Planned)

19

GDC Gotenyama
Power and IT
CompanyProgress on Key Strategies (2/2)
Fiscal 2009

Fiscal 2010

Fiscal 2011 (Planned)

Plan Preparation
Visualization
Vili ti off
management system

Manaagement Effficiency

Operations,
Assets,Capital and
Finances

Group presidents
committee, executive
committee andinformationexchange committee

Introducedhihierarchicalhi lmanagement
methodIntroduce CashManagement System(CMS)• CMS: 4 companies →11 companies
Mt cockpit
k it systemt• Management• Management approach⇒P.25 for details

Concentration ofGroup’s headquarter
operationsi

Established IT
Service Force Inc.
(ITSF), sharedcompany(Number of companies
and business activities
targeted)(10 companies/35
operations)(15 companies/60
operations)

Results: 10 companies/38 operations
Under presentation: 1 company/15
operations

Cost reduction throughcentralized purchasing

IImplemented
l
t dG
Group
purchasing forindirect materials

Expand scope of
products
d t underd GGrouppurchasing structure
as well as the numberof companies involved

Targeted products: 8
Targeted companies: 13(Reduction)(¥20 million)(¥60 million)(¥18 million)

Introduce CMS

Made progress toward reduced interestbearing debt through CMS use.
⇒P.24 for details

4

Set up employee healthand welfare benefits
program

Made preparations
for groupwide
health insurance
plan

Enhance Group
communication platform

Introduced groupwide
social networking
systemNumber of registeredusers: 2,300

Promote optimization tocreate a leading corporategroup in the IT industry
industry.

• Established ITSF
• NEXWAY joins the• EstablishedGroup
NEOAXIS• Restructured old TIS • INTEC Holdings
merged into INTEC
Group• SORUN joins Group

Copyright © 2010 IT Holdings Corporation

EstablishEt bli h groupwide
idinformation system

Considering ITSF andWEB OFFICE merger((planned))(Number of companies
targeted)Group Formation

Fiscal 2012 and Beyond

First Medium-term Management Plan

Effective use of capital

Personnel,
Corporate
CultureExecuted in First Two Quarters of Fiscal
2011

Establish groupwide
health insurance plan

20

11

18

Established groupwide health insurance
planConsider integrating
SORUN healthinsurance plan into
Group plan (planned)

Registered users: 3,600• Reassignments: IUK, Chuo System, TIS
Total Service, Oartech.
• Mergers: Keyport Solutions and es
Crew, AC MEDICAL and CRONOVA,
and KOUSHI INTEC and Huma(n)(planned)⇒P.27 for details• Mergers
Planned merger of TIS,SORUN and UFIT.
Planned merger of ITSF
and WEB OFFICE.

Key Strategy Topics: Business Cooperation among Group Companies
Status of Joint Orders
First Two Quarters of Fiscal 2011
Number of orders: 97 (Q1：53, Q2: 44)
Order value: ¥9¥9.3
3 billion (Q1: ¥6¥6.4
4 billion
billion, Q2: ¥2¥2.9
9 billion)

First Two Quarters of Fiscal 2010
Number of orders：39 (Q1：10, Q2：29)
Order value: ¥2.3 billion (Q1: ¥1.4 billion, Q2: ¥900 million)
No.

No.

Support
TIS
TIS
2

UFT

1

UFT

AG

3

1

2

6

12

1

7

8

18

TIS

Other Total

3

TIS

4

AG

Lead

Lead

INT

INT

0

Other

1

1

Total

4

7

2

9

Support

3

5

17

39

INT

SRN

UFT

AG

Other

Total

3

8

1

3

9

24

INT

12

2

8

17

39

SRN

2

1

1

6

10

UFT

2

2

9

1

1

1

4

14

13

39

97

5

AG

INT: INTEC, UFT: UFIT, AG: Agrex, SRN: SORUN

Other

7

1

1

Total

23

9

9

4

Joint Order Expansion Strategies• SORUN’s inclusion in the Group broadened composition of project participation. Aggressively encouraged reciprocal client introductions.
• Promoted mutual understanding of service know-how and solutions under each Group company’s scope of expertise through preliminary
discussions and joint seminars.*• Expanded Group’s flagship account targets from company focus to include industry and region as well. Significantly increased joint orderresultsl fromf
flagship
fl hi accounts, fromf¥800 million
illi iin fi
fiscall 2010 to ¥5¥5.8
8 billibillion in
i firstfi half
h lf off fiscal
fi l 2011.
2011
The suggestion that preliminary discussions improve synergy was written up in the Nikkei Sangyo Shimbun on July 30, 2010.

Copyright © 2010 IT Holdings Corporation

21

Key Strategy Topics: Build and Expand Next-Generation Data Centers
Tianjin Binhai Hi-tech Internet Data Center (Tianjin TIS Hi-tech Information
System Service Co., Ltd. (Tianjin TIS))(Features)• Capable of providing high-security,
high-security high-quality services on a par with those in Japan.
Japan• Facility exceeds Tier 3 of global standard in secure facility status.
• Tianjin TIS cooperating with SORUN offices in China to implement system operation services.
• Facility opened in April 2010 and 80% of first-stage construction—400m2—has already been taken up
by members of China
China’ss financial industry, European manufacturers and Japanese corporations.
• Second-stage construction (500 m2) is moving along as planned

INTEC Manyo Square (INTEC)(Features))(F• Next to under-construction Shin-Takaoka Station (temporary name) on the Hokuriku Shinkansen bullet
train line.
• Realized concepts of “sturdy, highly reliable data center,” “environment-friendly office building,” and“s rro ndings matched structure.”“surroundings-matched
str ct re ”
• Opened in July 2010, with 75% of anticipated capacity for fiscal 2011 (160m2) already allocated toclients.

GDC Gotenyama (TIS)(Features)• Tokyo city-center location within the Yamanote loop line offers excellent accessibility.
• Design based on three concepts: “ecology and society,” “on-demand service” and “high- performance.”• Realized configuration as core of cloud-related
cloud related services in conjunction with urban-format
urban format green data
center Shinsaibashi gDC.
• Opening planned for April 2011. With a considerable client base to tap, TIS has already received its first
unofficial OK from a potential user of services at GDC Gotenyama.
• Acquire top rank under CASBEE (Comprehensive Assessment System for Built Environment
Efficiency) in Japan.
Copyright © 2010 IT Holdings Corporation

22

Illustration

Key Strategy Topics: Cloud-based Business
ITHD Group Cloud Services
Level

SaaS

Launched Services in Cloud Telephony Business
High-level voice communication combining telephone equipment/network voice
andd th
the Internet
I tt as a cloudl d service.
iService
SKIPaaSi TRe
i-TRe
Quefit ZeeM
…

PaaS
IaaS

Cloud Telephony
TIS Enterprise Ondemand Service
Real Cloud Solutions…

Part 1: July 26, 2010

Part 2: September 29, 2010

Visualize response to advertising by tracking
incoming calls.
Call Notes, a SaaS-style incoming callmanagement service
service, was applied to Hot Pepper
FooMoo by Recruit.

Call Crayons, a new Internet- and phone-linked
communication service facilitated by
PhoneCookie technology (patent pending),enhances corporate connection to clients.
clients
Four companies have signed up on a trial basis.

Expand target segment to include companies that offer
services online and over the phone as well as companies,
companies suchas call centers, that deal with clients over the phone.

Sales directed mainly toward companies that extend services
to clients over the Internet
Internet. (Also considering tieups with
CRM-related vendors, CTI vendors, contact center/BPO
providers.)

Net sales should reach ¥1 billion in three years.

Aim for net sales of ¥3 billion in three years.

Know-how accumulated
through network
operations

Know-how
accumulated throughwebsite development
Copyright © 2010 IT Holdings Corporation

23

Key Strategy Topics: Boosting Group’s Capital Efficiency
Began expanding groupwide cash management system in April 2010, raising coverage from four companies
to 11, as of September 30, 2010, and accelerated reduction of interest-bearing debt through enhanced
ggroupwide
pcapitalpefficiency.
yInterest-bearing debt at the end of September 2010 was ¥15.4 billion less than it was at the end of March
2010. Short-term loans, following the tender offer for SORUN stock, hit ¥19.5 billion, but decreased ¥10.4
billion, to ¥9.1 billion.
→Sustained from December 2010 through long-term loans of three-to-five year duration.
Reference: ITHD’ Consolidated Interest-Bearing Debt
(Millions of yen)

(19,500)(9,100)Figures for April 1, 2008, are a combined
total using TIS consolidated and INTEC
Holdings consolidated amounts as of March
31, 2008.

Interest-bearing debt
Numbers in parentheses are tender offer portions

Copyright © 2010 IT Holdings Corporation

Cash and deposits

Interest-bearing debt ratio

Interest-bearing debt= Loans + Corporate bonds

24

Equity ratio

Key Strategy Topics: Group Governance Structure
Executive Committee• Monitors business performance at each company.
•Tracks situations, especially business conditions andstatust t off investments,itt att eachh company.

Group Executive Committee

Group Presidents Committee• Committee comprises representatives from 11
principal
i i l companies
i underd ITHD’ direct
di t controlt l whohprovide updates on business performance.
• The committee meets once each quarter.

• Presidents from 15 principal Group
companies sit on this committee.
• The committee meets once each quarter.

Group Information Exchange Committee• Managers from the corporate planning departments at principal
Group companies gather to exchange information on respective
business activities.
• The committee meets once each quarter.

Corporate Administration Department at ITHD and corporate planning departments at Group
companies regularly exchange information and work to pinpoint status of operations groupwide.

・Management cockpit system
・ Management approach・ Group Information System

Establish and strengthen information system platform
within the Group.
Expand cash management system.

Reinforce business foundation
Copyright © 2010 IT Holdings Corporation

25

Contents

Fiscal 2011 Two-Quarter Highlights
Fiscal 2011 Full-Year Performance Forecast
Progress on Key Strategies for Medium-term
Medium term GrowthThree-Company
ee Co p y Merger
e ge andd Stronger
S o ge GGroup
oup Management
ge e S
Structure
uc u eFrom the left:
Masaki Chitose, President, SORUN CORPORATION; Susumu Okamoto, President, IT Holdings
Corporation; Hiroaki Fujimiya, President, TIS Inc.; Takahide Nishino, President, UFIT Co., Ltd.
Copyright © 2010 IT Holdings Corporation

26

Three-Company Merger and Stronger Group Management Structure
Redefining and Enhancing Group Formation (Significant Developments Realized or Expected in Fiscal 2011)
April 2010

May 2010
July 2010
August 2010
O t b 2010
OctoberJanuary 2011
April 2011SORUN, which joined the Group in December 2009, became a wholly owned subsidiary.
IUK and Chuo System moved out from under the INTEC umbrella and became subsidiaries under the
direct control of ITHD. ［①］Status of TIS Total Service changed from subsidiary under ITHD’ direct control to subsidiary of TIS.
Agrex established AC MEDICAL.
Agrex made CRONOVA a wholly owned subsidiary.
Status of Oartech changed from subsidiary of Keyport Solutions to subsidiary of INTEC. ［②］K
KeyporttS
Solutionsl ti
andd es CrewC
merged.
d ［③］AC MEDICAL and CRONOVA merged.
KOUSHI INTEC and Huma(n) will merge. ［④］TIS、SORUN and UFIT will merge. ［⑤］
IT Service Force and WEB OFFICE will merge. ［⑥］

SORUN

Principal
i i l companies
i andd key
k Group companies
i involvedi
l d ini efforts,
ffeitherihalready executed or to be executed in fiscal 2011, to redefine andenhance Group formation are listed below.

ITHD Group

Anticipatingpg changes
g likelyy to unfold in the market,,management tapped three companies that are seen to offer themost effective combination of operations at the present time
and will sharpen the Group’s competitive edge.

①① ChuoIUK

SystemHuma(n)④

KOUSHI
INTEC

INTEC

Joined the Group in December
2009.Became wholly owned
subsidiary in April 2010.

ITHD

TIS

UFIT

Agrex

SORUN

Qualica

AJS⑤
KeyportSolutionsWEB
OFFICE②

Oartech③

es Crew

Copyright © 2010 IT Holdings Corporation⑥

IT Service
Force

Byy centralizing
g the activities of two
shared service companies under one
roof, the Group will promote higher
service efficiency.

More effective operations and a stronger businessplatform
l f
will
ill resultl throughhh a review
i off theh structurall
formation of the INTEC Group.
27

Group Management Structure and Background to Three-Company Merger
Desired Business Portfolio for the ITHD Group[ FY2016 ]Growth ratte

Growth ratte[ FY2009 ]New, promising andoverseas pursuits
Overseas
activities

Consulting

Outsourcing

C
Core
b
businessesi
O t
Outsourcing
i

C
Core
b
businessesi

New Businesses
B i
Businessplatform
services
Other new businesses

Softwaredevelopment

Softwaredevelopment

Solutions

SolutionsOperating income ratio

Operating income ratio

The basic strategy behind the merger of TIS, SORUN and UFIT is to constantly implement measures,with flexibilityy and adaptablepapproachesppin mind,, to redefine and further strengthengGroup
p formationand thereby establish the Group as a leading corporate entity.

Anticipating changes likely to unfold in the market,
market management tapped for merger the three companies with themost potential to underpin the desire growth-oriented Group structure.
Copyright © 2010 IT Holdings Corporation

28

Summary of New Company Following Three-Company Merger
Corporate Outline
Survivingg companyp y

TIS Inc.

Name

TIS Inc.

Representative

Toru Kuwano, President (currently, Executive Vice President, TIS)

Head office address

14-5, Kaigan 1-chome, Minato-ku, Tokyo

Board of Directors (Effective April 1, 2011) (plan)
New Title▽ Chairman

Name
Hiroaki Fujimiya

Current Title
President, TIS Inc.

▽ Vice Chairman

Yoshihiko Takeda

Chairman, UFIT Co., Ltd.

▽ President

Toru Kuwano

Executive Vice President, TIS Inc.

▽ Vice President

Masaki Chitose

President, SORUN CORPORATION▽ Vice President

Takahide Nishino

President UFIT Co.,
President,
Co Ltd.
Ltd▽ Advisor

Susumu Okamoto

Chairman, TIS Inc.

▽ Advisor

Junji Kitagawa

Chairman, SORUN CORPORATION

Copyright © 2010 IT Holdings Corporation

29

Purpose and Effect of Three-Company Merger
Main Purpose of Merger① Reinforce forte system configuration and operation services for clients in the finance industry.
② Promote outsourcing businessbusiness, maximizing combined three-company
three company data center area exceeding 100,000
100 000 m2③ Turn evolving demand for cloud computing—essentially, outsourcing services—into broader business content
by accelerating the transformation of the service expertise acquired by Group companies into solutions andservices.
④ Expand business activities in China, with a focus on one-stop IT services in Beijing and Tianjin.
⑤ Expand scope of engineering activities.
⑥ Strengthen the financial structure of the Group.

Effect of Merger
 Net sales: Seek growth rate surpassing industry average.
 Operatingpg income: Anticipate
p highergincome in three years’ytime, hittingg at least ¥5.0 billion on an annual basis.
Steps for Expanding Scale of Net Sales

Steps for Boosting Profitability◆ Use data centers to underpin higher sales.

◆ Trim investment requirements through reciprocal
use of data centers.

◆ Create new services and solutions.

◆ Improve software production efficiency.

◆ Utilize cross-selling to support higher sales.

◆ Consolidate duplicated,
duplicated peripheral services.
services◆ Secure mobilization capabilities for large projects.

◆ Improve capital efficiency.

◆ Strengthen one-stop business content.

◆ Pursue economies of scale, underpinned bycentralized ppurchasing.
g

Copyright © 2010 IT Holdings Corporation

30

Cautionary Statements• In these materials, ITHD is abbreviated IT Holdings.
• 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 thesematerials.
• Full-year targets reflect revised performance estimates announced on November 2, 2010, with the exception of consolidated results for
Agrex presented on pages 12 and 16.
• Second-half targets have been determined by subtracting first-half actual results from full-year estimates.
• The consolidated figures of each subsidiary group may differ from figures determined on a management approach basis.

IT Holdings Group