Presentation of Performance
Fiscal Year Ended March 31, 2017

May 12, 2017

Contents
I . Overview of Performance for the Fiscal Year Ended March 31, 2017
1. Highlights of Performance3

2. Details of Orders Received by Segment

4

3. Details of Net Sales by Segment

5

4. Details of Operating Income

6

5. Trends in Ecosystem Japan Performance7

6. Contract Backlogs

8

II . Full Year Forecasts for the Fiscal Year Ending March 31, 2018
1. Full Year Forecasts for the Fiscal Year Ending March 31, 20189

2. Breakdown of Orders Received, Net Sales and Operating Income

10

III . Trends in Principal Businesses
1. Trends in NTT Fixed-Line Related Business11

2. Trends in NTT Mobile Business

12

3. Trends in NCC Business13

4. Moving Ahead towards “5G”

14

IV . Strategies for Top-Line Expansion
1. Medium- to Long-Term Targets

15

2. M&A Results

16

3. Initiatives Aimed at Further Topline Expansion

17

4. Promotion of Future Structural Reform

18

V . Shareholder Returns Policy (Dividends and Acquisition of Treasury Stock)19

I-1. Highlights of Performance for the Fiscal Year Ended March 31, 2017
Growth in sales and profit due to newly consolidated company; orders received recorded all-time high(Unit: ¥100 million)

Performance inprevious term

Comparisons withthe previous term

Forecasts

Percent of Net Sales

Percent of Net Sales

Difference

Percent of Net Sales

Orders Received

3,701

3,319

+382

3,500

+201

Net Sales

3,341

3,206

+135

3,400

-58

457

433

+23

465

-7

Performance

Gross Proﬁts

Comparisonswith forecasts
Difference

13.7%

13.5%

+0.2 percentage points

13.7%-0.0 percentage points

Selling, General and

206

195

+11

215

-8

Administrative Expenses

6.2%

6.1%

+0.1 percentage points

6.3%-0.1 percentage points

250

238

+11

250

+0

7.5%

7.4%

+0.1 percentage points

253

242

+11

255

-1

7.6%

7.6%

+0.0 percentage points

7.5%+0.1 percentage points

144

154

-9

160

-15

Operating Income

Recurring Proﬁt

Net Income
Attributable to
Owners of Parent[ 167 ]
4.3%

Note: Figures are rounded down to the nearest whole unit.
Figures in brackets show estimates without impairment loss.

7.4% +0.1 percentage points[ +13 ]
4.8%

-0.5 percentage points[ +7 ]
4.7%

Remarks-0.4 percentage points

Orders Received
Orders received increased signiﬁcantly comparedwith the previous ﬁscal year and forecasts because
LTE-A work by mobile telecommunications carriers
moved into top gear and there was an increase inmaintenance process orders from NTT, in addition
to the effect of the consolidation of TOKYO HOSOH
KOGYO CO.,LTD. from this ﬁscal year.

Net Sales
Sales increased compared with the previous
fiscal year as a result of the newly consolidated
company, despite delays in mobile and otherconstruction progress, but there was a failure
to achieve forecasts due to major delays inconstruction progress in projects related to social
systems.

Operating Income
Profit increased compared with the previous
fiscal year, even though there were changes in
the product mix, and it was largely in line with
forecasts due to efforts directed at structuralreform, increasing productivity and cutting costs.

Extraordinary Loss
Impairment of “goodwill” of Ecosystem Japan due
to deterioration in environment for consumer solar
power construction business.

3I-2. Details of Orders Received by Segment
The NTT Engineering business remained robust, and orders received recorded an all-time high.
(Unit: ¥100 million)

Comparisons with
the Previous Term

• Decrease in alliance projects• Decrease in manufacturer-based IT
solution projects• Increase due to newly consolidated
subsidiaries• Decrease in consumer solar
construction projects+382(+11.5%)SocialSystem-Related
and Other-8.4%

SocialSystem-Related
and Other+28.6%-76

Increase in au (3.5GHz) negotiations andwireless construction processes, etc.

+151

3,319

Performance inPrevious Term

NCC
+5.8%

+15

-21

NCC
+11.6%

+29

+201

NTT-G
+15.3%(+5.8%)

Increase in au (3.5GHz)
negotiations and wirelessconstruction processes, etc.

+270

+184
NTT-G
+8.0%

IT
-3.8%

Comparisonswith Forecasts• Orders for expressway electrical construction
failed to materialize• Decrease in consumer solar construction projects• Anticipated overseas projects did not materialize

IT
+6.0%

+31

• Increase in software development projects• Increase in IT solution projects(public sector and corporate)

3,701

NTT Business (Access)Increase in user processes andplatform/maintenance processes
NTT Business (Network)
Downturn in reaction to network
simplification processes
NTT Business (Mobile)
Front-loading of LTE-A negotiation
processes and increase in wirelessconstruction processes

Performance

NTT Business (Access)Increase in user processes andplatform/maintenance processes
NTT Business (Network)
Increase in maintenance processes
NTT Business (Mobile)
Front-loading of LTE-A negotiation
processes and increase in wirelessconstruction processes

3,500

Target4

I-3. Details of Net Sales by Segment
Increase in sales due to newly consolidated subsidiary, despite delays in construction progress• Increase due to newly consolidated
subsidiaries• Decrease in consumer solar
construction projects• Decrease due to delays in receipt
of orders for the mega-solar powerbusiness

Comparisons with
the Previous Term

+135(+4.2%)• Increase in alliance business• Increase in software development projects

NTT-G
+1.1%

NCC
+0.8%

+2

IT
+8.5%

3,206

Performance inPrevious Term

SocialSystem-Related
and Other-12.2%

Comparisonswith Forecasts
IT
+2.0%

+10

NCC
+1.5%

+4

NTT-G
+1.1%

-58

(-1.7%)+20

SocialSystem-Related
and Other+11.7%-93+70• Increase in softwaredevelopment projects• Decrease because orders forexpressway electricalconstruction failed to materialize• Decrease in consumer solar
construction projects• Decrease because anticipatedoverseas projects did notmaterialize

+43

+19
NTT Business (Access)Increase in user processes andplatform/maintenance processes
NTT Business (Network)
Decrease due to delays in electricalconstruction progress
NTT Business (Mobile)
Decrease as a result of delays inconstruction progress due toaccidents(Unit: ¥100 million)

NTT Business (Access)Increase in user processes andplatform/maintenance processes
NTT Business (Network)
Increase in maintenance processes
NTT Business (Mobile)
Decrease as a result of delays inconstruction progress due toaccidents

3,400

3,341

Performance

Target5

I-4. Details of Operating Income
Operating income ended in line with forecasts, due to effect of newly consolidated subsidiary(Unit: ¥100 million)

Main measures to increase productivity• Streamlining through consolidation of access-related backyard operations(workflow standardization and integrated operations)• Streamlining through consolidation of network operations and personnel movement• Reduction of field expenses and indirect expenses

Comparisons with
the Previous Term

+11(+5.0%)

Excluding the newly
consolidated subsidiary

Fall innet sales-8238

Effect of newly
consolidated Cost reduction
Increase insubsidiary
products andproductivity+4-8

Improved
productivity

+7

+13

+0

(+0.1%)
Fall innet sales

Cost reduction-2Comparisonswith Forecasts

-14

250

250

Operating Margin(7.5%)

Operating Margin(7.4%)

Performance

TargetOperating Margin(7.4%)

Performance in Previous Term

6

I-5. Trends in Ecosystem Japan Performance
Initial Objectives of Acquisition• Contribution to COMSYS Group by addition of numerous technicians, including 150 licensed electriciansat Ecosystem Japan• Expansion of corporate solar power business through synergies
Decline in feed-in tariff price
Downturn in solar power generation market
End of public subsidies forsolar power generation in
private houses
Prohibition of partial sales of alow-voltage power generation
system.
Output controls• Utilization of green investment tax
cuts (100%)• Reduction of selling expenses byclosing permanent stores• Management integration with
Solar Service Japan Co.,Ltd.

• 33 technicians actively involved in COMSYS Group• Expansion of EPC and IPP businesses at COMSYS Group

Fall in price of solar power systems and storage batteries
Promotion of zero energy house (ZEH)
Implementation of revisedenergy conservation standards

Liberalization of electricity
retailing
End of public subsidies forstorage batteries• Utilization of green investment tax
cuts (30%)• Establishment of Jibun Denryoku(own electricity) service sales structure• Reduction in selling expenses byclosing permanent stores• Revision of salaries• Consolidation of COMSYS Create
Corporation• Suspension of marketing activities due
to Kumamoto earthquake• Increase in selling expenses due toadvance investment for Jibun Denryoku
service

From April 2020, power generationequipment required for all new construction

Purchasing system• Utilization of human resources fromCOMSYS Group, etc.
• Revision of salaries• Reduction in indirect personnel• Reduction in expenses throughcentralization of sales offices• Reduction in materials expenses

Possibility of demand to switch to captive
consumption in 2022, ten years after
commencement of system

Future Initiatives
Alliances with custom-made andready-built house providers andreal-estate brokers who arepromoting ZEH.

Industrial use

Electricity sales(by COMSYS Create)

Target existing customers withbusiness proposals for captive
consumption-type systems

Residential use

A cumulative total of at least 38,000
installations for residential use so far
Approach potential customers
Net Sales
Operating income/loss

FY March 2015

FY March 2016

FY March 2017

FY March 2018
Target7

I-6. Contract Backlogs
Significant contribution to sales in fiscal year ending March 2018from all-time-high projects carried forward(Unit: ¥100 million)

1,373
,

437

931
SocialSystem-Related
and Other

981

1,013
,

Social System-Related and Other• Increase in private-sector,
demand-related civil engineering
projects• Decline in completed projects
due to delays in orders received
for solar construction projects

+157

898

136
+2

50

IT
+10

NCC

+190

749

NTT

March 2014
Beginning of Term

March 2015
Beginning of Term

March 2016
Beginning of Term

March 2017
Beginning of Term

NTT-Access• Increase in cable tunnel repair
projects• Increase in maintenance projects
NTT-Mobile• Increase in LTE-A negotiations
and construction processes• Increase due to delays in projectprogress

March 2017
End of Term

*All-time-high projects carried forward was ¥101.3 billion recordedat the beginning of fiscal year ended March 31, 2017.

8

II-1. Full Year Forecasts for the Fiscal Year Ending March 31, 2018
Planning on sales and profit growth due to completion of large number ofprojects carried forward and improvement in construction efficiency

Orders Received

Net Sales

Gross Proﬁts

FY March 2017
Performance

FY March 2018
Targets

Comparisons withFY March 2017
Difference

Percent of Net Sales

Percent of Net Sales

3,701

3,600

-101

3,341

3,500

+158

457

475

+17

13.7%

13.6%

-0.1 percentage points

Selling, General and

206

205

-1

Administrative Expenses

6.2%

5.9%

-0.3 percentage points

250

270

+19

7.5%

7.7%

+0.2 percentage points

253

275

+21

7.6%

7.9%

+0.3 percentage points

144

185

+40

4.3%

5.3%

+1.0 percentage points

Operating Income

Recurring Proﬁt

Net Income Attributable to
Owners of Parent

Note: Figures are rounded down to the nearest whole unit.
The contribution from the acquisition of Kando is not anticipated in the forecast values of this business plan.

(Unit: ¥100 million)

Remarks

Orders Received
Forecasting positive expansion in orders received from
non-carrier segment despite a significant decline inreaction to the increase in NTT fixed-line maintenanceprocesses and front-loading of mobile negotiations
and wireless construction processes in the previous
fiscal year.
Net Sales
Forecasting increase in sales due to positive orders
received from non-carrier segment in addition to the large
number of projects carried forward.
0perating Income
Proﬁt is projected to rise due to forecasted sales growth
and the effect of structural reforms and measures toincrease productivity implemented to date.

9II-2. Breakdown of Orders Received, Net Sales and Operating Income(Unit: ¥100 million)
Comparisons with
the Previous Term

Comparisons with
the Previous Term

Orders Received-101

Socialὺ ᾀᾄᾇ
System-Related ίὺᵒᵌᵕᵃὸand Other

Net Sales(-2.8%)

NTT-G+13.2%-11.6%

SocialSystem-Related
and Other

3,701

+5.0%

IT

-235

+41

+12.1%

NCC

+66

+8.9%

IT

3,600

+25
Performance

TargetExpenses for the
consolidation ofComparisons withsubsidiaries
the Previous Termin the previous Strengthening+19
fiscal year of marketing, etc.

Operating Income
Gross profits+4-6(+7.8%)

SG&A expenses

+17

-1

NCC

NTT-G

+7.6%

0.0%

+20

0

+88

+8.9%

+49

3,341
Performance

3,500

Target[ Orders Received ]• NTT ﬁxed-line-related business forecasted to decline in reaction to increase in cable tunnel repair
and maintenance processes in the previous ﬁscal year
• NTT mobile business also forecasted to fall due to impact from front-loading of negotiations andwireless construction processes in the previous ﬁscal year
• NCC business forecasted to rise due to increase in new base station construction for 3.5GHz
and 700MHz bands• IT and social systems-related business forecasted to increase with strengthening of marketing
capabilities aimed at topline expansion[ Net Sales ]

270 ᴾ
250

• Despite completion of projects carried forward from previous ﬁscal year, NTT ﬁxed-line-related
business forecasted to fall due to decline in reaction to network simpliﬁcation• NTT mobile business forecasted to rise despite decline in negotiation processes as wirelessconstruction for 3.5GHz band and 700MHz band moves into top gear
• NCC business forecasted to rise due to increase in orders received for new base station construction
for 3.5GHz and 700MHz bands• IT and social systems-related business forecasted to expand due to expected completion ofprojects carried forward and increase in orders received[ Operating Income ]Performance

TargetProﬁt growth forecasted due to effect of sales growth and results from mobile mix

10III-1. Trends in NTT Fixed-Line Related Business
NTT East and NTT West capex
5,834

NTT EAST

2,940
Investment infiber optics
1,770

NTT WEST

2,894(Unit: ¥100 million)

5,450

No. of FLET’S subscriptions (including optical fiber collaboration)
1,926

1,996

2,076

Net increase

+54

+70

+80

(No. of collaboration agreements)

(469)

(854)

(1,169)FY March 2016
Results

FY March 2017
Forecast

FY March 2018
Target

5,100

2,700

2,500

Investment infiber optics
1,650

Investment infiber optics
1,530

2,750

2,600

Orders received at COMSYS Group (Network)
245

FY March 2017
Forecast

Orders received at COMSYS Group (Access)(Unit: ¥100 million)

973
484

1,061

489
FY March 2016
Results

523

510

538

480

FY March 2017
Results

240
145

120

114

95

85

FY March 2016
Results

FY March 2017
Results

FY March 2018
TargetFirst-half

COMSYS Group materials: Simple total for five companies; NTT Engineering business–Network

990

Second-halfFirst-half

131

FY March 2018
Target[Source: Application document for approval of NTT business plan]
Note: Full-year earnings results for fiscal year ended March 31, 2017 planned to be disclosed on May 15(Unit: ¥100 million)

205
Second-half

FY March 2016
Results(Unit: 10,000 lines)

FY March 2018
TargetCOMSYS Group materials: Simple total for five companies; NTT Engineering business–Access[ NTT Group ]• Capital investment plans by NTT East and NTT West for the ﬁscal year ending March 31, 2018are ¥510.0 billion, ¥35.0 billion below the previous ﬁscal year, trending toward a gradual decline
in line with medium-term plans.
• Signiﬁcant increase is forecasted for FLET’S Hikari due to steady expansion in Hikari Collaboration,with net increase forecasted at 800,000 lines, exceeding the previous ﬁscal year.

[ COMSYS Group ]• In ﬁscal year ended March 31, 2017, orders received and sales both increased signiﬁcantly due
to growth in user processes and increase in cable tunnel repair and all types of maintenanceprocesses, thanks to the increase in Hikari Collaboration business.
• In ﬁscal year ending March 31, 2018, increase in sales expected due to further growth in maintenance processes and completion of projects carried forward, despite decrease in capital
investment.

11III-2. Trends in NTT Mobile Business
NTT DOCOMO capex

LTE Network(Unit: ¥100 million)

5,971

5,952

Addition
+162

5,700

161,900
stations
LTE base stations
138,100 stations
Plans
130,000
stations

Communications
business

5,739

5,762

5,420
22,800stations

214

209

280

FY March 2016
Results

FY March 2017
Results

FY March 2018
TargetOther than above

Premium
PREMIUM 4G
4G-enabled Significant increase in 2Hbase stations
Highest domestic speed
69,700682Mbpsstations
Provided to 120 cities
nationwide*682Mbps service uses two frequency
bands: 3.5GHz and 1.7GHz

Plans
18,000 stations

FY March 2016

FY March 2017

[Source: NTT DOCOMO Results Briefing Materials]

Orders received at COMSYS Group (Mobile)
716(Unit: ¥100 million)

650
585
Second-half

334

360
300

[ NTT DOCOMO ]• Capital investment for ﬁscal year ended March 31, 2017 increased by ¥12.1 billion
from ¥585.0 billion planned at the beginning of the period. It included a ¥16.2 billion
increase in capital investment for the telecommunications business and was higher
than the ¥573.9 billion in the preceding ﬁscal year.
• Capital investment for ﬁscal year ending March 31, 2018 will fall ¥27.1 billion compared with the previous ﬁscal year. That of the telecommunications business will decrease by ¥34.2 billion.

[ COMSYS Group ]First-half

316

356

FY March 2016
Results

FY March 2017
Results

285
FY March 2018
TargetCOMSYS Group materials: Simple total for five companies; NTT Engineering business–Mobile• In ﬁscal year ended March 31, 2017, orders received exceeded ¥70.0 billion due to theimpact from the front-loading of LTE-A negotiations and consulting services and theincrease in construction processes due to rapid negotiation progress.
• In ﬁscal year ending March 31, 2018, orders received will decline from the previous
ﬁscal year due to the impact from the front-loading of negotiations despite continued
orders for LTE-A construction. Net sales are forecasted to rise as construction for 3.5GHz
and 700MHz bands moves into top gear.

12III-3. Trends in NCC BusinessKDDI Capex (payment)

Softbank Capex (Telecommunications business in Japan)(Unit: ¥100 million)

5,314

5,194

5,300

Mobile(Includes UQ)

3,380

3,250

3,300

Fixed line,
etc.

1,934

1,943

2,000

FY March 2016
Results

FY March 2017
Results

FY March 2018
Forecast

4,125

FY March 2016
Results

FY March 2018
COMSYS estimate

310• In ﬁscal year ended March 31, 2017, ¥560.0 billion set at beginning of period reducedby ¥40.6 billion to ¥519.4 billion due to delays in use of capital investment funds.
• In ﬁscal year ending March 31, 2018, capital investment forecasted at ¥530.0 billion.
A substantial increase in the project volume is expected due to construction project
expansion as a result of termination of 700MHz interference suppression measures in
addition to full-scale construction for 3.5GHz band.

[ Softbank ] (COMSYS assumptions)

Second-half

162

180

140

First-half

127

123

130

FY March 2017
Results

FY March 2017
Results[ KDDI ] (COMSYS assumptions)(Unit: ¥100 million)

FY March 2016
Results

3,500

International accounting standards

Orders received at COMSYS Group (NCC)

267

3,205

[Source] Figures for fiscal year ended March 31, 2016 taken from Softbank Securities Report
Figures for fiscal year ended March 31, 2017 taken from Softbank’s results briefing materials
for telecommunications business in Japan[Source: KDDI Financial Performance Briefing Materials for fiscal year ended March 31, 2017]285(Unit: ¥100 million)

FY March 2018
Target• Capital investment for ﬁscal year ending March 31, 2018 projected to be expanded fromﬁscal year ended March 31, 2017.
• Even though project volume will increase signiﬁcantly because large-scale projects areplanned, including introduction of Massive MIMO aimed at 3.5GHz band construction
and 5G, construction unit price will remain challenging.

[ COMSYS Group ]• Orders received for the ﬁscal year ending March 31, 2018 are expected to increase overall
in the NCC Engineering business with the positive tone being due to base station construction for the 3.5GHz and 700MHz bands as well as the ending of the LTE changeover period.

COMSYS Group materials: simple total for five operating companies NCC Engineering business13

III-4. Moving Ahead towards “5G”
Aiming to commence 5G service by 2020
Further advances from 2020 onward with new technologies and new frequencies
NTT DOCOMO Roadmap

Carrier trends
NTT DOCOMO

2017

2019

Develop 5G commercial systems

2020

2025

Use available frequency bands that have become available by 2020, including existing bands

5G (peak: several Gbps)“5G trials”
February 26, 201722 carriers and vendors, etc. agree
on joint proposals aimed atformulating standard 5G
specifications as soon as possible

Ultra-high-speed capacity
Major cities
Olympics and Paralympics
Around facilities

Expand from urban areas to suburbs
Add even broader frequency bands“5G trials” using 28GHz and 4.5GHz bands• Tokyo Waterfront City and around Tokyo Skytree tower• Conduct various verification tests such as 8K video, remotecontrol of driverless vehicles, and data transmission duringhigh-speed travelauSucceed in handover at 28GHz band

5G+ (peak: at least 10Gbps)
Ultra-low latency and multiple simultaneous connections
From urban areas

SB“5G Project” launch announced September 8, 2016

New 5G technologies• Massive MINO installed in 100 stations in urban areas
nationwide• Verification testing at Tokyo Waterfront City (Odaiba) from
August on 2016 4GHz, 4.5GHz, 28GHz

Massive MIMO (beam forming)
Phantom cells
Construction

Sales trends and forecasts for NTT Mobile business
March 11, 2011
Great East Japan Earthquake

October 24, 2006
MNP launch
December 24, 2010
LTE launch

September 11, 2013
iPhone sales launch

March 27, 2015
LTE-A launch

March 31, 2012
PDC deactivation

PDC
FOMA
LTE

LTE-A
FY March 2004

FY March 2017

5G
FY March 202014

IV-1. Medium- to Long-Term Targets
Start endeavors for early achievement of medium- to long-term targets
Toward further growth

Operating Income

M&As in social systems and IT business segments
Integrated marketing and construction management across the Group (introduction of business company system)
Increase productivity through workstyle innovation(Unit: ¥100 million)

Medium-term Targets

275

276

238

250

270

300

8.3%

8.4%

7.4%

7.5%

7.7%

7.5%

3,500 +

4,000

Kando Co., Ltd.

3,313
Social Non-carrier
System-Related related businessand Other
927
IT

3,286

3,206

3,341

M&A

2,000
1,092

1,108

1,222

1,360

NCC

Carrier-related
business

2,386

2,193

2,097

2,119

2,140

FY March 2014

FY March 2015

FY March 2016

FY March 2017

FY March 2018
TargetNTT

2,000

FY March 202X

15

IV-2. M&A Results
Making Kando Co., Ltd. into wholly owned subsidiary through share exchange (planned for July 1, 2017)
M&A objectives and synergies
Nippon COMSYS Group
growth sectors

Proﬁle of Kando Co., Ltd.

Areas of collaboration with
Kando Co., Ltd.

• Increase in communications projects
through promotion of undergrounding, etc.
• Agricultural civil engineering, water supply
and sewerage projects, Tokyo Hoso’s
paving business• Peripheral business related to renewableenergy• Urban infrastructure regeneration,
expressway regeneration projects• General civil engineering projects,
sewerage projects, pipeline projects,
paving restoration projects• Expansion of new business domains throughintegration with gas energy business• Electrical and communications projects,
including new installation and replacementof trafﬁc signals

Existing business sectors of
Nippon COMSYS Groups

Location

Shinjuku-ku, Tokyo

Representative

Manabu Fukumoto

Paid in Capital¥448 million

Date of Establishment

April 14, 1948

Number of Employees

1,422 (Consolidated)

Main business partners

TOKYO GAS Co., Ltd., Bushu Gas Co., Ltd.,NTT InfraNet, etc.

Business areas(1) Construction and maintenance of gas pipe
facilities(2) Electrical and telecommunications
construction(3) General piping and road paving, etc.

Kando’s business sectors• Survey, inspection, and repair of NTT cabletunnels and manholes• Purchase of concrete secondary products
using Communication Cable BOX (C.C.
Box), etc.

FY March 2016 Results• Certiﬁed as NTT special vendor• Development and sale of a range ofconcrete products and tools

Partnership with Kando in Nippon COMSYS Group’s
growth sectors and existing sectors

FY March 2017 Targets

Non-Consolidated

Consolidated

Non-Consolidated

Consolidated

Net Sales¥28.0 billion¥35.8 billion¥28.3 billion¥36.2 billion

Operating Income¥1.2 billion¥1.6 billion¥1.1 billion¥1.3 billion

Recurring Proﬁt¥1.4 billion¥1.6 billion¥1.2 billion¥1.5 billion

Net Assets¥10.2 billion¥12.4 billion

Subsidiaries
Tokyo Gas Lifeval Kando Co., Ltd.

Kando Security Co., Ltd.

Kando Techno Co., Ltd.

Nishi Nihon Tokushu Kogyo Co., Ltd.

Business areas

Sale of gas equipment, payments, safety
inspections, opening and closing of gas
valvesConstruction onsite patrols

Inspection and repair work of NTT pipes
Secondary concrete products

Inspection and repair work of NTT pipes
Secondary concrete products

Paid in Capital¥100 million¥45 million¥80 million¥100 million

543

62

42

17

Number of Employees

16IV-3. Initiatives Aimed at Further Topline Expansion
Digital transformation sector

Expand digital transformation business to ¥30.0 billion level within three years

Biomass (EPC and IPP)

Basic Structure for creating cloud services• Planned commercialization of an IPP project• Expand entry into EPC business, leveraging
knowledge in IPP business

Consulting

Small-scale wind power generation
PFI• Expand orders received through PFI method

Private electric facilities• Received first order• Expanding market development incollaboration with NTT Group and others

Okinawa project• Order received for common-use cable tunnels
and U.S. military compound electricalinstallation work

Customer

Alliance with Microsoft• Plan to acquire certification[Service menu]
Skype for Business
Cloud PBX planning service
Skype for Business
Cloud PBX integration service
Skype for Business
Cloud PBX managed service

ESCO• Continue efforts, including small-scale projects

Expressways• Continue large-scale projects for Shuto and
NEXCO expressways• Maintain market share at high level

Track record of IP-PBX
construction, such as COMSIP

Joint
proposalby COMSYS
Group

Construction

Operation

MicrosoftGold
Cloud Competency Partner

Collaboration Scheme

Agricultural civil engineering• Opportunities to receive orders expanding, withincreased budgets of local governments in Tokyo
metropolitan and Nagoya-Osaka areas, etc.

Utilize idle real estate17

IV-4. Promotion of Future Structural Reform
Pursuing “Increased productivity” and “diverse human resources” through workstyle reform

COMSYS WAYa
Strengthen
construction system

Harness IT

Reduce costs

Reform areas for workstyle innovation

Comprehensive design of
personnel systemand operating rules‫ڶ‬

Improve
employee awarenessChangecorporate culture

Review
operational work flow
Transform
management structures&'

Achieve flexible work
methods andcommunication
through utilizationof IT tools

Group strategy

Redefine jobs and harness IT
Build up construction information
through construction IT platform
Thoroughly review job structuresand screen processes
Redefine jobs and review workflow

3

Workstyleinnovation project

Integration synergy

Possible to simplify
procedures
Develop in-houseenvironment
Visualize
work progresses

High value added

Automation (AI)Business centralization
Telecommuting

Streamline and increase
productivity by further
harnessing IT
Upgrade construction IT platform

Wearable terminals

i-Construction

18

V. Shareholder Returns Policy (Dividends and Acquisition of Treasury Stock)
Planning increase in dividend for fifth year in a row and acquisition of ¥5.0 billion in treasury stock
Net Income(Target)

200
[167]
150

100

185
167

163
80

132
50

75

154 80144

Treasury

80

50 stockacquisition

71 30

40

25

24

29

35

39

44

March 2012

March 2013

March 2014

March 2015

March 2016

March 2017

March 2018
(Planned)

Interim

¥10

¥10

¥10

¥15

¥15

¥20

¥25

Year-end¥10¥10

Ordinary dividends: ¥10+
Commemorative dividends: ¥5

¥15

¥20

¥20

¥25

Consolidated Payout Ratio

36.0%

18.7%

18.4%

21.0%

25.6%

30.8% [ 26.6% ]29.5%

Total Return Ratio
Dividends + treasury stock
Net income

77.7%

48.7%

66.9%

66.2%

77.2%

85.6% [ 74.0% ]56.5%

Number of sharesof treasury stockat the end of the period*

19.18
million shares

23.01
million shares

28.31
million shares

31.41
million shares

30.24
million shares

31.86
million shares—(Ownership Ratio)(13.1%)(15.8%)(19.4%)(21.5%)(21.5%)(22.6%)

ROE

4.4%

7.9%

9.4%

9.0%

7.9%

7.3% [ 8.3% ](Unit: ¥100 million) 0

Dividends per
Share(annual)

54 Total
dividends¥15—*The total number of issued shares changed from 145.97 million shares to 141.00 million shares with the cancellation of 4.97 million shares of treasury stock on November 30, 2015.
2.12 million shares of treasury stock (1.5%) were contributed as a result of the exchange of shares with TOKYO HOSOH KOGYO CO., LTD. on April 1, 2016.
*Figures in brackets show estimates without impairment loss.

19

Results for the Fiscal Year Ended March 31, 2017
— Data Book —May 12, 2017

Data Book
Detailed Data
01

Consolidated Statements of Income

02

Income Statements [by operating company group] (results for fiscal year ended March 31, 2017)03

Income Statements [by operating company group] (forecasts for fiscal year ending March 31, 2018)04

Orders Received, Net Sales, and Contract Backlogs by Business Area

05

Orders Received and Net Sales by Detailed Business Area
for Five Companies on a Non-Consolidated Simple Sum Basis

06

Capital Expenditure, Depreciation and Amortization

Reference
07

Consolidated Balance Sheets (Condensed)

08

Consolidated Cash Flow (Condensed)

01 Consolidated Statements of Income(Unit: ¥100 million)

FY March 2016

FY March 2017
YoY
2nd Quarter
Percentage
Results
difference(c)((c) – (a))⁄ (a)YoY
Percentage
difference((e) – (b)) ⁄ (b)vs. Forecast
Percentage
difference((e) – (d)) ⁄ (d)

3,701

11.5%

5.8%

1,650

3,400

3,341

4.2%

-1.7%

465

457

5.4%

-1.7%

(13.7%)(13.7%)

6.7%

215

206

5.9%

-3.8%

100

-2.3%

205

-0.9%

-3.6%

250

250

5.0%

0.1%

75

19.0%

270

7.8%

(7.4%)(7.5%)

255

253(7.5%)(7.6%)

160

144(4.7%)(4.3%)

Full Year
Targets

Full Year
Results

(d)

(e)

9.8%

3,500

1,322

2.7%

433

165

2.5%

(12.5%)(13.5%)(12.5%)

Selling, General and Administrative Expenses

95

195

102

Operating Income

65

238

63

(5.1%)(7.4%)(4.8%)

68

242

64

(5.3%)(7.6%)(4.9%)Net Income Attributable to
Owners of Parent

45

154

41

(Net Profit Margin)(3.5%)(4.8%)(3.1%)

2nd Quarter
Results

Full Year
Results(a)(b)

Orders Received

1,626

3,319

1,786

Net Sales

1,287

3,206

Gross Profits

161(Gross Profit Margin)(Operating Margin)
Recurring Profit(Recurring Profit Margin)

FY March 2018

-5.9%

-9.2%

YoY
2nd Quarter
Percentage
Targets
difference(f)((f) – (c)) ⁄ (c)

(g)

YoY
Percentage
difference((g) – (e)) ⁄ (e)

-7.6%

3,600

-2.8%

1,400

5.9%

3,500

4.7%

175

5.8%

475

3.9%

(12.5%)(13.6%)(5.4%)
4.6%

-0.6%

77

(7.7%)
19.3%(5.5%)
-6.1%

-9.5%

50
(3.6%)

Full Year
Targets275

8.5%(7.9%)
21.1%

185(5.3%)

Note: Figures are rounded down to the nearest whole unit. Profit margin, and percentages of increase and decrease are calculated using a base unit of yen. Figures are rounded to the nearest first decimal place.

27.7%

02 Income Statements [by operating company group] (results for fiscal year ended March 31, 2017)(Unit: ¥100 million)

Comparisons with the Previous Term

Nippon COMSYS-G

SANCOM-G

TOSYS-G
Percentage Mar. 2016
Results
difference

Mar. 2017
Results

Percentage
difference

-6.3%

423

486

14.9%

268

-5.4%

440

467

6.2%

25

27

7.7%

52

54

2.5%

(8.9%)(10.1%)(12.0%)(11.6%)

5.4%

14

14

3.7%

28

27

-0.8%

56.0%

10

12

12.9%

24

26

6.3%

(3.8%)(4.6%)(5.6%)(5.6%)

Mar. 2016
Results

Mar. 2017
Results

Percentage
difference

Mar. 2016
Results

Mar. 2017
Results

Percentage
difference

Mar. 2016
Results

Mar. 2017
Results

Orders Received

2,195

2,520

14.8%

451

454

0.5%

297

278

Net Sales

2,101

2,203

4.8%

423

437

3.3%

283

Gross Profits

305

315

3.4%

34

42

22.8%

(14.5%)(14.3%)(8.1%)(9.6%)

Selling, General and Administrative Expenses

123

132

7.1%

22

23

Operating Income(Operating Margin)

181

183

0.8%

11

18

(8.6%)(8.3%)(2.8%)(4.2%)

Recurring Profit(Recurring Profit Margin)

184

185

(8.8%)(8.4%)

116

100(5.5%)(4.6%)(Gross Profit Margin)

Net Income Attributable to Owners of Parent(Net Profit Margin)

0.5%-13.6%

1118(2.8%)(4.2%)

7

11(1.7%)(2.6%)TSUKEN-G

54.3%
58.0%

11

12

(4.0%)(4.6%)

67(2.4%)(2.9%)

10.0%
15.2%

25

26

(5.8%)(5.8%)

18

22(4.3%)(4.9%)

5.8%
20.1%(Unit: ¥100 million)

Comparisons with Forecasts

Nippon COMSYS-G

SANCOM-G

Mar. 2017
Targets

Mar. 2017
Results

Percentage
difference

Mar. 2017
Targets

Orders Received

2,346

2,520

7.4%

478

454

Net Sales

2,291

2,203

-3.8%

457

Gross Profits

332

315

-5.0%

(14.5%)(14.3%)

Selling, General and Administrative Expenses

139

132

Operating Income(Operating Margin)

192

183

(8.4%)(8.3%)(Gross Profit Margin)

TOSYS-GMar. 2017 Percentage
difference
Results

TSUKEN-G
Percentage Mar. 2017
difference
Targets

Mar. 2017
Results

Percentage
difference

-5.3%

435

486

11.9%

268

-8.6%

442

467

5.7%

26

27

4.1%

53

54

2.2%

(8.8%)(10.1%)(12.0%)(11.6%)

3.3%

14

14

5.5%

28

27

-0.5%

22.2%

12

12

2.6%

25

26

5.3%

(4.1%)(4.6%)(5.7%)(5.6%)

Mar. 2017
Targets

Mar. 2017
Results

-5.0%

294

278

437

-4.2%

294

39

42

8.0%

(8.5%)(9.6%)

-4.8%

23

23

-4.6%

15

18

(3.3%)(4.2%)

Notes: 1. Figures are rounded down to the nearest whole unit. Profit margin, and percentages of increase and decrease are calculated using a base unit of yen. Figures are rounded to the nearest first decimal place.
Notes: 2. No elimination of intergroup transactions between groups

03 Income Statements [by operating company group] (forecasts for fiscal year ending March 31, 2018)(Unit: ¥100 million)

Forecasts for the full year

Nippon COMSYS-G

SANCOM-G

TOSYS-GMar. 2018
Targets

Percentage
difference

-0.2%

486

485

-0.3%

290

8.0%

467

485

3.8%

27

28

3.4%

54

57

5.2%

(10.1%)(9.7%)(11.6%)(11.8%)

1.0%

14

15

1.6%

27

30

7.7%

3.6%

12

13

5.6%

26

27

2.6%

(4.6%)(4.5%)(5.6%)(5.6%)

Mar. 2018
Targets

Percentage
difference

Mar. 2017
Results

Mar. 2018
Targets

Percentage
difference

Mar. 2017
Results

Mar. 2018
Targets

Orders Received

2,520

2,370

-6.0%

454

510

12.3%

278

278

Net Sales

2,203

2,316

5.1%

437

479

9.4%

268

Gross Profits

315

328

4.0%

42

43

2.1%

(14.3%)(14.2%)(9.6%)(9.0%)

Selling, General and Administrative Expenses

132

126

-4.8%

23

24

Operating Income

183

202

10.3%

18

19

(8.3%)(8.7%)(4.2%)(4.0%)(Gross Profit Margin)(Operating Margin)

TSUKEN-G
Percentage Mar. 2017
difference
Results

Mar. 2017
Results

Note: Figures are rounded down to the nearest whole unit. Profit margin, and percentages of increase and decrease are calculated using a base unit of yen. Figures are rounded to the nearest first decimal place.

04 Orders Received, Net Sales, and Contract Backlogs by Business Area
Orders Received

FY March 2016

FY March 2017
YoY
2nd Quarter Percentage
Results
difference(c)((c) – (a))⁄ (a)2nd Quarter
Results(a)

Full Year
Results(b)

Social System-Related and Other

924
128
243
329

1,884
269
522
644

1,003
122
263
396

Total

1,626

3,319

1,786

Business Area

NTT Engineering
NCC Engineering
IT Solutions

Net Sales

Social System-Related and Other

1,825
271
507
600

737
99
210
273

Total

1,287

3,206

1,322

IT Solutions

Contract Backlogs

2,035
284
553
828

9.8%

3,500

3,701

-4.4%
8.1%

5.8%

11.6%

6.0%

-3.8%

28.6%

-14.3%

-8.4%

860
130
290
370

11.5%

5.8%

1,650

YoY
Percentage
difference((e) – (b)) ⁄ (b)vs. Forecast
Percentage
difference((e) – (d)) ⁄ (d)

1.1%

1.1%

0.8%

1.5%

8.5%

2.0%

17.4%

11.7%

-12.2%

770
120
240
270

2.7%

3,400

3,341

4.2%

-1.7%

1,400

-18.4%-3.4%

FY March 2016

FY March 2017
YoY
2nd Quarter Percentage
Results
difference(c)((c) – (a))⁄ (a)15.9%

Social System-Related and Other

824
62
186
403

Total

1,321

1,094

1,477

Full Year
Results(e)

YoY
Percentage
difference((e) – (b)) ⁄ (b)

34.1%

-2.9%

749
50
136
437

11.8%

1,373

25.4%

28.6%
28.7%

-11.6%

-6.7%

1,800
310
620
870

-7.6%

3,600

-2.8%

5.9%
10.2%

8.9%
12.1%
5.0%

FY March 2018
YoY
YoY
2nd Quarter Percentage Full Year Percentage
Targets
Targets
difference
difference(f)((f) – (c)) ⁄ (c)(g)((g) – (e)) ⁄ (e)

1,845
274
550
671

558
39
133
362

IT Solutions

15.3%

1,825
270
540
765

3.4%

711
48
144
415

NCC Engineering

8.0%

Full Year
Results(e)

Full Year
Results(b)

NTT Engineering

vs. Forecast
Percentage
difference((e) – (d)) ⁄ (d)Full Year
Targets(d)

2nd Quarter
Results(a)Business Area

YoY
Percentage
difference((e) – (b)) ⁄ (b)FY March 2017

713
121
218
233

NCC Engineering

20.2%

1,765
255
575
905

8.5%

YoY
2nd Quarter Percentage
Results
difference(c)((c) – (a))⁄ (a)Full Year
Results(b)

NTT Engineering

Full Year
Results(e)

FY March 2016
2nd Quarter
Results(a)Business Area

Full Year
Targets(d)(Unit: ¥100 million)
FY March 2018
YoY
YoY
2nd Quarter Percentage Full Year Percentage
Targets
Targets
difference
difference(f)((f) – (c)) ⁄ (c)(g)((g) – (e)) ⁄ (e)

26.9%
1.8%
20.8%

Note: Figures are rounded down to the nearest whole unit. Percentages of increase and decrease are calculated using a base unit of yen. Figures are rounded to the nearest first decimal place.

-1.5%

1,845
295
600
760

13.2%

5.9%

3,500

4.7%

4.4%
20.7%
13.8%

-0.0%
7.6%
8.9%

Received and Net Sales by Detailed Business Area
05 Ordersfor Five Companies on a Non-Consolidated Simple Sum Basis(Unit: ¥100 million)
FY March 2016

Orders Received
Business Area

FY March 2017

2nd Quarter
Results

Full Year
Results

(a)

(b)

YoY
2nd Quarter Percentage
Results
difference(c)((c) – (a)) ⁄ (a)FY March 2018

Full Year
Targets

Full Year
Results

YoY
Percentage
difference

vs. Forecast
Percentage
difference

(d)

(e)

((e) – (b)) ⁄ (b)((e) – (d)) ⁄ (d)YoY
2nd Quarter Percentage
Targets
difference(f)((f) – (c)) ⁄ (c)Full Year
Targets

YoY
Percentage
difference(g)((g) – (e)) ⁄ (e)Access

489

973

538

10.0%

945

1,061

9.0%

12.3%

480

-10.9%

990-6.7%

Network

114

245

95

-16.9%

200

240

-2.0%

20.4%

85

-10.8%

205-14.9%

Mobile

316

650

356

12.8%

600

716

10.2%

19.5%

285

-20.1%

585-18.4%

920

1,870

990

7.6%

1,745

2,019

8.0%

15.7%

850

-14.2%

1,780-11.9%NCC Engineering

127

267

123

-3.5%

255

285

6.6%

12.0%

130

5.6%

310

8.5%

IT Solutions

189

413

203

7.7%

450

434

5.0%

-3.4%

225

10.5%

485

11.6%

Social System-Related and Other

195

392

177

-9.4%

490

431

9.8%

-12.0%

190

7.3%

475

10.2%

1,432

2,944

1,494

4.3%

2,940

3,170

7.7%

7.9%

1,395

-6.6%

3,050

-3.8%

NTT Engineering

Subtotal

Total

FY March 2016

Net Sales
Business Area

FY March 2017

2nd Quarter
Results

Full Year
Results

(a)

(b)

YoY
2nd Quarter Percentage
Results
difference(c)((c) – (a)) ⁄ (a)FY March 2018

Full Year
Targets

Full Year
Results

YoY
Percentage
difference

vs. Forecast
Percentage
difference

(d)

(e)

((e) – (b)) ⁄ (b)((e) – (d)) ⁄ (d)YoY
2nd Quarter Percentage
Targets
difference(f)((f) – (c)) ⁄ (c)Full Year
Targets

YoY
Percentage
difference(g)((g) – (e)) ⁄ (e)Access

377

963

405

7.5%

980

1,021

6.0%

4.2%

415

2.3%

1,030

0.8%

Network

83

228

79

-4.0%

220

229

0.6%

4.4%

85

6.4%

200

-12.9%

Mobile

247

620

243

-1.7%

590

572

-7.7%

-3.0%

260

6.9%

580

1.3%

707

1,812

728

3.0%

1,790

1,823

0.6%

1.9%

760

4.3%

1,810

-0.7%

NCC Engineering

121

270

99

-18.0%

270

274

1.6%

1.8%

120

20.5%

295

7.3%

IT Solutions

164

391

160

-2.8%

415

435

11.3%

5.0%

175

9.3%

485

11.3%

Social System-Related and Other

94

319

126

33.3%

385

359

12.4%

-6.7%

115

-9.0%

410

14.1%

1,089

2,794

1,115

2.4%

2,860

2,893

3.6%

1.2%

1,170

4.9%

3,000

3.7%

NTT Engineering

Subtotal

Total

Notes: 1. The non-consolidated simple sum data are for the following five companies: Nippon COMSYS Corporation; SANWA COMSYS Engineering Corporation; TOSYS Corporation; TSUKEN Corporation;
and COMSYS JOHO SYSTEM Corporation.
2. Figures are rounded down to the nearest whole unit. Percentages of increase and decrease are calculated using a base unit of yen. Figures are rounded to the nearest first decimal place.

06 Capital Expenditure, Depreciation and Amortization(Unit: ¥100 million)

March 2016
Results

March 2017
Results

March 2018

Comparisons with the previous term
Percentage
Difference
difference

Comparisons with FY March 2017
Percentage
Difference
difference

Targets

Tangible Assets

49

84

35

71.3%

61

-23

-37.9%

Intangible Assets

12

11

-1

-8.6%

9

-1

-17.3%

Total

62

96

34

55.2%

71

-24

-35.0%

Depreciation and Amortization

50

57

7

14.3%

49

-7

-16.2%

Capital Expenditure

Note: Figures are rounded down to the nearest whole unit. Percentages of increase and decrease are calculated using a base unit of yen. Figures are rounded to the nearest first decimal place.

07 Consolidated Balance Sheets (Condensed)
ASSETSLIABILITIES AND NET ASSETS(Unit: ¥100 million)

+183

2,660
Current
Liabilities(+116)• Accounts receivable—trade

1,555

+183

2,843

2,660

Current Assets(Unit: ¥100 million)

612

+117

• Accumulated costof construction in progress+43• Cash and cash equivalents-79• Other current assets

+34

1,671

Long-Term
Liabilities(+100)• Accounts payable—trade• Advances received on
construction in progress• Income taxes payable• Other current liabilities(+66)

As of March 31, 2016

• Long-term loans receivable-69• Goodwill-22• Other assets

+18

712

101

(+64)

1,965

1,105

+5
-12
+43

82

Net Assets• Property, plant and equipment,+140
including buildings

+63

(+18)

• Net Income attributable toowners of parent

Fixed Assets

2,843• Treasury stock, at cost

+144
-80

• Cash dividends-44• Other

+43

2,029

1,172

*Equity ratio
From 73.4% to 70.9%

As of March 31, 2017

As of March 31, 2016

As of March 31, 2017

08 Consolidated Cash Flow (Condensed)
Cash Flows fromOperating Activities

Cash Flows from
Investing Activities

+125

-99

• Income before income taxes
and other adjustments
to net income• Depreciation and amortization• Amortization of goodwill• Cash and cash equivalents
paid for income taxes• Increase in receivables—trade• Increase in inventories• Other• Newly consolidated subsidiaries

+228
+57
+30

(Unit: ¥100 million)• Acquisitions of property and equipment -88• Acquisitions of intangible fixed assets -11• Other+0

Cash Flows from
Financing Activities

-83
-76
-42
+13

-121
• Acquisitions of treasury stock• Cash dividends paid
• Other

+16

-80
-44
+2

288

-79
Cash and
Cash Equivalents
at End of YearAs of March 31, 2016

208
Cash and
Cash Equivalents
at End of YearAs of March 31, 2017

COMSYS Group Management Philosophy

At the COMSYS Group, we are united as a Groupand strive for strong partnership and collaboration with diverse external players
in achieving our management philosophy.

We will build a company that customers continue to choose through the construction of diverse infrastructure that carries our era forward.
We will contribute to our country and local communities by building social infrastructure that supports affluent lifestyles.
We will continue with unrelenting reform in our aim to further increase corporate value.

We formulated our management philosophy based on the three central themes of “customers,” “the community” and “employees and shareholders.”• For the first theme, our message to customers is: “Construction of Diverse Infrastructure That Carries Our Era Forward.” Our business is not only electrical andtelecommunications facilities, but it is also expanding into diverse sectors that support social and economic activity from its foundation.
• In the second theme, “Building Social Infrastructure That Supports Affluent Lifestyles,” we express the Group’s mission to contribute to the country and local
communities.
• In the third theme, “Unrelenting Reform and Further Increasing Corporate Value,” we mainly had in mind our employees in expressing a clear commitment toeveryone outside the Company to continue with our structural reform initiatives to overcome the competitive environment by raising productivity andstrengthening cost competitiveness.

Cautionary Statement with Respect to Forward-Looking Statements
Forecast figures contained in these presentation materials are forward-looking statements that assume underlying
risks and uncertain factors.
Accordingly, it should be recognized that actual results may differ from such forward-looking statements due to avariety of factors.
Important factors that could affect results include, but are not limited to, changes in economic conditions and social
trends relevant to the Group’s business areas, and downward pressure on prices for the services provided by theGroup owing to fluctuations in demand and intensified competition.

For further information, please contact:

IR Department
Telephone: +81-3-3448-7000 (direct)
Facsimile: +81-3-3448-7001
E-Mail: chd-ir@comsys.co.jp
URL: http://www.comsys-hd.co.jp/