March 2006 Interim Settlement
Detailed Discussion
November 25, 2005

COMSYS Holdings Corporation
Yoshihiro Mimata
Director, General Manager
Finance & Accounting Department
IR RepresentativeContents

1. Inte rim Consolidated Statements of Income

・・・・・・・・・・･ ・・・

3

2. Inte rim Consolidated Statements of Income by Company・・・・・・・ ・・・・・・・

4

3. Net Sales by Business Segment・・・・・・・ ・・・・・・・

5・・ ・・・・・・・・・ ・・

6・・ ・・・・・・・・・ ・・

7

4. Inte rim Cost Reductions via Operational Efficiency
Measures, including Operational Integration(Reference) Breakdown of Expenses(Non-consolidated for Nippon COMSYS)
5. Inte rim Consolidated Balance Sheets・・・・・・・.・・・・・・・ 8

6. Inte rim Consolidated Statements of Cash Flows

・・・・・・・・・・・・・・

9

1. Interim Consolidated Statements of Income(¥100 million)

Sept 04

Net Sales

Amtchange

Sept. 05

1,117

1,191

Details% change

74

6.6% ・NTT (50), DoCoMo (56), NCC (28)

P rivate (-26), Civil Engineering (-17), Other (-17)

982

1,042

60

6.1% ・Cost of sales ratio (88.0% → 87.5%; -0.5 percentage pt)
・Reduced materials and personnel costs (-16) via efficiency measures

1341481410.4% ・Gross profit margin (12.0 % → 12.5 %; +0.5 percentage ps)

103

99-4-3.9% ・Reduced overhead expenses (-2)

Operating Income

3149

1858.1% ・Operating margin (2.8% → 4.2%; +1.3 percentage pts)

Other Income

1211-1-8.3% ・Decrease in dividend income (-0.5)

Other Expenses

10-1-100.0% ・Decrease in interest expenses （-0.6）

42601842.9% ・Recurring profit margin (3.8% → 5.1%; +1.3 percentage pts)

143on revision of subsidiary retirement plans （2.2）
300.0% ・Gain
・Gain on sale of investment securities (0.7)

Cost of Sales
Gross Profits
Selling, General and
Administrative Expenses

Current Income
Extraordinary
IncomeExtraordinary Loss

Interim Net Income

・Reduced personnel costs (-2) via personnel downsizing and pension revisions

・Interim 05: Overseas reserves (7.0), Reserves for structural reforms (4.6),
Special retirement benefits (1.8), Loss on write-down of investment securities(3.3), Loss on disposal of property and equipment (2.3)
・Interim 06: Allowance for doubtful receivables (Heisei Denden Co., Ltd. 3.6),
Special retirement benefits (2.0), Loss on disposal of property and equipment(1.1)

197-12-63.2%

143420142.9% ・Interim net profit margin (1.3% → 2.9%; +1.6 percentage pts)3

2. Interim Consolidated Statements of Income by Company(¥100 million)

COMSYS Group
Sept. 04

Net Sales

Sept. 04

81153
NTT -42
NCC 68
179
162

817

66

147

(12.5%) 107 (13.0%) 122

15(8.9%) 1471-4

1531 (5.4%) 50

19(-0.8%) -1

75175(3.7%)(7.7%)(-1.4%)TOSYS Group
Amtchange

Sept. 05

112

Selling, General and
Administrative Expenses

Operating IncomeAmtchangeSept. 05

971
NTT 37
NCC -68
940859

Cost of Sales
Gross Profits

SANCOM Group
Sept. 04Amt
changeSept. 05

117-911NTT 5
17106122

16165

1893108

1513-1 (11.5%) 12

14216

1132-2-1

10(11.6%)

11(1.0%)1(1.0%)

Other Income

11110000000

Other Expenses

00010

1000

42 (6.6%) 62

20(-1.2%) -1-2-1

10Current Income(5.0%)(-1.3%)(1.7%)

1(1.2%)

Extraordinary Income

110000000

Extraordinary Loss

127-560-600019 (3.6%) 34

15(-3.1%) -5-1400

Interim Net Income(Expenses)(2.3%)

Note 1: Figures in parenthesis refer to net profit margins
Note 2: Net sales in brackets exclude the effect of business reorganization.

(-1.0%)(0.8%)

0(0.3%)

4

3. Net Sales by Business Segment(¥100 million)

COMSYS Group

CompanyBusiness

Interim 06

SANCOM Group

ChangeInterim 06

TOSYS Group

ChangeInterim 06

ChangeNTT Information Telecommunication Engineering(694) 731 (+104) +141(48)

6(-3) -45(76) 81(+8) +13

Electrical Communications Engineering(131)

63(+2) -66(79) 147(-8) +60

22+4IT Solutions

97-110+210+1Social System-related

47+71408-1(971) 940 (+112) +81(153) 179(-11) +17(117) 122(+11) +16Total

Note: Figures in parenthesis exclude the effects of business reorganization.

Reference: Impact of Interim Inter-company Sales
CompanyBusinessNTT

Nippon COM SYS＋4.2 bn (＋3.8)

SANCOM-4.2 bn (-8)-500 mn (-500)＋500 mn (＋500)

NCC-6.8 bn (-5.0)＋6.8 bn (＋50)

Impact on Interim Results-3.1 bn (-1.7)＋2.6 bn (＋12)

Note: Figures in parenthesis refer initial plan targets.

TOSYS＋500 mn (＋500)

54. Interim Cost Reductions via Operational Efficiency Measures,
including Operational Integration(¥100 million)

CategoryAmount and % Change

Item

50%

Personnel¥400 mn［¥50 mn］

Materials¥500 mn［¥500 mn］

(67%)

(56%)

PeriodTarget

Key Measures

6［1］Promotion of early retirement via generous retirement packages and revision ofpension system
Streamlining workf orce allocation via business reorganization

9［9］Implementation of volume discounts via bulk procurement of materials

Outsourcing¥400 mn［¥100 mn］ (40%)

10［4］Revision of subcontracting contracts
Elimination of duplicated services via reorganization of construction structure

Overhead¥300 mn(23%)［¥200 mn］

13
［10］

Elimination of expenses via expanding outsourcing of shared operations
Elimination of debt via expansion of CMS
Reduction of overhead costs

Total¥1.6 bn(42%)［¥850 mn］

38
［24］

－Note 1: Figures in brackets represent the effect of operational effi ciency measures.
Note 2: Figures in parenthesis refer to the percentage change compared with the annual plan target.

6(Reference) Breakdown of Expenses(Non-consolidated for Nippon COMSYS)
YoY:
YoY:①
① Gross
Grossprofit
profit margin:
margin:89.0%→88.6%
89.0%→88.6% (+0.4(+0.4 percentagepercentagept)pt) ②② Improved
Improved personnel,personnel,materials
materials andand SG&A
SG&A expenses
expenses＜Expense Ratios per Net Sales＞＜ Expense Ratios per Cost of Sales＞

(％)

(％)

1001007575

59.5% pts
Outsourcing +2.7

62.2

GrossP rofit
Margin50

25066.9

Outso urcing % pts
+ 3.4

70.3

Cost of Sales
Ratio
88.6% 50

89.0%

11.0

M aterials -1.99.111.8

Pers on nel -1.8

10.0

6.7

Overhead 0.6

7.3

13.2

8.3
2.7

SG&A -1.2
Operating M argin +1.7

7.1
4.4

7.5

Sept. 2004

Sept. 2005

250

12.3

Sept. 2004

Materials-2 .1

Pers onn el-1.9

Ov erhead+0.7

10.2
11.3
8.2
Sept. 2005

7

5. Interim Consolidated Balance Sheets
IncreasIncreasee inin FFixed
ixed Assets,Assets, Decreas
Decreasee inin Interest-bearing
Interest-bearingD
Debt,
ebt, andand Increased
Increased InternalInternal Res
Reserves
erves fromfrom Higher
Higher Cash
Cash Flows
FlowsAssets(¥100 million)Liabilities and Shareholders’ Equity (¥100 million)

1,958

1,958+42+42

1,916

1,916（+19）

Current
Assets
1,250

1,269

・Cash and cash equivalents+66

・Notes and accounts
receivable--trade-40

・Accumulated cost of
construction in progress-11

Current
Liabilities
489

・Accounts payable--trade +14
・Advances received on
construction in progress

Long-term
Liabilities
196

・Debt payable within 1 year -8

・Long-term debt

141

・Accrued severance
indemnities-14（+83）+14

・Long-term loans receivable +14
・Buildings / Land

-26

・Consolidation adjustments-15
account・Retained earnings
・Investment securities

503+7（-55）（+23）

FixedAssets665

（+14）

688

-8

Shareholders’Equity1,230+74

1,313*Equity Ratio（63.5%→66.5%）*Book Value per Share（¥862.57 → ¥922.97）

Sept. 2004

Sept. 2005

Sept. 2004

Sept. 2005

8

6. Interim Consolidated Statements of Cash Flows

352

Beginning+143- 36
Investing Activities

Operating Activities

・Acquisitions of property
and equipment-24・Increase in long-term
loans
-10

•Interim income before
income taxes and 57•Other Adjustments toNet Income 66(¥100 million)- 22439

Financing Activities
・Dividends- 14・Decrease in long-termand short-term debt
-7

End of Year+¥8.7 bnof Year（M arch 31, 2005）（September 30, 2005）

Cash
Cash Flow
FlowIndicators
Indicators
Sept. 2004

Sept. 2005

Key Factors in Change (Increase/Decrease)■ Free Cash Flow
（Operating CF －Investing CF）¥8.7 bill¥10.7 bn

Increase in operating cash flows (¥2.7 bn)
Increase in investing cash flows (¥700 mn)■ Years to Debt Repayment

0.3 years

0.1 years

Decrease in interest-bearing debt (-¥3.1 bn); Increase in operating cashflows (¥2.7 bn)■ Interest Coverage (times)

106.4

294.4

Decease in interest expenses (-¥60 mn); Increase in operating cashflows （¥2.7 bn）■ (Reference) EBITDA margin （OperatingIncome Basis）

4.50%

5.74%

Increase in net sales （¥7.4 bn); Increase in EBITDA (¥1.8 bn)

9