Presentation of Performance
Fiscal Year Ended March 31, 2019

May 16, 2019

Contents
I . Overview of Performance for the Fiscal Year Ended March 31, 2019
1. Highlights of Performance
2. Details of Orders Received by Segment
3. Details of Net Sales by Segment
4. Details of Operating Income
5. Status of Contract Backlogs
II . Business Targets for the Fiscal Year Ending March 31, 2020
1. Business Targets for the Fiscal Year Ending March 31, 2020
2. Order Targets by Segment
3. Sales Targets by Segment
4. Forecasts for NTT Fixed-Line Related Business
5. Market Trends for NTT Fixed-Line Related Business6. Forecasts for NTT Mobile Business7. Forecasts for NCC Business
8. 5G Development Plans of Telecommunications Carriers
9. Forecasts for IT Solutions Business10. Market Trends in IT Solutions Business11. Forecasts for Social System-Related Business12. Market Trends in Social System-Related BusinessIII . Medium-Term Vision
1. COMSYS VISION NEXT STAGE 2023
2. Expanding Business Opportunities Driven by 5G
3. Generating Consolidation Synergies
4. Developing IT Platform
5. Growth Strategy for IT Solutions Business
6. Successful Examples in IT Solutions Business7. Growth Strategy for Social System-Related Business
8. Successful Examples in Social System-Related BusinessIV . Shareholder Returns Policy
1. Shareholder Returns Policy (Dividends and Acquisition of Treasury Stock)

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I. Overview of Performance
For the Fiscal Year Ended March 31, 2019

I-1. Highlights of Performance
Orders received, net sales, operating income, and operating margin all achieved targets• Orders received, net sales, and operating income all increased dramatically from previous ﬁscal year
due to consolidation of three companies• Business of existing group companies also grew organically(Unit: ¥100 million)

FY March 2019
Performance

Comparisons withthe previous term

Comparisonswith target(Existing Group)(Existing Group)(Existing Group)

Orders Received

5,055+1,033+155(4,129)(+107)(+79)

Net Sales

4,817+1,017+117(4,144)(+344)(+44)

Operating Income

352

+49

+12

(326)

(+22)

(+6)

Operating Margin

7.3%-0.7 percentage points

0.1 percentage points(7.9%)(-0.1 percentage points)(+0.1 percentage points)*There was a consolidation of three companies, NDS Co., Ltd.; SYSKEN Corporation; and Hokuriku Denwa Kouji Co., Ltd., on October 1, 2018.

4

I-2. Details of Orders Received by Segment
Orders received increased dramatically from the previous fiscal year in all segments due to the consolidation• NTT Engineering business: due to the effects of the consolidation, orders received increased dramatically from the previous
ﬁscal year and also surpassed the target• NCC Engineering business: orders received outperformed both the previous ﬁscal year and the target due to robust orders
from au and Softbank• IT Solutions business: due to the consolidation and success in winning projects, orders received increased dramatically fromthe previous ﬁscal year and also exceeded the target• Social System-Related business: due to the effects of the consolidation and the winning of large-scale projects, orders
received increased dramatically from the previous ﬁscal year but fell just short of the target(Unit: ¥100 million)

FY March 2019
Performance

Comparisons withthe previous term

Comparisonswith target

NTT Engineering

2,229

+384

+79

NCC Engineering

465

+73

+35

IT Solutions

809

+204

+49

Social SystemRelated and Other

1,550

+370

-9
5

I-3. Details of Net Sales by Segment
Net sales increased significantly from the previous fiscal year
in all segments due to the effects of the consolidation• NTT Engineering business: sales surpassed the target due to favorable orders received for AC projects• NCC Engineering business: sales exceeded the target due to front-loaded orders of au base station projects• IT Solutions business: sales higher than the target due to successful software development projects• Social System-Related business: sales increased dramatically from the previous ﬁscal year, but fell short of the target due tothe extension of some construction projects(Unit: ¥100 million)

FY March 2019
Performance

Comparisons withthe previous term

Comparisonswith target

NTT Engineering

2,268

+409

+113

NCC Engineering

430

+73

+20

IT Solutions

750

+159

+25

Social SystemRelated and Other

1,367

+375

-42
6

I-4. Details of Operating Income
Achieved growth in operating income by steadily completinga high volume of construction work at hand
• Sales growth at existing consolidated subsidiaries offset changes in the product mix and increase in
SG&A expenses, leading to proﬁt growth• The three newly consolidated companies also contributed to proﬁt growth despite increased SG&A
expenses required for their sales capabilities enhancement(Unit: ¥100 million)

Effect of consolidation
Net sales
growthIncrease in
SG&A
expenses

59

Existing Group

SG&A expensesof three companies

Net sales Changes ingrowth product mix Increase in
SG&A
expenses49

Acquisition cost
+4

4

17

1

18

Strengthening
sales, etc.

9

Quarterly increase from
Kando Co., Ltd. consolidation
Increase from consolidation of
VACSLAB Co., Ltd.

303

86

Increase inChanges in Net sales
SG&A
expenses product mix growth

+55

+7
+1

49

FY March 2018
Performance*Kando Co., Ltd. was consolidated on July 1, 2017. VACSLAB Co., Ltd. was consolidated on April 1, 2018.

352

FY March 2019
Performance

12

340

FY March 2019
Target7

I-5. Status of Contract Backlogs
Contract backlog increased further due to robust orders received in growth segments• NTT Engineering business: contract backlog declined as MB projects brought forward from the previous ﬁscal year
were completed smoothly• NCC Engineering business: contract backlog increased due to robust orders received from au and Softbank• IT Solutions business: contract backlog increased due to the consolidation and continuation of favorable orders
received• Social System-Related business: contract backlog increased significantly due to the consolidation and robust
orders received for large-scale projects(Unit: ¥100 million)
+235
+222

1,595

1,373
+360

981
319
119
42
500
FY March 2016
Beginning of Term

+31

1,831

807

SocialSystem-Relatedand Other

625

1,013

437

280

136
50

150
85

209
119

IT
NCC

749

734

695

NTT

FY March 2018
Beginning of Term

FY March 2019
Beginning of Term

FY March 2020
Beginning of Term

133
39
558

FY March 2017
Beginning of Term

8

II. Business Targets
For the Fiscal Year Ending March 31, 2020

II-1. Business Targets for the Fiscal Year Ending March 31, 2020
Aiming for sales and profit growth based on the synergies from the consolidation andexpansion of the growing businesses• Planning all-time high for orders received, net sales and operating income• Generating consolidation synergies as soon as possible to contribute to sales growth• IT Solutions business and Social Systems-Related business to drive growth(Unit: ¥100 million)

FY March 2019
Performance

FY March 2020
Targets

Comparisons withFY March 2018

(Existing Group)(Existing Group)(Existing Group)

Orders Received

5,055

5,370

+315

(4,129)(4,195)(+66)

Net Sales

4,817

5,400

+583

(4,144)(4,269)(+125)

Operating Income

352

380

+29

(326)

(336)

(+10)

Operating Margin

7.3%

7.0%

-0.3 percentage points(7.9%)(7.9%)(0.0 percentage points)10II-2. Order Targets by Segment
Planning significant growth due to the consolidation and strengthening sales activities• NTT Engineering business: planning signiﬁcant growth in orders received as a result of the consolidation• NCC Engineering business: planning growth based on strong orders received from au and Softbank• IT Solutions business/Social System-Related business: promoting the virtual company system in cooperation
with the three consolidated companies, to further enhance capabilities to gain orders(Unit: ¥100 million)

FY March 2019
Performance

FY March 2020
Targets

Comparisons withFY March 2019

NTT Engineering

2,229

2,325

+95

NCC Engineering

465

480

+14

IT Solutions

809

870

+60

Social SystemRelated and Other

1,550

1,695

+144
11

II-3. Sales Targets by Segment
Planning significant sales growth due to the consolidation
and rapid expansion of the growth sectors• NTT Engineering business: signiﬁcant sales growth from previous ﬁscal year due to theconsolidation with focus on generation of consolidation synergies as soon as possible• NCC Engineering business: aiming to achieve targets by steadily completing massive orders
received from au and Softbank• IT Solutions business/Social System-Related business: promoting the virtual company system toaccelerate growth(Unit: ¥100 million)

FY March 2019
Performance

FY March 2020
Targets

Comparisons withFY March 2019

NTT Engineering

2,268

2,465

+196

NCC Engineering

430

445

+14

IT Solutions

750

825

+74

Social SystemRelated and Other

1,367

1,665

+297
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II-4. Forecasts for NTT Fixed-Line Related Business
Planning net sales growth due to effects of the consolidation• Sales to grow due to the consolidation despite decline in NTT’s capital investment• Focusing on cost reduction through elimination and integration of redundant operations at each of theconsolidated companies
Sales of NTT Engineering business–Access and Network(Simple total of eight companies*)(Unit: ¥100 million)

1,560
1,217
NW

223

1,725
205

208

AC 1,008
FY March 2018
Results

NTT East and NTT West capex

1,336

1,520

FY March 2019
Results

FY March 2020
TargetNo. of FLET’S Subscriptions(including optical fiber collaboration**)(Unit: ¥100 million)

5,496
Investment infiber optics
1,540
FY March 2018

5,410
Investment infiber optics**
1,610
FY March 2019

5,200
Investment infiber optics
1,500
FY March 2020

281

285

Investment infiber optics
193

Investment infiber optics
208

FY March 2018

FY March 2019

(Unit: 10,000 lines)

265
Investment infiber optics
190
FY March 2020
Target[Source: Prepared by COMSYS Holdings Corporation based on NTT Financial Results Briefing Materials, NTT Business Operation Plan for the Fiscal Year Ending March 31, 2020]* Simple total of eight companies is the sum of net sales of the following eight companies: Nippon COMSYS Corporation; SANWA COMSYS Engineering Corporation; TOSYS Corporation;
TSUKEN Corporation; NDS Co., Ltd.; SYSKEN Corporation; Hokuriku Denwa Kouji Co., Ltd.; and COMSYS JOHO SYSTEM Corporation. The amount for NDS Co., Ltd.; SYSKEN Corporation;and Hokuriku Denwa Kouji Co., Ltd., is included in the sum after the consolidation of the three companies in the second half of the fiscal year ended March 31, 2019.
** These are target values as the actual values are not disclosed.

13II-5. Market Trends for NTT Fixed-Line Related Business
Gradual decline in sales despite migration to full IP networks,
5G rollout, maintenance outsourcing, etc.
Your Value Partner 2025
Medium-term management strategy of the NTT Group
Promote B2B2X model / Realize and roll out 5G services / Promote personalization / Promote digital transformation / Promote PSTN migration /Promote city planning / Contribute to revitalization of regional societies and economies / Take disaster countermeasures

2019 (FY)
Rugby World Cup
5G pre-commercial
service

2020

2021

2022

2023

2024

Osaka World Expo

Tokyo Olympic andParalympic Games

Start IP service
connection

2025
Economic ripple effectof approx. ¥2 trillion

End ADSL services

Start migration of fixed-line
telephone services to IP
End ISDN services

Complete full
IP migration

Promote conversion to fiber optics
Promote migration of AC and NW to IP
In connection with 5G development, promote construction of facilities related to enhancing local 5G,DC, edge computing, IoT, and AC/NW
Promote outsourcing of maintenance operations

14II-6. Forecasts for NTT Mobile BusinessStarting investment aimed at 5G service rollout• Maintaining sales with quality enhancement of LTE and capacity countermeasures, etc. covering decline in
3.5GHz band projects• Newly receiving orders for the start of 5G pre-commercial service and for new frequency 3.4GHz band
construction projects• NTT DOCOMO to acquire 5G frequencies
NTT DOCOMO capex

Sales of NTT Engineering business–Mobile(Simple total of eight companies)

Annual investment amount will decline(Unit: ¥100 million)

681(Unit: ¥100 million)

5,770

5,937

5,700

Communications
business 5,465

5,627

5,330

305

311

370

680

632

Other

FY March 2018
Results

FY March 2019
Results

FY March 2020
TargetFY March 2018 FY March 2019 FY March 2020
Target[Source: Prepared by COMSYS HOLDINGS Corporation based on NTT DOCOMO Results Briefing Materials]

15II-7. Forecasts for NCC Business
Mobile-related construction to remain at high level• Aiming to receive further orders for au’s new frequency 1.7GHz band construction business and LTE quality enhancement
countermeasures projects• For Softbank base station construction area, aiming to receive orders for upgrading of LTE base stations ahead of 5G services• For Rakuten Mobile base station and NW facility construction areas, aiming to receive further orders in the nationwide rollout phase• au, Softbank, and Rakuten Mobile to acquire 5G frequencies
Consolidated Sales of NCC Engineering BusinessKDDI Capex (payment)(Unit: ¥100 million)

445

430

357

(Unit: ¥100 million)

5,608

FY March 2019
Results

FY March 2018
Results

FY March 2020
TargetFY March 2018

6,017

6,100

FY March 2019

FY March 2020
Target[Source: Prepared by COMSYS Holdings Corporation based on KDDI Results Briefing Materials]

Status of Rakuten Mobile

Softbank Capex

Intending to bring forward 4G base station
installation plans significantly
27,39724,802
21,378
7,
17,520• Utilize latest NW virtualization technology• Simplify base station design• Use standardized, universal hardware• Utilize open source(Unit: ¥100 million)

3,501

3,803

3,800

FY March 2019

FY March 2020
Target13,46363
8,652

Bring forward• 4G capital investment expected to be lessthan ¥600.0 billion• Migration to 5G through software updates

3,432

FY19 FY20 FY21 FY22 FY23 FY24 FY25
[Source: Prepared by COMSYS HOLDINGS Corporation based on Rakuten Results Briefing Materials]

FY March 2018

[Source: Prepared by COMSYS HOLDINGS Corporation based on
Softbank Results Briefing Materials and Securities Report]16

II-8. 5G Development Plans of Telecommunications Carriers
Full-scale 5G-related construction expected to begin from 2021 onward
5G development plans of each telecommunications carrier
5G infrastructure rollout rate*
100%

97.0%
93.2%

docomoau (KDDI)
Softbank
Rakuten Mobile

64.0%
56.1%

50%

0%

2019 (FY)
Rugby World Cup
5G pre-commercial service

2020

2021

2022

2023

Tokyo Olympic andParalympic Games

5G introductionplans of the
Allocate
Establish local frequency
Ministry of Internal frequency bands use regulations
Affairs andCommunications

Provide 5G services inall prefectures

Encourage regional
revitalization through 5G

Achieve 5G infrastructureroll out rate at least 50%

Ministry of Internal Affairs
and Communications
Aim at providing funding 20% greaterthan what is set by four mobile carriers
in improvement plans up to FY2024[Source: Nikkei Inc.]

5G investment up until
end of fiscal 2024

docomoPre-commercial
service

Service launchBase station facilities: ¥660.0 billion
NW facilities:¥135.0 billion

au(KDDI)

Trial

Service launchBase station facilities: ¥372.8 billion
NW facilities:¥93.9 billion

Softbank

Pre-commercial
service

Service launchBase station facilities: ¥122.1 billion
NW facilities:¥84.0 billion

Rakuten
MobileProactively use
5G virtualizationarchitecture with 4G

Service launch[Source: prepared by COMSYS HD based on Results of Deliberations related to Authorization of Establishment Plans on Specified Base Stations for the Introduction of 5G Mobile Communications Systems,
Ministry of Internal Affairs and Communications]*5G infrastructure roll out rate: with Japan divided into approximately 4,500 10km2 meshes, the percentage of meshes in which specified advanced 5G base stations have been established

Base station facilities: ¥159.8 billion
NW facilities:¥34.8 billion17II-9. Forecasts for IT Solutions Business
Aiming for at least 10% growth based on effects of the consolidation and internal growth• Servers, storage, and software development will drive growth• Accelerating top-line expansion by promoting virtual company system that includes the three consolidated
companies• Establishing stock-type earnings base by expanding maintenance business
Consolidated Sales of IT Solutions Business

Focus Strategies for Top-Line Expansion(Unit: ¥100 million)

+10٫

825

750
+12%

590
Softwaredevelopment
Servers
and storage

+47%

+23%

• Expand alliance partners• Take advantage of alliance projects to convert morecustomers to direct clients of COMSYS+5%• Generate synergies from the consolidation bystrengthening cross-selling• Expand stock-type business+52%

NW/infrastructure+0%(including maintenance)

FY March 2018

• Shift from system engineer dispatch-type contracts
to system development contracts• Strengthen development of RPA/AI solutions

FY March 2019
Results

FY March 2020
Target18

II-10. Market Trends in IT Solutions Business
Cloud computing and IoT drive growth in solutions market
Forecasts of IT Market Growth
Forecast for Cloud Services Market Size

Forecast for IT Market Size
(Unit: ¥100 million)

80,000(Markets of cloud platforms, application
connectivity and devices)(Unit: ¥100 million)

25,000(excluding data center-related market)

20,00060,00015,00040,00010,00020,000

5,000

0

0
2018

2019

2020

2021

2022

2023 (FY)

2018

2019

2020

2021

2022

2023 (FY)Forecast for Data Center Market Size
(Unit: ¥100 million)

20,000• Cloud computing and IoT will drive growth in the solutions
market, with robust development also in security, data center,
AI, and big data segments

15,00010,000

Promotion and development of new services utilizing 5G
5,000• 4K/8K streaming, self-driving cars, and remote control• Smart cities, buildings, and homes and wearable devices

0
2018

2019

2020

2021

2022

2023 (FY)[*Source: prepared by COMSYS HD based on IT Navigator 2019, Nomura Research Institute, Ltd.

19

II-11. Forecasts for Social System-Related Business
Aiming for at least 20% growth through effects of the consolidation and internal growth• Accelerating growth in the infrastructure and telecommunications segments based on the consolidation and internal growth• In the renewable energy segment, although orders received in the mega-solar business will peak out, sales will berobust, and the renewable energy business in biomass and wind power will expand• Maximizing the top-line by promoting virtual company system that includes the three consolidated companies
Consolidated Sales of Social System-Related Business(Unit: ¥100 million)

1,665

+22%

Focus Strategies for Top-Line Expansion

1,367
992
Infrastructure andOther Sectors

+13%
+27%

• Acquire new projects in disaster prevention, disaster mitigation,national resilience, and reconstruction fields• Expand PPP/PFI business in undergrounding of electrical wiring• Enter concession business for water supply facilities• Expand biomass and wind power generating business• Develop self-consumption solar power business+10%
Renewable
EnergyTelecommunications

FY March 2018

+70%
+39%

FY March 2019
Results+56%• Win Ministry of Defense facility-related construction projects• Get expressway renovation projects and Olympic
and Paralympic Games projects

FY March 2020
Target20

II-12. Market Trends in Social System-Related Business
Planning new installation, renovation, and maintenance projectsof infrastructure facilities in every segment
Fiscal Year
Segment

2018

2019

2020

2021

2022

2023

Ministry of Health, Labour and Welfare: Renovation of water supply and sewerage facilities based on New Water Supply Vision (FY 2016–2025)

Infrastructure
and Other
Sectors

Tokyo Metropolitan Government: 7th city plan for conversion tounderground electric power lines

Next-stage plan for conversion to underground electric power lines(covering other regions)Cabinet Office: Action Plan for Promotion of PPP/PFI (FY 2013–2022) business scale of ¥21 trillion
Ministry of Land, Infrastructure, Transport and Tourism: Three-year emergency countermeasuresfor prevention and disaster mitigation plans (FY 2020: approx. ¥7 trillion)

National Resilience measures (up to 2023: ¥200 trillion)

Increase in amount of solar systems introduced* (2020: 66GW, 2030: 153GW)

Renewable
EnergyAgency for Natural Resources and Energy: Promotion of zero energy buildings (ZEB) and zero energy houses (ZEH)(by 2020 making all newly constructed public buildings ZEB and the majority of newly constructed housing ZEH)
Ministry of Agriculture, Forestry and Fisheries: Basic plan for the utilization of biomass (targeting creation of ¥500.0 billion market by 2025)
Ministry of Economy, Trade and Industry: Basic hydrogen strategy (creating 900 hydrogen stations, 800,000 fuel cell vehicles in 2030)

Ministry of Land, Infrastructure, Transport and Tourism: Major expressway repair and renovation program (¥600.0 billion during FY2014–2030)

Telecommunications

Termination measures for frequency reorganization (1.7GHz) (¥190.0 billion face to Ministry of Defense )Ministry of Defense: Medium Term Defense Program (¥17.17 trillion for FY 2019-2023)
Forecast investment in construction of large-scale data centers (market size of ¥1.8 trillion in fiscal 2022**)* Forecast for installation of solar power generation by RTS Corporation** Research by IDC Japan21

III. Medium-Term Vision

III-1. COMSYS VISION NEXT STAGE 2023
Aiming for NEXT STAGE as One COMSYSCOMSYS VISION

Achieved COMSYS VISION 2020
ahead of schedule

NEXT STAGE 2023

Net Sales At least ¥400.0 billion
Operating Income At least ¥30.0 billion

Net Sales
At least ¥600.0 billion
Operating Income At least ¥50.0 billion
Total return ratio

Maintain 70% target

At least ¥600.0 billion

5,400
4,817
Net Sales
IT
SocialSystemTop-line expansion

1,665

Further expand existing segments
Enter new segments
M&As

1,367
524
403

Maintain profit by creating
consolidation synergies

At least
20% growth

Maintain
Net sales

2,386

2,699

2,910

2013

2018

2019 Target

2023 Target(FY March 2014)(FY March 2019)(FY March 2020)(FY March 2024)

NTT
NCC

Business year

825

750

3,313

At least
30% growth

Operating Income

275

352

380

(Operating Margin)(8.3%)(7.3%)(7.0%)

Promote streamlining through structural reform
Share IT platform

At least
50%

At most50%

At least 50.0 billion(At least 8%)23

III-2. Expanding Business Opportunities Driven by 5G
One-Stop Solutions for Various Industry Needs Induced by 5G
Telecom CarriersPartnering
CHD

Construct 5G networks, create and provide services

Support service
implementation

Service Providers
Enterprises,
Local Governments, etc.
Create, provide, and install 5G-based services

DisasterPrevention

Tourism
Communications

Fixed WirelessBB AccessEnhance NW

MediaTransform all industries
Security

Augmented Reality (AR),Virtual Reality(VR),
Mixed Reality (MR)

Enhance
optical AC

NTT-AC and NW

Industry,
Agriculture,
Fisheries

Public Infrastructure
EnergySmart Cities- buildings- homes

Increasebase stations

Construct data
centers andedge computing

NTT-MB/NCC

Transportation
and Distribution

IoT

Automobiles

Remote Operation
Healthcare

Robots, Construction
Machinery, Airports
Operations

Autonomous Cars

Public experimentand verification

IT Solutions

Construction

Service proposal
and development

Monitor, maintain,
and preservation

Social System-Related

We will integrate the strengths of each segment to take advantage of new opportunities in expanding business areas

COMSYS’s Business Domains
24III-3. Generating Consolidation Synergies
Achieving synergies as soon as possible
through structural reform and utilization of IT platforms
At least 8%
7.3%

7.0%

Operating Margin

Operating
Income¥35.2

Temporary drop in
operating margin after
consolidation

billionOver¥50.0billion

FY 2019(FY Mar. 2020)

FY 2023(FY Mar. 2024)¥38.0

billion

Sales expansion synergies(from optimum use ofmanagement resources)

Cost reduction synergies(from structural reform,
process streamlining)0

FY 2018(FY Mar. 2019)

5 Existing Companies

3 Consolidated Companies

Eliminate and integrate duplicated operations in AC, NW and MB businesses

Radical
Structural
ReformUtilizationof IT

Reorganize and integrate consolidated subsidiaries
Improve work efficiency through multi-skilling of engineers
Optimize resource allocations across Group companies and business sectors
Strengthen IT platforms

Migrate to IT platforms

Develop construction-related IT systems
25

III-4. Developing IT Platform
Build COMSYS Holdings’ IT Platform within Three YearsCOMSYS Holdings’ common IT platform

Individual compcompany basis
Hokuriku
Denwa
systemStandardizing operations
Integrating management
resources

TSUKENTOSYSCOMSYS
system

• Improve productivity• Enhance efficiency in
IT investment• Allocate resources in optimum
manner nationwide

NipponCOMSYS
NDS
system

SYSKENsystemCOMSYS Holdings’ common IT platform

Future IT measures• Streamline reporting using document
management tools• Convert routine tasks to RPA• Use next-generation ERP• Develop integrated humanresource database

Backbone systems
Business systems

GroupwareManagement of general service
construction undertaken incustomers’ residence
Access-related
construction
management

Procurement

Mobile-related
construction
management

Make construction
management evenmore efficient
Fixed line-related
photo inspection

Streamline
operations using AI

Personnel

NTT intra-officeproject management

Finance andAccounting

Photo inspection center

UpgradeSecurity
User Projects

Access Projects

Look into possible use ofwearable fence devices

Intra-office Projects

Mobile Projects

26III-5. Growth Strategy for IT Solutions Business
Create most competitive and unique business domains
Growth Strategies

IT Solutions Business Consolidated Net Sales(Unit: ¥100 million)

Improve growth potential utilizing partnering and M&As

At least 30% New
growthExpand Stock Business

Develop New Businesses¾ Maintenance and operation¾ Outsourcing¾ Full-layer solutions businesses combining
5G, IoT, and AI, etc.
Provide one-stop solutions combining
consulting, IoT, cloud computing, servers
and network integration (5G and NW) as
One COMSYS

Develop New Solutions

750
SoftwareDevelopment

Business Domains

825
+39%
+12%

+28%
Servers +23%
andStorage

NW/+2%
Infrastructure
Maintenance +19%

FY Mar. 2019 FY Mar. 2020
(Target)¾ Cloud computing and data centers¾ IoT and information security¾ AI, RPA, and workstyle reform

Promote and Further Develop
More Direct-Customer Base

Obtain New Customers¾ Promote alliances with partners withstrong sales capability¾ Promote virtual company system- DELL, HP, NSSOL, telecom carriers, etc.

- Establish business collaboration model- Optimize resources allocation+40%- Promote cross selling- Expand alliance model across the Group- Integrate maintenance platforms

+78%
•

•

•

¾ Expand partnership proactively¾ Generate synergies from consolidation

FY Mar. 2024
(Forecasts)- Foreign-affiliated hardware andsoftware vendors- System integrators, etc.

Existing
Existing

CustomersNew27

III-6. Successful Examples in IT Solutions Business
Alliance segment has grown significantly to date
• Sales have increased through alliances with high-growth companies• Accelerate growth by expanding alliance with more high-growth companies• Expand alliance model throughout Group companies to boost sales
Alliance Models (examples)

Sales Performance of Alliance Segment

Past example

Future Model

Customer companies
Public sector and local governments

Expand cross-layer collaboration
Expand direct-customer base

+19%
IoT

(1) Marketing

Alliance partners

+9%

+18%

Cloud
computing(3) Sales
SystemDevelopment
SupportAI
NW/infrastructure

FY Mar. 2016

FY Mar. 2017

FY Mar. 2018

FY Mar. 2019

DELL EMC

Expand the model toevery consolidated company• Enhance technical capabilities(partner qualifications)
DELL EMC partner qualification ranks
Authorized(2) Procurement of merchandise,such as servers

Gold

Top qualification level(given to 7 companies in Japan)

Platinum

Titanium• Strengthen resources• Deepen partnerships

28

III-7. Growth Strategy for Social System-Related Business
Implement one-stop, comprehensive engineering & construction solutions nationwide
Social System-Related and Others Business
Consolidated Net Sales

Growth Strategies(Unit: ¥100 million)

+4%

+56%

+39%

Electrical andCommunication

FY Mar. 2019 FY Mar. 2020
(Target)FY Mar. 2024
(Forecasts)

Measures

Renewable +10%
EnergyNationwide

Expand areas

Expand areas

Bridges

Agricultural waterRiversRoad paving

Gas piping

Water supply and sewerage piping

Communication cable piping

Civil engineering

Other renewable energy

Ground source heat energy

Geothermal power

Wind power

Biomass

Solar power

Warehousing

Building

Sanitation

Security

HVAC

Roads

Hydro-electric power+13%
Infrastructure
and Other
Sectors

ElectricalBusiness domains+16%

Communications

1,367

Expand areas

Main cities

1,665

Area coverage

At least 20%
growthExpand business domains and area coverage through M&As and other measures

Expand business domains

Expand business domains

Expand business domains

Telecommunications

Renewable Energy

Infrastructure- Proactively expand areas from
Tokyo metropolitan area to otherregions- Develop new projects incollaboration with general
construction contractors- Acquire peripheral projects andenhance business capabilities- Improve competence (in costand construction speed)- Expand from EPC into total
O&M business- Develop new renewableenergy businesses- Enter PPP/PFI and concessions
business- Improve competence and develop
human resources by delivering
successful results in various
strategic projects- Expand area outside of Tokyo
metropolitan area and Chubu area29

III-8. Successful Examples in Social System-Related Business
Acquired undergrounding projects by means of PFI• Acquired business opportunities by participating in regional PFI-based projects for undergrounding utility poles• Also participate in nationwide expansion of undergrounding projects in the future
Leverage PFI project know-how to enter into water supply and sewerage projects, etc. in the future
Promotion of Utility Pole Undergrounding

Tokyo: approx. 5%

Ibaraki Prefecture:
approx. 0.5%
0%[Needs for undergrounding](1) Preventing utility poles from falling
down during disaster(2) Ensuring safe and smooth traffic flow
(3) Landscape improvement and tourism
promotion(4) Contribution to Olympic andParalympic Games[Source: Promoting the undergrounding of utility
poles, Ministry of Land, Infrastructure, Transport
and Tourism]

Promotion of undergrounding of utility polesby the Japanese government• Act for Promoting Removal and Burying of Utility Poles established in 2016
• Plan for Conversion to Underground utility poles formulated(Ministry of Land, Infrastructure, Transport and Tourism)

Planning to underground utility poles along 1,400km
of major roads over three years from fiscal 2018

• Public-private collaboration• Financial support

Received orders for two PFI pilot projects (in FY ended March 31, 2019)• Yasugi, Shimane Prefecture: ¥1.4 billion• Matsuyama, Ehime Prefecture: ¥2.0 billion
Consortium
Ministry of Land,
Infrastructure,
Transport and Tourism- Chugoku Regional
Development Bureau- Shikoku Regional
Development Bureau

Nippon COMSYS[Representative](Construction)

Company A

PFI agreement(Design, maintenanceand management)

Company B(Management)[Conventional undergrounding projects]
Construction expenses
paid by local governments[Undergrounding ratio by prefecture]
5%

COMSYS business records[PFI-based Undergrounding projects]

Peak in local
government budgets
DesignLocal government
budgets can be leveled

Main construction, etc.
Construction period

Private-sector companies orconsortiums bear construction expenses
during the construction period

Local government pays
back later by installment• Will participate in undergrounding projects to be expanded nationwide in the future• Will Participate in new PFI-based projects for water supply and sewerage systems
and educational facilities, etc.

30

IV. Shareholder Returns Policy

IV. Shareholder Returns Policy (Dividends and Acquisition of Treasury Stock)
Maintain total return ratio of approx. 70% through ¥15 increasein dividend and acquisition of treasury stock
Net Income

Total dividends

280

Amount of Treasury Stocks Acquired(Unit: ¥100 million)

Negative
Goodwill51

Net Income(Target)<167>+a
203 8080

255 5096[ 228 ]

167 75154

80

144 80

35

39

44

58

72

March 2015

March 2016

March 2017

March 2018

March 2019

March 2020
(Planned)

Mid-term

¥15

¥15

¥20

¥25

¥30

¥35

Year-end

¥15

¥20

¥20

¥25

¥30

¥40

Consolidated Payout Ratio

21.0%

25.6%

30.8%
< 26.6% >*

28.0%

26.1%
[ 32.0% ]**37.9%

Total Return Ratio
Dividends + Repurchases
Net income

66.2%

77.2%

85.6%
< 74.0% >*

67.5%

54.5%
[ 66.8% ]**Number of sharesof treasury stockat the end of the period*

31.41
million shares

30.24
million shares

31.86
million shares

26.42
million shares

12.29
million shares(Ownership Ratio)(21.5%)(21.5%)(22.6%)(18.7%)(8.7%)

ROE

9.0%

7.9%

7.3%
< 8.3% >*

9.4%

10.6%
[ 8.7% ]**Dividends per
Share(annual)

57.5% +

Amount ofTreasury
StocksAcquired
Total
dividends

a
× 100
255

—

8.4%

* Figures in < >* are estimates assuming no impairment loss on goodwill.
** Figures in [ ]** are estimates assuming no negative goodwill.
*** 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.

32

— COMSYS Group Management Philosophy —At the COMSYS Group, we are united as a Group and 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.

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 a variety 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’sbusiness areas, and downward pressure on prices for the services provided by the Group 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/