Presentation of Performance
Fiscal Year Ended March 31, 2021

May 20, 2021

Contents
I． Overview of Performance for the Fiscal Year Ended March 31, 2021
1. Highlights of Performance
2. Details of Orders Received by Segment
3. Details of Net Sales by Segment
4. Details of Operating Profit
5. Status of Contract Backlogs

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6
7
8

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10
11
12
13

・・・・・・・・・
1. Changes in Telecommunications Carrier Business・・・・・・・・・
2. Competition Strategy of COMSYS Group in 5G Era
・・・・・・・・・
3. Business Strategy of COMSYS Group・・・・・・・・・
4. Market Trends for NTT Fixed-Line Related Business・・・・・・・・・
5. Forecasts for NTT Fixed-Line Related Business・・・・・・・・・
6. 5G Development Plans of Telecommunications Carriers
・・・・・・・・・
7. Forecasts for NTT Mobile Business・・・・・・・・・
8. Forecasts for NCC Business・・・・・・・・・
9. Market Trends in IT Solutions Business・・・・・・・・・
10. Growth Strategy for IT Solutions Business
11. Examples of New Business Development in IT Solutions Business ・・・・・・・・・・・・・・・・・・
12. Market Trends in Social System-Related Business・・・・・・・・・
13. Growth Strategy for Social System-Related Business・・・・・・・・・
14. Growth Strategy for Renewable Energy Business・・・・・・・・・
15. Toward Achievement of NEXT STAGE 2023

15
16
17
18
19
20
21
22
23
24
25
26
27
28
29

II． Business Targets for the Fiscal Year Ending March 31, 2022
1. Business Targets for the Fiscal Year Ending March 31, 2022
2. Order Targets by Segment
3. Sales Targets by Segment
4. Progress of COMSYS VISION NEXT STAGE 2023

III． Business Environment and Business Strategy

IV． Shareholder Returns Policy
1. Shareholder Returns Policy(Dividends and Acquisition of Treasury Shares)

・・・・・・・・・

31

1. Basic Strategy of COMSYS Group・・・・・・・・・

33

2. Promotion of ESG

・・・・・・・・・

34(Reference) ESG

I. Overview of Performancefor the Fiscal Year Ended March 31, 2021

I-1. Highlights of Performance
All-time high net sales and operating profit achieved• In the second half, the impact from COVID-19 in the first half declined, and all-times highs of net sales
and operating profit were achieved for the full year.
• Orders received fell year on year, due to a decline in the super-large solar projects obtained in the previous fiscal year.
• Orders received, net sales, and operating profit all exceeded targets.
FY March 2021
(Unit: ¥100 million)

Performance

Comparisons with
the Previous Term

(Existing Group)(Existing Group)

Orders Received

5,865

-42

(4,551)(-33)

Net Sales

5,632

+23

(4,343)(+24)

Operating Profit

415

+26

(351)

(+20)

Operating Margin

7.4%+0.5 p.p.

(8.1%)(+0.4 p.p.)

Comparisonswith Target

+215
+32
+35
+0.6 p.p.

Notes 1. Existing Group shows consolidated figures for Nippon COMSYS Corporation, SANWA COMSYS Engineering Corporation, TOSYS Corporation, TSUKEN Corporation,
COMSYS JOHO SYSTEM Corporation, and COMSYS Shared Services Corporation.
2. p.p. = percentage points4I-2. Details of Orders Received by Segment
Although orders received in the Social System-Related Business fell year on year, declining from the high level oforders received recorded in the previous fiscal year, orders received were strong in other businesses.
• NTT Engineering business: Orders were robust in the access (AC) business (high-speed wireless-related, and conversion to fiber optic networks)
and the mobile business (5G construction) were significantly higher than the target.
• NCC Engineering business: Although orders received increased significantly year on year due to expanded Rakuten orders,
they fell slightly short of the target.
• IT Solutions business: Orders were higher year on year and compared to targets as GIGA School projects offset a market downturn
due to the COVID-19 pandemic.
• Social System-Related business: Order decreased year on year due to a decline from the orders received for large-scale solar projects recordedin the previous fiscal year and fell short of the target due to a decline in orders received for biomass projects.
FY March 2021
(Unit: ¥100 million)

Performance

Comparisons with
the Previous Term

Comparisonswith Target

NTT Engineering

2,582

+27

+292

NCC Engineering

504

+70

-5

IT Solutions

1,053

+44

+23

Social SystemRelated and Other

1,723

-185

-96
5

I-3. Details of Net Sales by Segment
Although sales in the NTT Engineering business fell year on year,
the NCC Engineering and IT Solutions businesses drove an increase in total net sales.
• NTT Engineering business: Although the AC business sales outperformed the target due to robust demand for fiber optic conversion,
total sales fell year on year due to a decline in the high level of sales in the previous fiscal year in the network businessand mobile business construction delays.
• NCC Engineering business: Although sales increased year on year due to expanded Rakuten sales, they fell slightly short of the target.
• IT Solutions business: Sales were considerably higher year on year and compared well to the target,
mainly owing to the completion of GIGA School projects.
• Social System-Related business: Sales were largely the same year on year due to completion of order backlogs,
but fell short of the target owing to delays in progress of solar projects.
FY March 2021
(Unit: ¥100 million)

Performance

Comparisons with
the Previous Term

Comparisonswith Target

NTT Engineering

2,421

-83

+11

NCC Engineering

472

+35

-7

IT Solutions

1,055

+74

+45

Social SystemRelated and Other

1,682

-2

-17
6

I-４. Details of Operating Profit
Operating profit rose due to sales growth and thorough cost reductions.
• Steady progress of construction despite the COVID-19 pandemic expanded net sales
and contributed to the operating profit increase.
• Thorough cost reductions and expanded productivity improved the gross profit marginand contributed to the operating profit increase.
• A decrease in SG&A expenses, such as travel and transport costs due to promotion of teleworking owing
to the COVID-19 pandemic contributed to the increase in operating profit.
Decrease in
SG&A expenses

Decrease in
Improvement in
SG&A expenses
gross profit
margin+2+5(Unit: ¥100 million)

Improvement ingross profit
margin+20
Net sales
growth

415

+3

397

+25
Net sales
growth+4389

FY March 2020
Performance

＋26

＋35

FY March 2021
Performance

380
FY March 2021
Target7

I-5. Status of Contract Backlogs
Total contract backlog increased against the backgroundof robust orders received in the telecommunications carrier business.
• NTT Engineering business: Contract backlog increased considerably year on year due to robust orders received in the access (AC)and mobile businesses although the contract backlog in the network business decreased year on year.
• NCC Engineering business: Contract backlog increased considerably year on year owing to expanded orders from Rakutenin addition to steady orders from KDDI and SoftBank.
• IT Solutions business: Contract backlog was at the same level as in the previous fiscal year due to steady completionof favorably ordered GIGA School projects.
• Social System-Related business: Contract backlog increased year on year due to robust orders for new projects in addition
to the previous contract backlog.

2,362 (Unit: ¥100 million)
2,129
1,831
1,595
1,373
437

+222

+235

+232

+298

1,078

SocialSystem

234

IT

142

NCC

906

NTT

1,031
807

625

136
50

150
85

209
119

236
115

749

734

695

745

FY March 2018
Beginning of Term

FY March 2019
Beginning of Term

FY March 2020
Beginning of Term

FY March 2021
Beginning of Term

FY March 2022
Beginning of Term

8

II. Business Targets
for the Fiscal Year Ending March 31, 2022

II-1. Business Targets for the Fiscal Year Ending March 31, 2022
Aiming for all-time high net sales and operating profit• A decrease is anticipated in total orders received year on year with a considerable decrease in orders for the NTT businesswhile those in other business will be strong.
• Expecting increase in net sales, mainly due to full-scale rollout of 5G base stations, high-speed wireless-related,social system-related and other construction projects.
• Expecting increase in operating profit with continued implementation of measures for productivity improvement and cost reduction.
FY March 2021
(Unit: ¥100 million)

Performance

FY March 2022
Targets

Comparisons withFY March 2021

Orders Received

5,865

5,700

-165

Net Sales

5,632

5,800

+167

Operating Profit

415

430

+14

Operating Margin

7.4%

7.4%

+0.0 p.p.

Note. p.p. = percentage points

10II-2. Order Targets by Segment
Orders received are likely to decrease considerably in NTT business but will be strong in other segments.
• NTT Engineering business: Expecting considerable decrease in orders year on year due to decline from the high levelof high-speed wireless-related orders received in the previous fiscal year and a decrease in CAPEX.
• NCC Engineering business: Aim for increase in orders received year on year due to growth in orders received from Rakuten
and full-scale rollout of 5G base stations by each carrier.
• IT Solutions business: Aim for increase in orders received year on year by capturing recovering IT investment despite decline in orders
for GIGA School from the high level received in the previous fiscal year.
• Social System-Related business: Aim to win orders for undergrounding of utility poles, and expansion of road-use electric equipment
required in expanded areas, as well as biomass and other new projects.
FY March 2021
(Unit: ¥100 million)

Performance

FY March 2022
Targets

Comparisons withFY March 2021

NTT Engineering

2,582

2,230

-352

NCC Engineering

504

530

+25

IT Solutions

1,053

1,070

+16

Social SystemRelated and Other

1,723

1,870

+146
11

II-3. Sales Targets by Segment
Aim to steadily complete contract backlogs and increase net sales in all segments• NTT Engineering business: Aim to increase sales in access (AC) business (high-speed wireless-related)and mobile business (5G base station construction).
• NCC Engineering business: Aim to increase sales by actively supporting the nationwide 4G expansion by Rakuten
and 5G base station rollout by each company.
• IT Solutions business: Aim to increase sales by offsetting decrease in GIGA School sales from high level recordedin the previous fiscal year with other IT investment projects.
• Social System-Related business: Aim to increase sales by steadily completing ample contract backlog.
FY March 2021
(Unit: ¥100 million)

Performance

FY March 2022
Targets

Comparisons withFY March 2021

NTT Engineering

2,421

2,460

+38

NCC Engineering

472

500

+27

IT Solutions

1,055

1,070

+14

Social SystemRelated and Other

1,682

1,770

+87
12

II-4. Progress of COMSYS VISION NEXT STAGE 2023
Aim to achieve goals by further growing sales and increasing productivity
COMSYS VISION NEXT STAGE 2023
Moderate growth inprevious fiscal year due to COVID-19

Assuming steady growthfor current fiscal year

FYE March 31, 2021 results YoY

FYE March 31, 2022 targets

Net Sales: +0.4% (+0.6%)

Net Sales: +3.0%

Operating Profit: +6.7% (+9.0%)

Operating Profit: +3.4%

COMSYS VISIONNEXT STAGE 2023
(Unit: ¥100 million)

Net Sales: At least 6,000
Operating Profit: At least 500
Total return ratio: Maintain 70% target

Figures in parentheses show growth of existing Group companies

Net Sales(Unit: ¥100 million)

IT
SocialSystem

5,608
981

1,685

5,800

5,632
1,055

1,682

At least

+1.4%
+5.2%

Maintainta approx.
+6%/year

1,070
Growth Businesses

1,770

Balance sales and profit growth
Expand existing and new domains,promote M&As
Promote virtual company system

Maintain
at approx.
+4%/year

6,000
At least
1,200

At least
1,900

At least
50%

Telecommunications Carrier Business

Carrier+ 2 .3 %

2,960

2,942

2,894

Business YearFY March 2020
Results

FY March 2021
Results

FY March 2022
Targets

Operating Profit(Operating Margin)389（6.9%）

415（7.4%)

430（7.4%）

Reduce costs and improve productivity
through structural reform and IT system
integration
Create synergies from consolidation
Ensure capture of business opportunities

Maintain
Net sales

At most50%(Unit: ¥100 million)
FY March 2024
Targets+70

At least

500(8.0%)

13

III. Business Environment and Business Strategy

III-1. Changes in Telecommunications Carrier Business
Shift of competitive arena from telecommunications infrastructure to B2B2X• Telecommunications companies aspire to build ecosystems that transcend conventional telecommunications
business framework.
• Shift of resources from telecommunications infrastructure to service domains will continue going forward
Revenue of
Telecommunications Carriers*

Transformation of telecommunications
business in the age of the data industry

Revenue from domestic telecommunications business ispeaking while non-telecommunications business is growing

New collaboration and competition based on B2B2X model¥200(Unit: ¥100 billion)

ICT Business Domain

¥150
¥100

Traffic

B2B¥50
FY2017
Telecomm uni cat ions

FY2018FY2019

Expansion in Business Domains
by Mobile Carriers
Shift of competition from telecommunications
network to ecosystem
docomoKDDI
SoftBank
Rakutend Barai
MerpayE-commerce,
Mercarietc.
(business alliance)

docomoSecurity

Rakuten Pay
Rakuten Edy

auPay

PayPayauPayMarketYahoo Shopping,

Zozo

Rakuten Ichiba

au
UQ

SoftBank
Y︕Mobile

Rakuten Mobile

Manufacturing

Healthcare

Data Centers
Cloud

Non-t elecommunicati ons business, corporat e business, other*Total of the net sales in each segment of NTT Docomo, KDDI, and SoftBank

Telecommunications

B2C

FinanceExpansion in business domains by telecommunications carriers¥0

Finance

Tourism

Distribution

Platforms

Telecommunications network(access, network, mobile)AI
Big Data

Local 5G
IoT

Agriculture, forestry
and fisheries

Education

Entertainment

Smart cities and natural energy
Air conditioning
HygieneWater supply andsewerage
Electric powerand gasConstruction
PavingSocial Infrastructure-Related Domain

15

III-2. Competition Strategy of COMSYS Group in 5G Era
Supporting all types or infrastructure with “full layers” and “full lifecycle” principles• Provide total support as One COMSYS for expanding business of telecommunications carriers and diverse customers• Venture into new domains as well as supporting social and telecommunications infrastructure in the 5G era
through M&As and collaboration
Customers

Privatecompanies

Government andmunicipal
agencies

Agriculture,
forestry andfisheries

Manufacturing

Education

Healthcare

Telecommunications infrastructure

One COMSYSBuild solutions(Security, cloud, software)

Competitive Strategy

Full Layers

Differentiation through“full layers” and “fulllifecycle” principles

Build systems(Servers, storage, virtualization)
Build telecommunications carrier networks(Access, network, mobile)
Build basic civil engineering, electricalfacilities, renewable energy

Partnering thatleverages advantages

Full Lifecycle
Planning
ProposalDesigning

Construction

Collaboration Strategy

Competing and
Collaborating Companies
IT vendors
System integrators
Manufacturer-affiliated construction
companies

Telecommunications
construction companies
Electrical system construction
companies
Plant construction companies
General contractors and subcontractors

Repair
MaintenanceOperation

16

III-3. Business Strategy of COMSYS Group
Accelerate telecommunications carrier business and growth business strategies to achieve goals• In the telecommunications carrier business, establish optimal business structure as soon as possible to raise productivity
and maximize capture of 5G and other business opportunities• In growth business, expand the topline by means of M&A and other measures and concentrate on areas of COMSYS strength to improve profit margin• Strengthen the management basis through DX and structural reform

Increase
Profitability
Topline Contraction• Gradual decrease intelecommunications carrier capex
Raise Productivity• Build optimal Group businessstructure• Integrate IT platforms and optimize
workflow
NTT Fixed-Line
Related BusinessApprox. 1,700(Unit: ¥100 million)

Social SystemRelated business
1,900

Mobile BusinessApprox. 1,200

FYE March
2022
Targets

NEXT STAGE 2023
Net Sales: At least 6,000
Operating Profit: At least 500

Expand Topline• Expand business domains (businesssectors, geographical regions, greater
added value)• M&AsRaise Productivity• Utilize i-Construction• Standardize profit management methods(Unit: ¥100 million)

IT Solutions
business
1,200

Expand Topline• Initiatives in new domains (local 5G, AI,
maintenance)• Expand partnering
Raise Productivity• Full-layer value-added proposals• Integrate maintenance platforms

FYE March 2024 goals

Expand Sales
Expand Topline• Capture 5G and other business opportunities• Expand sales in NCC business (Rakuten)
Raise Productivity• Integrate IT platforms and optimize workflow• Pursue integrated and flexible management ofbusiness resources17

III-4. Market Trends for NTT Fixed-Line Related BusinessConversion to fiber optics, 5G rollout, maintenance outsourcing, undergrounding, etc.
expected to continue over medium to long term
NTT Group Medium-Term Management StrategyYour Value Partner 2025

NTT’s new network initiatives“IOWN”

Promote B2B2X model/roll out 5G services/promote personalization/pursue DX/migrate PSTN to IP
Promote urban development/contribute to vitalization of regional societies and economies/undertake disastercountermeasures

2020 (FY)

2021

2022

2023

2024

Tokyo Olympic
and Paralympic Games

Start IP service
connection

2025

2030

Osaka World Expo
Economic ripple
effect ofapprox. ¥2 trillion

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

End
ADSL services

PromoteEstablishment of high-speed
conversion to
wireless environmentfiber optics

Launch 5G/local 5G“All-Photonics Network”

Completefull IPmigration

Promote migrationof AC and NW to IPTransmission medium:

Conversion from metal lines to all fiber optics

Transmission equipment:

Currently, fiber optics → electrical → fiber optics
Change to directly transmit optical signals
without conversion

Information processing:From electrical processing to photoelectric
fusion device

Promote construction of equipment related to DC, edge computing, IoT,
and 5G Backhaul Networks
NTT Group’s entry into local 5G market

Promote outsourcing of maintenance operations
Expand smart energy business

Sales ¥600 billion, capex ¥100 billion/year

Green power generation, VPP, advanced EV stations, backup power sources, electricity retail and wholesale

Promote undergrounding of utility poles
Plans to promote undergrounding by the Ministry of Land, Infrastructure, Transport and Tourism and Tokyo Government18

III-5. Forecasts for NTT Fixed-Line Related Business
Aim for topline expansion and productivity improvement through Group-wide optimization• Expect sales growth in AC business due to high-speed wireless-related construction, but trend of gradual decrease
will continue in network business• Work to further improve productivity by standardizing workflows and promoting shared use of IT systems• Aim to transform operating structure to maximize profit in telecommunications carrier business
Sales of NTT Engineering Business–AC and NW(Simple total of eight companies*)

NW

Implement Transformation from Individual Company
Optimization to Group-Wide Optimization

1,849

1,785

1,790 (Unit: ¥100 million)

241

224

220

• Accelerate nationwide centralization of sales and back-office functions

1,570• Start review into optimal operating structure for entire
telecommunications carrier business

1,608

1,561

Structural Reform

Improve Productivity by Standardizing IT Platforms

AC• Business reform
FY March 2020
Results

FY March 2021
Results

FY March 2022
Targets

NTT East and NTT West Capex**
5,225

5,274

5,100

(Unit: ¥100 million)• Promote DX
Capture New Business Opportunities
Strengthen New Business Initiatives• Steadily implement high-speed wireless-related construction• Strengthen competitiveness of electric power-related
business (sales and construction systems)

FY March 2020 FY March 2021 FY March 2022
Targets

Expand Maintenance Business• Win design/construction/maintenance projects in an
integrated manner* 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.
** Prepared by COMSYS Holdings Corporation based on supplementary data for the FY2020 financial results of NTT Corporation

19

III-6. 5G Development Plans of Telecommunications Carriers

5G base station rollout will proceed at rapid pace
(Base stations)

70,00060,00050,00040,0005G Base Station Establishment
Plans by Telecommunications Carriers
キャリア各社の5G基地局開設計画
5G Capex Plans by Telecommunications Carriers
docomoKDDISB• ¥1 trillion over five years to March 31, 2024

• ¥1 trillion over five years to March 31, 2024
• Cumulative total of ¥2 trillion through 2030
(includes 6G research and development)

docomoau(KDDI)
SoftBank
Rakuten M

Rakuten• Around ¥500 billion through March 31, 2024 • Around ¥200 billion through March 31, 2024
• Cumulative total of ¥2.2 trillion through 2030 (with 4G investment expected to increase by(includes 6G research and development)
30–40% from approximately ¥600 billion)

KDDI and SoftBank
50,000 base stations (Notes 3 and 4)
Includes joint use with 5G Japan Corp

docomo32,000 base stations (Note 5)

30,000KDDI
Approx. 10,000 basestations (Note 2)

20,000docomo10,000 base stations (Note 1)

docomo20,000 base stations (Note 1)
RakutenApprox. 13,000 base stations (Note 6)

10,000

RakutenApprox. 6,000 base stations (Note 6)0March 31, 2020
Ministry of Internal
Affairs andCommunications’
5G introduction
guidelines

Local 5G roll out

June 30, 2020

March 31, 2021

June 30, 2021

March 31, 2022

March 31, 2023

RakutenMarch 31, 2028
Additional 1.7GHz band
allocation Approx.
30,000 base stations(Note 6)

Tax incentives for bringing forward establishment
Institutionalization for
5G use of 4G bands

Promotion of 5G and local 5G roll out

Expansion of demonstration projects and use cases(agriculture, manufacturing, education, infrastructure monitoring, and open laboratory establishment)
Local 5G licenses to be acquired by vendors,
cable TV, NTT-COM, NTT East and NTT West, local governments, and universities
Notes
1. Information on NTT Docomo presentation of 5G, new services and new products, March 18, 2020
2. KDDI, News Release, March 23, 2020
3. SoftBank, Earnings Results Briefing for FY ended March 2020

Ministry of Internal Affairs
and Communications
March 31, 2024
Rollout target: Four-fold
280,000 base stations (Note 7)(Includes use of 4G)

4. KDDI FY2019 General Meeting of Shareholders Q&A
5. NTT Docomo, New Service and Product Presentation 2020 – 2021 Winter and Spring, November 5, 2020
6. Ministry of Internal Affairs and Communications, information on Authorization of Establishment Plans
7. Ministry of Internal Affairs and Communications, Master Plan 3.0 on the Regional Development of ICT Infrastructure20III-7. Forecasts for NTT Mobile Business
Shift maximum business resources to 5G although total capex is gradually decreasing• Actively promote 5G base station construction, despite decline in capex• Manage resources and construction to the fullest to ensure achievement of 5G base station completion targets• Launch DX measures to optimize resources of entire COMSYS Group and minimize costs
Sales of NTT Engineering business–MB(Simple total of eight companies) (Unit: ¥100 million)
612

597

FY March 2020
Results

FY March 2021
Results

NTT DOCOMO Capex*

5,728Communications
5,320
business

5,691

5,290

FY March 2021

FY March 2022
Targets

Promote Digital Transformation of NTT Mobile Business(Unit: ¥100 million)

5,500

IT Platformsl Commence operation of company-wide mobile
business systems

DXl Commence optimization through integrated
operation of nationwide mobile businessresourcesl Commence streamlining and nation-level
concentration of design and construction
management services

4,750

Other
FY March 2022
Targets*NTT Docomo Inc., Presentation Material for FY2020 Financial Results
FY March 2020

630

21

III-8. Forecasts for NCC Business
Aim for further growth through expansion of sales in Rakuten business• In Rakuten business, aim to expand sales in nationwide 4G rollout and acquire 5G base station projects• Actively support 5G base station rollout coming into full swing at au and SoftBank and aim to increase orders received• Aim to increase orders received and sales by maximizing resources utilization in the entire mobile business
Consolidated Sales of NCC Engineering Business(Unit: ¥100 million)

FY March 2021
Results

FY March 2020
Results

FY March 2022
Targets

Source: KDDI materials for financial results briefing on the FY ending March 31, 2021

Status of Rakuten Mobile

Status of SoftBank

Simultaneous development of
nationwide 4G rollout and 5G launch

Active investment in 5G backed by steady increasein number of contracts[Forecast number of Rakuten’s Mobile 4G base stations]

March 31, 2020
4,738 base stations

Active promotion of 5G use and accelerationof nationwide 5G rollout

500

472

437

Status of KDDI

llout
station ro
ide base
w
n
o
ti
a
N

March 31, 2021
Population coverage rate 80%
35,877 base stations*

April 2020

September 2020

4G service
launch5G service
launchSummer 2021
Population coverage rate 96%
44,000 base stations*Includes number of base stations
already contracted so far

March 2021
Nationwide 5G rollout
Number of base stations: At least 1,000

Source: Prepared by COMSYS Holdings Corporation based on materials for FY 2021 1Q financial results briefing
by Rakuten, Inc. and press releases

Source: SoftBank Corp. financial results briefing on the FY ending March 31, 2021

22

III-9. Market Trends in IT Solutions Business
IT investment expected to recover gradually with the improvement in economic environment
Forecast Size of IT Services Market in Japan(Unit: ¥100 million)

200,000

160,000

120,000

80,00040,000

2019

2020

2021

2022

2023

2024

■Finance ■Manufacturing ■Distribution ■Information services ■Services ■Government and municipal agencies ■Other(Source: Published January 2021 by IDC Japan)n2020: The IT market in Japan declined 6.3% year on year due to the COVID-19 pandemic. All sectors, except for education,
recorded negative growth, and sectors such as manufacturing, distribution, and transportation were affected seriously.

n2021: With the improvement in the economic environment, the pace of recovery will be gradual although there is a growthforecast of 2.9% year on year.

n2022 onward: The market is forecast to return to its pre-COVID-19 pandemic level. DX investment will also be in full swing,
primarily at major corporations in metropolitan areas. In other regions, however, the growth rate is expected to remain low in
2021 and beyond.

23

III-10. Growth Strategy for IT Solutions Business
Venture into new business domains leveraging advantages
as a telecommunications construction system integrator
Growth Strategies
Topline Expansion

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

Continue
approx.
+ 6%/year

1,055

1,070

277

280

At least

1,200• Expand partnering• M&As, capital and business alliances• Venture into new business domains
leveraging local 5G, AI and IoT, etc.
(full-layer support)

271• Expand recurring revenue business, including
maintenance and operation, and provision of
AI and IoT services• Increase efficiency and consolidate operations
utilizing maintenance platform• Promote DX (utilize CRM, RPA, etc.)

Strengthen Business Base

981
SoftwareDevelopment

Bottom Line Expansion• Reinforce integrated management of the IT company• Develop advanced engineers

Priority Measures for FY2021
Top line
Solutions

659

711

• Take initiatives and increase orders received for large-scale urban development and major events, etc.
• Support NTT Group, private companies, central government agencies and local governments with
their DX initiatives

720

Bottom line

Maintenance

51

66

70

FY Mar. 2020 FY Mar. 2021 FY Mar. 2022
Targets

FY Mar. 2024
Goals

• Take full advantage of construction resources, including those of COMSYS consolidated subsidiaries,
business partners, and associates• Consolidate and automate routine work and backyard operations, etc.
• Standardize and integrate project management functions
Business base
• Promote integrated management of IT company in metropolitan Tokyo and other areas• Share training curriculum for advanced engineers and exchange human resources24

III-11. Examples of New Business Development in IT Solutions BusinessParticipate in local 5G and IoT-related projects• Participate in pioneering local 5G and agriculture IoT projects together with partner companies• Aim to expand business partners and increase domains to include consulting and maintenanceby accumulating facility construction expertise“Full layers” and “full lifecycle” principles

Increase value-added and expand scope

Accumulate expertise startingwith participation in facility
construction
Construction of local 5G systems
at universities

Construction of IoT environment
for agriculture

Software Development• Strengths in construction of corporate
business systems• Develop original solutions using AI
technology
Solutions• Strengths in network construction• Expand into servers, cloud, and storage
construction

Present

Smart city

From consulting through tomaintenance and operation

Expand partnering
Strengthen support for cloudbased computing
Venture into new domains
Nationwide
system forconstruction andmaintenanceSmartinfrastructure• Provide smart solutions in social infrastructuredomain leveraging COMSYS strengths• Support diffusion of advanced technology
based on partnering

Long track record
and trust

Advantages as a telecommunications
construction system integrator

FY March 2023

Future25

III-12. Market Trends in Social System-Related BusinessNew construction, renovation, and maintenance of infrastructure facilities
will continue over the medium- to long-term in all sectors
2019

2020

Undergrounding ofutility poles

7th Tokyo Metropolitan Government Undergroundingof Utility Poles Implementation Plan

Water supply

Tokyo Waterworks Management Plan (FY2016 – FY2020)

Disaster prevention

Disaster prevention and mitigation three-year emergency measures

Infrastructure
Flood prevention

Electric
Facilities

2021

2022

Tokyo Metropolitan Government Strategy for Acceleration of Undergrounding of Utility Poles(doubling annual installation by 2040)
Tokyo Waterworks Long-Term Strategic Initiative(pipe renewal volume approx.. 1.5 times, installation ¥20.0 billion/year)
Five-Year Plan for National Resilience(FY2021 – FY2025: ¥15 trillion)
River Basin Flood Control Project (Class A river system total project cost: around ¥17 trillion)

Expressways

Major Expressway Renewal Plan (Shuto Expressway FY2014 – FY2028 total project cost approx. ¥600 billion)

Defensecommunications

Ministry of Defense Medium-Term Defense Program (FY2019 – FY2023)

Data centers

Data center construction investment forecast (FY2022 market size: around ¥230.0 billion)*

Large decline in FIT price (solar ¥12/kWh in 2020)

Transition to FIP system/corporate PPA

Solar

Renewable
EnergyExpand introduction of solar power generation (Installation capacity forecast: 70GW in 2020, 133GW in 2030)**

Biomass
Hydrogen2023

Expand introduction of biomass energy (market size forecast: ¥760.8 billion in 2025)***2050
Carbon neutral

FY

Business

Basic Hydrogen Strategy (900 hydrogen stations, 800,000 and fuel cell vehicles in 2030)* IDC Japan, July 7, 2020 Press Release “Forecast for Investment in Data Center Construction in Japan”** RTS Corporation, “Forecasting PV Installed Capacity in Japan toward FY2030/2050 (2020-21 Edition)”*** Yano Research Institute Ltd., April 24, 2020 Press Release “Biomass Energy Market in Japan: Key Research Findings 2020”26

III-13. Growth Strategy for Social System-Related Business
Aim to be a nationwide, one-stop, comprehensive engineering leader
Growth Strategies
Social System-Related and Others Business
Consolidated Net Sales(Unit: ¥100 million)

1,685
Infrastructure
and Other
Sector

909

1,682

1,770

Continue
approx.
+ 4%/year

At least

Topline Expansion

Bottom Line Expansion• Initiatives in new domains(PFI/concession, renewable energy)• Utilize i-Construction(3D surveying – construction – management)• Increase areas and expand business scope• M&As• Standardize profit management methods

1,900

Strengthen Business Base
• Promote integrated management of the social system company• Restructure operational sites and optimize personnel allocation• Increase and train engineers

867

930

Priority Measures for FY2021
Top line

Renewable
Energy 293• Reinforce efforts to capture renewable energy projects (biomass, hydrogen)383• Participate in investment projects (new renewable energy, M&As)

430

Bottom line
Electric
Facilities 483

432• Standardize cost estimate, technology, and management expertise within the Group410• Sharply distinguish bidding projects based on established profit management indicators
FY Mar. 2020 FY Mar. 2021 FY Mar. 2022
Targets

FY Mar. 2024
Goals

Business base
• Strengthen strategic planning and management functions• Promote exchange of human resources between Group companies

27

III-14. Growth Strategy for Renewable Energy Business
Develop new domains to reduce greenhouse gas emissions• Need for renewable energy expected to increase further to reduce greenhouse gas emissions• Venture into development of new domains such as biomass, wind, and hydrogen,leveraging achievements and experience in IPP and EPC projects

Increase in scale and complexity

Win large-scale projects

Win replacement projects
Win hybrid solar projects

Undertake submarine cableinstallation and groundfacility construction

Win solar power generation FIP/PPA/self-consignment projects

Present

FY March 2023

Future28

III-15. Toward Achievement of NEXT STAGE 2023
Strengthen order-taking capabilities and productivity
through early integration of Group operations• Build optimal Group-wide business operating structure through drastic structural reform• Build shared Group IT platforms• Promote workstyle reform for new normal society
Implement radical structural reform
Reorganize
business structurein Tokyometropolitan area

Integrate
management oftelecommunication
s carrier business

Implement
businesscompanysystem

• Reorganize business structurein Tokyo metropolitan area
• Consolidate corporate functions• Eliminate distributed and mixed situationof different functions• Maximize 5G orders from telecommunications
carriers through integrated resource management• Reduce costs through integrated managementof common operations• Build construction system that cuts acrossorganizational boundaries• Focus on projects with high profitability basedon integrated management/construction• Improve profit margin by sharing resources
and know-how

Build common COMSYS Group platforms
Communication
infrastructure• Continue with teleworking/remote meetings• Reduce security risks

New personnel
system• Flexible movement of personnel• Optimize allocation of human resources• Consolidate backyard operations

Business systems(access, network,and mobile)• Standardize workflows• Consolidate and automate common tasks• Strengthen management

Sales and
construction
systems• Manage projects based oncommon Group indicators• Joint Group procurement29

VI. Shareholder Returns Policy

VI-1. Shareholder Returns Policy(Dividends and Acquisition of Treasury Stock)
Aim for total return ratio of 70% through ¥10 yen increasein the dividend and acquisition of treasury shares

ProfitTotal Dividends

Purchase of Treasury Shares(Unit: ¥100 million)

Net Sales(Targets)

280
51

Negative
Goodwill

<167>
【228】

144 80203 8058

44

Dividends
Per Share

InterimYearend

Consolidated
Payout Ratio
Total Return Ratio

72

259 80293 70290 40 Treasury
Shares95

106

117 Dividends

Total

March 2017*

March 2018

March 2019**

March 2020

March 2021

March 2022
(Planned)

¥20

¥25

¥30

¥35

¥40

¥45

¥20

¥25

¥30

¥40

¥45

¥50

37.0%

36.5%

41%

67.5%

60.2%

55% +α14.16
million shares(10.0%)

15.96
million shares(11.3%)

—

8.6%

9.2%

8.7%

30.8%

28.0%

<26.6%>

85.6%

Dividends + treasury shares
Profit<74.0%>

Number of Sharesof Treasury Sharesat the End of the Period(Ownership Ratio)

31.86
million shares(22.6%)ROE

80+α Purchase of

67.5%
26.42
million shares(18.7%)

7.3%<8.3%>* Figures in < > are estimates assuming no impairment loss on goodwill.
** Figures in [ ] are estimates assuming no negative goodwill.

9.4%

26.1%
[32.0％]

54.5%[66.8％]

12.29
million shares(8.7%)

10.6%[8.7％]

31

(Reference) ESG

Reference-1. Basic Strategy of COMSYS Group

Smart Infrastructure for the Future
Build infrastructure for smart society to create the future
Social issues: global warming, increasingly severe natural disasters, restricted national and local
finances, aging of social infrastructure, advent of super-aging society
Intensifying competition due to new market participants
Shift to non-telecommunications business

Intensifying competition
Slowing labor productivity

Telecommunications carriers

Corporations, government agencies,
local governments

MaintenanceOutsource

Fully migrate
fixed network
to IP

Upgradedisastermeasures andnetwork
reliability

Establish 5G
networkInnovate
industrythrough local
5G

Promote cloud
migration andDX

WorkstylereformExpandintroduction ofrenewableenergyExpand PFI
andconcession
business

Respond to social issues and business opportunities with one stop at “One COMSYS”
Fixed-line
telecommunications
business

Nationwide network ofan array of engineers

MobileTelecommunications
business

IT solutions business

Extensive businessdomains

Trusting relationships
with customers andpartners

COMSYS Core Competencies

Social system-related
business

Safety and quality
secured intelecommunications
carrier standards

33

Reference-2. Promotion of ESG
Strive to enhance corporate value by making social contributions through business activities
Social (S)Environment (E)Expand Renewable Energy Business

Human Resources

Renewable energy business net sales(Unit: ¥100 million)

303

293

383

l Increase percentage of women among new graduate hires(fiscal 2020: 18.8%, up 0.1 percentage points year on year)

430

l Increase percentage of women in management positions(fiscal 2020: 2.1%, up 0.5 percentage points year on year)

178

Mar. 2018

Mar. 2019

Mar. 2020

Mar. 2021

Mar. 2022

l Ensure diversity of Board of Directors(identify women qualified as candidates for director)(construction of water and sewerage, expressway facilities,
and earthquake-proofing of communications equipment)

CO2 emissions
Final disposal volume
Approx. 22% reduction year on yearof industrial waste(Nippon COMSYS Corporation) Approx. 12% reduction year on year
Effect of increasing purchase of green electricity,(Nippon COMSYS Corporation)
adjusting business sites, and introducing lowemission vehicles, etc.

(As of March 31, 2021)

l Established Nomination and Remuneration Advisory
Committee (2017)l Promote work style reforml Increase orders received for construction related to disasterprevention and mitigation, and national resilience

Reduce Environmental Impact

l Transitioned to a “company with audit and supervisorycommittee” structure (2017)l Ratio of Outside Directors: 1:3 (5 out of 15)

Build Safe and Secure Social
Infrastructurel Expand post-solar business(biomass power generation,wind power, hydrogen)Strengthen Corporate Governancel Employ non-Japanese nationals(as of April 1, 2021: 6 employees, up 4 year on year)
Targetsl Start operation of Group’s first biomass

Governance (G)Compliancel Complete internal reporting systems(internal and external)l Establish regulations to protect whistleblowers

l Disaster recovery and reconstruction projects

l Training to prevent collusion, bribery, etc.

(responded to 2020 Kyushu region typhoon damage with a
total of 3,200 people over 2 months)l Training to promote respect for human rights(eliminate sexual harassment, power harassment, anddiscrimination, etc.)(As of March 31, 2020)

Adopted for MSCI Japan ESG Select Leaders Index**A share price index constructed by selecting large-, medium-, and small-cap companies listed in Japan with outstanding ESG ratings based on MSCI standards (composed of 235 stocks as of December 2020)34

— 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’s businessareas, 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: https://www.comsys-hd.co.jp/