Results for the Six Months Ended
September 30, 2016
November 2016

Building a better,brighter future together
Total ICT Solutions:Contributing to the Realization of a Brighter
Future by Bringing People Together andForming Connections with Society

URL: http://www.exeo.co.jp/overseas/index.html

Results for the Six Months Ended September 30, 2016

Contents･･･ 2(5) NTT Group (Mobile)･･･ 17(1) Performance Figures･･･ 3(6) NCCs･･･ 18(2) Orders Received･･･ 4(7) Urban Infrastructure･･･ 19(3) Net Sales･･･ 5(8) SYSTEM-SOLUTIONS･･･ 20(4) Operating Income･･･ 6(9) Improved Productivity･･･ 27(5) Cash Flow･･･ 8
3. Raising Shareholders’ Value･･･ 29(1) Payment of Dividends･･･ 30

1. Overview of FY16 Interim Results

2. Expectations for the Rest of FY16
(1) Performance Figures･･･ 9･･･ 10(2) Medium-Term Management Plan
（FY16-FY20）･･･ 31

4. Topics･･･ 12(1) The National Skills Competition(3) Investment Trends ofMajor Telecom Carriers･･･ 15(4) NTT Group (Access/Network)･･･ 16(Information Network Cabling)－1－･･･ 32

Results for the Six Months Ended September 30, 2016

1. Overview of FY16 Interim Results(1) Performance Figures(2) Orders Received(3) Net Sales(4) Operating Income(5) Cash Flow

－2－

Results for the Six Months Ended September 30, 2016

1. Overview of FY16 Interim Results(1) Performance Figures Both orders received and net sales up YOY due to strong NTT Group orders
 Operating income up from both YOY and plan due to improved efficiency■ Overview of FY16 interim results (consolidated)

(¥bn)

FY15
InterimactualFY16Interimplan

FY16InterimactualYOY

Plan
accuracy

A

B

C

C/A

C/B

Orders received

140.8

140.0

154.6

110%

110%

Net sales

107.7

118.0

116.2

108%

98%

107%

99%

8.3

98%

93%

5.9

124%

109%

5.7

121%

103%

2.4

83%

69%

Gross profit
SG&A expenses
Operating income
Ordinary income
Net income attributableto owners of parent(12.4%)(12.3%)

13.3(7.9%)(12.3%)

14.5(7.6%)

8.5(4.5%)(7.2%)

9.0(4.7%)

4.8(4.4%)(5.2%)

5.5(4.7%)

4.7(2.7%)

14.3(5.0%)

5.6(3.0%)

2.9(2.1%)

3.5

Notes: All amounts less than ¥100m are disregarded. Figures in parentheses are ratio to net sales.

－3－

Results for the Six Months Ended September 30, 2016

1. Overview of FY16 Interim Results(2) Orders Received◆ Exceeded the previous year due to strong NTT Group and Urban Infrastructure orders◆ Overachieved plan with NTT Group orders boosting overall orders■ YOY (consolidated)■ Compared to plan (consolidated)

〇 ＮＩ

305.0

300.4
〇 ＫＤＤＩ

NCCs
+1.1

140.8

NTT Group＋8.4

SYSTEMSOLUTIONS
+0.9

Urban
Infrastructure
+3.4

305.0

● ＮＩ

305.0
NCCs
-0.8

(¥bn)

SYSTEMSOLUTIONS
-1.8

Urban
Infrastructure
-0.4

154.6
140.0

○Telecommunications
facilities○Civil engineering

NTT Group＋17.4○Civil engineering●Electricity supply

154.6○ Access○ Mobile○ Access● Network○ Mobile

+14.6

+13.8

FY15 Interim

FY16 Interim

FY16 Interim Plan

○Reason for increase ●Reason for decrease

FY16 Interim

Note: All amounts less than ¥100m are disregarded.

－4－

Results for the Six Months Ended September 30, 2016

1. Overview of FY16 Interim Results(3) Net Sales Up YOY due to completion of work carried over from previous fiscal half and strong orders
 Down from plan because completion of part of construction jobs was carried over to next fiscal half

■ YOY (consolidated)■ Compared to plan (consolidated) (¥bn)

300.0
○ SI

287.4
NCCs
-1.6

○ SI

SYSTEMSOLUTIONS
+1.2

NCCs
-0.4

118.0

116.2
107.7

300.0

300.0

NTT Group＋2.1○ Access○ Mobile

Urban
Infrastructure+6.8

NTT Group＋0.7○ Access● Network○ Mobile○ Electricity supply

Urban
Infrastructure
-3.1

116.2

● Telecommunications
facilities● Civil engineering

-1.8

+8.5

FY15 Interim

SYSTEMSOLUTIONS+0.9

FY16 Interim

FY16 Interim Plan

○Reason for increase ●Reason for decrease

FY16 Interim

Note: All amounts less than ¥100m are disregarded.

－5－

Results for the Six Months Ended September 30, 2016

1. Overview of FY16 Interim Results(4) Operating Income
 Up YoY and from plan due to cost reduction by improved efficiency■ YOY (consolidated)■ Compared to plan (consolidated) (¥bn)

〇 Profit increase by large
construction jobs
〇 Sales mix

18.4

20.0

20.0

20.0
〇 Sales mix● Cost deterioration due
to unprofitable jobs

Up due toincrease in sales
+1.0

4.8

Improved
efficiency+0.6● Cost deterioration due tounprofitable jobs

Others-0.5

Down due todecrease in sales
-0.2

5.9

Reduction of SG&A expenses
+0.6

5.5

5.9

+0.4

+1.1

FY15 Interim

Others±0.0

FY16 Interim Plan

FY16 Interim○Reason for increase ●Reason for decrease

FY16 Interim

Note: All amounts less than ¥100m are disregarded.

－6－

Results for the Six Months Ended September 30, 2016

1. Overview of FY16 Interim Results
Reference: Trends in Group company profitability◆ Continued high level of profits in Group companies■ Trends in operating profits over the past five years (consolidated/non-consolidated)(Ratio of consolidated to
non-consolidated profits)

(1.7)

2.3

(1.7)

(1.6)

(2.1)

2.9

2.9

8.3

6.7

8.3

6.7

3.1

12.4
2.3

3.3

2.3

11.3

4.3

4.6

FY12 Interim(2.1)

Group companies

8.3
8.3

8.3

3.1

2.6
10.0

FY13 Interim

FY14 Interim

Exeo alone

10.1

2.8

2.2

6.6

(¥bn)

FY15 Interim

FY16 Interim

Notes: Ratio of consolidated to non-consolidated profits = operating profits from consolidated projects ÷operating profits from non-consolidated projects. All amounts less than ¥100m are disregarded.

－7－

Results for the Six Months Ended September 30, 2016

1. Overview of FY16 Interim Results(5) Cash Flow
◆ Stable cash flow
■ Cash flow (consolidated)

(¥bn)

FY13

FY14

FY15
InterimFull

FY16InterimCash at beginning of FY

14.6

16.2

24.2

24.2

16.0

Operating activities

9.8

23.1

9.9

5.3

17.9

Investing activities

-7.4

-2.8

-3.3

-13.9

-2.0

Financing activities

-0.9

-12.3

-5.0

0.3

-12.5

Cash at end of FY

16.2

24.2

25.8

16.0

19.3

Note: All amounts less than ¥100m are disregarded.

－8－

Results for the Six Months Ended September 30, 2016

2. Expectations for the Rest of FY16
(1) Performance Figures(2) Medium-Term Management Plan（FY16-FY20）(3) Investment Trends of Major Telecom Carriers(4) NTT Group (Access/Network)(5) NTT Group (Mobile)(6) NCCs(7) Urban Infrastructure(8) SYSTEM-SOLUTIONS(9) Improved Productivity－9－

Results for the Six Months Ended September 30, 2016

2. Expectations for the Rest of FY16
(1) Performance Figures Will remain firm in 2Q
 Aim to achieve annual plan on the back of record-high work carried over and strong orders■ Plans for FY16 (consolidated)

(¥bn)

FY15
Interim
A

FY16
Full
B

Interim
C

Plan
D

YOY
D/B

Orders received

140.8

300.4

154.6

305.0

102%

Net sales

107.7

287.4

116.2

300.0

104%

Gross profit(12.4%)
13.3(7.9%)
8.5(4.5%)
4.8(4.4%)
4.7(2.7%)
2.9(12.5%)
35.7(6.0%)
17.3(6.4%)
18.4(6.4%)
18.5(4.2%)
12.1(12.3%)
14.3(7.2%)
8.3(5.2%)
5.9(5.0%)
5.7(2.1%)
2.4(12.5%)
37.6(5.9%)
17.6(6.7%)
20.0(6.7%)
20.2(6.4%)
13.3

SG&A expenses
Operating income
Ordinary income
Net income attributable toow ners of parent

105%
101%
109%
109%
109%

Notes: All amounts less than ¥100m are disregarded. Figures in parentheses are ratio to net sales.

－10－

Results for the Six Months Ended September 30, 2016

2. Expectations for the Rest of FY16
Reference: Construction work carried over from 2Q of FY16
◆ Work carried over into next fiscal half at all-time high■ Trends for value of work carried over into second half of fiscal year (from 2Q to 3Q) (consolidated)
(¥bn)

156.6

131.7

133.1

FY12 Interim

FY13 Interim

138.6
125.8

FY14 Interim

FY15 Interim

FY16 Interim

Note: All amounts less than ¥100m are disregarded.

－11－

Results for the Six Months Ended September 30, 2016

2. Expectations for the Rest of FY16(2) Medium-Term Management Plan (FY16–FY20)■ Medium-Term Vision■ Basic Policies
１．Reorganize business portfolio, fostering solutions into second core business２．Expand engineering peripheral businesses by combining existing technologies and services
３．Expand business through M&A and alliances
４．Bolster profitability by increasing productivity through business improvement and implementing
thorough efficiency measures
５．Increase shareholder value by boosting capital efficiency■ Achievements and Targets
Net sales
Operating income¥400.0bn¥30.0bn （Operating income margin 7.5%）

ROE

10%

EPS

Over ¥200

ＲＯＥ: return on equity

ＥＰＳ: earnings per share－12－

Results for the Six Months Ended September 30, 2016

2. Expectations for the Rest of FY16(2) Medium-Term Management Plan (FY16–FY20): Business environment and target portfolio
FY20
FY15

25%

13%

23% ¥287.4bn
64%

Expansion of sales andbusiness domains by
development into new domains¥400.0bn

50%

25%

Telecom carriers
business

Urban
infrastructurebusiness

SYSTEMSOLUTIONS

Increased traffic despite reduced fixed-line investment and slowing of mobile investment
Advances in high-speed, high-capacity communications (LTE→LTE-Advanced→5G)
NTT maintenance expansion; start of order trial for KDDI synchro
Increase in fiber-optic cable demand expected due to 4K/8K, “Hikari collaboration,” etc.
Increased Tokyo redevelopment work and undergrounding of cables before 2020
Public investment to build national resilience (surveillance cameras, expressways, etc.)
Increased renewal demand due to aging of waste-treatment plants
Expanding renewable energy (biomass, etc.) demand, etc.
Changing industrial structure due to the cloud, IoT, big data, etc.
Growing advanced security needs, such as related to My Number
Expanding investment in boosting efficiency through IT, looking ahead to drop in working
population
Increased ODA-related projects accompanying economic growth in SE Asia, etc.

－13－

Results for the Six Months Ended September 30, 2016

2. Expectations for the Rest of FY16(2) Medium-Term Management Plan (FY16–FY20) : Concept of Growth(¥bn)

 Expand engineering peripheral businesses by combining existing
technologies and services
 Provide total solutions to ICT and IoT-related business Expand business through M&A and alliances

4,000
400

3,500
350

300
3,000

New solutions
HEMS, Smart meters
Data Center Project

2,500
250

Philippines Project■Reduction of above-street wiring

Public projects

2,000
200

Response to aging public infrastructure(Waste-treatment plants,
water and sewage, etc.)

Indoor Project

1,500
150

Infrastructure■Shift to CATV FTTH (8K-compatible)

700 MHz Band TV reception

KDDI synchro (Hokkaido) ■ＳＢ FY16–17PJ■700 MHz

Urban■Response to inbound (cameras, signage, etc.)■Tokyo redevelopment work

(NEXCO, disasterprevention wireless etc.)

SYSTEMSOLUTIONS◇Geo solutions （Mesh Beacon）◇Disaster prevention (EXRescue)◇IoT solutions
Overseas projects◇New energy (Energy Viewer)◇ MS CloudODA projects in Southeast Asia

■ Railway communication （New Haneda Line, etc.)

NCCs■KDDI synchro■5th generation

NTT Group(Mobile)■LTE-Advanced

100
1,000
■ NTT maintenance expansion

NTT Group(Access/Network)■ Maintenance of aging facilities accompanying measures for easing burden for ensuing years

500
50■ Hikari collaboration

0

FY14

FY15

FY16

FY17

－14－

FY18

FY19

FY20

Results for the Six Months Ended September 30, 2016

2. Expectations for the Rest of FY16(3) Investment Trends of Major Telecom Carriers■ NTT East/West■ NTT DoCoMo

754.9

753.7
690.7
626.6

(¥bn)

703.1
661.8

583.4
545.0

291.0

FY12

263.0

FY13

224.0

177.0

165.0

FY14

FY15

FY16 Plan

387.8

406.7

FY13

FY14

595.2

585.0

365.4

339.0

218.9

FY12

Optical fiber

FY15

合計

FY16 Plan

LTE-related■ SoftBank■ KDDI
Including the amount caused bychanges in construction starttimings
About 30 billion yen

667.7
571.8

531.4

560.0

715.5

739.4
583.7

467.0

412.8

338.2

344.3

FY12

FY13

479.1

FY14

338.0

FY15

合計

TBA

350.0

FY12

FY16 Plan

FY13

FY14

FY15

FY16 Plan

Notes: FY12 and FY13 figures are totals for mobile and fixed-line communications. (Source: FY13 Results Data Sheet)

MobileFY14 and FY15 give figures for domestic communications business. (Source: FY15 Results Data Sheet)

Note: Trends in FY15 plan include UQ mobile.

On Japanese standards in FY12, and on IFRS in the years after FY13.
(Source: Figures released by the telecommunications carriers)－15－

Results for the Six Months Ended September 30, 2016

2. Expectations for the Rest of FY16
(4) NTT Group (Access/Network) Hikari collaboration has highlighted new demand for FTTH
 Maintenance jobs of aging facilities have increased due to NTT’s measures to ease burden for
ensuing years■ Net sales of NTT Group(fixed-line network, consolidated)■ NTT facilities management (fixed-line related)【Net sales (consolidated)】
(¥bn)

100

2Q

(¥bn)

Full
year

50

0

130.4

FY12

127.2
113.1

111.8

109.0

FY13

FY15

FY14

FY16 Plan■ Trend in Number of ＦＴＴＨ Subscribers(Total of ＮＴＴ East and West)
1,872
1,805

58.0

54.1

50.7

27

1,926

1,986

10,000s of
subscribers

Collabo469

Hikari
824

44.9

45.6

1,845
1,457

Flets
Hikari
1,162

FY12

FY13

FY14

FY15

FY16
Plan

FY13

FY14

FY15

FY16 Plan(Source: Created by Kyowa Exeo, based on NTT presentation material)－16－

Results for the Six Months Ended September 30, 2016

2. Expectations for the Rest of FY16(5) NTT Group (Mobile) LTE-Advanced construction work at full pace
 Orders received exceed target due to frontloaded orders for negotiations and consulting work
■ Net sales of NTT Group(mobile network, consolidated)■ NTT DoCoMo Network Development
Video
(4K)

Video
(8K)

300Mbps>10Gbps
5th generation

Video(High resolution)

Effective
speed
2Q

(¥bn)

Full
year

>100Mbps

4th generation(LTE-Advanced)

3.9th generation

Next-generation
mobile

(LTE)

49.6
46.3

48.7

46.0

42.9

■ ＬＴＥ-Ａｄｖａｎｃｅｄ

19.5

2020s

2010s

22.5

24.4

＜3.5 GHz-Band Area>
160 cities or more

19.7

21.1
49 cities

FY12

FY13

FY14

FY15

FY16
Plan

Add-on Cells

FY16 1Q

FY16 Plan

Note: Created by us based on NTT DoCoMo presentation material.

－17－

Results for the Six Months Ended September 30, 2016

2. Expectations for the Rest of FY16
(6) NCCs Orders received in Hokkaido area surge by winning orders for a combination of construction andmaintenance of KDDI facilities Construction jobs for traffic are likely to increase in second fiscal half
■ Net sales of NCCs (consolidated)■ Trial consolidation of KDDI construction andmaintenance orders[Value of orders received in Hokkaido area]

2Q

Full
year

In FY 2016, it started
with Hokkaido.

(¥bn)

44.1

FY15 2Q

FY16 2Q

EXEO orders

36.6

 With an eye to nationwide deployment, strengthen a

31.2

construction and maintenance system
23.2
17.1

■ Softbank FY16–17 Project
10.2

FY13

 Aim at expanding the share in the future

18.8

11.6

FY12

24.0

FY14

FY15

8.6

FY16
Plan

 A mega project involving about 80,000 ground stations
 No reverse auction
 Build systems and expand share in established areas－18－

Results for the Six Months Ended September 30, 2016

2. Expectations for the Rest of FY16
(7) Urban Infrastructure◆ Electrical construction and power pole elimination related to Tokyo metropolitan area redevelopment remain strong◆ Expand government communication construction through disaster wireless, road telecommunications, etc.
■ Status of Large Redevelopment■ Urban Infrastructure net sales (consolidated)* The graphs by completion year refer to the number of office buildings
with floor space of 10,000 m² or more in 23 wards, Tokyo.

206

173
161
Number of buildings

138

132
115

2Q

Full
year

(¥bn)

Floor space(in 10,000s of m²)

92

85
23
21

18

17

18
10

13
8

3

79.0
FY2015

63.6

65.5

67.9

5

FY2016FY2017FY2018FY2019FY2020

FY2021 FY2022～ Undecided

Source: Created by Kyowa Exeo, based on ”Nikkei Real Estate Market Report”
June 2016 issue.

65.7■ Government-sector telecom projects
Trends in orders received (consolidated)
（¥bn）

15

24.8

20.1

21.0

23.9

10

17.1

5
0

FY12

FY13

FY14

FY15

FY16
Plan

FY12

FY13

FY14

FY15

FY16 plan◇Targeting disaster wireless, road telecommunications and CCTV projects◇Boost sales estimate skills and train construction engineers－19－

Results for the Six Months Ended September 30, 2016

2. Expectations for the Rest of FY16
(8) SYSTEM-SOLUTIONS◆ The IoT and cloud fields are markets that are expected to rapidly grow◆ Expand new solutions toward further growth■ SYSTEM-SOLUTIONS net sales(consolidated)■ Forecast of IoT Market in Japan(Trillions of yen)

15

(Compound Average Growth Rate)

10
2Q

Full
year

(¥bn)

5
0
FY2014

Source: Created by Kyowa Exeo, based on IDC Japan press release “Domestic
IoT Market by Usage and by Industrial Field” (February 23, 2016).

42.0
33.1

35.2

37.8

FY2020■ Forecast of IT Service Market for Cloud Services in
Japan

33.6

(Trillions of yen)

2
13.4

14.1

12.1

15.7

16.9

(Compound Average Growth Rate)

1.5
1
0.5

FY12

FY13

FY14

FY15

0

FY16
Plan

FY2015

FY2020Source: Created by Kyowa Exeo, based on IDC Japan press release “Market
Forecast of IT Services for Japan 3rd Platform” (August 4, 2016) .

－20－

Results for the Six Months Ended September 30, 2016

2. Expectations for the Rest of FY16
Reference: Performance and future initiatives of new solutions¥3.8bn4

4
3¥2.1bn3¥1.8bn2

New energy

1

field

0

15

Expand business in thePhilippines
Phase 2 of Indonesia project:consider starting business

Global, other 12
10・ Okinawa

8・ International, etc.

6

Orders
Received

¥900m

1
0

・ Regional power companies
・ Power Producers andSuppliers (PPSs)
・ Smart meter162¥10.0bn¥5.1bn4

15

16

Launched survival power supply (March)
Started supplying cloud services to new power businesses(July)

Solutions field

Expand EXTravel to 23

・ EXTravel (outdoors,municipalities,etc., including

indoors, educational,

Koya and Eiheiji

tourist spot versions)・WHERE made a Group・Beacon positioning

company
Expand to geospatial business2(Development of EXBeacon)

0
4
3
2

¥2.2bn¥3.3bn16

Cloud/security
field

1
0

15

15

16

・Cloud integration engineering in partnership with Microsoft

4
3

・ Thin client/virtual field

2・ Security infrastructure

1・ Educational apps

0

¥200m
15

¥800ｍ
16

・Education/public works field (school networks, local
government servers, etc.)－21－

Results for the Six Months Ended September 30, 2016

2. Expectations for the Rest of FY16
Reference: Energy Viewer

July launch◆Energy management system for small and midsize companies (low volume, high voltage / low
voltage, non-residential)◆Business model based on supplying to power producers with service fees as revenue source【Energy Viewer features】

Energy Viewer cloud・Ensures energy saving

user service apps

power・Includes automatic AC control (for multiple models)Internet serverstorage database(cubicle)・Makes possible thorough cost-cutting throughM2M platform

construction company know-how

pulse sensor

IPC device
power line
communication＜Advantages of Adoption＞(client building)◇Small and midsize companies

air conditioning

AC control reduces energy usage→lower power bills(distribution board)
external air conditioning unit

current sensor

ＧＷ devicetemperature sensor◇Power producers
Reduced peak-time power use→lower power supply costs
Effective tool for securing customers after electricity
deregulation－22－

Results for the Six Months Ended September 30, 2016

2. Expectations for the Rest of FY16
Reference: Cloud Integration Engineering*

Existing Telecommunications Cloud Business
Infrastructure Business

Cloud Integration Engineering

Bolster partnership with Microsoft in corporate communication and IoT fields
Groupware

Mail

Storage
Cloud PBX

Authentication

IoT

Big Data

Serverprocessing/Analysis

Azure

Cloud platform(1) Conduct joint promotion with Microsoft Japan
 Started corporate communication service on April 1
 IoT Suite real-time visualization and analysis(July: Microsoft Worldwide Partner Conference, Toronto, Canada) Exhibited latest Microsoft Cloud Voice solutions(August: Microsoft Japan Partner Conference, Tokyo, Japan)

Internet
Carrier IP-NW
Optical-fiber
cable

sensorMobilePSTN

LTELTE Optical-fiber

IoT-NW(2) Train cloud engineerscableTrain 2,000 Microsoft cloud engineers by 2018 (50 toadvanced and 500 to intermediate qualifications)90 people have already successfully completed theadvanced MCSE Communication and MCSA
Office365 qualifications (Through partnership with
Microsoft Japan, targeting largest-scale training inJapan during 2016)(3) State of activities
Unified communication/Thin clients

・・*Offer nationwide, unified, one-stop engineering, including cloud
implementation alongside existing network engineering－23－

 Corporate communication
Offer latest Microsoft Cloud Voice solutions from
September （Cloud Connector Edition + Cloud PBX）
 IoT
Field engineering real-time visualization and analysis
Results for the Six Months Ended September 30, 2016

2. Expectations for the Rest of FY16
Reference: Geospatial Business Development
Geo services to meet different user needs

 Integrating management with WHERE to accelerate
geospatial pioneering business using beacon (transmittersthat can be placed anywhere) and other technologies.
 Develop mesh-network EXBeacon and plan beacon
management platform.
 Supply beacon infrastructure and positioning engine for
MLIT high-accuracy positioning society project (NTT Data).

Outside use

Develop specialized solutions for different fields

With sensor

Construction industry
Process management to meetneeds of construction sites.

Tourism industry
Seamless tourism guides inareas with poor GPS signal.
*Experiment planned with Tachikawa, Tokyo(August–October 2016)

For mobile
communication* Experiment planned with X generalcontractor (October–December 2016)

Indoor use－24－

Results for the Six Months Ended September 30, 2016

2. Expectations for the Rest of FY16
Reference: Geospatial Business Development: Participation in Exhibition EXBeacon■CEATEC JAPAN 2016
October 4 (Tue.) to 7 (Fri.) at Makuhari Messe
Products by WHERE were displayed in the booth of Bluetooth
SIG, Inc.

 EXBeacon Product Debut
 People from various industries visited the booth
Automobile, housing, manufacturing, commerce, etc.

 Keynote speech and new product seminars wereheld
 Received many product inquiries after theexhibition■IoT/M2M Exhibition Autumn (2016 Japan IT Week
Autumn）
October 26 (Wed.) to 28 (Fri.) at Makuhari Messe
Booth exclusive to WHERE and Kyowa Exeo

 Received over 200 inquiries through a priorappointment system There are a number of needs to improve work
processes with IoT in manufacturing, in particular－25－

Results for the Six Months Ended September 30, 2016

2. Expectations for the Rest of FY16
Reference: Global business initiatives ■ MG Exeo sales trends（¥100m）

10
5
0

FY11

FY12

FY13

FY14

FY15

FY16 Plan

MG Exeo (Philippines) as a basefor development across SE Asia
・Development of ICT technology educators in thePhilippines

Philippines → Spread to other SE Asian countries
・Train global staff in the Philippines

Comprehensive service project in two Manila suburbs¥600m/yr for three years (May 2014–April 2017)(One-year local stay)

Send trainees from Japan・FTTHPhilippinesfrom PLDT (¥170m)
・Optical-fiber access from SMART (¥60m)
・Mobile signal survey from NTT DoCoMo (¥60m)
・Entry/exit management system at new Bohol airport(¥20m)
・Win projects of building SMART Wi-Fi (several thousand
access points)

・Construction of ICT in airports in the Philippines
・Terrestrial digital construction (adoption of Japanese system)
・Comprehensive service project area expansion
・Carrier network consulting
・Carrier data center ICT
・Setup of the ICT business(First group sent in Oct. 2015 (completed); second group in
Oct. 2016 (in progress))

Trial implementation of Indonesian
FTTH project PH2 (Mar.–Oct. 2016)
Targeting SE Asian ODA projects
・Airport ICT・Industrial complex ICT・Data center ICT

－26－

etc.

Results for the Six Months Ended September 30, 2016

2. Expectations for the Rest of FY16(9) Improved Productivity◆ FY15 targets achieved◆ Continued measures to improve profits

Improvement■ Enhanced profitability through cost reductions
ＦＹ

2013

Aims
Results

2014

2015

¥1.5bn¥1.5bn¥1.0bn(cumulative ¥3.5bn)(cumulative ¥5.0bn)

2016¥1.0bn(cumulative ¥6.0bn)(cumulative ¥7.0bn)¥2.0bn¥2.0bn¥1.0bn¥0.6bn(cumulative ¥5.0bn)(cumulative ¥7.0bn)(cumulative ¥8.0bn)(cumulative ¥8.6bn)

Note: Amount of improvement represents cost reductions relative to FY10.

■ Recent principal measures
Measures

Area◇Integrated cross-departmental systems ◇Improved business flow and systems through BPR◇Construct common bases for system◇Continue to improve business flow andsystems through BPR* Improve safety Cremas, etc.

◇Merger of subsidiary security companies ◇Merger of subsidiary access companies in Kansai/Chugoku regions◇Liquidation of network subsidiaries◇Review of access, network, and engineering construction systems
Functional◇Expansion of shared company work consignments

integration◇Group-wide unification of audits, MS tasks ◇Reorganization of Group access companies in Kanto area

Reorganizationof Group◇Merger of subsidiary mobile companies ◇Merger of subsidiary access companies in Tohoku region

companies◇Merger of major subsidiaries (WAKO and Ikeno) ◇Merger of subsidiary network companies◇Sendai General Engineering Center (9 bases → 1) ◇Kagawa Technical Center (5 bases → 1)
Consolidation of ◇Ishioka General Technical Center (4 bases → 1)
bases

◇Kansai branches （11 bases → 1)

◇Koshin branches (5 bases → 1)*(planned for Oct. 2017)◇Hyogo General Technical Center (5 bases → 1)

◇Fujisawa Technical Center （2 bases → 1)*(planned for Nov. 2017)

Resource◇Resource shift to mobile/solutions area

sharing◇Group-wide cross-sectional projects (mobile, 700 MHz TV reception measures, Data Centers, etc.)－27－

Results for the Six Months Ended September 30, 2016

2. Expectations for the Rest of FY16
Reference: Reorganization of Group companies◆ Accelerated reorganization of Group companies aimed at improved streamlining
and optimization of resources◆ Deployed a flexible personnel shift to the Tokyo Metropolitan Area

■ Trends in number of subsidiaries (excluding Exeo Tech, Daiwa Densetsu, AID-HD)

33 companies
29 companies◇ Merger of
Kansai/Chugoku
access subsidiaries

17◇Merger of mobile
subsidiaries

27 companies

26 companies
Small-scalecompanies

November 201613

12

◇ Liquidation of
network subsidiaries

11◇ Liquidation of
WAKO subsidiary(one company)

11

5
FY13

◇ Merger of Tohoku
access subsidiaries◇ AID becomesa subsidiary9◇ Merger of network
subsidiaries

Companies withsales of ¥5.0bn

7

7

7

8

8

FY14

FY15

FY16 Plan－28－

Companies withsales of ¥10.0bn

Results for the Six Months Ended September 30, 2016

3. Raising Shareholders’ Value(1) Payment of Dividends－29－

Results for the Six Months Ended September 30, 2016

3. Raising Shareholders’ Value(1) Payment of Dividends
 Annual dividend up ¥8 YoY to ¥46, acquisition of ¥300m of treasury stock Targeting 3% DOE and continued stable mid- to long-term dividend rise
■ Total shareholder return■ Dividend history (per share)(Total dividends + total acquisition of treasury stock)

22

24

FY12

FY13

32

FY14

38

FY15

\46

Total dividends
Total acquisition of treasury stock

5.3

5.4

FY12

FY13

5.0

FY13

3.0

FY14

FY15

FY16 Plan

109\3.0bn

ＲＯＥ

147

FY15

123

125

\140

11.6％
9.6％

FY12

FY14

■ EPS/ROE
ＥＰＳ

3.0\7.4bn5.6

FY16 Plan■ Acquisition of treasury stock

3.0

8.7

FY16 Plan

FY12

－30－

8.7％

FY13

FY14

8.2％

FY15

8.7％

FY15 Plan

Results for the Six Months Ended September 30, 2016

4. Topics(1) The National Skills Competition－31－(Information Network Cabling)

Results for the Six Months Ended September 30, 2016

4. Topics(1) The National Skills Competition (Information Network Cabling) Won the gold medal in the national competition in October 2016
 Scheduled to attend the WorldSkills Competition that is due next year in Abu Dhabi, UAE, asrepresentatives of Japan This was our sixth gold medal in the national competition
 Have participated in the international competition four times (won gold medals in all the competitions) and aim tocapture the fifth gold medal(A scene during the competition

Gold-medalist Yoshiaki Shimizu: Competitor Yoshiaki Shimizu)(second from left)－32－

Results for the Six Months Ended September 30, 2016

Disclaimer Regarding Forward-Looking Statements
Management of the Company has made estimates and assumptions
relating to financial forecasts based on information available as of thereporting date. Actual results could differ from those estimates.

3-29-20 Shibuya, Shibuya-ku,
Tokyo 150-0002 JAPANhttp://www.exeo.co.jp/overseas/index.html
TEL: (81)3-5778-1073
FAX: (81)3-5778-1228

A variety of IR materials is available for
consultation on our company website.

－33－

Results for the Six Months Ended September 30, 2016