Information Meeting Materials
for the First Three Quarters of the Fiscal Year Ending March 31, 20172017.2.2

Copyright © 2017 TIS Inc. All rights reserved.

Fiscal 2017 First Three Quarters: Financial Highlights
Fiscal 2017 Performance Forecast
Reference Materials

Copyright © 2017 TIS Inc. All rights reserved.

2

Fiscal 2017 First Three Quarters: Financial Highlights[Millions of yen]

• Net sales grew against favorable business backdrop, leading to year-on-year improvement.
• On profit front, efforts to expand business volume and boost profitability offset the impact of unprofitableprojects, pushing profits up year-on-year.

Net Sales ¥280,708 million

Operating Income ¥15,931 million

YOY change: +¥10,113 million [+3.7%]

YOY change: +¥1,792 million [+12.7%]

280,708

270,595

Net income
millionattributable to owners of ¥11,251
the parent company
YOY change: +¥4,138 million [+58.2%]

11,251

15,931
14,139+ 10,113[+3.7 %]

+ 1,792[+12.7 %]5.2%

Operatingmargin

7,113+ 4,138[+58.2 %]5.7%

First Three Quarters First Three Quartersof Fiscal 2016of Fiscal 2017

First Three Quarters First Three Quartersof Fiscal 2016of Fiscal 2017First Three Quarters First Three Quartersof Fiscal 2016of Fiscal 2017

In sectors where IT investment is showing
renewed growth, we emphasized accurate
identification of client needs and wererewarded with higher sales, year-on-year.

Successful efforts to improve profitability,
along with higher net sales starting point,
offset impact of unprofitable projects,
pushing operating income up year-on-year.

Net income attributable to owners of parent
was up year-on-year, buoyed by higher
operating income and reduced extraordinaryloss.

Copyright © 2017 TIS Inc. All rights reserved.

3Fiscal 2017 First Three Quarters:
Net Sales and Operating Income Analysis[Billions of yen]

Net Sales

270.59IT Infrastructure
Services+ 0.93
[91.79→92.73]

Financial IT
Services+ 4.11

Industrial IT
Services+ 7.22

Other- 2.33
[11.21→8.88]

280.70+ 10.11

Inter-segment+ 0.16[+3.7%][ - 13.57→ - 13.41][124.87→132.10][56.28→60.39]

First Three Quartersof Fiscal 2016

First Three Quartersof Fiscal 2017

Operating Income

15.93
14.13
IT Infrastructure
Services+ 1.70
[5.71→7.42]

Financial IT
Services- 1.20
[2.18→0.98]

First Three Quartersof Fiscal 2016
Copyright © 2017 TIS Inc. All rights reserved.

Industrial ITServices+ 2.27[4.78→7.05]

Other- 1.04
[1.80→0.75]+ 1.79[+12.7%]

Inter-segment+ 0.06[ - 0.34→ - 0.28]

First Three Quartersof Fiscal 2017
4

Fiscal 2017 First Three Quarters:
Sales and Income for Key Segments
IT Infrastructure Services[Millions of yen]

Financial IT Services

Industrial IT Services

Net Sales ¥92,733 million

Net Sales ¥60,399 million

Net Sales ¥132,105 million

YOY change: +¥938 million [+1.0 %]YOY change: +¥4,117 million [+7.3 %]YOY change: +¥7,228 million [+5.8 %]

92,733

91,795+ 938[+1.0 %]First Three Quartersof Fiscal 2016

60,39956,282+ 7,228[+5.8 %]

+ 4,117[+7.3 %]First Three Quartersof Fiscal 2017

First Three Quartersof Fiscal 2016

132,105

124,877

First Three Quartersof Fiscal 2017

First Three Quartersof Fiscal 2016

First Three Quartersof Fiscal 2017

Operating Income ¥7,421 million

Operating Income ¥980 million

Operating Income ¥7,052 million

YOY change: +¥1,706 million [+29.9 %]YOY change: - ¥1,204 million [- 55.1 %]YOY change: +¥2,270 million [+47.5 %]5,715+ 1,706[+29.9 %]6.2%

OperatingmarginFirst Three Quartersof Fiscal 2016

7,421
8.0%

First Three Quartersof Fiscal 2017

Sales and income up year-on-year and above target,
reflecting favorable shift in data center business, mainly
contribution from large projects for public sector clients, aswell as expansion in BPO operations and cost reduction
through successful efforts to boost efficiency.

Copyright © 2017 TIS Inc. All rights reserved.

2,184- 1,204[- 55.1 %]3.9%
OperatingmarginFirst Three Quartersof Fiscal 2016

4,782980
3.8%

1.6%

First Three Quartersof Fiscal 2017

Sales up year-on-year, thanks to expanded business volume
on renewed IT investment interest from clients in payment
settlement sector, particularly credit card companies. But
operating income declined, mainly due to huge impact from
unprofitable projects that appeared in second quarter.
*Segment sales include intersegment sales.

+ 2,270[+47.5 %]OperatingmarginFirst Three Quartersof Fiscal 2016

7,052
5.3%

First Three Quartersof Fiscal 2017

Sales and income up year-on-year, reflecting expandedbusiness volume, primarily due to sustained brisk IT
investment by clients in energy-related fields, contributions
from large projects for clients in public sector, and a trend
toward greater IT investment matched to clients’ growthstrategies. Also fueled by successful efforts to improve
profitability.

5Fiscal 2017 First Three Quarters: Sales by Client Sector* We revised the breakdown of client sector categories for some clients, effective from the first quarter of fiscal 2017.
Values for the previous term have been reviewed and restated under the new category breakdown.

63,33056,304

46,995[+12.5 %]42,54635,196[+10.5 %]Credit card

[Millions of yen]

19,923 20,177 18,997 18,610[+1.3 %][-2.0 %]

Banking

Insurance

31,26625,360 26,511 24,057 23,292

14,684 15,042[-11.2 %]Other finance

Assembly-based Processing-based
manufacturing manufacturing

First Three Quarters of Fiscal 2016
3.9%
15.7%
8.5%
20.8%

8.9%
9.4%
Financial sector:35.5%
Public sector:8.5%[+4.8 %][-3.2 %]

10,536[+2.4 %]First Three Quarters of Fiscal 2016

Net Sales
Breakdown byClientSector[+4.5 %]

22,989 24,101

7.4%
7.0%
5.4%

13.0%

Copyright © 2017 TIS Inc. All rights reserved.

ServicePublic institutions[+8.0 %]
OthersFirst Three Quarters of Fiscal 2017

Credit card
Banking
Insurance
Other finance
Assembly-based
manufacturing
Processing-based
manufacturing
Distribution

First Three Quarters of Fiscal 2017
4.1%
8.6%
16.7%

22.6%

Net Sales
Breakdown byClient
SectorServicePublic institutions
OthersIndustrial sector: 52.1 %Other sectors: 3.9 %Distribution

11,3798.3%
9.4%
Financial sector:35.9%
Public sector:8.6%

7.2%
6.6%
5.4%

11.1%
Industrial sector: 51.4 %Other sectors: 4.1 %6Fiscal 2017 First Three Quarters: Order Status[Millions of yen]

• Against a brisk business backdrop, order volume high enough to offset adverse factors, such as reactionary drop in demand,leading to year-on-year increase.
• Backlog decreased year-on-year, but primary cause was drop due to progress on large projects for clients in public sector.
Orders received during first quarter

Order backlog at end of first quarter¥150,888 million¥69,811 million

YOY change: +¥5,164 million [+3.5%]

150,888

145,724

69,811

72,763+5,164[+3.5 %]

- 2,952[- 4.1 %]First Three Quarters First Three Quartersof Fiscal 2016of Fiscal 2017

First Three Quarters First Three Quartersof Fiscal 2016of Fiscal 2017

Financial IT Services
47,961

YOY change: -¥2,952 million [-4.1%]

52,241

Industrial IT Services
97,763

98,647

Financial IT Services
21,21323,898+4,280[+8.9 %]

+884[+0.9 %]

+2,685[+12.7 %]First Three Quarters First Three Quartersof Fiscal 2016of Fiscal 2017

First Three Quarters First Three Quartersof Fiscal 2016of Fiscal 2017

First Three Quarters First Three Quartersof Fiscal 2016of Fiscal 2017

Copyright © 2017 TIS Inc. All rights reserved.

Industrial IT Services
51,54945,912- 5,637[- 10.9 %]First Three Quarters First Three Quartersof Fiscal 2016of Fiscal 2017

*Order volume and backlog at term-end and net sales apply to Software Development only.

7Changes in Orders Received[Millions of yen]

110,457[+27.7 %]86,248[- 8.5 %]86,472[+1.6 %]

89,385

108,697
98,648[+4.3 %]

39,568[- 20.0 %][- 3.1 %]36,895[+8.7 %]

1st Half
2nd Half
Fiscal 2014[+6.0 %][+3.6 %][+17.2 %]49,577

104,570[+10.4 %]58,09546,680[- 1.6 %]47,73153,369[+11.8 %]61,62153,437[+6.1 %][+0.1 %]

47,076

51,133[+2.3 %]

41,654[+5.3 %]

52,362[+41.9 %]1st Half
2nd Half
Fiscal 2015

45,279[+8.7 %][- 10.1 %]1st Half
2nd Half
Fiscal 2016

Second quarter of first half

Fourth quarter of second halfFirst quarter of first half

Third quarter of second half

Copyright © 2017 TIS Inc. All rights reserved.

[+12.9 %]46,318[- 1.6 %]1st Half2nd Half
Fiscal 2017

* Orders received during the term apply to Software Development only.
* Percentage figures in columns indicate increase or decrease from the previous term.

8Changes in Orders Received[Millions of yen]

Financial IT Services
33,11330,81341,43038,410[+ 16.0 %]30,816[+ 7.9 %]32,43135,765[+ 10.3 %][- 3.9 %][- 0.6 %]19,129[+ 21.8 %]20,469[- 4.5 %]17,029[- 11.0 %]11,684[- 28.6 %]12,644[+ 6.5 %]13,786[+ 18.0 %]15,203[+ 20.2 %]14,017[+ 1.7 %]

15,530[+ 2.2 %]16,271[+ 16.1 %]16,476[+ 6.1 %]1st Half

2nd Half

1st Half

2nd Half

1st Half

2nd Half

1st Half

2nd Half[+ 5.2 %][+ 0.0 %]23,207[+ 13.4 %]Fiscal 2014

25,900[+ 11.6 %]18,414[+ 8.1 %]Fiscal 2015

19,494[+ 5.9 %]Fiscal 2016

Fiscal 2017

Industrial IT Services
72,04855,43453,359[- 10.8 %][+ 3.0 %]27,551[- 5.2 %]29,108[- 2.1 %]27,883[- 15.8 %]1st Half[+ 35.0 %]58,568[+ 5.7 %]
30,701[+ 11.4 %]24,251[+ 9.8 %]27,867[- 0.1 %]2nd Half

1st Half

Fiscal 2014

67,266

66,217[+ 13.1 %][- 6.6 %]34,955[+ 13.9 %]35,720[+ 2.4 %]33,943[- 2.9 %]37,159[+ 53.2 %]31,262[+ 12.2 %]31,546[- 15.1 %]34,861[+ 11.5 %]

29,843[- 5.4 %]2nd Half

1st Half

2nd Half

1st Half

2nd Half

34,889[+ 19.9 %]Fiscal 2015

Fiscal 2016

Second quarter of first half

Fourth quarter of second halfFirst quarter of first half

Third quarter of second half

Copyright © 2017 TIS Inc. All rights reserved.

68,804[+ 3.9 %]Fiscal 2017

* Orders received during the term apply to Software Development only.
* Percentage figures in columns indicate increase or decrease from the previous term.

9

Fiscal 2017 First Three Quarters: Financial Highlights
Fiscal 2017 Performance Forecast
Reference Materials

Copyright © 2017 TIS Inc. All rights reserved.

10

Fiscal 2017: Performance Forecasts[Millions of yen]

• Higher sales and income are expected. Will strive to expand business volume by accurately responding to ITinvestment needs of clients and by steadily executing large projects, in addition to promoting strategies toboost profitability, including measures to raise productivity.
⇒ Results are generally on track, obviating the need to revise initial targets.

Net Sales ¥390,000 million

Operating Income ¥26,500 million

YOY change: +¥7,311 million [+1.9 %]YOY change: +¥2,064 million [+8.4 %]

390,000

382,689[Estimate]

24,436[Estimate]

6.8%
OperatingmarginAnticipate higher net sales year-on-year,mainly from expanded business volume
achieved through accurate responses toclients’ IT investment needs and from steady
execution of large projects.
Copyright © 2017 TIS Inc. All rights reserved.

12,678+2,064[+8.4 %]
6.4%

Fiscal 2017

15,00026,500+7,311[+1.9 %]

Fiscal 2016

Net income attributable toowners of the parent
15,000 million
company
YOY change: +¥2,322 million [+18.3 %]Fiscal 2016

Fiscal 2017

Expect higher operating income year-onyear, buoyed by higher net sales as well as
progress on strategies to boost profitability,
such as measures to improve productivity.
Emphasis also on approaches to prevent
projects from turning unprofitable.

[Estimate]+2,322[+18.3 %]¥173.88

Net Income¥145.22 per Share
3.3%

3.8%
Net income tonet sales ratio

Fiscal 2016

Fiscal 2017

Net income attributable to owners of parent
should rise year-on-year, mainly due to boost
from operating income.

11

Fiscal 2017:
Net Sales and Operating Income Analysis [Forecast][Billions of yen]

Net Sales

382.68IT Infrastructure
Services- 0.22Financial IT
Services+ 3.38[125.92→125.70][79.51→82.90]

Industrial IT
Services+ 8.70

Other- 3.39
[16.09→12.70]

390.0Inter-segment- 1.14

[Estimate]+7.31[+1.9%][-18.85→-20.00）[180.00→188.70]

Fiscal 2016

Fiscal 2017

Operating Income

26.50
24.43
IT Infrastructure
Services+ 1.47

Financial ITServices+ 0.23

Industrial ITServices+ 1.92

[3.36→3.60][9.97→11.90]

Other- 1.64

Inter-segment＋0.07[2.64→1.00][- 0.47→- 0.40][Estimate]+2.06[+8.4%][8.92→10.40]

Fiscal 2016
Copyright © 2017 TIS Inc. All rights reserved.

Fiscal 2017
12Fiscal 2017:
Key Business Segment Performances [Forecast]
IT Infrastructure Services

Financial IT Services[Millions of yen]

Industrial IT Services

Net Sales ¥125,700 million

Net Sales ¥82,900 million

Net Sales ¥188,700 million

YOY change: - ¥229 million [- 0.2 %]YOY change: +¥3,381 million [+4.3 %]YOY change: +¥8,700 million [+4.8 %]125,700

125,929- 229[-0.2%]

Fiscal 2016

82,90079,519[Estimate][Estimate][Estimate]+8,700[+4.8%]+3,381[+4.3%]

Fiscal 2017

Fiscal 2016

Fiscal 2017

188,700

180,000

Fiscal 2016

Fiscal 2017

Operating Income ¥10,400 million

Operating Income ¥3,600 million

Operating Income ¥11,900 million

YOY change: +¥1,476 million [+16.5 %]YOY change: +¥239 million [+7.1 %]YOY change: +¥1,928 million [+19.3 %]

8,924+1,476[+16.5%]

7.1%
Fiscal 2016

Operatingmargin

10,400[Estimate]

3,361

8.3%
4.2%
Fiscal 2017

Segment sales likely to decrease year-on-year, mainly
due to impact of restructuring, but on a real basis,
sales expected to rise, along with income, mainly due
to successful cost-cutting efforts.
Copyright © 2017 TIS Inc. All rights reserved.

Fiscal 2016

+239[+7.1%]
Operatingmargin3,600+1,928[Estimate][+19.3%]5.5%

Operatingmargin[Estimate]

4.3%
Fiscal 2017

Despite impact from unprofitable projects in first half,business volume should expand, mainly throughcontributions from large development projects,
pushing sales and income above levels recorded in theprevious fiscal year.

11,900

9,972

Fiscal 2016

6.3%

Fiscal 2017

Expect higher sales and income year-on-year, mainly
owing to wider demand paralleling overall increase in
IT investment and to successful efforts to prevent
projects from turning unprofitable while improving
productivity.
*Segment sales include intersegment sales.

13Fiscal 2017 First Three Quarters: Financial Highlights
Fiscal 2017 Performance Forecast
Reference Materials

Copyright © 2017 TIS Inc. All rights reserved.

14

Fiscal 2017 Second Half:
Sales and Income for Key Business Segments [Forecast]
Net Sales
200,006

200,977

Operating Income
17,077

15,063[Estimate]+971[+0.5 %]
Second Halfof Fiscal 2016

7.5%
Second Halfof Fiscal 2017

+2,014[Estimate][+13.4 %]Operatingmargin

Second Halfof Fiscal 2016

[Millions of yen]

Net income attributable toowner of the parent company
9,319
7,077

8.5%

Second Halfof Fiscal 2017

[Estimate]+2,242[+31.7 %]Second Halfof Fiscal 2016

Second Halfof Fiscal 2017

IT Infrastructure Services

Financial IT Services

Industrial IT Services

Net Sales

Net Sales

Net Sales

63,77064,828[Estimate]+1,017[+2.4 %]

-1,058[- 1.6 %]Second Halfof Fiscal 2016

Second Halfof Fiscal 2017

Operating Income
5,667

8.7%

5,221-446[- 7.9 %][Estimate]

Operatingmargin

8.2%

Second Halfof Fiscal 2016

Second Halfof Fiscal 2016

Copyright © 2017 TIS Inc. All rights reserved.

+3,738[+3.9 %]

Second Halfof Fiscal 2017

3.7%

Second Halfof Fiscal 2016

Second Halfof Fiscal 20169.6%

Second Halfof Fiscal 2017

[Estimate]

Second Halfof Fiscal 2017

Operating Income
7,517

6,567

+950
[Estimate][+14.5 %]6.9%

Operatingmargin+2,582 [Estimate][+167.1 %]Operatingmargin98,512

94,774[Estimate]

Operating Income
4,127
1,545

Second Halfof Fiscal 201742,843

41,826

Second Halfof Fiscal 2016

7.6%

Second Halfof Fiscal 2017

*Estimated amounts for the second half of Fiscal 2016 are calculated by subtracting the first half
estimates from the annual estimates of Fiscal 2016. *Segment sales include intersegment sales.

15Cautionary Statements• All statements described in these materials are based on information available to management regarding the TIS INTEC Group—that is,TIS and the subsidiaries under its umbrella—as of the presentation date and certain assumptions deemed reasonable at this time. No intent
is implied of promise by the Company to achieve such forward-looking statements. Indeed, various factors may cause future results to be
substantially different from the assumptions presented in these materials.
•Amounts for each three-month quarter are calculated by subtracting data for the respective period from the cumulative total.