Presentation of Performance and Third Medium-Term Management Plan Presentation of Performance for the Fiscal Year. Ended March 31, 2007

Transcription

1 Presentation of Performance and Third Medium-Term Management Plan Presentation of Performance for the Fiscal Year Fiscal Year Ended March 31, 2008 Ended March 31, 2007 May 27, 2008

2 Contents I. Overview of Performance for the Fiscal Year Ended March 31, Highlights of Performance 1 2. Highlights of Performance ( and Operating Income) 2 3. Details of by Segment 3 II. Third Medium-term Management Plan 1. Third Medium-term Management Plan Basic Policies and Management Strategy 4 2. Highlights of Medium-term Management Plan Target Values 5 3. and Operating Income Performance and Medium-term Plan Figures 6 4. Outlook for Non-NTT Business 7 5. Strategy for NTT Group Business 8 6. Strategy for Expanding the NCC Business 9 7. Strategy for Expanding the IT Solutions Business Expanding the IP Network Business Domain Principal Measures to Achieve Medium-term Productivity Enhancement and Rationalization 12 III. Returns to Shareholders 13

3 I-1. Highlights of Performance S Minimized year-on-year declines in revenues and income S FY March 2007 Performance FY March 2008 Performance Comparisons with the previous term Remarks Orders Received 3,341 3, (-0.7%) Orders Received and Operating Income 3, , (-2.7%) -30 Because orders received recovered in the second half, the decline in the NTT group business was held to a minimum. NCC business remained strong, primarily on the strength of mobile communications. The IT solutions business stayed strong, driven by NI The construction business contracted as a result of the effects of the exclusion from bidding. Recurring Profit Net Income Operating Margin: 5.7% 211 Recurring Profit Margin: 6.3% 123 Operating Margin: 5.0% 182 Recurring Profit Margin: 5.6% percentage points percentage points -7 Income Effects of the decline in net sales and changes in the business structure. Increase of expenses in connection with strategic investment (in-house computerization, training of IP personnel) and reduction of expenses. Improvement in income via thorough screening of private sector orders. Net Profit Margin: 3.7% Net Profit Margin: 3.6% -0.1 percentage points 1

4 I-2. Highlights of Performance ( and Operating Income) Despite year-on-year decline, revised forecasts met Operating Income Unit: 100 million Unit: 100 million 3,365 Performance in Previous Fiscal Year (FY March 2007) ( ): Operating Margin 192 (5.7%) ,200 Revised Targets (November 2007) 150 (4.7%) ,275 Performance this Fiscal Year (FY March 2008) 162 (5.0%) -90 (-2.7%) -30 (-15.6%) Performance in Previous Fiscal Year (FY March 2007) Revised Targets (November 2007) Performance this Fiscal Year (FY March 2008) 2

5 I-3. Details of by Segment NCC +16.0% IT +7.1% +27 Construction -4.0% -26 NTT-G -10.8% +53 3, (-4.9%) -216 NCC +6.8% +26 IT +2.0% +8 Construction +0.6% +4 NTT-G +2.0% (+2.3%) -90 (-2.7%) 3,200 3,275 Performance in Previous Fiscal Year (FY March 2007) Revised Targets (November 2007) Performance this Fiscal Year (FY March 2008) 3

6 II-1. Third Medium-term Management Plan Basic Policies and Management Strategy Third Medium-term Management Plan Basic Policies (March 2009 through March 2011) COMSYS will further solidify its position as the top firm in the communications infrastructure development industry. COMSYS is working to become a communications construction SIer, with the IT solutions business as the core operation. Using the framework of a pure holding company, the company is seeking to maximize the effects of management integration. Medium-term Management Strategy Moving forward with reform of our business AAAAAAAAAAAAAAAA structure and kaizen (improvement) Expanding high-value-added fields AAAAAAAAAAAA Opening new business fields In three years COMSYS aims to generate record high net sales of billion and operating income of 19.5 billion. 4

7 II-2. Highlights of Medium-term Management Plan Target Values S Aiming for record highs within three years S FY March 2008 Performance FY March 2009 Targets Comparisons with FY March 2008 FY March 2011 Targets Comparisons with FY March 2008 Orders Received 3,319 3, , (+10.0%) 3,275 3, , (+11.5%) Operating Income Operating Margin 5.0% 4.2% -0.8 percentage points 5.3% +0.3 percentage points Recurring Profit Recurring Profit Margin 5.6% 4.5% -1.1 percentage points 5.4% -0.2 percentage points Net Income Net Profit Margin 3.6% 2.6% -1.0 percentage points 3.2% -0.4 percentage points 5

8 II-3. and Operating Income Performance and Medium-term Plan Figures First growth period Turning point Through structural reforms, a second growth period Special demand for mobile communication-related construction 3,365 3,275 [ Third Medium-term Management Plan ] 3,300 3,450 3,650 Fiscal year ending March 31, 2009 seen as the nadir. Areas other than the NTT infrastructure business will be expanded. The gross profit margin will be significantly improved. 3,074 2, , (4.8%) (3.6%) Operating Income 163 (5.3%) 192 (5.7%) 162 (5.0%) 140 (4.2%) 160 (4.6%) 195 (5.3%) Strategic anticipatory investments in IT and other areas resulted in higher administrative expenses (up 2.3 billion). Expanding NTT Group peripheral businesses Expanding the NCC business Expanding the IT business Operating Income The drop in income is a chance to make decisive, radical changes to the business structure. Ingraining COMSYS-style kaizen (improvement) Maximizing synergistic effects using COMSYS Holdings Groups framework. Ingraining awareness of prime costs and process control by project (Employing new internal systems) Mar Mar Mar Mar Mar Mar Mar Mar (FY) 6

9 II-4. Outlook for Non-NTT Business S Goal set to increase net sales from non-ntt businesses to more than 50% of total, to ensure stable growth S Target figures for non-ntt net sales Both the IT solutions and NCC businesses are growing steadily. 1,450 1,535 1,875 Target figures for net sales by business area 624 Construction business 645 Growth of 22.7 billion over three years Growth rate: 55% (18% annual average) ,825 NTT business 1,765 1,760 1,690 1,875 1, IT solutions business (Network integration, systems integration, maintenance) NCC business 440 Growth of 11.9 billion over three years Growth rate: 29% (10% annual average) 530 1,450 1,535 Non-NTT business Mar Mar Mar Mar (FY) 7 (FY) Mar Mar Mar Mar. 2011

10 II-5. Strategy for NTT Group Business S Doubling the size of peripheral businesses S NTT Group Business 1,841 2,006 1,825 The drop in the DoCoMo business will produce a slight decline in NTT Group business overall. 1, ,765 Reduction in the DoCoMo business 1,760 Double 1, NTT Business In the NTT business, the drop in infrastructure projects will be covered by peripheral businesses, so performance will be maintained at its previous levels. 60 Peripheral businesses 110 DoCoMo Business In the DoCoMo business, peripheral businesses will be inadequate to offset the decline in infrastructure projects. 40 Peripheral businesses 100 [ Third Medium-term Management Plan ] Mar Mar Mar Mar Mar Mar Mar (FY)

11 II-6. Strategy for Expanding the NCC Business S Expansion in the NCC business to cover drop in the DoCoMo business S 411 The NCC field is a growth business. Other Target figures for net sales COMSYS will expand the nationwide carrier business. Expanding the share of existing businesses Expanding peripheral businesses (maintenance, new residential projects, etc.) Developing new carrier businesses (WiMAX, etc.) Joint operations with manufacturers and vendors Commercialization of construction capacity (wireless devices, IP design and testing) Project proposal marketing Mobile Developing a new regional carrier business Increased entry into the FTTH field by regional electric power companies, CATV companies, etc. Responding to regional WiMAX Mar Mar Mar Mar Medium-term Plan (FY) 9 Strengthening the nationwide marketing and project execution systems Facilitating the appropriate assignment of personnel within the COMSYS Holdings Group

12 II-7. Strategy for Expanding the IT Solutions Business Maintenance business SI business +227 (55% growth) Security Maintenance and operation Consignment software Comsip CTI Security 640 Grown to be profitable businesses Principal measures to expand operations Strengthening alliances to bolster business development resources and expand markets Using the nationwide project execution system to increase orders received 197 LAN and WAN construction Expanding the verification and training business (using ICT professionals) NI business Projects nationwide IT office construction Tenant building infrastructure Expanding operations in the IT business Server design and construction Launching new businesses FY March 2008 Medium-term Plan FY March

13 II-8. Expanding the IP Network Business Domain Developments at NTT FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 Commercializing NGN services (March 2008) Adding and expanding NGN and 3G network services Creating services in cooperation with application providers, etc. Building a full IP network infrastructure for both fixed and mobile communications (solidifying the foundation for service integration) IP-NW business domain Full-scale service integration Full-scale development of ubiquitous broadband services Source: NTT documents Carrier NGN domain Expanding business with ICT professionals playing a core role Corporate solutions domain Expanding the NGN-compatible NI business Execution Design Seeking full-turnkey orders Present Equipment and cables Unit testing (Communications construction industry) Incidental testing Cable installation Maintenance Operation Responding to high-speed broadband VPN Virtualization of servers (integration with data centers) Higher-speed LANs Teleconferencing Collaboration system Image monitoring sensors Nationwide network Building SaaS servers Building certification systems B2BVPN Highly Skilled Personnel (Unit: Persons) March 31, 2005 (Cumulative) March 31, 2008 (Performance) CCIE (Cisco) 6 65 LPIC-2 (Linux) SCNA (Sun) 7 9 Expanding the testing and verification business Expanding the training business 11 Training of ICT professionals 86 people seconded to NTT Research laboratories; net sales, 1.4 billion. Established NGN-SF Corporation (April 2007)

14 II-9. Principal Measures to Achieve Medium-term Productivity Enhancement and Rationalization S Increasing productivity and dramatically strengthening cost competitiveness S Principal medium-term measures Re-evaluating the division of roles among consolidated subsidiaries Rationalization of branches and construction bases Ingraining awareness of BPR Roll out COMSYS-style kaizen (improvement) at all Group companies nationwide Thorough shift to shared services (integration of joint operations) Standardization of workflow and computerization throughout the COMSYS Holdings Group Building new core systems Building business support systems 12

15 III. Returns to Shareholders Status of Treasury Stock Acquisition 9,193 thousand shares This fiscal year s planned acquisitions Newly acquired portion Number of shares held at the end of the term 4,820 thousand shares Stock swap with Kokusai Densetsu, Ltd. -1,134 thousand shares 4,989 thousand shares Newly acquired portion 4,386 thousand shares (Approximately 5.0 billion) 3,754 thousand shares Newly acquired portion 1,035 thousand shares (Approximately 1.2 billion) 9,370 thousand shares (Approximately 9.4 billion) Status of Dividends Mar Mar Mar Mar Mar (FY) Dividends per Share (Planned) Interim Year-end Consolidated Payout Ratio % 21.5% 19.5% 20.3% ( 7+Fifth anniversary commemorative dividend 3) % (Planned)