Business Direction

Fiscal 2005 Interim Results: Briefing Materials

Medium-term Business Direction

Nov-04

TIS Inc.

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Net Sales and Operating Income 60.0

Interim/ Nonconsolidated (単位：億円)

Full Term/ Nonconsolidated 5.0

58.3

(Billions of yen)

Net sales

120.0

12.0

(Billions of yen)

Operating income

Net sales

Operating income

117.1

4.8

115.0

11.0

112.0

4.6 55.0

53.1

52.1

51.9 50.8

50.0

110.0

107.5

4.2

4.3 4.1

48.3

110.4

4.4

4.2

4.0

105.0 4.0

105.0

10.6

10.5

10.0

9.6

102.7

9.0

9.1

3.8

100.0

8.0

3.6

3.7

45.0

8.0 3.4

95.0

3.1 40.0

3.0

(FY)

2001

7.0

7.3

3.2

2002

2003

2004

2005

90.0

6.0

(FY)

2005

2001

2002

2003

2004

(Actual) (Original Estimate) 

Interim/ Consolidated

Net sales Operating income

120.0

(Billions of yen)

106.7

110.0

7.0

240.0

Ne t sale s O pe rating income

Full Term/ Consolidated

80.0

205.0

200.0

16.7

71.6 66.3

5.0

164.6

160.0

141.4

5.3 4.0

4.6 3.7

60.0

180.0

6.3

79.3

80.0

70.0

6.0

3.0

2.0

(FY)

2001

2002

2003

2004

2005

2005

169.4

120.0

7.6

17.0

15.0

13.0

11.0

10.7

9.0

8.8 7.0

100.0

5.0

(FY)

2001

(Actual）(Original Estimate)

Nov-04

15.5

12.5

146.9

140.0

3.0 50.0

19.0

215.8

220.0

7.2 90.0

2005

(Estimate）(Original Estimate)

(Billions of yen) 8.0

97.5

100.0

9.0

2005

2002

2003

2004

2005

2005

(Estimate）(Original Estimate)

TIS Inc.

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Understanding the Environment   Most recent forecast (June 2004) -- Streamlined growth, maturing market 単位：億円 Scale of information services market in 1999

Scale of information services market in 2010 (1999 forecast) ¥16.4 trillion*  (Annual average growth rate: 11%-12%)

¥4.9 trillion    Slowing growth rate parallels maturing market *Prepared by TIS from Gartner materials, excluding hardware sales.

Scale of information services market in 2010 (June 2004 forecast)     ¥10 trillion* Annual average growth rate: 4%-5%) Understanding the Environment by TIS • The information services market is in the midst of transformation into a mature market that will result in a new industry order. (億円) • In the short term, a better earnings environment for clients will prompt higher IT investment and expand market scale. However, in the long term, oversupply in the industry will continue to put downward pressure on the amount paid per project. • Polarization of corporate performances will expand at a heightened pace. An era of intense competition approaches in which clients wield the power of choice.

【TIS Goal】 To be playing a constructive role in the industry by fiscal 2011 (fiscal (計画) year ended March 31, 2011), as one of the top three companies. Nov-04

TIS Inc.

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Views on Growth Three Keys to Growth

単位：億円

Degree of growth -- Expanded scale

Quality of growth – Higher profitability

Core business selection and concentration

Improved productivity ∼TIS’ own quality management systems and development standards∼

M&A

Building original solutions

(億円)

Boldly enter new businesses

More efficient administrative function

Market Dialogue (計画)

Nov-04

TIS Inc.

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Target Fields New client groups to capture

Already enjoying solid profile

Assembly-based Manufacturing (Electric machinery, construction machinery)

Processing-based Manufacturing (Chemicals, Pharmaceuticals)

Around 2010

Credit Card

Advent of ubiquitous Society An era approaches when IT investment will be essential in all fields, from finance, including credit cards, consumer lending and leasing business, to manufacturing, services and distribution.

Survivors gain access to IT investment demand

【Core business selection and concentration】 1. Client’s sector: Highlight solid profile already enjoyed with credit card companies and target new clients in the processing-based manufacturing sector, such as makers of chemicals and pharmaceuticals, as well as the assembly-based manufacturing sector, such as electric machinery, and makers of construction machinery.    2. Target Region: Emphasize regional responses by concentrating management resources in the three key cities: (計画) Tokyo, Nagoya and Osaka.    Nov-04

TIS Inc.

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IT-related Trends in Credit Card Sector Public use and social infrastructure Credit card Employee ID function

Progress in the use of IC cards for resident registry card and driver’s licenses

Settlement function

Payment of public utility fees Facilitating the execution of service processing

Commuter pass function

Commercial use Mobile phones with e-money function E-wallet, e-money (primarily for small settlement amounts)

Nov-04

Medical institutions

IC Card, RFID Responses Personal ID and security function

Medical cost adjustments and electronic medical charts

(Receipt: e-money exchange)

National health insurance (regional administration)

Reserve and pay for electronic tickets, such as those for concerts.

General use of combined prepaid/commuter pass cards. ⇒Easy access to information on people’s movements. (年度)

Widespread use of MPNs (Multi Payment Networks)

TIS Inc.

Key marketing tool

u-Japan Concept

Get into cash-ondelivery market, such as catalog sales, should mobile phones with e-money feature have a settlement function.

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IT-related Trends in Processing-based Manufacturing Sector Changes in business environment Deregulation allowing overseas manufacturers to enter domestic market

Mergers, business alliances prompting industry realignment

Heightened competition worldwide Information systems have to --

・facilitate real-time management for effective selection and concentration ・ensure standardized business processes and systems that weather the frequent division and integration of business segments. The solution is --

TIS Chemical Model

TIS Consulting’s ERP Solutions Proven results on large-scale projects for major processing-based manufacturers, including paper and chemicals companies.

Nov-04

TCM: TIS Chemical Model is a solution that provides an analysis of business-specific results in a short time.

TIS Inc.

Taking aim at addition realignment demand from chemicals and pharmaceuticals companies.

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IT-related Trends in Assembly-based Manufacturing Sector ・TIS boasts proven results for electric home-appliance makers, a sector particularly concerned about quality. ・TIS combines systems for production control, sales and distribution control and SCM into a comprehensive response to meet the sophisticated needs of the assembly-based manufacturing sector.

Sales control system

Strategies Business climate Seasonal trends

Inventory plan

Inquiries Clients

Products

Estimates Orders

Product flow

Standard, secure inventory

Distribution Center

Sales plan

Accounting

Quality control Manufacturing plan

Data development Production Manufacturing estimates instructions Assembly Mechanism, inventory Production Packaging Shipment

Parts makers

Traders

Users

Inquiries/ estimates/ order information

Production plan

Global SCM Factories

Sales goals

Head Office

Offices

Sales control

Production control system

Wrapping instructions, shipment

Full Support Order and delivery of appropriate large-scale systems for major electric machinery makers.

Core solutions, CommerceCube Nov-04

TIS Inc.

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Group Strategy UFIT

Finance

Manufacturing AGREX Credit Card

Leasing, consumer loan

Public corporation Processing-based Manufacturing

* 1 Toyo Network Services Corporation 2 Hi-Ho Broadband Systems, Inc. 3 M&T System Operations Co., Ltd. 4 Hong Tu Financial Software (Shanghai ) Co., Ltd. 5 DGT Information Systems Japan Limited 6 TIS Solution Business Co., Ltd.. 7 System Engineering Laboratory Co., Ltd.

Distribution services

China Securities Market Medium-sized companies

TNS ※1 TSB ※6 SEL ※7

Hi-Ho ※2

Assembly-based Manufacturing

TIS

Banking

TNS ※1

TIS Consulting

M&T ※3

QUALICA

TISI (Shanghai) HFS※4 DGT ※5

Group businesses and functions will be realigned in FY2006. Nov-04

TIS Inc.

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Technology Strategy Tackling Production Technology

Tackling Leading-Edge Technologies

Improve productivity Improve quality

Establish leading-edged technologies ↓

Quantitative identification of production capabilities

Turning technologies into businesses

・System Development Council ・Tackling

・Agile

CMMI※1

・Objective

Ⅱ※2

・SEWS I、 SEWS (Gartner Data Quest(2004.7) より、ＴＩＳ作成)

・On-demand

・Component format

・Open

・Knowledge management 注記

・Secure systems

※1 Capability Maturity Model: Real world standard for evaluating capability of software development structure and degree of maturity.

・Ubiquitous

※2 System Engineer Work Station: TIS’ own combination of SEWSⅠand SEWS II. SEWSⅠis an environment that provides standardized information in fixed frameworks, while SEWS II is a support environment for document creation using a standard database.

Nov-04

TIS Inc.

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