Ⅱ. fy2018 full year plan - topcon...©2018 topcon corporation 11 Ⅱ.fy2018 full year plan...

©2018 Topcon Corporation 11

Ⅱ. FY2018 Full Year Plan

Ⅱ-1. FY2018 Full Year Plan

Ⅱ-2. Strategic Plans

Ⅱ-3. Summary


1HActual

Full YearActual

1HActual

Full YearPlan

YoY(%)

Announced on July 31st

Net Sales 68,046 145,558 70,271 150,000 +3% 150,000

Operating Income(Operating Income Ratio)

4,570(6.7%)

12,073(8.3%)

5,268(7.5%)

15,000(10.0%)

+24% 15,000(10.0%)

Ordinary Income 4,088 10,674 4,742 13,000 +22% 13,000

Net Income 1,867 6,028 2,146 7,000 +16% 7,000

ROE 9.7% 11% 11%

ROIC 7.1% 9% 9%

Dividends ¥10 ¥20 ¥12 ¥24 ¥24

Exchange Rate (Average)

USD ¥111.42 ¥110.81 ¥110.07 ¥105 ¥106.14

EUR ¥126.63 ¥129.45 ¥129.88 ¥130 ¥129.81

FY2018 Full Year Plan [Consolidated]

FY2017 FY2018

Assumed FX rate( )

No change from initial forecasts：Expect growth in sales and profit, dividend increase

（unit：million yen）


1HActual

Full YearActual

1HActual

Full YearPlan

YoY(%)

Announced on July 31st

Net Sales

Positioning 35,884 74,945 37,018 79,000 +5% 79,000Smart Infrastructure

17,042 36,626 18,207 38,000 +4% 38,000

Eye Care 21,397 46,515 21,828 48,000 +3% 48,000Others 1,030 2,493 934 1,500 -40% 1,500Elimination -7,307 -15,023 -7,716 -16,500 -16,500Total 68,046 145,558 70,271 150,000 +3% 150,000

Operating Income

(Operating Income Ratio)

Positioning 3,869(10.8%)

8,018(10.7%)

3,740(10.1%)

9,500(12.0%)

+18% 9,500(12.0%)

Smart Infrastructure

1,630(9.6%)

5,102(13.9%)

2,856(15.7%)

6,000(15.8%)

+18% 6,000(15.8%)

Eye Care 526(2.5%)

2,038(4.4%)

636(2.9%)

2,500(5.2%)

+23% 2,500(5.2%)

Others -22 (-2.1%)

88(3.5%)

-17(-1.8%)

0(0.0%)

- 0(0.0%)

Elimination -1,433 -3,173 -1,947 -3,000 -3,000

Total 4,570(6.7%)

12,073(8.3%)

5,268(7.5%)

15,000(10.0%)

+24% 15,000(10.0%)

FY2018 Full Year Plan by Business [Consolidated]

FY2017 FY2018

Expect sales and profit growth in all segments（unit：million yen）





Ⅱ-3. Summary


Strategic Plans

0

2

4

6

8

10

12

0

20

40

60

80

FY2016 FY2017 FY2018

Sales Operating Income

8.0

74.9 79.0

9.5

5.6

60.6

IT Construction：Strengthen of sales by launching strategic new productsExpansion of maintenance business for road repaving works

IT Agriculture：Sales expansion by strengthening of OEM business

Asian business expansion：Launch of IT Construction and IT Agriculture business

planactual actual

（unit：billion yen）

Positioning


IT Construction：Strengthen of sales by launching strategic new products

FY2016actual

FY2017actual

FY2018plan

Sales of Excavator system

*Expected useful life is 8 years（Topcon’s estimated number）

Features・Autonomous Operations according to the design data・Safety and security in the deep-digging prevention function

・Easy upgrade from current machine guidance model⇒ Coping with the shortage of skilled operators

Global addressable number of excavator

approx. 200,000 units

3D system for concrete paving

The world’s first Mastless system for motor grader

Excavator machine control system (auto)

Release in 4Q (tentative)

Positioning

4Q Release (tentative)4Q Release

(tentative)

Prevention of deep-digging

Mastless

Present：low penetration

（unit:sales）

*


IT Construction：Expansion of maintenance business for road repaving works Automation of road repaving work process（Acquisition of ThunderBuild BV Group ）

FY2016actual

FY2017actual

FY2018plan

Sales of paving system

Reuse asphalt

INOUTAsphalt plant

*Software Development Company in Netherland. Software they develop is related to logistics management with a primary focusin the asphalt market, as well as additional applications that pertain to the transport of bulk materials.

Integrated datamanagement

Delivery time management

Just-in-Timesupply system

of asphalt

Road repaving solution

After acquisition

Present

Subscription business model

Just-in-Time

Positioning

Road surface measurement

MillingPaving

DesignCompaction

（unit:sales）

*

Transport asphalt


IT Agriculture：Sales expansion by strengthening of OEM businessStabilization of OEM sales due to diversification of OEM partners and OEM products

Display unitsWeighing system

OEM Products

OEM Customers Small to medium sized OEM partners are increased

FY2016actual

FY2017actual

FY2018plan

Sales of IT Agriculture

Expansion of product lineup for 250 OEM partners

0

100

200

300

FY2014 FY2016 FY2018

Auto Steering System

Control Display

GNSSreceiver

（unit: # of companies）

Over 250OEM partners

Steering wheel with electric motor

（unit:sales）

Positioning


Asian business expansion：Launch of IT Construction and IT Agriculture business

FY2014actual

FY2015actual

FY2016actual

FY2017actual

FY2018plan

Asian Sales（IT Construction and IT Agriculture）

Sales ratio of Asia

FY2018 planFY2014 actual

12%5%

Key market

-Digging up demand in the local OEM partners-Utilization of distribution network of existing

business-Apply the best practice of Japan

Increasing OEM inquiry from local machine manufacturers

Our action

ChinaIndia

Spreading of i-ConstructionStrong demand of IT Agriculture

Japan

（unit:sales）

Strengthen of collaboration with Smart Infrastructure Business for expansion of i-Construction and IT Agriculture

Tractor market in IndiaAnnual sales：

approx. 700,000 units(Global：1.5 million units)

Excavator market in ChinaAnnual sales：

approx. 70,000 units(Global：230,000 units)

Source：Off-Highway Research DataTechnavio「Global Agriculture Tractor Market」

Positioning

China India

* "i-Construction" is a registered trademark of National Institute for Land and Infrastructure Management, MLIT, JAPAN.

Japan


Strategic Plans

0

2

4

6

8

0

10

20

30

40

50

FY2016 FY2017 FY2018

Sales Operating Income

（unit：billion yen）

5.1

36.6 38.0

6.0

3.9

33.1

i-Construction：Continue market and business growthIT Agriculture in Japan：Further business expansion by strengthening support capabilities

planactualactual* "i-Construction" is a registered trademark of National Institute for Land and Infrastructure Management, MLIT, JAPAN.



Number of orderNumber of implementation

Market is expanding 1st “Construction&Survey Productivity improvement EXPO”Aug.28-30 in Makuhari Messe

0

1,000

2,000

3,000

FY2016actual

FY2017actual

FY2018plan

（number） i-Construction

Number of order/implementation

【Reference】Number of public

works orders

approx.15,000

FY2017actual Construction machinery manufacturers exhibited IT Construction machinery

15,000

Market trends

1,625

1,952

2,500

50％

36％42％

Source：the Ministry of Land, Infrastructure and Transport



A kind of Japan version of BAUMA（International construction machinery exhibition）

held for the first time Approx. 30,000 visitors

i-Construction：Continue market and business growth


FY2014actual

FY2015actual

FY2016actual

FY2017actual

FY2018plan

・Deployed 4 training centers in Japan nationwide・Enhancement of training programs ・Enlightenment by sharing success stories of i-Construction 0

2,000

4,000

6,000

8,000

10,000

12,000

FY2016actual

FY2017actual

FY2018plan

10,000 totalswill be exceeded

3D point navigator 「LN-100」 getting popular

Focus on fostering of i-Construction engineersTotal number of trainees

LN-100 sales As an entry product for i-Construction

（unit:number of trainees）

Topcon’s action

KobeTraining Center

Kita-KyushuTraining Center

Kanto Training Center

（Ibaraki）

ShirakawaTraining Center



（unit:sales）

i-Construction：Continue market and business growth


IT Agriculture in Japan：Further business expansion by strengthening support capabilities

0

500

1,000

1,500

2,000

0

10,000

20,000

30,000

40,000

50,000

60,000

Sales of IT Agriculture in Japan（Auto Steering System ）

Source：Hokkaido Agricultural Administration Department Production Promotion BureauJapan Agricultural Machinery Industry Association

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

FY2014actual

FY2015actual

FY2016actual

FY2017actual

FY2018plan

【Reference】Company A

Step１ Strengthen product capabilities

Step 2 Strengthen Sales Network

Step ３ Strengthen support capabilities

Utilization of sales network of major tractor manufacturers

・Increase sales and support personnel・Enhancement of sales support tools・Enhancement of training programs for dealer skill up

Auto Steering System ・Easy installation・Installable to existing tractor・Shared use⇒ Released Auto-turn function

Auto Steering System sales

Tractor sales in Japan

NewFrom July, 2018


Done

Company B Company C Company D

Control Display

GNSSreceiver

Steering wheel with electric motor

（unit:sales）

Done

New

（unit:Q’ty）（unit:Q’ty）


Strategic Plans

0

1

2

3

4

5

6

0

10

20

30

40

50

60

FY2016 FY2017 FY2018

Sales Operating Profit（unit：billion yen）

2.0

46.5 48.0

2.52.6

43.1

Expansion of business domain into Preventive and Prognostic：Pioneer a new business model utilizing IoT and AI

Launching a Screening business：Case 1 : Overseas major optical chain deployed OCT for the first timeCase 2 : Exclusive agreement with US IDx

planactualactual

Eye Care


Pioneer a new business model utilizing IoT and AI

Expansion of business domain into Preventive and Prognostic

Exam/Diagnosis/Treatment domains

General Hospital

Eye ClinicScreeningOptical Store

GeneralPractitionerDrug Store

AIdiagnosis

Nursing Home

Full AutoOCT/

Retinal Camera

Promotion of screening business

Promotion of Prognostic business

Preventive domain Prognostic Domain

Existing business

Optical Store

GeneralPractitionerDrug Store

Eye Care


Launching a Screening business：Case 1

Realized eye screening at optical store

0

500

1000

1500

2000

2500

3000

FY2017actual

FY2018plan

Global sales of 3D OCT(unit:Q’ty)

Maestro

TritonProvide early detection of eye disease as a value added service

Maestro has been deployed in 200 stores

Overseas major optical chain deployed OCT for the first time

Optical chain having 1,600 stores in 10 countries

Fully automatic

“Easy-To-Operate” OCT

Eye Care


Announcing strategic alliance for Autonomous AI diagnostic system

Exclusive agreement with US IDx Technologies Inc.

Effect Early detection, early treatment / Improvement of medical efficiency and quality

*US venture company which develops algorithm of the disease detection based on retina or OCT image

Retina images by NW400

AI automatic diagnosis

Diagnose Diabetic Retinopathy automatically (General Practitioner)

*

Launching a Screening business：Case 2

Fully automatic AI

Center of the picture) IDx Technologies Inc. CEO and Founder Mr.Michael D. Abramoff, MD, PhD

Joint press announcement (October 23, 2018)

*

World's First FDA approved “Autonomous AI diagnosis system”

Upload on a Cloud

Cloud

Eye Care

https://www.topcon.co.jp/





Ⅱ-3. Summary


Summary

2030405060708090100110120130140150160170180190200

0100200300400500600700800900

10001100120013001400150016001700

FY2016actual

FY2017actual

FY2018plan

Net Sales Operating Income

FY2018 Full Year Plan : No change from initial forecasts

12.1

145.6 150.0

15.0

9.6

128.4

(unit : billion yen)

YoY

¥15B

¥150B

¥7B

¥13B

+24%

+3%

+16%

+22%

Net Sales

Operating Income

Net Income

Ordinary Income

Interim Dividends ¥24FY2017

¥20FY2018

ActualPlan

Expects growth in sales and profit, dividend increase

FY2018Plan


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Ⅱ. fy2018 full year plan - topcon...©2018 topcon corporation 11 Ⅱ.fy2018 full year plan...

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