fy2016 financial results -...

FY2016 Financial Results April 28, 2017 TOPCON CORPORATION President & CEO Satoshi Hirano

©2017 Topcon Corporation 1

FY2017 Full Year Plan

Ⅱ Appendix

Ⅰ FY2016 Financial Results

Ⅱ

CONTENTS

FY2016 Financial Results


Ⅰ. FY2016 Financial Results Ⅰ-1. FY2016 Financial Results

Ⅰ-2. Overview of Each Business


POC=Positioning Company

FY2016 Result <Performance is V-shaped recovery trend>

Net Sales

Operating Income

Net Sales FY15 Exchange Rate Conversion

Net Sales (billion yen)

Operating Income FY15 Exchange Rate Conversion

Operating Income (billion yen)

POC: Operating income increased approx. 235% YoY Growth in IT Construction

-Substantially higher sales and profit growth under strong yen market conditions -Achieved announced operating income 9.5 billion yen

Strong yen 5

9

13

17

0

40

80

120

FY2013 FY2014 FY2015 FY2016

139.0

12.1

16.0

11.7

8.8

116.7

9.6

128.6 130.7

128.4 E

xcha

nge

Rat

e 120.16 JPY/USD

109.03 JPY/USD

¥11.13

132.36 JPY/EUR

119.37 JPY/EUR

¥12.99

-Operating cash flow 18.2 billion yen


FY2016 Financial Results <Increased operating income on a YoY basis>

[Consolidated] FY2015 FY2016

Actual Actual YoY FY15 Exchange Rate Conversion Announced

on Jan 31st Conversion YoY YoY%

Net Sales 130,735 128,387 -2,348 139,047 8,312 106% 125,000

Gross Profit (Gross Profit Ratio)

65,642 （50.2%）

65,547 （51.1%）

-95

SGA 56,839 55,996 -843

Operating Income (Operating Income Ratio)

8,803 （6.7%）

9,551 （7.4%）

748

12,061 （8.7%）

3,258

137%

9,500 (7.6%)

Non-Operating Expenses -1,437 -1,929 -492 -1,771 -334

Ordinary Income 7,366 7,622 256 10,290 2,924 140% 7,500 Extraordinary Income (Loss) -58 28 86 Income (Loss) Before Income Taxes and Minority Interests 7,307 7,651 344

Net Income (Loss) 4,197 4,395 198 6,333 2,136 151% 4,200

ROE 6.9% 7.4%

ROIC 5.4% 5.5%

Dividends (JPY) ¥24 ¥16 ¥16

Exchange Rate

(Average)

ＵＳＤ ¥120.16 ¥109.03 -¥11.13 ¥120.16 ¥107.21

ＥＵＲ ¥132.36 ¥119.37 -¥12.99 ¥132.36 ¥118.18

(unit: million yen)


[Consolidated] FY2015 FY2016

Actual Actual YoY FY15 Exchange Rate Conversion Announced

on Jan 31st Conversion YoY YoY%

Net Sales

Positioning 61,977 60,602 -1,375 66,879 4,902 108% 56,000 Smart Infrastructure 32,989 33,091 102 34,998 2,009 106% 33,000

Eye Care 43,834 43,148 -686 46,779 2,945 107% 44,000 Others 4,997 3,708 -1,289 3,758 -1,239 75% 4,000 Elimination -13,062 -12,163 899 -13,366 -304 -12,000 Total 130,735 128,387 -2,348 139,047 8,312 106% 125,000

Operating Income

(Operating Income Ratio)

Positioning 2,385 （3.8%）

5,596 （9.2%）

3,211 （235%）

6,149 （9.2%）

3,764

258%

4,500

Smart Infrastructure

3,909 （11.8%）

3,939 （11.9%）

30

4,533 （13.0%）

624

116%

3,500

Eye Care 4,850 （11.1%）

2,598 （6.0%）

-2,252

4,138 （8.8%）

-712

85%

4,000

Others 196 （3.9%）

10 （0.3%）

-186

11 (0.3%)

-185

- 0

Goodwill Amortization -2,538 -2,593 -55 -2,770 -232 -2,500

Total 8,803 （6.7%）

9,551 （7.4%）

748

12,061 （8.7%）

3,258

137%

9,500

FY2016 Financial Results by Business <Dynamic improvement in Positioning/Smart Infrastructure Business>

(unit: million yen)


FY2015

FY2015

FY2015 FY2015 FY2016 FY2016

FY2016

FY2016 34.5 39.5 26.9 25.0 36.4 33.9

8.5

108％

109％ 102％

125％

6.8 FY2015 FY2016

15.4 14.3

108％

FY2015 FY2016 10.5

110％

9.5

Japan North America

Europe

China Asia/Oceania Others

(Billion yen) (Billion yen) (Billion yen)

(Billion yen) (Billion yen) (Billion yen)

Domestic and Overseas Sales (YoY, at constant currency)

POC: Growing sales in IT Construction ECB: Growing sales of Maestro

SIB: Sales increase in i-Construction business

POC: Strong sales in IT Construction

POC/ECB: Strong sales

POC=Positioning Company/ SIB=Smart Infrastructure Business/ ECB=Eye Care Business

SIB: Strong sales of Total Station ECB: Growing sales of Exam Unit/OCT

POC: Growing sales in IT Construction SIB: Growing sales in India


8.8

1.8 1.5

12.1

-2.5

9.6

0.0

5.0

10.0

FY2015 Sales increase anddecrease, Product

mix

Reduction of fixedcost/ Lowering

COGS

FX Effects FY2016

(unit: Billion yen)

Operating Income w/o FX effects

FY2016 Operating Income Breakdown <Increased operating income on a YoY basis>


Ⅰ. FY2016 Financial Results Ⅰ-1. FY2016 Financial Results

Ⅰ-2. Overview of Each Business


FY2015 FY2016

Actual Actual YoY FY15 Exchange Rate Conversion Announced on

Jan 31st Conversion YoY

Net Sales 61,977 60,602 98% 66,879 108% 56,000 Operating Income (Operating Income Ratio)

2,385 (3.8%)

5,596 (9.2%)

235% 6,149 (9.2%)

258% 4,500 (8.0%)

Exch

ange

R

ate USD ¥120.16 ¥109.03 -¥11.13 ¥107.21

EUR ¥132.36 ¥119.37 -¥12.99 ¥118.18

(unit: million yen)

Overview of Each Business

ー Negative factors The markets of Middle East and South America are slow

Positive factors Growth in IT Construction (120% YoY) IT Agriculture showed 3 straight quarters of positive growth on a quarterly

comparison / same positive growth on a YoY comparison A great improvement in operating income (235% YoY) greatly due to the growth in IT Construction, the cost reduction and the fixed-cost reduction

Review of FY2016 Financial Results



Review of FY2016 Financial Result

Positive Factors Sales increase in the i-Construction business in Japan (YoY 160%) Sales increase in New Total Station (YoY 120%) Sales increase in India’s market (YoY 130%)

ー Negative Factor Sluggish market in Middle East and South America

FY2015 FY2016



Net Sales 32,989 33,091 100% 34,998 106% 33,000 Operating Income (Operating Income Ratio)

3,909 (11.8%)

3,939 (11.9%)

101% 4,533 (13.0%)

116% 3,500 (10.6%)

Exch

ange

R

ate USD ¥120.16 ¥109.03 -¥11.13 ¥107.21

EUR ¥132.36 ¥119.37 -¥12.99 ¥118.18

(unit: million yen)

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


Positive Factor Success in 3D OCT Maestro launch in USA Growth in Optometry market & OCT sales in China (YoY 130%) Reinforcement of sales network in India Hiring talented leaders for Ophthalmology EMR business

－ Negative Factor Price competition intensified due to the JPY appreciation(in EU) Competition intensified in the Japanese market Cost increase due to up-front investment(strengthen sales network, Enhancement of

FDA acquisition, Hiring talented leaders )

FY2015 FY2016



Net Sales 43,834 43,148 98% 46,779 107% 44,000

Operating Income (Operating Income Ratio)

4,850 (11.1%)

2,598 (6.0%)

54% 4,138 (8.8%)

85% 4,000 (9.1%)

Exch

ange

R

ate USD ¥120.16 ¥109.03 -¥11.13 ¥107.21

EUR ¥132.36 ¥119.37 -¥12.99 ¥118.18

(unit: million yen)

Review of FY2016 Financial Results



Ⅱ. FY2017 Full Year Plan Ⅱ-1. FY2017 Full Year Plan Ⅱ-2. Strategic Plans For Each Business Ⅱ-3. Summary


［Consolidated］

FY2016 FY2017 1H Full Year 1H Full Year

Actual Actual Plan YoY(%) Plan YoY (%)

Net Sales

57,939 128,387

60,000 104% 131,000 102%

FY16 Exchange Rate

Conversion 61,100 105% 134,800 105%

Operating Income (Operating Income Ratio) 3,757

(6.5%)

9,551

(7.4%)

4,000(6.7%) 106% 12,000(9.2%) 126%

FY16 Exchange Rate

Conversion 4,400(7.2%) 117% 12,900(9.6%) 135%

Ordinary Income 2,233 7,622 3,000 134% 10,000 131%

Net Income 634 4,395 1,200 189% 5,700 130%

ＲＯＥ 7.4% 10%

ＲＯＩＣ 5.5% 7%

Dividends ¥8 ¥16 ¥10 ¥20

Exchange Rate

(Average)

ＵＳ$ ¥106.43 ¥109.03 ¥105 ¥105

ＥＵＲ ¥119.12 ¥119.37 ¥115 ¥115

FY2017 Full Year Plan (unit: million yen)


［Consolidated］ FY2016 FY2017

1H Full Year 1H Full Year

Actual Actual Plan YoY(%) Plan YoY (%)

Net Sales

Positioning 27,166 60,602 29,000 107% 61,000 101%

Smart Infrastructure 14,958 33,091 16,000 107% 35,000 106%

Eye Care 19,611 43,148 20,000 102% 45,000 104%

Others 1,736 3,708 2,000 115% 4,000 108%

Elimination -5,532 -12,163 -7,000 -14,000

Total 57,939 128,387 60,000 104% 131,000 102%

Operating Income (Operating

Income Ratio)

Positioning 2,472 (9.1%)

5,596 (9.2%)

2,700 (9.3%)

109% 6,500 (10.7%)

116%

Smart Infrastructure 1,377 (9.2%)

3,939 (11.9%)

1,400 (8.8%)

102% 4,500 (12.9%)

114%

Eye Care 1,269 (6.5%)

2,598 (6.0%)

1,200 (6.0%)

95% 3,500 (7.8%)

135%

Others -93 (-5.4%)

10 (0.3%)

0 (-)

- 0

(-) -

Goodwill Amortization -1,268 -2,593 -1,300 -2,500

Total 3,757 (6.5%)

9,551 (7.4%)

4,000 (6.7%)

106% 12,000 (9.2%)

126%

Exchange Rate (Average)

USD ¥106.43 ¥109.03 ¥105 ¥105

EUR ¥119.12 ¥119.37 ¥115 ¥115

FY2017 Full Year Plan by Business (unit: million yen)


■ IT Construction: 1- Sales growth by the differentiated technologies

■ IT Agriculture : Utilization of the new global organization (Preparing for the future)

0

2

4

6

8

10

0

20

40

60

FY2015 FY2016 FY2017 Plan

60.6 61.0 62.0

2- Sales growth by increasing the OEM partners

6.5 5.6

2.4

Strategic Plans for Each Business

1. Positioning Company

Focused Strategy

Net Sales (billion yen) Operating Income

(billion yen)

Net Sales Operating Income


IT Construction: Sales growth by the differentiated technologies

Sales Transition of IT Construction （FY2015-2017）

Further Expansion of the OEM sales / of the Aftermarket

• Contributor to the OEM sales increase • An advantage over competitors in the

aftermarket

Mastless MC System ３Ｄ-ＭＣＭＡＸ

FY15 FY16 FY17

World's First

Traditional Dozer Machine Control System New Dozer System

Mast (Attached

after purchase)

Cables


IT Construction: Sales growth by increasing the OEM partners

・Topcon OEM Partners：about 30 companies (Triple in 3 years) Trade Show： ConExpo 2017, the biggest show for the construction in the US, Held every 3 yrs Visitors: 130 thousand / Exhibitors： 2,800 / Venue： Las Vegas, USA

The number of machinery equipped with IT construction technology has increased dramatically at ConExpo


IT Agriculture: Utilization of the new global organization (Preparing for the future)

Kee Technologies (Australia)

Wachendorff (Germany)

Digi-Star (U.S.A.)

NORAC (Canada)

Produc tion

Development Sales Admini

stration

Topcon Agriculture

Purposes • Improvement in business efficiency

(Cost reduction) • Enhancement of governance • Maximization of synergy effect

Headquarter (Italy)

Staff Allocation and Organizational reforms

completed

New Global Organization

Prod Dev Sales Admin

CEO


CEO


CEO


CEO

New Organization “Topcon Agriculture”

Organization restructuring of the 4 acquired companies

Expanding sales immediately when the market recovers


i-Construction: 1 - “Introduction” to “Diffusion” phase

■

■

2 - Sales growth by expanding product lineup

0

2

4

6

0

10

20

30

40


33.0 35.0 33.1

4.5 3.9 3.9


2. Smart Infrastructure Business

Focused Strategy


Net Sales (billion yen) Operating Income

(billion yen)


New Total Station sales expansion


0

0.5

1

1.5

2

2.5

2016年 2017年予測

2018年予測

2019年予測

2020年予測

i-Construction: Introduction to Diffusion Phase

TOPCON’s Mission

Industry issues TOPCON’s Mission

Our sales plan Market growth forecast

100％ (Obligation)

Domestic ICT Construction

FY15 FY16 FY17計画

(Amount)

Education

Great Expansion

FY2015 FY2016

Number of Users of Training Centers

Over 2,000 trainees Great Expansion

“i-Construction” related order public work

Trillion JPY


Shirakawa Sep 2014 Launched

Kita Kyushu Dec 2016 Launched

Kanto FY2017

Planning

Supply detailed training

Expand Training Centers

Kobe Jun 2016 Launched

2016 2017 2018 2019 2020 Est. Est. Est. Est. Est.

(Estimated by TOPCON) FY15 FY16 FY17 Plan

Lack of headcounts of “i-Construction” technicians

Provide more satisfactory Education and Support


i-Construction：Sales growth by expanding lineup

World's first Drone surveying without orientation point

Revolution in drone surveying!

i-Construction improves working

efficiency!

World's First

Drone

3D Scanner 3D Mapping



FY2015 FY2016 FY2017

Low-end

High-end

Middle class Common platform

World's Smallest/ World's Lightest

New Total Station

World's Lightest

World's Smallest

World's Fastest

Increase profitability with high market share Total Stations

Common platform (300 models → 30 Models)

(Units)

High value added Total Station sales trend

New Total Station sales expansion


■

■

0

2

4

6

0

10

20

30

40

50


43.8 45.0 43.1

2- Sales expansion by Triton(SS OCT)

Strengthen sales in high-growth Indian market ■

Cost reduction corresponding to the appreciation of the yen ■

3.5

4.9

2.6


3. Eye Care Business

Focused Strategy




3D OCT: 1- Sales growth of Maestro in US

Promotion of EMR business for Ophthalmology


FY14 FY15 FY16 FY17Plan

Vision Expo East(New York)

Approx. 4times(YoY) received order amount due to Maestro effect

（Visitors: Approximately 20,000 people）

3D OCT: Sales growth of Maestro in US

Significant sales growth in the world's largest market

(March) One of the largest World largest optical exhibition

OCT display area of Topcon booth

Significant growth

Total OCT sales Q’ty


Visible from Invisible!!

Faster, higher resolution, deeper

Adopted Swept Source light source

3D OCT: Sales expansion by Triton (SS OCT)

Keynote speech by Dr. Spaide, a leading expert in retinal vitreous field

Attendees ： 319 Doc. from the world-wide （Eur.287, USA ：17, Asia：9, Japan：4）

(Co-sponsor：Novartis)

A large number of prestigious doctors all over the world attended

1st SS OCT International Conference TOPCON established its own

State of the art SS OCT technology

Demo

SS OCT Triton contributes to

Age-Related Macular Degeneration

Age-Related Macular Degeneration

Early Detection / Early Treatment

Conventional OCT SS OCT Triton

＊Swept Source Technology A frequency swept light source and a high speed detector are used to detect the interference signal as a function of time, instead of a spectrometer and camera as in spectral-domain technology.

Provided by Dr. Ichiro Maruko (Fukushima Medical University, Tokyo Women's Medical University)

World's First


5years ago Present

Expand sales with state-of-the-art SS OCT and popular Maestro

Expanding from R&D to clinical market

SS OCT Triton released

Maestro released Expanding from clinical to screening market

OCT series Coverage area

Contribute to early detection and early treatment

R&D (University

Hospital, etc..)

Clinical (University Hospital,

Clinic)

Screening (Clinic, Medical Check-Up)

3D OCT: Sales expansion by Triton (SS OCT)


Cost reduction corresponding to the appreciation of the yen

Cost reduction of main products

- Common platform - Reduction of processing cost by mold conversion - Expansion of overseas procurement by utilizing yen appreciation - Automation of quality inspection

Maximize the benefits of scale by increasing sales

FY20 Plan FY17 Plan

Total OCT sales Q’ty


Topcon Healthcare IT Solutions

Established new organization

Promotion of EMR business for Ophthalmology

Sales Development

Technical Support

General Manager Former MD of Accenture

Advisor Former Zeiss US CEO

(April, 2017)

Product Planning

VisionVan

EMR for Ophthalmology

Active use of leader human resources ・General Manager Former Managing Director of Accenture IT business specialist

・Advisor Jim Taylor , Former CEO of Carl Zeiss Meditec, Inc.

Hospital

Private eye clinic



Remote medical care system

Optical shop in abroad

Medical check-up Hospital (Japan)

General practitioner

Visiting care

Remote medical care system


FY2015 FY2016 FY2017 FY2018 FY2020

0

500

1,000

1,500

2,000

2,500

3,000

FY2015 FY2016 FY2017 FY2018 FY2020

Strengthen sales in high-growth Indian market

Acquisition of Mehra Eyetech Pte. Ltd Expand our business in growing market India greatly Focus on high-end products such as OCT and ICT Business as a Topcon group company

（1st December, 2016）

CAGR 17% （Unit: USD M）

Mumbai Head Office

9 branch

CAGR 7% Sales plan in India India GDP


0

5

10

15

20

25

0

40

80

120


130.7 128.4 131.0

139.0 145.5

12.1

15.4

120.16 JPY/USD

132.36 JPY/EUR

109.03 JPY/USD

119.37 JPY/EUR

105 JPY/USD

115 JPY/EUR E

xcha

nge

Rat

e

12.0 9.6 8.8

Summary Trends of Financial Results Annually



Net Sales

Operating Income

Net Sales FY15 Exchange Rate Conversion

Operating Income FY15 Exchange Rate Conversion


Topcon for Human Life 医・食・住


Appendix Ⅲ.


7.1

9.1

6.9

9.9

6.6 8.4 7.5

10.6

0.4

1.5

0.6

1.5

0.3

1.1

0.3

2.2

0.0

1.0

2.0

3.0

0.0

5.0

10.0

FY15/1Q 2Q 3Q 4Q FY16/1Q 2Q 3Q 4Q

Net SalesOperating Income

Net Sales (billion yen) Operating Income (billion yen)

7.9

11.6 9.8

14.5

8.8 10.8 10.5

13.1

0.5

1.6

0.5

2.3

0.5 0.8

0.4 0.9

0.0

1.0

2.0

3.0

0.0

5.0

10.0

15.0

FY15/1Q 2Q 3Q 4Q FY16/1Q 2Q 3Q 4Q



14.4 17.0

13.3

17.3

12.8 14.3 13.6

19.9

0.6 1.1

-0.7

1.4 0.7

1.7

0.5

2.6

-1.0

0.0

1.0

2.0

3.0

0.0

5.0

10.0

15.0

20.0

FY15/1Q 2Q 3Q 4Q FY16/1Q 2Q 3Q 4Q



27.6

35.3

28.6

39.2

26.2

31.7 29.5

41.0

0.7

3.6

-0.3

4.7

0.7

3.0

0.7

5.2

-1.0

1.0

3.0

5.0

7.0

9.0

0.0

10.0

20.0

30.0

40.0

FY15/1Q 2Q 3Q 4Q FY16/1Q 2Q 3Q 4Q




Financial Results (Quarterly) 1. Consolidated 2. Positioning

3. Smart Infrastructure 4. Eye Care


62.9 67.8 57.9

70.4 60.0

71.0

4.5 4.3 3.8 5.8

4.0

8.0

0.0

5.0

10.0

15.0

0.0

20.0

40.0

60.0

80.0

FY15/1H FY15/2H FY16/1H FY16/2H FY17/1H FY17/2H



16.2 16.8 15.0

18.1 16.0

19.0

1.9 2.0 1.4

2.5

1.4

3.1

0.0

2.0

4.0

0.0

10.0

20.0




31.4 30.6 27.2

33.4 29.0

32.0

1.7

0.7

2.5 3.1

2.7

3.8

0.0

2.0

4.0

0.0

10.0

20.0

30.0

40.0




19.5 24.3

19.6 23.5

20.0

25.0

2.1 2.8

1.3 1.3 1.2

2.3

0.0

2.0

4.0

0.0

10.0

20.0

30.0




Financial Results and Plan (Semiannually) 1. Consolidated 2. Positioning

3. Smart Infrastructure 4. Eye Care

These materials contain forward-looking statements, including projections of future operating performance. Such statements are based on management’s best judgment, given the materials available to them at the time these statements are made. However, please be aware that actual performance may differ from projected figures owing to unexpected changes in the economic environment in which we operate, as well as to market fluctuations. The original disclosure in Japanese was released on April 28, 2017 at 16:30 (UCT+9).

Inquiries: Corporate Communication Div. Investor Relations and Shareholder Relations Dept. TOPCON CORPORATION Tel: +81-3-3558-2532 E-mail: [email protected] URL: http://global.topcon.com/invest/

Cautionary Note regarding Forward-Looking Statements

fy2016 financial results -...

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