fy2015 3q financial results -...

©2016 Topcon Corporation 11

Ⅱ. FY2015 Full Year Plan Ⅱ-1. FY2015 Full Year Plan Ⅱ-2. Strategic Plans by Company

Ⅱ-3. Summary

©2016 Topcon Corporation

19 billion yen → 12.5 billion yen -6.5 billion yen (YoY 78％)

Conditions until 3Q

143 billion yen → 133 billion yen -10 billion yen (YoY 103％)

・Prolonged stagnation in the Agriculture Market ・New strategic products release delay ・Sales decrease of high value added products ・Market stagnation in Russia, Middle East, and South America

in response to changes in external environment

Measures in 4Q ・Sales increase by launching new strategic products (POC,SIC,ECC) ・Sales increase through IT Construction business in Japan (POC,SIC) ・Final phase towards FDA clearance (ECC) ・Sales increase through acquisition of ifa systems AG

12

Margin decline from an unexpected slow growth in sales

Temporal cost increase

Speedy business management ・Completion of employment lay off ・Acceleration of FDA clearance ・Development acceleration of new strategic products ・Majority share acquisition of ifa systems AG

FY2015 Revised Plan Overview

Speedy business management by foreseeing changes

FY2015

Operating Income (Plan)

Sales (Plan)

Revised


［Consolidated］

FY2014 FY2015

Full Year Full Year October 30, 2015

Actual Forecast Change YoY(%) Announcement

Net Sales 128,569 133,000 -10,000 103％ 143,000

Operating Income (Operating Income Ratio)

16,041

(12.5%) 12,500

(9.4%) -6,500 78％ 19,000

(13.3％)

Ordinary Income 14,880 11,000 -6,500 74％ 17,500

Net Income＊1 8,670 6,000 -4,800 69％ 10,800

ROE 14.8% 10% 17%

ROIC 10.9% 8% 13%

Dividends (Dividend ratio)

¥16 (20%)

¥24 (43%)

¥24 (24%)

Exchange Rate＊2

(Average)

US$ ¥110.03 ¥121.14 ¥120.81

EUR ¥138.68 ¥132.82 ¥132.48

13

FY2015 Full Year Forecast (unit: million yen)

＊1 According to change in Japanese Accounting Standards, the former Net Income is shown as "Profit (loss) attributable to owners of parent" on financial statements. ＊2 Assumed exchange rate after January 2016 is ¥120/US$, ¥130/EUR


［Consolidated］

FY2014 FY2015

Full Year Full Year October 30, 2015

Actual Forecast Change YoY(%) Announcement

Net Sales

Positioning 58,672 64,000 -4,000 109% 68,000

Smart Infrastructure 33,909 34,000 -4,000 100% 38,000

Eye Care 41,240 44,000 -3,000 107% 47,000

Others 6,558 5,000 0 76% 5,000

Elimination -11,812 -14,000 1,000 -15,000

Total 128,569 133,000 -10,000 103% 143,000

Operating Income

(Operating Income Ratio)

Positioning 6,652 (11.3%)

4,500 (7.0%) -3,000 68% 7,500

(11.0%)

Smart Infrastructure

5,965 (17.6%)

4,500 (13.2%) -2,500 75% 7,000

(18.4%)

Eye Care 5,093 (12.3%)

5,500 (12.5%) -1,000 108% 6,500

(13.8%)

Others 163 (2.5%)

400 (8.0%) 0 245% 400

(8.0%) Goodwill Amortization -1,833 -2,400 -2,400

Total 16,041 (12.5%)

12,500 (9.4%) -6,500 78% 19,000

(13.3%)

14

FY2015 Company Full Year Forecast (unit: million yen)



Ⅱ-3. Summary


■ IT Construction: Sales Expansion of i-Construction in the Japanese market and the steady Western market

IT Agriculture: Concentration on the aftermarket ■

0.0

2.0

4.0

6.0

8.0

0.0

20.0

40.0

60.0

FY2012 FY2013 FY2014 FY2015 Plan

58.7

37.8

4.5 4.5

48.9 6.6

64.0

■ Introduction of new strategic products

1.4

Strategic Plans by Company

1. Positioning Company

Focused Strategy

New Privately Owned Housing Units Started

U.S. Construction Investment Progress

Net Sales

Operating Income

Net Sales (billion yen)

Operating Income (billion yen)

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


FY11 FY12 FY13 FY14 FY15

IT Construction <Sales expansion in the aftermarket>

Active IT Construction Business in North America

IT Construction Sales Transition in North America

FY11 FY13 FY15 Ｐｌａｎ

Steady Aftermarket

• Steady North American Construction Market

• Sales recovery in Europe • Penetration through

introduction of new strategic products

17

FY12 FY14


Solution Welding unnecessary Pole unnecessary Cable unnecessary

IT Construction <New strategic products>

Mastless MC System Traditional Dozer Machine Control System

Mast (Attached

after purchase)

Problem Trouble of welding the pole Breaking of the pole from vibration Damaging of the GPS cable

３Ｄ-ＭＣＭＡＸ

Cables

18

http://www.google.co.jp/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwi6z86wwsvKAhWHGaYKHdijAH0QjRwIBw&url=http://www.historiccoventry.co.uk/photo-mysteries/lena-conway.php&psig=AFQjCNHqPaOme-xfOK12BWryVToHIM8CWQ&ust=1454036492014807


Survey Design - Layout - Execution - Inspection

Current construction process 5 phases

Survey Design

IT Construction 3 phases

Construction revolution 2 phases

19

Survey Design Layout Execution Inspection IT Construction ・ Reduces the process ・ Labor saving ・ Resolves lack of manpower

Shortening process

Layout - Execution - Inspection

IT Construction <A further advancement >

Further Advancement

Acquire 3D Model automated creation software technology

(Finland)


・

Drop in crop prices provides severe low-cost competition

Farm producers are keen on improving the productivity

IT Agriculture <Outlook of the market>

20

Reference: Ministry of Ag, Forestry & Fisheries of Japan* website

• Cost competitiveness will become imperative when the

TPP is concluded

• The lack of manpower due to the aging

• MAFF* encourages the Smart-Agriculture (left graph)

<The Ag Market in Japan>

The IT Ag market will certainly expand because of

the food problem lying behind

The demand for IT Ag System (Auto Steering) continues to grow

The IT Ag System (Auto Steering) will be an inevitable tool

㎡ 100M

50

60

70

80

1,8002,0002,2002,4002,6002,800

1996 2015 2030

The World Population

Farmland area per person

<The World Ag Market>


IT Agriculture <Auto steering system of the tractor>

21

(Automatically controlled wheel) ・Productivity growth ・Labor saving (No need for skilled workers)

・Fertilizer & pesticide reduction

The wheel with electric motor

The Console

GNSS Receiver

Auto Steering System New Tractor Vehicle

Add-on system (Aftermarket) The system attachable to all the existing tractors of any makers

Easy installation Low cost (about 1/10th of a new vehicle)

or

Regular Wheel

is... w/ Topcon OEM System Auto Steering System provided by Ag machinery makers


World Ag Market 3400 thousand (Durable period: 8 years)

Market in Japan 370 thousand

(Durable period: 8 years)

装着未装着 0.2%

Accelerate the spread of low-cost, easy-attachable system

The Solutions We Offer

System Use Ratio System Use Ratio

22

Pricey initial investment & slowness in the penetration

Downward trend in capital spending (esp. new vehicles)

IT Agriculture <Penetration of the add-on system>

The World Ag Market The demand for IT Ag System (Auto Steering) continues to grow

Producers keen on improving the productivity

Problem

Cost competitiveness will become imperative

The Ag Market in Japan The IT Ag System (Auto Steering) will be an inevitable tool

Problem

W/out system

With system

W/out system

with system


Topcon’s Revolutionary Technologies in One Receiver

Hi-end GPS Receiver

HiPer-HR

Advancement

23

New Strategic Products <Hi-end GPS Receiver>

Small & lightweight! Plenty number of channels! Measurable even tilted!


New Strategic Products <Drone business sales development>

Survey & Mapping Inspection & Monitoring

Sirius Falcon 8 High

maneuverability Resistance to

wind

Wide range Automatic

flight

24

Remote sensing at hand


GPS

MC & AG＊

＊ MC＝Machine Control AG＝IT Agriculture

New Products <Revitalization of the Market with Revolutionary Products>

Apr Mar Jan 2015 2016

Jul Oct

GCX2 Revolutionary GNSS receiver

C-63 Compaction Management System w/ Temperature sensor

GX-55 New display for excavator system (integrated LED light bars)

NET-G5 448 Channels

QZSS・BeiDou Compatible

G5-A1 Multi Constellation Entry-level GNSS antenna

GNR5 448 Channels

QZSS・BeiDou Compatible

RD-M1 Compact portable road

scanning system

3D-MC MAX

25


2. Smart Infrastructure Company

Expansion of Total Station business with supplementary budget (Japan) ■

■ Sales growth of new Total Station(new strategic products)

Expansion of IT Construction Business along with “i-Construction” regulation ■

■ Sales increase in growing India’s market

Construction Demands forecast in the world (unit: trillion yen)

26

*Prepared on the basis of Yano Research Institute Ltd. & Mizuho Research Institute Ltd. data

0.0

2.0

4.0

6.0

8.0

0.0

10.0

20.0

30.0

40.0

FY2012 FY2013 FY2014 FY2015 Plan

4.1

6.0

33.9 29.8

4.5

34.0

5.2

34.6

Strategic Plans by Company

Focused Strategy


Operating Income (billion yen)

Net Sales

Operating Income


Obligation to follow “i-Construction” (MLIT)

Improving construction productivity

Countermeasure for a critical labor shortage

FY2016 FY2020

20％

100％

MLIT’s independent placement of order for public works (foundation work)

Approx. 5~600 Billion yen

Source: Nikkei Inc. Nov 19, 2015

Acceleration of “i-Construction” <Expansion of IT Construction Business>

FY2016: 20%→FY2020: 100%

(Obligation)

Source :MLIT website

Source: MLIT website http://www.mlit.go.jp/common/001111976.pdf

27

MLIT: Ministry of Land, Infrastructure, Transport and Tourism

*Design/ Planning *Survey *Construction *Inspection


Design/ Planning

Obligation of i-Construction(Japan MLIT)

Utilization of Topcon 3D-MC System for i-Construction

2013 2014 2015

Planning to add the 2nd training center in West Japan

Launch Strategic new product

NEW!!

Survey

3D measurement (UAV)

Design & plan by 3D surveying data IT Construction Saving inspection

process

Launch Mast-less MC system

2H

1H

28

Plan

■ Machine control sales(Japan)

MLIT: Ministry of Land, Infrastructure, Transport and Tourism

Construction Inspection

(sales)

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


Positive factors in the Q4 Supplementary budget(2015)

1.3 trillion yen (Jan 2016 enacted)

0

10

20

30

40

50

2012 2013 2014 2015 2016

Nominal construction investment transition

Steady construction investment

.....on the other hand,

Order delay in public works (Apr-Dec YoY basis -8%)

Construction market trend

Impact on domestic sales

The repair works of rivers and embankments (after disasters) will go into full-scale operation

in various areas

Expansion of Total Station business

(Trillion yen)

Source: Research Institute of Construction and Economy

Expansion of Total Station Business with Supplementary Budget(Japan)

29


2013 2014 2015

Launch New Strategic Products <Accelerate shifting to sales of high value added product >

2H

1H

Increase profitability with Total Stations of high market share

Common platform (110 models →10 models)

New Total Station Low-end

High-end

Middle class

World's Smallest/ World's Lightest

Common platform

30

Plan

Sales of high value added Total Stations

(Q’ty)

World's Lightest

World's Smallest

World's Fastest


0123456789

2013 2014 2015 2016 2017 2018

IndiaWorld Ave.

0

2,000

4,000

6,000

8,000

2013-2014 … 2014-2015 … 2015-2016 …

道路鉄道

Sales Increase in Growing India’s Market <Strengthen Sales Channels in India’s market>

Expand sales channel 2014 2015 2016

India Sales Plan Aggressive investment in growing India’s market

FY14-15 growth 200%

Growing infrastructure demand

Source: Ministry of Finance, Government of India

Continued High GDP growth rate

Source: IMF

India national budget(Road & Railway sector) Unit : INR Billion

(%)

2013-14 2014-15 2015-16 Plan

Surveying Market

New Channels

Road Railway

(INR M)

31


IP-S3

MS1005/NET1005

GPT-3500 TKS-400R

TP-L5

Image Master UAS

DS-200i

Long type GLS-2000 series Short type

THE-2016 SET25

ES-50 CX-50

Inspection systems of road crack


Jul Oct

New Products <Strengthen Total Station lineup>

3D Measurement

and others

Total Stations and others

New Total Station

32


Strategic Plans by Company 3. Eye Care Company

■

Sales growth by launching the new strategic product, OCT angiography software for DRI OCT Triton

■

■ Launch into Eye Care IT solution business with the synergy of Topcon and ifa’s technologies

Focused Strategies

Sales enhancement in the screening market

Net Sales Operating Income

0.0

2.0

4.0

6.0

0.0

10.0

20.0

30.0

40.0

50.0

FY2012 FY2013 FY2014 FY2015 Plan

Net Sales (billion Yen)

Operating Income (billion Yen)

1.6

31.1 5.1

41.2

5.5

4.0

38.7 44.0

■ Boost the OCT sales (Enter the final phase towards FDA clearance for Maestro)

33

Source: United Nations Report

(Global)


OCT Angiography Software for DRI OCT Triton <Released!>

1Q 2Q 3Q 4Q (Plan)

Visualize blood vessels!

Makes it possible to observe blood vessels without contrast dye! Reduces patient’s burden, also enables the early detection of various eye diseases!!

34

Acceleration of OCT Triton sales!

Sales of DRI OCT Triton in FY2015

Fundus Image OCT Angiography Image

Released in Jan 2016 OCT Angiography for Triton


Acquisition of Majority Shares of ifa Systems AG <Expand business domain>

Create the IT solution business for Eye Care

“Easy-to-operate full-auto” OCT & Fundus Camera

EMR(Electrical Medical record) /Telemedicine Systems

Exam/Diagnosis/Treatment domains

Diagnosis Examination Treatment

Hospital

Private eye clinic

Prognostic Domain

Prognostic management

Preventive domain

Screening

Medical check-up Hospital (Japan)

Optical shop

General practitioner

Visiting care

VisionVan

EMR for Ophthalmology

Existing business Expand business domain

Expand business domain

250 billion Yen＊

500 billion Yen＊＊Market volume

35

Remote medical care systems

Remote medical care systems


Growth through the remote medical care systems and enhancing our profits by providing existing hardware (examination devices) as well as EMR.

36

Current sales EMR sales More OCT sales in new fields

Continuous revenue flow by remote medical

care systems

High quality hardware

Transmit images

Examination at remote area

Existing business Improvement

Transmit images

Grade at reading center

Transmit images Transmit reports Billing

Information infrastructure

Global expansion

Acquisition of Majority Shares of ifa Systems AG <A new business model>


Sales Enhancement in the Screening Market

Early-detection of eye diseases

3D OCT-1 Maestro

Introduce the OCT system to the medical check-up market (penetration ratio: approx.1%)

With the rapid aging of society, the penetration will be accelerated

37

Expansion to the Medical check-up market

FY2014

Sales of TRC-NW300 & NW400

1H 2H 1H 2H 1H

FY2013

2H Plan

FY2015

TRC-NW400

FDA Approved

Full Auto

“Easy-To-Operate” Fundus Camera

Full Auto

“Easy-To-Operate” OCT


Sales of 3D OCT-1 Maestro

1H 2H 1H 2H (Plan)

FY2015 FY2014

38

Update Status of FDA Clearance Activities for 3D OCT-1 Maestro

Entering the final phase towards FDA clearance for Maestro by continued efforts through enhanced U.S. Regulatory team and collaboration with specialized law firm for FDA.

Only a little while until 3D OCT-1 Maestro launches into the World’s Biggest Health Care market!


Examination / Diagnosis

FDA approval

New Products <Enrich product portfolio>


Jul Oct

Triton

IMAGEnet 6 Integral

SP-1P

ALADDIN (for domestic market) CT-800A

KR-800A IMAGENet6 Ver.up OCT Angiography (Extended “Smart Track” function)

39

FDA Approved



Ⅱ-3. Summary


0.0

5.0

10.0

15.0

20.0

0.0

40.0

80.0

120.0

FY2012 FY2013 FY2014 FY2015 Plan

16.0 128.6 133.0

12.5

116.7 97.3

11.7

5.2

Summary

Trends of Financial Results Annually Operating Income (billion yen)


Net Sales Operating Income


We will strive to increase the corporate value to reach the

target of ROE20%

With a strong focus on our growth strategy of mid-long term, we will respond to the latest business environment changes,

keenly and promptly.

42

Summary <Speedy business management by foreseeing changes>

fy2015 3q financial results -...

Documents