FY2014 2Q Financial Results...FY2014 2Q Financial Results In this presentation, “ FY2014” refers...

FY2014 2Q Financial Results In this presentation, “FY2014” refers to the fiscal year ending March 31, 2015.

October 31, 2014 TOPCON CORPORATION President & CEO Satoshi Hirano

©2014 Topcon Corporation

CONTENTS

FY2014 2Q Financial Results

FY2014 Full Year Forecast

Ⅲ Appendix

Ⅰ FY2014 2Q Financial Results

Ⅱ

1


Ⅰ. FY2014 2Q Financial Results Ⅰ- 1. FY2014 1H Financial Results

Ⅰ- 2. Overview of Each Company

2


118% vs Announcement


60.0

5.0

4.3

2.1

113％

143％

140％

209％


59.4

5.9

5.6

3.5

3

Sales

Operating Income

Ordinary Income

Net Income

Announcement Actual YoY Comment

Achievement of 1H FY2014 <Grow at a steady pace>

(unit: billion yen)

Close to the target

Upward revision

Upward revision


-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

0

10

20

30

40

50

60

70

FY2008/1H FY2009/1H FY2010/1H FY2011/1H FY2012/1H FY2013/1H FY2014/1H

5.9

4.1 +1.8 Billion Yen

4

Net Sales (billion yen)

Operating Income (billion yen)

Trends of 1H Financial Results

Topic <Maintain the growth in sales and profit>

Net Sales Operating Income

・Execution of Growth Strategy ・Effects of New Businesses ・Steady US Market Conditions


FY2014 1H Financial Results <Drastic improve on YoY basis>

[Consolidated] FY2013/1H FY2014/1H July 31, 2014

Actual Actual YoY Announcement

Net Sales 52,795 59,402 6,607 60,000

Gross Profit (Gross Profit Ratio)

24,986 (47.3%)

29,566 (49.8%) 4,580

SGA 20,842 23,660 2,818

Operating Income (Operating Income Ratio)

4,143 (7.8%)

5,905 (9.9%) 1,762 5,000

(8.3%)

Non-Operating Expenses -103 -265 -162

Ordinary Income 4,040 5,640 1,600 4,300

Extraordinary Income (Loss) -597 0 597

Income (Loss) Before Income Taxes and Minority Interests 3,442 5,640 2,198

Net Income (Loss) 1,673 3,489 1,816 2,100

Dividends ¥5 ¥8 ¥3 ¥8

Exchange Rate

(Average)

US$ ¥97.99 ¥103.51 ¥5.52 ¥101.22

EUR ¥128.79 ¥139.07 ¥10.28 ¥137.86

5

(unit: million yen)


FY2014 1H Company Financial Results <All companies made significant growth in profit >

[Consolidated] FY2013/1H FY2014/1H July 31, 2014

Actual Actual YoY Announcement

Net Sales

Positioning 22,352 27,383 5,031 27,000 Smart Infrastructure 15,887 15,639 -248 17,000

Eye Care 17,072 18,582 1,510 19,000 Others 3,175 3,493 318 3,000 Elimination -5,692 -5,697 -5 -6,000 Total 52,795 59,402 6,607 60,000

Operating Income

(Operating Income Ratio)

Positioning 1,830 (8.2%)

2,929 (10.7%) 1,099 2,400

(8.9%)

Smart Infrastructure

1,975 (12.4%)

2,242 (14.3%) 267 2,000

(11.8%)

Eye Care 1,251 (7.3%)

1,462 (7.9%) 211 1,400

(7.4%)

Others 16 (0.5%)

136 (3.9%) 120 100

(3.3%)

Goodwill Amortization -928 -866 62 -900

Total 4,143 (7.8%)

5,905 (9.9%) 1,762 5,000

(8.3%)

6

(unit: million yen)


¥5.3B

FY2013/1H

FY2013/1H

FY2013/1H

FY2013/1H FY2013/1H

FY2013/1H FY2014/1H FY2014/1H

FY2014/1H FY2014/1H FY2014/1H

FY2014/1H

- Steady performance in all companies - SIC: Sales grew by special reconstruction works

- SIC: Slow Chinese market

¥3.0B ¥5.6B

¥14.4B ¥14.5B ¥13.1B 91億円

¥3.1B ¥5.6B ¥5.5B

124% 123% 111%

100% 97%

7

97%

¥10.6B ¥11.8B ¥13.1B

Domestic and Overseas Sales (YoY) <Strong advanced countries>

Japan North America

Europe

China Asia/Oceania Others

・ POC=Positioning Company/ SIC=Smart Infrastructure Company/ ECC=Eye Care Company ・ Net sales of former Finetech business are excluded from figures above.

- ECC: Good sales of 3D OCT


Ⅰ. FY2014 2Q Financial Results Ⅰ- 1. FY2014 1H Financial Results

Ⅰ- 2. Overview of Each Company

8


FY2013/1H Actual

FY2014/1H Actual YoY FY2014

Forecast Net Sales 22,352 27,383 +5,031 57,000 Operating Income (Operating Income Ratio)

1,830 (8.2%)

2,929 (10.7%) +1,099 6,200

(10.9%)

ー Negative factor Delayed recovery of the European markets

Positive factors IT Automated construction sales keeping strong (YoY 160％) Reorganized distribution channel resulting in expanded china business

(YoY340％) North American construction markets showing growth (YoY 130％)

9

Overview of Each Company <Reinforcing IT construction sales and Asian markets>

(unit: million yen)

Review of FY2014 1H Financial Results


ー Negative factors Sluggish market in Russia Sluggish market in China

Positive factors Accelerated Reconstruction Works in Japan (YoY 120%) Recovery of US Market


FY2013/1H Actual


Forecast Net Sales 15,887 15,639 -248 37,000 Operating Income (Operating Income Ratio)

1,975 (12.4%)

2,242 (14.3%) +267 5,900

(15.9%)

10

Overview of Each Company <Strong sales in Japan and North America>

(unit: million yen)


ー Negative factor Stagnant South-East Asian Market

Positive factor Steady European and US Market Rapid Growth of Fundus Camera for Screening Market (YoY 240%) Strong Sales of 3D OCT-1 Maestro

FY2013/1H Actual


Forecast Net Sales 17,072 18,582 +1,510 42,000 Operating Income (Operating Income Ratio)

1,251 (7.3%)

1,462 (7.9%) +211 5,500

(13.1%)

11

Overview of Each Company <Strong OCT sales>


(unit: million yen)


Ⅱ. FY2014 Full Year Forecast

Ⅱ-1. FY2014 Full Year Forecast

Ⅱ-3. Summary Ⅱ-2. Strategic Plans for 2H

12


［Consolidated］

FY2013 FY2014

Full Year Full Year July 31, 2014

Actual Forecast YoY(%) Announcement

Net Sales 116,685 130,000 111% 130,000

Operating Income (Operating Income Ratio)

11,730 (10.1%)

16,000 (12.3%)

136% 16,000 (12.3%)

Ordinary Income 11,300 14,500 128% 14,500

Net Income 5,963 8,300 139% 8,300

ROE 11.7% 15% 15%

ROIC 7.9% 11% 11%

Dividends ¥10 ¥16 ¥16

Exchange Rate (Average)

US$ ¥100.00 ¥101.89 ¥100.66

EUR ¥134.01 ¥137.19 ¥136.54

13

FY2014 Full Year Forecast (unit: million yen)

Assumed exchange rate after October 2014 is ¥100/US$, ¥135/EUR


［Consolidated］

FY2013 FY2014

Full Year Full Year July 31, 2014

Actual Forecast YoY(%) Announcement

Net Sales

Positioning 48,959 57,000 116% 57,000

Smart Infrastructure 34,621 37,000 107% 37,000

Eye Care 38,736 42,000 108% 42,000

Others 6,625 7,000 106% 7,000

Elimination -12,258 -13,000 -13,000

Total 116,685 130,000 111% 130,000

Operating Income

(Operating Income Ratio)

Positioning 4,514 (9.2%)

6,200 (10.9%) 137% 6,200

(10.9%)

Smart Infrastructure 5,201 (15.0%)

5,900 (15.9%) 113% 5,900

(15.9%)

Eye Care 4,003 (10.3%)

5,500 (13.1%) 137% 5,500

(13.1%)

Others -205 (-3.1%)

300 (4.3%) ―% 300

(4.3%)

Goodwill Amortization -1,782 -1,900 -1,900

Total 11,730 (10.1%)

16,000 (12.3%) 136% 16,000

(12.3%)

14

FY2014 Company Full Year Forecast (unit: million yen)


(unit: model)

Company FY2014

FY2014 1H FY2014 2H Plan

Positioning 4 11 Smart Infrastructure 5 8

Eye Care 3 7 Total 12 26

15

New Products Launch



Ⅱ-1. FY2014 Full Year Forecast Ⅱ-2. Strategic Plans for 2H

Ⅱ-3. Summary

16


■ Continued share growth in the strong North American construction market

1. Positioning

Continue to propel IT automation in construction ■

Strategic Plans for 2H <Securing profit from increased sales>

0.0

1.0

2.0

3.0

0

5

10

15

20

25

30


2.9

0.5

17

Dodge Construction Index

NA Construction investment amount




1.8


1H 2H 1H 2H 1H 2H

FY2012 FY2013 FY20141H 2H 1H 2H 1H 2H

FY2012 FY2013 FY2014

Expansion of IT Automation

• Striking growth for the whole business

• Expecting further growth from new excavator system

IT Construction Sales Trend

Precision AG Sales Trend

• Market continues global expansion

18

180%

2H Frcst

2H Frcst

200%

©2014 Topcon Corporation 19

Future IT Excavators

IT Dozers

Future

Dozers

Excavators

IT Dozers IT Dozers

Global Market

IT Excavators

• IT automation market continues a steady growth • Potential market expands with the launch of IT excavators

FY13

FY13

Global Market

Global Market

The Growth and Expansion of IT Market <Market forecast>

FY14

FY14

Global Market

Global Market

Global Market


Expanding business fields with revolutionary technology

Business Fields

R&D

20

10 Years Ago 5 Years Ago

Today

IT Construction

Mobile Mapping

Network Survey

Precision AG

Mining

GIS

Survey Unmanned Aerial Survey

High precision handheld GNSS receiver

Powerful Product Launch <Disruptive innovation>


GPS

MC & AG＊

Apr Mar Jan 2014 2015

＊ MC= Machine Control AG= Agriculture

Jul Oct

C-63 Compaction Management System

GCX2 Revolutionary GNSS Receiver

21

Magnet for AG Magnet Application specializing for precision agriculture

NET-G5 448 Channel QZS・Beidou compatible

Apollo ECU Application Controller

SGIS Enterprise Farm Management Software

New Product Launch <Reinforcing each field with advanced technology>


Strategic Plans for 2H <Expand new business & maintain steady domestic business>

2. Smart Infrastructure

0.0

1.0

2.0

3.0

0

5

10

15

20



1.5

2.2

22

Maintain steady core business and IT Construction business in domestic market with expanding demand

■ Expand sales channels for BIM market by business alliance with Autodesk

Launch new and competitive Mobile Mapping System ■

■

2.0




BIM

23

Growth Strategy: Expanding Business Domain

Shifting from 2D to 3D Measurement and Construction Business

High-Precision 3D Measurement and

Construction Business

Maintenance Surveying Construction

Smart sensing of aging infrastructure

Expanding Business Domain

Existing Business

Business alliance


Penetrating into BIM Market <Enhance alliance with Autodesk>

24

Autodesk: Released the “BIM 360 Layout”, an exclusive field software for LN-100

Exhibited at Intergeo 2014 (Germany)

※ on Oct,/13, 2014


1H 2H 1H 2H

LN-100

1H 2H 1H 2H

3D Laser Scanner

25

Sales Expansion in BIM Market <Launching new products>

Unit Sales

Unit sales

1H 2H 1H 2H Forecast

FY2014 FY2013

1H 2H 1H 2H Forecast

FY2014 FY2013


Expanding IT Construction Market

Sept, 2014 Opened renewed

“Shirakawa Training Center” Opening ceremony attendees : 138 persons Guest : MLIT (Ministry of Land Infrastructure, Transport and Tourism) , Policy Bureau Fukushima Pref., Kennan Regional Develop Bureau Komatsu Ltd, Nishio Rent All Co.,Ltd.

26

75

193

358

612 686

1114 Topcon’s Action ・ Provide Personnel Training ・ Enhance User Support System

● Number of Projects utilized IT Execution Technique 1,200 1,000 800 600 400 200 0

2008 2009 2010 2011 2012 2013 Source: Nikkei BP

River Construction Civl Construction Paving Construction Others

Prepare for Paradigm

Shift

x15


Expanding Mobile Mapping System Market <Launching a new product>

IP-S3 1/2 Size Ultra Compact and Light Weight design !

x5 Higher Density To obtain High resolution 3D model ! Speedy and Easy Data Check Can be done at the site !

※ Estimated by Topcon

Mobile Mapping System

IP-S3 Previous Model

NEW

27

x2

Mobile Mapping System Market

(Amount)


Higher Density

28

Previous Model IP-S3 NEW


型

ES/CX-P

GLS-2000

ScanMaster

DS-200i

29

IP-S3

Mobile Master

SiteHunter

New Product Launch <Enhancing product line for growing business>

Apr Jul Mar Oct Jan 2014 2015

Total Stations and others

3D Measurement and others


Strategic Plans for 2H <Sales expand for 3D OCT/ Screening/ Treatment Product>

3. Eye Care

Treatment Market: Sales expansion by launching new products (Synthesis TwinStar・ALADDIN)

3D OCT: Expansion of targeting market by new model release to OCT lineup

Screening Market: Global sales expansion of Screening device to clinic & chain stores (1H YoY 240%)

FDA Approval: Continuous follow up by FDA special team (Main product for Screening market TRC-NW400 FDA Approved in September )

■

■

■

■

0.0

0.5

1.0

1.5

2.0

2.5

0

5

10

15

20

25


0.4

1.5

30

1.3





1H 2H 1H 2H見込上期下期上期下期

3D OCT Screening

Strategic Plans for 2H <3D OCT/ Screening sales transition>

(unit: qty) (unit: qty)

Full Auto

Operating with only one finger OCT

Full Auto

Easy Capturing Fundus Camera

TRC-NW400 FDA Approved In September

31

FY2013 FY2013 FY2014 FY2014 1H 2H 1H 2H 見込

Sales Launch in US

Forecast Forecast


Ophthalmologist・R&D Market

R&D (University

Hospital, etc..)

Clinical (University Hospital・

Clinic)

Screening (Clinic, Medical Check-Up)

New Product Launch <Expansion of targeting market>

TRC-NW400 Maestro

Ophthalmologist・Screening Market

FY2014 2H New Product

Launch DRI OCT-1 Atlantis

Stable Existing Market

Expansion of Targeting Market

“Highly Functional Premium Products”

“Easy-To-Operate, Full Auto Function”

FDA Approved in Sept

32


Expansion of Business Field

Current Business Field

Sales & Profit Strategy <Sales expansion in the Screening/ Treatment market>

TRC-NW400

Maestro

FDA Approved in June

ALADDIN (Diagnosis Products for Pre

Cataract Surgery)

Full Auto

Full Auto

FDA Approved

in Sept

33

TwinStar (PASCAL

Laser)

Strengthen Preventive Medicine and Treatment Segment by Enhancing the Strong Competitive of Examination/Diagnosis Segment

Preventive Medicine/ Physical check-up

Treatment/ Prognostic

Management Examination Diagnostic

Ophthalmic IT

Expand Business Field

Sharing data with Cloud System and providing regional Medical cooperation service

Easy Capturing Fundus Camera

Operating with only one finger OCT

New Product Launch into Treatment Market


上期下期上期下期

Treatment Market <Sales expansion in Treatment market>

ALADDIN Global Launch

Synthesis TwinStar Launch

上期下期上期下期

PASCAL Sales Transition

ALADDIN Sales Transition

(unit: qty)

ALADDIN: Pre Cataract Surgery Diagnosis Products = Axial Length Measuring Device

FDA Approved in June

34

FY13/1H FY13/2H FY14/1H FY14/2H Forecast

(unit: qty)

FY13/1H FY13/2H FY14/1H FY14/2H Forecast

Sales in Europe

Global Launch


Examination/Diagnosis

Treatment

FDA Approval (Forecast)

35

CT-800

SL-D701

TRC-NW400

CL-200Touch

ALADDIN

PASCAL Synthesis TwinStar

FDA Approved

FDA Approved

FDA Approved

FDA Approved

TRC-NW8F Plus

New Products Launch <New products in 2H>

Apr Jul Mar Oct Jan 2014 2015

Acquiring approval one after another



Ⅱ-1. FY2014 Full Year Forecast Ⅱ-2. Strategic Plans for 2H

Ⅱ-3. Summary

36



0.0

2.0

4.0

6.0

8.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

FY11/1H FY11/2H FY12/1H FY12/2H FY13/1H FY13/2H FY14/1H FY14/2H

37

7.6

4.1

52.8 5.9

59.4 63.9

Summary <Steady implementation of growth strategy>

Trends of Financial Results (Semiannually)



1.5


We will strive to increase the corporate value to reach the target of ROE20% by FY2015

We will accelerate revenue growth and high profitability furthermore

then implement our growth strategy

Summary

38


Appendix Ⅲ.

39


6.8

9.1 7.5

11.2

6.8

8.9

0.4

1.5

0.9

2.3

0.8

1.4

0.0

0.5

1.0

1.5

2.0

2.5

0.0

5.0

10.0

15.0

FY13/1Q 2Q 3Q 4Q FY14/1Q 2Q

Net IncomeOperating Income

7.5

9.6

9.1

12.6

7.9

10.7

0.02

1.2

0.8

2.0

0.3

1.2

0.0

0.5

1.0

1.5

2.0

0.0

5.0

10.0

15.0

FY13/1Q 2Q 3Q 4Q FY14/1Q 2Q

Net IncomeOperating Income

10.7 11.7 10.8

15.8 13.0

14.3

0.8 1.1

0.4

2.3

1.2

1.8

0.0

0.5

1.0

1.5

2.0

2.5

0.0

5.0

10.0

15.0

20.0

FY13/1Q 2Q 3Q 4Q FY14/1Q 2Q

Net SalesOperating Income

24.1 28.7 26.5

37.4

26.4

33.0

0.7

3.4

1.6

6.0

1.7

4.2

0.0

2.0

4.0

6.0

0.0

10.0

20.0

30.0

40.0

FY13/1Q 2Q 3Q 4Q FY14/1Q 2Q


40

Financial Results (Quarterly) 1. Consolidated 2. Positioning

3. Smart Infrastructure 4. Eye Care

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



46.1 51.2 52.8

63.9 59.4 70.6

1.5

3.7 4.1

7.6

5.9

10.1

0.0

5.0

10.0

15.0

0.0

20.0

40.0

60.0

80.0

FY12/1H FY12/2H FY13/1H FY13/2H FY14/1H FY14/2H


13.7 16.1 15.9

18.7

15.6 21.4

1.5

2.7

2.0

3.2

2.2

3.7

0.0

1.0

2.0

3.0

4.0

0.0

5.0

10.0

15.0

20.0

25.0



17.4 20.4 22.4

26.6 27.4 29.6

0.5 0.9

1.8 2.7 2.9

3.3

0.0

1.0

2.0

3.0

4.0

0.0

10.0

20.0

30.0

40.0



14.5 16.6 17.1

21.7 18.6

23.4

0.4 1.1

1.3

2.8

1.5

4.0

0.0

1.0

2.0

3.0

4.0

5.0

0.0

5.0

10.0

15.0

20.0

25.0



41

Financial Results and Forecast (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 October 31, 2014 at 16:30(UTC+9).

Inquiries: General Accounting & Finance Div. Public & Investor 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

FY2014 2Q Financial Results...FY2014 2Q Financial Results In this presentation, “ FY2014” refers...

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