©2012 Topcon Corporation
FY2011 Financial Results
Reform & Enhancement
April 27, 2012 TOPCON CORPORATION President Norio Uchida
©2012 Topcon Corporation
CONTENTS
FY2011 Financial Results
Ⅰ FY2011 ended March 2012 Financial Results
III FY2012 Full Year Plan
II Outcome of business restructuring
Ⅳ Appendix
*In this presentation, name of each business unit is abbreviated as follows. PBU: Positioning Business Unit / EBU: Eye Care Business Unit / FBU: Former Finetech Business Unit
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©2012 Topcon Corporation
FY2011 ended March 2012 Financial Results Ⅰ.
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©2012 Topcon Corporation
[Consolidated] 2011/3 2012/3 2012/1/31
Actual Actual YoY (%) Announcement
Net Sales 102,470 98,834 96.5% 97,000
Gross Income on Sales 41,061 38,118 92.8%
SGA 39,261 36,037 91.8%
Operating Income OP Ratio
1,799 (1.8%)
2,080 (2.1%)
115.6%
1,800 (1.9%)
Non-Operating Expenses (1,191) (1,613)
Ordinary Income 608 467 76.8% 0
Extraordinary Income (Loss) (621) (5,076) (5,400) Income before income taxes and minority interests (12) (4,608)
Net Income (Loss) (1,288) (3,686) (5,000)
Dividends (¥) ¥4 ¥4 ¥4
(million yen)
Consolidated Financial Results
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©2012 Topcon Corporation
(million yen)
[Consolidated] 2011/3 2012/3 2012/1/31
Actual Actual YoY (%) Annoucement
Net Sales
Positioning 51,559 52,656 102.1% 51,000
Eye Care 30,946 32,598 105.3% 32,000
Finetech 19,964 13,579 68.0% 14,000
Total 102,470 98,834 96.5% 97,000
Operating Income
Positioning 130 1,482 1,300
Eye Care 307 1,766 575.2% 1,700
Finetech 1,362 (1,168) (1,200)
Total 1,799 2,080 115.6% 1,800
Consolidated Financial Results
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©2012 Topcon Corporation
Analysis of Gain and Loss in Operating Income (YoY)
5
1.62.33.4
2.1
(1.3) (1.3)
1.8
(4.9)
3.42.1
Operating Income for FY2011
(including theimpact of theearthquake)
Total amountof Gain andLoss Factors
Operating Incomefor FY2011
(without theimpact of theearthquake)
SalesPrice Down
Change inSales,
Change inSales Mix,
etc
Impact of theearthquake
Resultsfor FY2010(including
impact of theearthquake)
Increase ofFixed-cost
ExchangeFluctuations
ReductionofCost of Goods
(billion yen)(codes are based on gain and loss)
[Consolidated] FY2010Actual Results
FY2011Actual Results
©2012 Topcon Corporation
Exchange rate in FY2011 Total Amount of Impact
Assumed Rate
(April - Sept)
Assumed Rate for 3Q
(Oct- Dec)
Assumed Rate for 4Q (Jan – Mar)
Average Exchange Rate Net Sales Operating
Income
US$ ¥80 ¥75 ¥75 ¥79.30 (¥0.4 B) (¥0.1 B)
EUR ¥110 ¥105 ¥100 ¥110.17 ¥0 B ¥0 B
Total (¥0.4 B) (¥0.1 B)
*Exchange rate at the end of the FY2010 *Average Exchange Rate for FY2010
Impact from Currency Exchange (Compared with Original Plan)
: (US$) ¥83.15 (EUR) ¥117.57 : (US$) ¥85.82 (EUR) ¥113.56
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©2012 Topcon Corporation
51,559 52,656
YoY 102%
55,494 YoY 108%
30,946 32,598
YoY 105%
33,800 YoY 109%
Eye Care
Positioning (2,838)
(1,202)
Net Sales 2011/3 Actual
2012/3 Actual In local currency Impact from
currency exchange
(million yen)
130 1,482
YoY x11
2,294 YoY x18
307 1,766 YoY x6
2,209 YoY x7
Positioning (812)
(443)
Operating Income
2011/3 Actual
2012/3 Actual Impact from
currency exchange
Impact from Currency Exchange (by segment)
In local currency
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Eye Care
©2012 Topcon Corporation
North America Japan
China Asia & Oceania
Others
10.0
2011/3 2011/3 2012/3 2012/3
- Moderate improvement in PBU - Slump in FBU - Steady growth of EBU
- Steady growth of PBU - Slump in FBU
- Slump in FBU - Negative impact on PBU due to investment reluctance in construction market
9.5 12.8
23.0 18.7 24.9 28.3 17.3 22.6
12.0 12.5 9.7
88% 108% 102%
79% 102% 103%
Domestic and Overseas Sales (YoY)
- Moderate improvement in PBU and EBU
2011/3 2012/3
2011/3 2011/3 2012/3 2012/3 2011/3 2012/3
(billion yen)
Europe
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©2012 Topcon Corporation
2010/3 2011/3 2012/3
10
(10)
0
100
0
149.8%
127.2%
3.7
(2.6)
1.1
0
(3.6) (3.6)
200
(0.9)
(0.7) (7.9)
180.2%
FCF by business unit (billion yen) ・PBU : 1.8 ・EBU : 0.2 ・FBU and others : (5.6)
Consolidated Cash Flow Cash Flows (billion yen)
D/E Ratio (%)
C/F from Operating Activities
C/F from Investment Activities Free Cash Flow
D/E Ratio
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©2012 Topcon Corporation
2011/3 2012/3 2010/3 2011/3 2012/3 2010/3
10
8
6
4
2
0
4
2
3
1
12
3.4 3.1
2.1
3.9
4.5
3.0
5
Capital Expenditure / Depreciation R&D
Capital Expenditure
Depreciation
Positioning
R&D Expenditure to Sales Ratio
Eye Care
Finetech
R&D Expenditure to Sales Ratio (%)
R&D (billion yen)
Cash Flows (billion yen)
CAPEX / Depreciation / R&D
2011/3 2012/3 2010/3
10.0% 10
10.1%
4.6
8.7
2.7
1.4
5.4
9.6
2.7
1.3
5.5
3.1
1.5
10.3
8.8%
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©2012 Topcon Corporation
■
■
■
(701)
(55)
(282)
605
■
(4,967)
(5,076)
■ Profit on the sale of real estate 325
Details of Extraordinary Income and Losses (FY2011)
1. Extraordinary Income
2. Extraordinary Losses
■ Profits from sales of affiliated companies stocks
(million yen)
Loss on valuation of investment securities
Loss on business withdrawal
Loss on liquidation of affiliated companies
Special payment for voluntary retirees
★ Total of Extraordinary Income and Losses 11
©2012 Topcon Corporation
Ⅱ. Outcome of business restructuring
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©2012 Topcon Corporation
“Reform” has been completed
Results of “Reduction of Personnel Expense” and “Cost of Goods” (Actual results of FY2011 and plan for FY2012)
Reduction Of Personnel Expense
Reduction of Cost of Goods
Total
Mid-term Business Plan 2013
2012/3 Actual (A)
2013/3 Plan (B)
Total (A+B)
2.5 4.9
7.5 7.2
12.1
2.3 PBU 1.1 / EBU 0.7
3.4 PBU 1.9 / EBU 1.3
5.7 PBU 3.0 / EBU 2.0
2.6
3.8
6.4 10.0
(billion yen)
PBU 0.7 / EBU 0.5
★We will achieved our plan for mid-term business plan 2013 (from FY2011 to FY2013) within 2 years.
PBU 2.5 / EBU 1.1
PBU 3.2 / EBU 1.6
PBU 1.8 / EBU 1.2
PBU 4.4 / EBU 2.4
PBU 6.2 / EBU 3.6
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©2012 Topcon Corporation
Trends of Number of Employees (Personnel Reduction completed as it was planned)
*including part time employees and temporary staffs
FY2009 Actual
FY2010 Actual
FY2011 Forecast
231
205 reduced
439 reduced
Original Plan
2,116
2,529 2,324
1,885
Cumulative Total
644 reduced
FY2009~2011
231
*including retired personnel by March 31, 2012
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©2012 Topcon Corporation
Reorganization has been completed (Concentration in Core Competence )
FBU
EBU PBU
FY2011
Business Portfolio
Downsizing Finetech Business
We completed business reorganization to concentrate on Positioning and Eye Care businesses which have high potential growth.
FY2014
EBU PBU
FY2013
EBU PBU High
Profitability
Low Mature Growth Market
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©2012 Topcon Corporation
FY2012 Full Year Plan Ⅲ.
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©2012 Topcon Corporation
[Consolidated]
FY2011 FY2012
1H Full Year 1H Full Year
Actual Actual Forecast YoY (%) Forecast YoY
(%)
Net Sales 49,577 98,834 51,000 102.9% 108,000 109.3%
Operating Income 517 2,080 2,000 386.8% 8,000 384.6%
Ordinary Income (Loss) (688) 467 1,400 6,800
Net Income (Loss) (1,960) (3,686) 400 3,000
ROE (10.6%) 8.8%
Dividends ¥2 ¥4 ¥2 ¥6
Exchange Rate (Average)
US$ ¥79.73 ¥79.30 ¥80 ¥80
EUR ¥114.09 ¥110.17 ¥110 ¥110
(million yen)
Full Year Business Forecast
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©2012 Topcon Corporation
[Consolidated]
FY2011 FY2012
1H Full Year 1H Full Year
Actual Actual Forecast YoY (%) Forecast YoY
(%)
Net Sales
Positioning 26,004 52,656 30,000 115.4% 62,000 117.7%
Eye Care 15,620 32,598 16,000 102.4% 35,000 107.4%
Finetech 7,952 13,579 5,000 62.9% 11,000 81.0%
Total 49,577 98,834 51,000 102.9% 108,000 109.3%
Operating Income
Positioning 508 1,482 1,500 295.3% 5,000 337.4%
Eye Care 424 1,766 800 188.7% 3,000 169.9%
Finetech (416) (1,168) (300) 0
Total 517 2,080 2,000 386.8% 8,000 384.6%
Business Forecast by Segment (million yen)
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©2012 Topcon Corporation
1.ポジショニング 1.Positioning
Create and develop new business
Improve core business category
Maximize growth potential by investing in sales force and product quality enhancement, aiming at meeting the high demands in Precision Agriculture led by America, Europe and Australia No.1 Technological Strength
Invest resources mainly in growing markets and promote penetration of high value-added products
Precision Agriculture
FY2010 FY2011 FY2012 (plan)
Enhance customer support by standardizing “TSshield” which is world’s first information management system
Increase profitability, at the same time, reduce production cost by half and maintain product quality of made in Japan
Net Sales
Growth Strategies by Segment (FY2012)
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©2012 Topcon Corporation
Enhance growing business (covering wide range of markets with 3D OCT)
Foster new business category (surgical equipment)
2010 2011 2012
Launch new model of PASCAL No.1 Technological Strength
2010 2011 2012
Launch affordable models for medical private clinic and optometrist markets (Integrated model of retinal camera and OCT) Only 1
Practice strategic price setting
Hospital
Private Clinic, Optometrist
Screening, Medical Check Up
MD
Researcher
2.Eye Care
Growth Strategies by Segment (FY2012)
Launch new high-performance model DRI-OCT for high-end market (received very positive testimonials from prominent doctors) World’s First
FY2010 FY2011 FY2012 (plan)
(Unit sales)
(Unit sales)
FY2010 FY2011 FY2012 (plan)
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©2012 Topcon Corporation
“Reform” Future missions
Build global business management system
Optimize our production sites
Obtain precise information quickly Make quick decision making
Enhance “Monozukuri”
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©2012 Topcon Corporation
Impact of business
restructuring
Enhancement of business restructuring
Enhance new business category Launch core products
PBU
EBU Preventive Medical Checkup Surgical equipment
Precision Agriculture 3D Measurement
Shift to “Enhancement (Growth Strategy)”
Make concentrated investment Management resource for former FBU will be invested in PBU and EBU
New OCT、New PASCAL
New GPS, New Total Station, New MC
Net Sales
Operating Income FY2012 YoY
Improve business performance
Accelerate research and development We will add ¥2.1 billion (¥7.3 billion → ¥9.4 billion)
: PBU +9.3 ( 18% up) : EBU +2.4 ( 7% up)
: PBU +3.5 (237% up) : EBU +1.2 ( 70% up)
(billion yen)
PBU
EBU
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©2012 Topcon Corporation
4.1
0.4
6.2
3.3
0.11.82.1
(3.5)
8.0
3.8
Operating Incomefor FY2012
(including theimpact of theearthquake)
Total amountof Gain andLoss Factors
Operating Income for FY2012(without the
impact of theearthquake)
SalesPrice Down
Change inSales,
Change inSales Mix,
etc
Impact ofthe earthquake
Resultsfor FY2011(including
impactof the
earthquake)
Increase ofFixed-cost
ExchangeFluctuations
Cost Reduction
(codes are based on gain and loss)
[Consolidated] FY2011Actual Results
FY2012Forecast (billion yen)
*Impact of Personnel Reduction : +2.6 *Investment in development and sales promotion : (2.2)
Forecast of Gain and Loss in Operating Income (YoY)
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©2012 Topcon Corporation
Capital Expenditure 3.4 3.4
(Depreciation) (3.1) (4.0)
(billion yen)
R&D (R&D Expenditure to Sales Ratio)
8.7
(8.8%)
9.7 (9.0%)
Investment & Loan 0.6 3.0
Items FY2011 FY2012
★R&D budget for former FBU will be allocated in PBU and EBU in FY2012.
FY2012 Resource Loading Plan
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©2012 Topcon Corporation 25 25
We are shifting from “Reform”
to “Enhancement”
©2012 Topcon Corporation
Appendix Ⅳ.
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©2012 Topcon Corporation
11.810.1
15.7
12.213.8
9.8
16.914.0
2.2
(1.2)
0.7
(0.2)
1.6
(1.6)
1.0
(0.9)0
5
10
15
20
FY10/1Q 2Q 3Q 4Q FY11/1Q 2Q 3Q 4Q(2)
(1)
0
1
2
3Net Sales Operating Income
22.027.7
21.0 21.7
27.9
19.3
31.8
30.0
3.3
(1.8)
1.4
(0.9)
3.9
(2.1)
1.6
(1.6)
0
10
20
30
40
FY10/1Q 2Q 3Q 4Q FY11/1Q 2Q 3Q 4Q(5)
0
5Net Sales Operating Income
6.87.7 7.5
8.97.0
8.67.2
9.8
1.5
(0.3)0
(0.3)
9
(0.2)
0.7
(0.1)
0
5
10
15
FY10/1Q 2Q 3Q 4Q FY11/1Q 2Q 3Q 4Q(1)
0
1
2Net Sales Operating Income
3.3
6.07.2
2.5
5.4
2.33.3
3.4
1.4
(0.5) (0.3)(0.5)0.1
0.30.6
(0.4)0
5
10
FY10/1Q 2Q 3Q 4Q FY11/1Q 2Q 3Q 4Q(1)
0
1
1
2Net Sales Operating Income
Financial Results (Quarterly)
Operating Income (billion yen) Net Sales (billion yen)
1. Consolidated 2. Positioning
3. Eye Care 4. Finetech
Net Sales (billion yen) Operating Income (billion yen)
Net Sales (billion yen) Net Sales (billion yen) Operating Income (billion yen) Operating Income (billion yen)
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©2012 Topcon Corporation
Regional and Market Trends
▶ Rather flat market in Advanced countries caused by strong yen and uncertainty over economy
▶ Emerging countries generally grew, but it was less than expected due to financial crisis and political instability
▶ Steady growth in Machine Control, Precision Ag and Measurement
markets ▶ Nearly flat Survey market due to strong yen and severer
competition
✔ Moderate improvement mainly led by US market ✔ Regaining growth pace in Emerging countries
✔ Machine Control, Precision Ag and Measurement markets continue to grow
✔ Increasing demands for high value-added products in Emerging countries
FY11 FY12
FY11 FY12
America
Europe
Japan
Emerging Countries
Construction
Precision Agriculture Surveying / GIS 3D Measurement
By Market
By Region 《Overview of FY2011》
《Forecast for FY2012》
《Overview of FY2011》
《Forecast for FY2012》
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©2012 Topcon Corporation
▶ Major South European countries showed investment reluctance due to recurring economic crisis in Europe ▶ Market in America hit bottom and showed sign of recovery ▶ Optometric Market in Japan hit bottom, and ophthalmic market held on revision of medical reimbursement ▶ Asia, China and India showed stable growth
✔ Reduction of health care budget in European major countries decreases demand ✔ America shows moderate improvement ✔ Japan shows steady growth for surgical equipments, slight growth for diagnostic instrument ✔ China and India are still growing countries as expecting growth market
▶ Ophthalmic facilities hold off on investment; bid projects decreased ▶ Capital expenditure slumped in optometric market / Competition in price and differentiation emerged ▶ Medical check up market grew in emerging countries
✔ Capital investment and inquiries increase in Chinese ophthalmic market, while decrease in Europe ✔ Glasses market experience fierce competition in price and differentiation ✔ Expanding demand in Screening Market / replacement demands in developed countries, and continuous newly demands in emerging countries
FY11 FY12
FY11 FY12
By Region
By Market
Ophthalmic Market
Optometric Market
Diabetes and Glaucoma Screening Market
《Overview of FY2011》
《Forecast for FY2012》
《Overview of FY2011》
《Forecast for FY2012》
Regional and Market Trends
America
Europe
Japan
Asia
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©2012 Topcon Corporation
49.7 52.849.6 49.3 51.0
57.0
25.8 25.8 26.0 26.730.0 32.0
14.5 15.6 17.0 16.0 19.016.42.2
0.81.30.40.6
(0.3)
3.51.5
0.90.50.00.1
6.0
2.01.51.8
0.00.5
10/1H 10/2H 11/1H 11/2H 12/1H 12/2H 10/1H 10/2H 11/1H 11/2H 12/1H 12/2H 10/1H 10/2H 11/1H 11/2H 12/1H 12/2H
Financial Results and Forecast (Semiannually)
1. Consolidate 2. Positioning 3. Eye Care
Operating Income (billion yen)
Net Sales (billion yen)
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©2012 Topcon Corporation
Exchange Rate Impact from Fluctuation by ¥1
Assumed Rate for FY2012 Net Sales Operating Income
US$ ¥80 ¥0.6 billion ¥0.2 billion
EUR ¥110 ¥0.2 billion ¥0.1 billion
Impact from Currency Exchange FY2012
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©2012 Topcon Corporation
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 Jan. 31, 2012 at 16:30 (GMT+9).
Cautionary Note regarding Forward-Looking Statements
Inquiries: Corporate Communication Dept. IR Affairs TOPCON CORPORATION TEL: +81-3-3558-2532 E-mail: [email protected] URL: http://global.topcon.com/invest/
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