Creating a Growth Engine - EIZO GLOBAL6th Mid-Term Business Plan Fiscal Years 2018 - 2020 Synergy...

6th Mid-Term Business PlanFiscal Years 2018 - 2020

Synergy Transformation~ Creating a Growth Engine ~

6737

May 16th, 2018

© 2018 EIZO Corporation. All Rights Reserved.

Market Group Market / Use

Business & Plus (B&P)

⚫ Financial institutions

⚫ Public authorities

⚫ Educational facilities

⚫ Office use

⚫ High-end home use

Healthcare (HC)⚫ Medical imaging

⚫ Diagnostic applications

⚫ Operating rooms

Creative Work (CW)⚫ Publication / Printing / Photo editing

⚫ Video production

Vertical & Specific (V&S)

⚫ Air traffic control

⚫ Maritime

⚫ Security & surveillance

⚫ Other industrial fields

Amusement (AMU) LCD-mounted pachinko and slot machines

Other (OTH)Maintenance services and commissioned development of

software

Disclaimer Regarding Forward-Looking Statements

Any statements in this document, other than those of historical fact, are forward-looking statements about the future

performance of EIZO and its group companies, which are based on management’s assumptions and beliefs in light of

information currently available, and involve risks and uncertainties. Actual results may differ materially from these forecasts.

Note: “20F” appearing in this presentation means “fiscal year 2020”, that is fiscal year ended March 31, 2021.

Details of the Market Group

1


1. Review: 5th Mid-Term Plan

(Fiscal Years 2015 - 2017)

2. Direction: 6th Mid-Term Plan


3. Business Strategy by Key Markets

4. Return to Shareholders

2








3


Review: 5th Mid-Term Plan

Achieved financial goals

17F Actual

Net Sales JPY 84.0 Bil. (+1.0 Bil.)

Operating Income JPY 8.5 Bil. (+0.2 Bil.)

Operating Margin 10.2% (+0.2 pt )(vs plan)

4



Targets “10/15/150”

5



HC/CW/V&S: Expanded business successfully

◼HC

◼Strengthened business lines driven by M&A and resulting

synergy

2015 Nov. HC system integration business

2016 Jul. Endoscopy monitor business

◼Business growth in Priority and Strategic Markets

◼CW

◼Expanded sales in the M&E field worldwide starting from

Hollywood

6



HC/CW/V&S: Expanded business successfully

◼V&S

◼ Increased business in ATC, Maritime, Security &

Surveillance, but did not achieve sales targets

AMU: Maintained No.1 position

◼Reinforced partnerships with agile R&D and

manufacturing reacting to the market

◼R&D reorganization

◼Strengthened manufacturing through sourcing capability

and production flexibility7



Profitable operation

◼ Increased high-value product portfolio

HC/CW/V&S sales distribution ratio 17F 52% (14F 45%, +7pt)

◼Achieved higher productivity with a new factory and

production lines

◼ Improved labor productivity driven by “Work-Style

Reform”

8


15.5 17.9 16.8 18.1 18.5

20.7 23.4 26.0 29.7 25.25.5

6.3 5.45.7 7.36.6

6.8 6.97.8 15.015.1

15.2 18.415.2 12.0

8.84.9 4.5

7.2 5.072.5 74.8 78.284.0 83.0

6.2%

6.8%

9.0%10.2% 10.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

0.0

20.0

40.0

60.0

80.0

100.0

120.0

14F 15F 16F 17F 17F Plan

B&P HC CW V&S AMU OTH Operating Margin

Review: 5th Mid-Term Plan(JPY Billion)

9








10


- 17F Business Model

As a Visual Technology Company with display technologies at our core,

we expanded our business domain by developing world-leading, high-

quality, reliable products and offering monitor solutions.

11


We will further expand our Healthcare, Creative Work, and Vertical & Specific

business units and create new opportunities in untapped markets with

comprehensive solutions that encompass the “Capturing”, “Recording/Distributing”,

and “Displaying” of images.

18F - 20F Transformed Business Model

12


Growth Engine –“Imaging Chain Innovation”

© 2018 EIZO Corporation. All Rights Reserved.13


Mid-Term Plan - Targets

14


Sales and Operating Margin - Goals

(JPY Billion)

18.1 18.5 18.5 18.5

29.7 34.8 37.8 40.5

5.77.0 7.5 8.2

7.89.5

12.5 13.315.2

11.211.7

13.57.2 3.0

3.03.0

84.0 84.091.0

97.010.2%

9.6%

10.8%11.3%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

0.0

20.0

40.0

60.0

80.0

100.0

120.0

17F 18F Plan 19F Plan 20F Plan

B&P HC CW V&S AMU OTH Operating Margin

89%

vs17F

169%

143%

136%

102%

15


R&D Increase investment to accelerate “Imaging Chain Innovation”

(JPY Billion)

4.9 5.4 5.5 5.7

1.01.2

1.62.05.9

6.67.2

7.8

7.0%7.9% 7.8% 7.9%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

0.0

2.0

4.0

6.0

8.0


R&D Investment R&D / Net Sales

16


2.0

6.4

2.5 2.6

0.0

2.0

4.0

6.0

8.0


CAPEX Depreciation

CAPEX18F: Acquire two new facilities in Germany to enhance R&D and

production capabilities → JPY 32 Bil.

19F - 20F: Plan additional logistics and R&D facilities in Japan

for future growth

2.5 - 6.0

(JPY Billion)

2.5 - 6.0

17


Carina System Corp. (Japan)

Image capture and

distribution in Operating

room field

M&A Continue to enhance business models

Tech Source, Inc. (USA)

ATC business

Siemens AG (Germany)

HC business

eg-electronic GmbH(Germany)

ATC, V&S business

Avnet Europe Comm. VA (Europe)

Sales and Marketing

M&A – Historical 2005 ~ 2018

Imation Corp. (Japan)

HC system integration

business

Panasonic Healthcare Corp.

(Japan)

Endoscopy business

EXCOM AG (Switzerland)

Sales and Marketing

18


Continuous improvement on operational efficiencies driven by AI / RPA*

The rise in SG&A expenses will be kept under 3% vs 17F (excl. R&D, investment, M&A)

Expenses for investment and sales expansion will increase to drive business

Selling, General and Administrative Expenses

(JPY Billion)

6.2 6.5 6.9 7.2

5.5 6.2 6.7 7.3

5.96.6 6.6 6.8

17.519.3 20.2 21.2

20.8%23.0% 22.2% 21.9%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

0.0

10.0

20.0

30.0


Personnel R&D Other SG&A / Net Sales

*Robotic Process Automation

19








20


Healthcare“Imaging Chain Innovation” expands our business domain

Comprehensive solutions to

encompass the “Capturing”,

“Recording/Distributing” and

“Displaying” of images


Diagnostics

◼ Further competitiveness through evolving our

diagnostic workflow concept

◼ Drive the sales in strategic markets (US,

China, India, Middle East + Southeast Asia)

Operating Room

◼ Acceleration of Endoscopy monitor business

◼ Business synergy with Carina System Co.,

Ltd.

Healthcare“Imaging Chain Innovation” expands our business domain

22


Establish market dominance by leading in the HDR era

Creative Work

Solutions to improve work efficiency throughout

the HDR* content production workflow

Seamless color management

To enable all users to achieve professional-level

creation*HDR: High Dynamic Range

23


Level up! Advancing technology, supply and support

V&S - Overall

Further utilize EIZO’s comprehensive R&D

power including optical bonding, AR film, touch

panel, etc.

Advanced environmental resistance

performance

◼ MIL-STD

Speedy customization through “Agile” R&D

PLM* corresponding to long-term project

development *PLM: Product Life-cycle Management

24


Imaging chain supporting the efficient monitoring of air traffic

V&S - ATC

End-to-end visual display solutions

and content management

PLM, expert support and solution

development

Capture No.1 market position

25


Innovative solutions for onboard IT systems

V&S - Maritime

High Sensitivity Camera

ECDIS monitor and beyond

◼ “Industry's first” large-scale chart table LCD

monitor with touch panel for maritime route

planning and navigation

◼ Implementing EIZO technology into

“Embedded” systems to complete unique

maritime surveillance solutions


Target multiple security & surveillance environments

V&S - Security & Surveillance (1/3)

Expansion of IP decoding monitor line-up

◼ 4K support, size variation

◼ Video Management System (VMS) Support

Cross-selling with EIZO’s wide product line-up

27


Strengthen our business model with

EIZO’s original camera

Image data encoding/decoding, distribution

and analysis

◼ FHD multi-screen simultaneous display

◼ H.265*

◼ VMS support

◼ Utilizing AI technology



Camera

*H.265： A video compression standard that enables efficient transmission with

4K and 8K video at approximately twice the compression rate of H.264

28




Optimal image display in multiple installations

◼ High brightness

◼ De-fog function

◼ Housing options

◼ Optical bonding

29


Define new ways of entertainment abiding

to evolving regulations

Realize further development efficiency by

utilizing EIZO original tools

Further strengthen cooperation with

partners

Flexible production and supply adapted to

needs©SANYO BUSSAN CO.,LTD.

Stay ahead of market changes to maintain No.1 position

Amusement

Further competitiveness to show EIZO’s presence30








31


- Returning profit to shareholders is a key management concern for EIZO Corporation, and we have followed a basic policy of

stable dividend payment in line with corporate growth. We return profit to shareholders on the basis of an overall consideration

of securing retained profit for capital investments and R&D expenditures required for business expansion, financial status and

future performance.

- Our target shareholder return ratio is 40% to 50% of net income.

Basic policy on profit distribution to shareholders

(JPY / Share)

- Dividend Payout Ratio (Consolidated base)

- Share buybacks 0.9 billion in 08F and 1.6 billion in 11F

Dividend Payout

Ratio11.3% 9.5% 14.4% 17.5% 20.6% 41.0% 229.7% 22.6% 31.5% 67.5% 66.7% 21.6% 38.5% 35.5% 30.1% 26.9% 33.8%

Shareholder Return

Ratio11.3% 9.5% 14.4% 17.5% 20.6% 41.0% 375.2% 22.6% 31.5% 168.0% 66.7% 21.6% 38.5% 35.5% 30.1% 26.9% 33.8%

7.5 10 1525 30

40 4025 25 25 25 25 30 35 40 45 50

7.5

2025

30

40

4030

25 25 25 25 3030

3540

4550

15

30

40

55

70

80

70

50 50 50 5055

60

70

80

90

100

0

10

20

30

40

50

60

70

80

90

100

02F 03F 04F 05F 06F 07F 08F 09F 10F 11F 12F 13F 14F 15F 16F 17F 18F Plan

Interim Dividend Year-end Dividend

Return to Shareholders

32


http://www.eizoglobal.com

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Creating a Growth Engine - EIZO GLOBAL6th Mid-Term Business Plan Fiscal Years 2018 - 2020 Synergy...

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