FY2017 2Q Financial...
Transcript of FY2017 2Q Financial...
FY2017 2Q Financial Results October 27, 2017 TOPCON CORPORATION President & CEO Satoshi Hirano
©2017 Topcon Corporation 1
FY2017 Full Year Plan
Ⅲ Appendix
Ⅰ FY2017 2Q Financial Results
Ⅱ
CONTENTS
FY2017 2Q Financial Results
©2017 Topcon Corporation 2
Ⅰ. FY2017 2Q Financial Results Ⅰ-1. FY2017 2Q Financial Results
Ⅰ-2. Overview of 2Q
©2017 Topcon Corporation 3
FY2017 1H <On a recovery>
Net Sales
Growth in sales and profit
Operating Income
1H Sales Trend Net Sales
(billion yen) Operating Income (billion yen)
0
4
8
0
10
20
30
40
50
60
70
FY20141H
FY20151H
FY20161H
FY20171H
5.9
59.4
4.5
62.9 57.9
3.8
68.0
4.6
Sales Operating Income Ordinary Income Net Income
Achieved announced target
YoY
Sales Operating Income
¥68.0B 117% ¥4.6B 122% ¥4.1B 183% ¥1.9B 294%
¥62.0B ¥4.0B
©2017 Topcon Corporation 4
[Consolidated] FY2016/1H FY2017/1H
Actual Actual YoY YoY %
Announced on July 28th
Net Sales 57,939 68,046 10,107 117% 62,000
Gross Profit (Gross Profit Ratio)
30,220 (52.2%)
34,545 (50.8%)
4,325
SGA 26,463 29,975 3,512
Operating Income (Operating Income Ratio)
3,757 (6.5%)
4,570 (6.7%)
813
122%
4,000 (6.5%)
Non-Operating Income (Expenses) -1,523 -481 1,042
Ordinary Income 2,233 4,088 1,855 183% 3,000
Extraordinary Income (Loss) -210 -263 -53
Income Before Income Taxes and Minority Interests 2,023 3,825 1,802
Net Income 634 1,867 1,233 294% 1,200
Interim Dividends ¥8 ¥10 ¥10
Exchange Rate (Average)
USD ¥106.43 ¥111.42 ¥4.99 ¥108.78
EUR ¥119.12 ¥126.63 ¥7.51 ¥119.65
FY2017 1H Financial Results <Growth in sales and profits>
(unit: million yen)
©2017 Topcon Corporation 5
[Consolidated] FY2016/1H FY2017/1H
Actual Actual YoY YoY %
Announced on July 28th
Net Sales
Positioning 27,166 35,884 8,718 132% 31,000
Smart Infrastructure 14,958 17,042 2,084 114% 16,000
Eye Care 19,611 21,397 1,786 109% 20,000
Others 1,736 1,030 -706 59% 2,000
Elimination -5,533 -7,307 -1,774 -7,000
Total 57,939 68,046 10,107 117% 62,000
Operating Income
(Operating Income Ratio)
Positioning 2,472 (9.1%)
3,869 (10.8%)
1,397 157% 3,200
(10.3%)
Smart Infrastructure
1,377 (9.2%)
1,630 (9.6%)
253 118% 1,600
(10.0%)
Eye Care 1,269 (6.5%)
526 (2.5%)
-743
41% 500
(2.5%)
Others -93 (-5.4%)
-22 (-2.1%)
71
-
0 (-)
Goodwill Amortization -1,268 -1,433 -165 -1,300
Total 3,757 (6.5%)
4,570 (6.7%)
813
122%
4,000 (6.5%)
FY2017 1H Financial Results by Business <Significant Profit Growth in Positioning Business>
(unit: million yen)
©2017 Topcon Corporation 6
FY2016/1H
FY2016/1H
FY2016/1H FY2016/1H FY2017/1H FY2017/1H
FY2017/1H
FY2017/1H
16.6 19.9 13.4 11.4 16.2 14.4
3.8
117%
123% 115%
101%
3.8 FY2016/1H FY2017/1H
8.1 6.3
130%
FY2016/1H FY2017/1H
5.2
127%
4.1
Domestic and Overseas Sales (YoY)
POC=Positioning Company/ SIB=Smart Infrastructure Business/ ECB=Eye Care Business *”i-Construction” is a registered trademark of National Institute for Land and Infrastructure Management, MLIT, Japan.
Japan North America
Europe
China Asia/Oceania Others
(Billion yen) (Billion yen) (Billion yen)
(Billion yen) (Billion yen) (Billion yen)
SIB: Growing sales in i-Construction Growing sales in IT Agriculture
POC: Growing sales in IT Construction Recovery in IT Agriculture ECB: Growing sales of Maestro
POC: Recovery in IT Agriculture ECB: Temporarily on sales downturn
POC: Growing sales in IT Construction SIB/ECB: Growing sales in India
POC/ECB: Growing sales in South America SIB: Growing sales in Middle East
©2017 Topcon Corporation 7
3.8
3.4 -3.0
4.2
0.4
4.6
0
2
4
6
8
FY2016 1H Sales increase
and decrease,
Product mix
Fixed cost,
Lowering COGS
FX Effects FY2017 1H
(unit: Billion yen)
Operating Income w/o FX Effects
YoY 111%
YoY 122%
mainly
R&D Cost Increase
FY2017 1H Operating Income YoY Breakdown <Profit growth, Accelerate upfront investment>
©2017 Topcon Corporation 8
Ⅰ. FY2017 2Q Financial Results Ⅰ-1. FY2017 2Q Financial Results
Ⅰ-2. Overview of 2Q
©2017 Topcon Corporation 9
Overview of Each Business
Review of 1H Financial Results
FY2016/1H FY2017/1H
Actual Actual YoY % Announced on July 28th
Net Sales 27,166 35,884 8,718 132% 31,000 Operating Income (Operating Income Ratio)
2,472 (9.1%)
3,869 (10.8%)
1,397 157% 3,200 (10.3%)
Exch
ange
R
ate USD ¥106.43 ¥111.42 ¥108.78
EUR ¥119.12 ¥126.63 ¥119.65
(unit: million yen)
ー Negative factors Further acceleration of upfront investment (advanced technology
development, enhancement of distribution network)
Positive factors Sales growth in IT Construction supported by strong global construction investment (YoY 130%) Sales recovery in IT Agriculture with OEM sales growth (YoY 130%)
©2017 Topcon Corporation 10
Overview of Each Business
* "i-Construction" is a registered trademark of National Institute for Land and Infrastructure Management, MLIT, JAPAN.
Review of 1H Financial Results
FY2016/1H FY2017/1H
Actual Actual YoY % Announced on July 28th
Net Sales 14,958 17,042 2,084 114% 16,000 Operating Income (Operating Income Ratio)
1,377 (9.2%)
1,630 (9.6%)
253 118% 1,600 (10.0%)
Exch
ange
R
ate USD ¥106.43 ¥111.42 ¥108.78
EUR ¥119.12 ¥126.63 ¥119.65
(unit: million yen)
ー Negative factors Temporary production delay with production line transfer to
Topcon Yamagata
Positive factors Favorably prevailing the i-Construction in Japan (YoY 160%) Sales growth in IT Agriculture in Japan (YoY 300%)
©2017 Topcon Corporation 11
ー Negative factors Continued upfront investment (Building an IoT business, R&D cost,
Enhancement of FDA acquisition) Temporarily on sales downturn in European market
Overview of Each Business
Review of 1H Financial Results
Positive factors Turnover into surplus in 2Q "OP ¥1B" (Progress as planned) Sales growth of 3D OCT (YoY 120%) Sales growth of Fundus Camera (NW400) (YoY 130%)
FY2016/1H FY2017/1H
Actual Actual YoY % Announced on July 28th
Net Sales 19,611 21,397 1,786 109% 20,000 Operating Income (Operating Income Ratio)
1,269 (6.5%)
526 (2.5%)
-743 41% 500 (2.5%)
Exch
ange
R
ate USD ¥106.43 ¥111.42 ¥108.78
EUR ¥119.12 ¥126.63 ¥119.65
(unit: million yen)
©2017 Topcon Corporation 12
FY2017 Full Year Plan Ⅱ. Ⅱ-1. FY2017 Full Year Plan Ⅱ-2. Strategic Plans after 2H
Ⅱ-3. Summary
©2017 Topcon Corporation 13
0
5
10
15
0
50
100
150
1H FullYear
1H FullYear
128.4 138.0
9.6
12.0
68.0 57.9
4.6
Results Plan
FY2016 FY2017
3.8 122%
-Operating Income YoY122%
126% Full Year Plan
-Sales YoY117%
1H Result
¥12B
¥138B ¥5B
-Operating Income
-Sales
YoY107%
YoY126%
Upward Correction
FY2016 Result and FY2017 Plan
Net Sales (billion yen) Operating Income
(billion yen)
©2017 Topcon Corporation 14
[Consolidated]
FY2016 FY2017
1H Full Year 1H Full Year
Actual Actual Actual YoY (%)
New Plan Change YoY (%)
Announced on July 28th
Net Sales 57,939 128,387 68,046 117% 138,000 5,000 107% 133,000
Operating Income (Operating Income Ratio)
3,757
(6.5%)
9,551
(7.4%)
4,570 (6.7%)
122%
12,000
(8.7%)
0
126%
12,000
(9.0%)
Ordinary Income 2,233 7,622 4,088 183% 10,000 0 131% 10,000
Net Income 634 4,395 1,867 294% 5,700 0 130% 5,700
ROE 7.4% 10% - 10%
ROIC 5.5% 7% - 7%
Dividends ¥8 ¥16 ¥10 ¥20 ¥20
Exchange Rate (Average) *
USD ¥106.43 ¥109.03 ¥111.42 ¥108.46 ¥107.03
EUR ¥119.12 ¥119.37 ¥126.63 ¥121.26 ¥117.50
FY2017 Full Year Plan (unit: million yen)
* Assumed exchange rate after October 2017 is ¥105/US$, ¥115/EUR
©2017 Topcon Corporation 15
[Consolidated]
FY2016 FY2017
1H Full Year 1H Full Year
Actual Actual Actual YoY
(%) New Plan Change
YoY
(%)
Announced on July 28th
Net
Sales
Positioning 27,166 60,602 35,884 132% 68,000 5,000 112% 63,000
Smart Infrastructure
14,958 33,091 17,042 114% 36,000 1,000 109% 35,000
Eye Care 19,611 43,148 21,397 109% 45,000 0 104% 45,000
Others 1,736 3,708 1,030 59% 4,000 0 108% 4,000
Elimination -5,533 -12,163 -7,307 -15,000 -1,000 -14,000
Total 57,939 128,387 68,046 117% 138,000 5,000 107% 133,000
Operating
Income (Operating
Income Ratio)
Positioning 2,472 (9.1%)
5,596 (9.2%)
3,869 (10.8%)
157%
7,000 (10.3%)
0
125%
7,000 (11.1%)
Smart Infrastructure
1,377 (9.2%)
3,939 (11.9%)
1,630 (9.6%)
118%
4,700 (13.1%)
0
119%
4,700 (13.4%)
Eye Care 1,269 (6.5%)
2,598 (6.0%)
526 (2.5%)
41%
2,800 (6.2%)
0
108%
2,800 (6.2%)
Others -93 (-5.4%)
10 (0.3%)
-22 (-2.1%)
24%
0 (-)
0
-
0 (-)
Goodwill Amortization -1,268 -2,593 -1,433 -2,500 -2,500
Total 3,757 (6.5%)
9,551 (7.4%)
4,570 (6.7%)
122%
12,000 (8.7%)
0
126%
12,000 (9.0%)
Exchange Rate
(Average)
USD ¥106.43 ¥109.03 ¥111.42 ¥108.46 ¥107.03
EUR ¥119.12 ¥119.37 ¥126.63 ¥121.26 ¥117.50
FY2017 Full Year Plan by Business (unit: million yen)
©2017 Topcon Corporation 16
FY2017 Full Year Plan Ⅱ. Ⅱ-1. FY2017 Full Year Plan Ⅱ-2. Strategic Plans after 2H
Ⅱ-3. Summary
©2017 Topcon Corporation 17
1. Positioning
0
2
4
6
8
10
0
20
40
60
FY2015 FY2016 FY2017 Plan
60.6 68.0
62.0
7.0
5.6
2.4
Net Sales(billion yen)
Net Sales
Operating Income(billion yen)
Operating Income
■ IT Construction: Further expansion of the aftermarket/OEM sales with overwhelming superiority in technology
■ Drones: Sales growth in Survey/Agriculture/Measurement fields
■ IT Agriculture: OEM Sales growth with an increase in the cross selling
Focused Strategy
Strategic Plans after the second half
©2017 Topcon Corporation 18
IT Construction: Further expansion of the aftermarket/OEM sales with overwhelming superiority in technology
-Improve work efficiency: Yield an accurate result even in the top gear, the third gear (conventionally, 2nd gear)
Superiority of Mastless MC System
FY2015 FY2016 FY2017
Global sales plan of IT Construction
Actual Actual Plan
(Amount)
✓Mastless ✓Weldingless ✓Cableless
-Easy installation / malfunction, prevent malfunction beforehand
Weldingless
Cableless
Antennas on the cabin
Mastless
IMU sensors
©2017 Topcon Corporation 19
Kee Technologies
IT Agriculture: OEM Sales growth with an increase in the cross selling
Agriculture group in POC
A
Supplier Tractor Maker
B
C
D
E
Each company sells individually Past
Farm machine Industry
©2017 Topcon Corporation 20
Topcon Precision Agriculture
(Ex )
(Ex )
(Ex )
(Ex Kee Technologies)
Topcon Agriculture Canada
Topcon Electronics
Topcon Agriculture America
A
B
C
D
E
Significant growth in OEM sales
FY2015Actual
FY2016Actual
FY2017Plan
Topcon Agriculture S.p.A
Present The companies are unified to form one group
Maximization of synergy effect
(Headquarter)
Farm machine Industry
Supplier Tractor Maker
IT Agriculture: OEM Sales growth with an increase in the cross selling
Global sales plan of IT Agriculture (Amount)
©2017 Topcon Corporation 21
Drone surveying without orienting point
World’s First
Drones for professional equipped with high- accuracy GPS receivers
Survey Agriculture Measurement
Drones: Sales growth in Survey/Agriculture/Measurement fields
FY2015Actual
FY2016Actual
FY2017Plan
Global sales plan of Drones (Amount)
Drone Sales: YoY 160%
Surveying - Current condition surveying and volume control
Agriculture - manage the growth status of crops Measurement - Maintenance of structures etc.
Professional duties
©2017 Topcon Corporation 22
2. Smart Infrastructure
0
2
4
6
0
10
20
30
40
FY2015 FY2016 FY2017 Plan
Net Sales(billion yen)
Net Sales
Operating Income(billion yen)
Operating Income
■
■
■
Focused Strategy
Strategic Plans after the second half
i-Construction: Into authentic “Diffusion” phase IT agriculture: Sales growth at domestic after market Total Station: Further expansion of profitability
33.0 36.0
33.1
4.7 3.9 3.9
* "i-Construction" is a registered trademark of National Institute for Land and Infrastructure Management, MLIT, JAPAN.
©2017 Topcon Corporation 23
FY2015Actual
FY2016Actual
FY2017Plan
i-Construction: Into authentic “Diffusion” phase
Education
Lack of headcounts of “i-Construction” technicians Industry issues
Over 3,000 Trainees YoY150%
Shirakawa Sep 2014 Launched
Kitakyushu Jul 2017 Opend
Ibaraki FY2017 Planning
Expand Training Centers
Kobe Jun 2016 Launched
4th
FY2015Actual
FY2016Actual
3rd
City of Kitakyushu established i-Construction Promotion Council
(From the right, Mayor of Kitakyushu Mr.Kitahashi, President Hirano)
Promotion activity to local governments
TOPCON’s Mission
4th Center
FY2017 Plan
Provide more satisfactory Education and Support
*”i-Construction” is a registered trademark of National Institute for Land and Infrastructure Management, MLIT, Japan.
Domestic sales plan of IT Construction (Amount) Supply detailed training
©2017 Topcon Corporation 24
IT Agriculture: Sales growth at domestic after market
FY2015Actual
FY2016Actual
FY2017Plan
Diffusion of IT Agriculture by retrofit system
The wheel with electric motor
The Console
GNSS Receiver
Overview of retrofit system
Regular Wheel
Automated by attaching to the existing tractors
Utilization of tractor maker's sales network
The wheel with electric motor
Company A Company B Company C
✓Easy installation within 1hour ✓Low Cost
- Productivity improvement - Labor saving (skill unnecessary) - Reduction of fertilizer and pesticide
Merit
Domestic sales plan of IT Agriculture (Amount)
©2017 Topcon Corporation 25
Total Station: Further expansion of profitability
Total station production transfer to Topcon Yamagata (mother factory of eye care)
Opening Ceremony
From the right, Mayor of Yamagata Mr. Sato, GM of Murayama General Branch Office in Yamagata Prefecture Mr. Komabayashi, President Hirano New factory appearance
New factory interior view
Topcon HQ Factory
Eye Care Product
Smart Infrastructure
Topcon Yamagata
Total Station
Other measuring Prod.
Total Station Moved
Production transfer
Maximize production efficiency by consolidating production bases ⇒ Expand profitability
©2017 Topcon Corporation 26
3. Eye Care
0
2
4
6
0
10
20
30
40
50
FY2015 FY2016 FY2017 Plan
Net Sales(billion yen)
Net Sales
Operating Income(billion yen)
Operating Income
■ 3D OCT: Good sales performance worldwide
■ Accelerate upfront investment: Release of new products / FDA acquisition / Building an IoT business
■ Screening: Market expansion in emerging countries
Focused Strategy
Strategic Plans after the second half
43.8 45.0 43.1
2.8
4.9
2.6
©2017 Topcon Corporation 27
3D OCT: Good sales performance worldwide
(Vision Expo West held in September)
FY2015Actual
FY2016Actual
FY2017Plan
Sales plan of 3D OCT (Amount)
Sales expansion at world's largest eyeglasses exhibition
Widely spread to clinical area of ophthalmologic practitioner
Triton
Strong sales in the world's largest, US market
(Las Vegas)
Maestro
Clinical to Research
Screening to Clinical
©2017 Topcon Corporation 28
World diabetes population(2015)
FY2015Actual
FY2016Actual
FY2017Plan
Screening: Market expansion in emerging countries
-Chinese market grows rapidly (The examination at the screening center rapidly advanced)
(No. 2 in diabetes patients worldwide)
Promoted diabetes screening project led by the Chinese government, adoption of fundus camera (NW 400) advanced
・・・
・・・
・・・
(million)
Source: International Diabetes Federation
-Also adoption expected in the Indian market
Rank 1st 2nd 3rd 9th Total
Country China India USA Japan
Patients 109.6 69.2 29.3
7.2
415.0
% 26% 17% 7%
100% 2%
Sales plan of screening equipment
“Easy-To-Operate” Fundus Camera
Full-auto function
Fundus Camera and OCT for screening market
Screening devices TRC-NW400 & Maestro
(Amount)
©2017 Topcon Corporation 29
Release of new products
FDA acquisition
Building an IoT business
FY2017 FY2018
Accelerate upfront investment: Release of new products / FDA acquisition / Building an IoT business
2017/4
Core organization of full-scale promotion of IoT
THS=Topcon Healthcare Solutions
THS established
©2017 Topcon Corporation 30
FY2017 Full Year Plan Ⅱ. Ⅱ-1. FY2017 Full Year Plan Ⅱ-2. Strategic Plans after 2H
Ⅱ-3. Summary
©2017 Topcon Corporation 31
0
5
10
15
20
0
40
80
120
FY2015 FY2016 FY2017 Plan
130.7 128.4 138.0
120.16 JPY/USD
132.36 JPY/EUR
109.03 JPY/USD
119.37 JPY/EUR
108.46 JPY/USD
121.26 JPY/EUR
12.0 9.6 8.8
Summary Trends of Financial Results Annually
Net Sales (billion yen)
Operating Income (billion yen)
Net Sales
Operating Income
Exc
hang
e R
ate
©2017 Topcon Corporation 32
Topcon for Human Life 医・食・住
©2017 Topcon Corporation 33
Appendix Ⅲ.
©2017 Topcon Corporation 34
6.6
8.4 7.5
10.6
7.8 9.2
0.3
1.1
0.3
2.2
0.8 0.8
0.0
1.0
2.0
3.0
0.0
5.0
10.0
FY16/1Q 2Q 3Q 4Q FY17/1Q 2Q
Net SalesOperating Income
Net Sales (billion yen) Operating Income (billion yen)
1. Consolidated
8.8
10.8 10.5
13.1
9.1
12.3
0.5 0.8 0.4
0.9
-0.5
1.0
-1.0
0.0
1.0
2.0
0.0
5.0
10.0
15.0
FY16/1Q 2Q 3Q 4Q FY17/1Q 2Q
Net SalesOperating Income
Net Sales (billion yen)
2. Positioning
3. Smart Infrastructure
12.8 14.3 13.6
19.9 17.2 18.7
0.7
1.7
0.5
2.6
1.7 2.2
-1.0
0.0
1.0
2.0
3.0
0.0
5.0
10.0
15.0
20.0
FY16/1Q 2Q 3Q 4Q FY17/1Q 2Q
Net SalesOperating Income
Net Sales (billion yen) Operating Income (billion yen)
26.2 31.7
29.5
41.0
31.6 36.5
0.7
3.0
0.7
5.2
1.3
3.2
-1.0
2.0
5.0
8.0
0.0
10.0
20.0
30.0
40.0
FY16/1Q 2Q 3Q 4Q FY17/1Q 2Q
Net SalesOperating Income
Net Sales (billion yen) Operating Income (billion yen)
4. Eye Care
Operating Income (billion yen)
Financial Results (Quarterly)
©2017 Topcon Corporation 35
62.9 67.8 57.9
70.4 68.0 70.0
4.5 4.3 3.8
5.8 4.6
7.4
0.0
5.0
10.0
0.0
20.0
40.0
60.0
80.0
FY15/1H FY15/2H FY16/1H FY16/2H FY17/1H FY17/2H
Net SalesOperating Income
Net Sales (billion yen) Operating Income (billion yen)
16.2 16.8 15.0
18.1 17.0 19.0
1.9 2.0 1.4
2.5
1.6
3.1
0.0
2.0
4.0
0.0
10.0
20.0
FY15/1H FY15/2H FY16/1H FY16/2H FY17/1H FY17/2H
Net SalesOperating Income
Net Sales (billion yen) Operating Income (billion yen)
31.4 30.6 27.2
33.4 35.9
32.1
1.7
0.7
2.5
3.1
3.9 3.1
0.0
2.0
4.0
0.0
10.0
20.0
30.0
40.0
FY15/1H FY15/2H FY16/1H FY16/2H FY17/1H FY17/2H
Net SalesOperating Income
Net Sales (billion yen) Operating Income (billion yen)
1. Consolidated
19.5
24.3
19.6 23.5
21.4 23.6
2.1 2.8
1.3 1.3 0.5
2.3
0.0
2.0
4.0
0.0
10.0
20.0
30.0
FY15/1H FY15/2H FY16/1H FY16/2H FY17/1H FY17/2H
Net SalesOperating Income
Net Sales (billion yen)
2. Positioning
3. Smart Infrastructure 4. Eye Care
Operating Income (billion yen)
Financial Results and Forecast (Semiannually)
©2017 Topcon Corporation 36
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 27, 2017 at 16:30(UTC+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