fy2011 financial results...fy2011 financial results Ⅰ fy2011 ended march 2012 financial results...

©2012 Topcon Corporation

FY2011 Financial Results

Reform & Enhancement

April 27, 2012 TOPCON CORPORATION President Norio Uchida


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

1


FY2011 ended March 2012 Financial Results Ⅰ.

2


[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

3


（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

4


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


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

6


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

7

Eye Care


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

8


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

9


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％

10


■

■

■

(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


Ⅱ. Outcome of business restructuring

12


“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

13


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

14


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

15


FY2012 Full Year Plan Ⅲ.

16


[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

17


[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)

18


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)

19


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)

20


“Reform” Future missions

Build global business management system

Optimize our production sites

Obtain precise information quickly Make quick decision making

Enhance “Monozukuri”

21


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

22


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)

23


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

24


Appendix Ⅳ.

26


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


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


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


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)

27


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》


28


▶ 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





Regional and Market Trends

America

Europe

Japan

Asia

29


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)

30


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

31


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/

32

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