Measures for Achieving the MediumTerm Management Plan (2018 – 2020)and Priority Measures for FY 2018

2-1-1 Measures for Achieving the Medium-Term
Management Plan (MTMP): Rolling Method

Embarking on the second year of the Medium-Term
Management Plan “Value Up 2022”
Phase I

2017

2018

Phase II

2019

2020

2021

2022

MTMP (2017 – 2019)

Business climate
Reflection of status ofmeasures

MTMP (2019 – 2021)
Business climate

Goal

MTMP (2018 – 2020)

Business climate
Reflection of status ofmeasures

MTMP (2020 – 2022)

Reflection of status ofmeasures(1) Regular review and update of the three-year plan on a yearly basis in order
to meet the FY 2022 goals(2) Management that constantly monitors changes in business climate for thefollowing three years(3) Review and update of the following year’s business plan based on the statusof execution and operation of each year’s business plan1

2-1-2 Measures for Achieving the Medium-Term
Management Plan: Business Climate

The Economy

CustomerNeeds

In response,
companies
are called to: Global economy expected to maintain stable growth as it did last year
• On the other hand, careful watch is needed on geopolitical risks
 Strong demand of capital investment in electronic parts and machine toolindustries• Technological innovation in information and communication (IoT) fields,
and labour shortage Acceleration of technological innovation trend (from products to services)• Mounting interest in AI, robotics, and cloud-technology applications
 Aggressive investment in smart company/smart factory concepts• Introduction and implementation of digitization, systematization, andfactory automation solutions
 Streamline management structures• Strengthening of corporate governance systems, introduction ofglobal-approach frameworks
 Promote profit-oriented business management• Annual sales and profits growth, stabilization of dividends, increases inequity
22-1-3 Measures for Achieving the Medium-Term
Management Plan: Progress Status
Rate of Ordinary Profit to Net Sales

Equity Ratio(Target: annual growth rate of 9%)(Target: 7.6% or higher by FY 2020)(Target: 37% or higher by FY 2020year-end)

FY 2017 actual: 103.7 billion yen

FY 2017 actual: 7.6%

FY 2017 actual: 29.6%

Net Sales(100 million yen)

FY 2020 plan

FY 2017 actual
L: market rate basis,
R: ¥105 conversion basis

977
30%

34%

40%

35%

34%34%6%34%

FY 2017 actual

66%
70%

FY 2020 plan

7%5%

66%

FY 2017 actual

FY 2020 plan

3-year
growth rate29%

1,037 5% 1,0408%

66%

66%

FY 2017 actual30%(¥105 conversion basis)

4%
25%
3%
20%

2%
FY2016 FY2017

FY2018 FY2019

FY2020FY2016 FY2017 FY2018 FY2019 FY2020

FY2016 FY2017 FY2018 FY2019 FY2020

Industrial Equipment & Systems BusinessSewing Machinery & Systems Business
Exchange rate for MTMP: 1US$ = ¥10532-1-4 Measures for Achieving the Medium-Term
Management Plan: Vision and Six Basic Policies

VisionTo be an enterprise that consistently provides customer-preferred,
high-quality systems, products and services- Let’s impress customers by, and have customers relied on JUKI Group’s activities,systems, products and services!

(1) Strengthening our value-creation capabilities through solution sales

Business
Strategies- Bolstering our ability to propose automation and systematization, incorporating,applying, and utilizing AI and other cutting-edge technologies in our hardware, software,services, etc.

(2) Building future customer base through developing the market← added(3) Creating new business categories and reinforcing them effective in or
looking toward the future

BasicPolicies
Organizational
Strategies(4) Developing globally competent and innovative personnel and deploying
them to fulfil our visions(5) Constructing a smart business foundation(Introduce Smart & Connected processes) ← added- Reforming supply chain management and promoting work style reforms(6) Building capital through strengthening our financial structure42-1-5 Measures for Achieving the Medium-Term
Management Plan: Investment Plan
Investment plan for next three years (FY 2018 – 2020)• Investment in “cutting-edge development” including development of new products, etc.
that enable differentiation with other companies’ products, etc.
• “Strategic IT investment” to speed up company-wide work and communication• “Investment in boosting production capability” to achieve increased plant productivity

Investment in Development

Investment in IT(Million Yen)

(Million Yen)

8,000

1,500

Implement
actively

Investment in Production Facilities(Million Yen)

4,000

Investment in cutting-edge development
Investment in existing development

Strategic investment

Investment in boosting capability

Regular investment

Investment in maintenance and reinforcement

3,000

6,000
1,000+62%

2,000

4,000+30%

+389%

500

1,000

2,0000002017
actual2018
plan

2019
plan2020
plan

2017
actual2018
plan2019
plan2020
plan

2017
actual2018
plan2019
plan2020plan

5

2-2-1-1 Priority Measures for FY 2018:
Sewing Machinery & Systems Business(Industrial Sewing Machines)

VisionContribute to customer innovation by system proposals
based on JUKI Smart Solutions with innovative technology

Basic Policy

Establish standards for smart factory (sewing factory) and strengthen
proposals tailored for each market (including the middle market)

PriorityMeasures• Establish smart factory business model and enhance product portfolios• Develop package-deals for sewing machinery network systems• Restructure Asian business model and foster executive candidates in thehubs

6

2-2-1-2 Priority Measures for FY 2018:
Sewing Machinery & Systems Business(Industrial Sewing Machines)

JUKI Smart Factory (Sewing Factory) ProposalDataaccumulation

Cloud

Sewingfactory

Order
received

Sales rep

ClientMaterial
warehouse
Acceptance of fabrics& auxiliary materials,
inspection

ClientＤＢ

Sample room

Cutting

Ordering of samplematerials, inspection,
process analysis

Pattern making,grading, spreading,cutting, sorting

StockＤＢ

Process
Inventory
Mgmt.
ＤＢＤＢ

Group’s sewing factories

Sewing line

Finishingprocess

Productwarehouse

Inspection,
packaging

Finished products

Production process analysis, coordination,
facility arrangement, layout revisions

Delivery

Automated transport device (AGV)

NewNew

Digital locksmith
sewing machine
DDL-9000C

New

New

Digitized sewing machinefor knitwear
MF-7900

Automatic machine withpolo shirt placket device
AMS-221ENSS3020

Automatic shoelaceloop attachingmachineAB-1360

New

Sewing machine for nonapparel products (machinehead turning type)
AMS-2517

2-2-2-1 Priority Measures for FY 2018:
Sewing Machinery & Systems Business(Household Sewing Machines)

VisionCreate new ways to enjoy handicraft-making, incollaboration with customers (home sewers) who haveexcellent handicraft capabilities

Develop solid business based on strengths in high-end household sewing
Basic Policy machines, small overlock machines, sewing machines for professionals,
and quilting machines

PriorityMeasures• Target hobby and craft markets with product development that makes themost of JUKI’s strengths• Increase sales and improve profits with a focus on three key large-scale
markets (Japan, the U.S., and Europe) that contain high-end markets• Secure and win users by identifying needs of users and strengthening
our capability to disseminate information82-2-2-2 Priority Measures for FY 2018:
Sewing Machinery & Systems Business(Household Sewing Machines)
HZL-EX7

MO-1000ML

JUKI’s flagship model with further
improved ease of use and sewing quality

An overlock machine that features
automatic looper threading using air
pressure

High-end household
sewing machines

Overlock machines

Product group developed based on various and high technologies
accumulated in the process of research and development ofindustrial sewing machines
Quilting machines

Sewing machines
for professionals

J-150QVP

SL-700EXNew

A top-end professional sewing machinethat features advanced sewability with awider range of thick fabric sewing

TL-2200QVPNewA high-end quilting machine with aquilting function added to anindustrial sewing machine

The only full-scale long arm
quilting machine by a Japanesemanufacturer

92-2-3-1 Priority Measures for FY 2018:
Industrial Equipment & Systems Business(Electronic Assembly Systems)

VisionBecome an essential business partner for customers bydevoting resources to our areas of strength and by using
automation and labor-saving solutions- Achieve top market share in general-purpose mounters in2020

Basic Policy

Establish a strong business base with expansion of multi-function
mounter and non-mounter fields

Priority
Measures• Promote customer segment-specific sales strategy and product strategy• Expand sales and improve gross margin by launching new products• Expand sales of MI, ISM, and alliance products through solution sales
activities102-2-3-2 Priority Measures for FY 2018:Industrial Equipment & Systems Business(Electronic Assembly Systems)

JUKI Smart Solutions
Production
supportEquipmentcooperation

Remote support
AI predictive andpreventive maintenanceCore systemcooperation
Mounter/Inspection machine/Mounterfor post processing

Intelligent storage
management system

Materials and parts
supply field

Expandingbusiness areas

Robotic insertion system

SMT field

Manualinsertion field

Existing business areas

Assembly field

Packaging field

Expanding business areas112-2-4-1 Priority Measures for FY 2018:
Industrial Equipment & Systems Business(Group Business)

VisionGrow into JUKI’s third pillar business leveraging JUKIGroup management resources (including manufacturingtechnologies)

Increase sales to create the third pillar business by acquiring new customers
Basic Policy and expanding scope of business with important business customers- Achieve sales target of 15.0 billion yen in 2020

Priority
Measures• Increase sales by expanding scope of business with important businesscustomers• Increase sales by commercializing proprietary manufacturing technologies
and proprietary products122-2-4-2 Priority Measures for FY 2018:
Industrial Equipment & Systems Business(Group Business)

Use of accumulated leverage of JUKI’s manufacturing capabilities and global network, utilizing the Group’s
manufacturing companies (7 companies in Japan, 1 company overseas) and alliance companies.
JTEC
JUKI
AIZU

Alliancecompanies

OHTAWARA
PLANTGroupcollaboration

Vietnam★For needs of external customers★By expanding contract range through Group’s collaboration★Supplement and complement manufacturing process ofcustomers

JUKI
METAL

JUKI
HIROSHIMASUZUTAMIPRECISION

Planning anddevelopment

JUKI
MATSUE

DesignMaterials

Processing

AssemblySales

Contract that includes the finished product and unit design/manufacturing
Contract that includes the finished product and unit
manufacturingCustomer

Customer
CustomerParts manufacturing contract
Material supply

Customer
Customer13

2-2-5-1 Priority Measures for FY 2018:
Industrial Equipment & Systems Business(Customer Business)

VisionJUKI’s parts can be received on the day next to day of ordering.

Basic Policy

Expand Customer Business beyond the confines of sewing machinery andelectronic assembly systems

Priority
Measures(Sewing machinery) Secure customers through online sales, utilizing
a website dedicated to parts sales(Electronic assembly systems) Stimulate demand for parts through paid
maintenance service(Common) Expand after sales service business in introducing smart lines
and create synergistic value-added parts/services

14

2-2-5-2 Priority Measures for FY 2018:
Industrial Equipment & Systems Business(Customer Business)

Technicalsupport
・Expand sales of sewing machinery parts
・Expand sales of parts/services through paid
maintenance for electronic assembly systems

Parts supply system
Parts center/sales company’swarehouse

Support for Smart Solution

Network system to share anddisseminate information15

2-3-1 80th Anniversary Activities

80 years of partnership with you
Thanks to you, JUKI will celebrate its 80th anniversary on
December 15, 2018.
We offer our deep gratitude for the support provided
by all stakeholders, including customers, business partners,shareholders, and the local community.

16

2-3-2 80th Anniversary Activities《Strengthening of relationships》
Showing gratitude to our customers,
business partners and shareholders
Post on anniversary website, etc.

80th anniversary
activities
As 80 years corporation,
we will continue to be proud ofoperating in our main businessand satisfy customers《Strengthening of capability toimplement MTMP》《Reforming of employee awarenessand corporate culture》

Achieving the plan by providing products
and services that contribute to boosting
the competitiveness of our customers

Promoting global and innovative humanresources development and organizationbuilding to lay the foundation forbecoming a 100-year-old company

Establishing of JUKI History Museum, etc.

Publishing of 80-year history, and introducing of
new groupware, etc.

17This material contains forward-looking statements concerning future plans, strategies and assumptions
in light of the economic, financial and other data currently available. Furthermore, they are subject to anumber of risks and uncertainties. JUKI therefore wishes to caution readers that actual results may
differ materially from those projected in such forward-looking statements.

JUKI CORPORATION18