2016 Corporate Strategic Plan (16CSP)
Hiroyuki Sasa
President and Representative Director
Olympus Corporation
March 30, 2016

Todayʼs Agenda
1. Corporate Philosophy and Vision
2. Positioning of 16CSP
3. Review of Medium-Term Vision (From FY2013)
4. Operating Environment
5. 16CSP

2

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

PoliciesPriority Strategies



Positioning of Each Business within Portfolio

16CSP Framework and Management Goals

No data copy / No data transfer permitted

Todayʼs Agenda
1. Corporate Philosophy and Vision
2. Positioning of 16CSP
3. Review of Medium-Term Vision (From FY2013)
4. Operating Environment
5. 16CSP3

2016/3/30

Policies

Priority Strategies



Positioning of Each Business within Portfolio

16CSP Framework and Management Goals

No data copy / No data transfer permitted

Corporate Philosophy and VisionCorporate“The Olympus Group strives to realize

Philosophy

better health and happiness for people
by being integral members of society,sharing common values, and proposing
new values through its business
INtegrity

Vision4

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INnovation

INvolvementactivities.”

Olympus contributes to society by making peopleʼs lives healthier, safer and more
fulfilling around the world

No data copy / No data transfer permitted

Todayʼs Agenda
1. Corporate Philosophy and Vision
2. Positioning of 16CSP
3. Review of Medium-Term Vision (From FY2013)
4. Operating Environment
5. 16CSP

5

2016/3/30

Policies

Priority Strategies



Positioning of Each Business within Portfolio

16CSP Framework and Management Goals

No data copy / No data transfer permitted

Positioning of 16CSPStrengthening foundations and developing an aggressive business portfolio for sustainable growth
beyond the 100th anniversary (2019)
Medium-Term Vision

Recover trust and strengtheninternal systems
201220162019 (100th anniversary)

Managementreconstruction stage

2021

Sustainable growth stage
VisionOlympus contributes to society by making peopleʼs lives healthier, safer andmore fulfilling around the world
6

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Todayʼs Agenda
1. Corporate Philosophy and Vision
2. Positioning of 16CSP
3. Review of Medium-Term Vision (From FY2013)
4. Operating Environment
5. 16CSP

7

2016/3/30

Policies

Priority Strategies



Positioning of Each Business within Portfolio

16CSP Framework and Management Goals

No data copy / No data transfer permitted

Review of Medium-Term Vision (From FY2013) (1)１

Rebuilding of business portfolio / optimizing allocation of management resources
Grew Medical Business, restructure Imaging Business, and improve profitability of life science field
operations and expanded industrial field operations (Scientific Solutions Business) Failed to achieve projected performance levels in Imaging Business and Scientific Solutions Business, but realized
impressive growth in Medical Business (obstacles still remain impeding drastic reform of Imaging Business)

Reorganized non-core businesses Transferred Information & Communication Business (ITX), withdrew from biologics
business, and completed other reorganizations of non-core businesses ahead of schedule（Billions of yen）

（Billions of yen）

Net Sales
629.6

713.3

764.7

816.0

Operating Income
73.4

91.0

100.0

33.4

FY2013*2

FY2014FY2015FY2016FY2013

FY2014FY2015

Review and reduction of costs
Reorganized manufacturing sites in China, other parts of Asia, and North America(total sites worldwide: 30 → 21) and optimized staﬀ numbers

8* Net sales and operating income figures for FY2013 exclude amounts attributed to the transferred Information & Communication Business (ITX).

FY2016(Forecast)Review of Medium-Term Vision (From FY2013) (2)3Restoration of financial health
Raised equity ratio to more than 30% by improving performance, commencing business andcapital alliance with Sony, and conducting capital increase
Resumed dividend payments in FY2015（Billions of yen）
642.4
6,000
600

400
4,000
200

2,000

Equity ratio
有利⼦負債Interest-bearing debt ⾃⼰資本⽐率
560.4

16%

32%
415.8

33%

30%
354.4

5%

20%
10%0%

0Mar.FY2012
31, 2012

440%

Restructuring of corporate governanceMar.FY2013
31, 2013

FY2014Mar.
31, 2014

FY2015Mar.
31, 2015

Removed Security on Alert designation from Companyʼs stock
Restructured governance systems, strengthened internal controls, and reinforced
compliance systems
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Review of Medium-Term Vision (From FY2013) (3) Achieved operating margin and equity ratio targets ahead of schedule

Performance Nearly accomplished ROIC target (forecast)

Indices

FY2012（Actual）

FY2015（Actual）

FY2016（Forecast）

TargetReturn on invested capital(ROIC)

3%

8%

9%

More than 10%

Operating margin

4%

12%

12%

More than 10%

Free cash flow
(Cash flow from operating
activities + cash flow frominvesting activities)(¥4.8 billion)¥27.2 billion－More than
¥70 billion

Equity ratio

5%

33%

39%

More than 30%

Summary10

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 Overall, reorganized non-core businesses, made progress in strengthening corporate governance andcompliance systems, nearly achieved performance index targets, and escaped state of crisis and began
recovering trust Left issues to be addressed in reconstruction of business portfolio due to failure to complete drastic reform ofImaging BusinessNo data copy / No data transfer permitted

Todayʼs Agenda
1. Corporate Philosophy and Vision
2. Positioning of 16CSP
3. Review of Medium-Term Vision (From FY2013)
4. Operating Environment
5. 16CSP

11

2016/3/30

Policies

Priority Strategies



Positioning of Each Business within Portfolio

16CSP Framework and Management Goals

No data copy / No data transfer permitted

Operating Environment
Megatrends

 “Great Rebalancing”: Growing presence of emerging countries in global market
 Declining birthrates and aging populations: Rising medical needs and growing pressure
to limit medical costs
 ICT development and advances: ICT-driven industry structure changes (diversification)

Market structure changes

Growing pressure to limit medical costs

exemplified by growing presence ofIncrease in case numbers andHealth

GPOs and IDNs in North America

decrease in facility numbers
Institution of more-stringent regulations

Economic slowdown and potential

and more-rigorous requirementsof China

Diversification of customer needsin Scientific Solutions Business

SafetyFulfillment

Rising presence and growing business potential of emerging countries
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Contraction of digital
camera market

Response to technological innovations

Operating Environment
Operating Environment

Strategic Directives

Growing pressure to limit
medical costs

Rising importance of Company-emphasized early diagnosis andminimally invasive treatments and growing business opportunities to berealized by further advertising medical economic benefits

Increase in case numbers
and decrease in facility
numbers

Growing business opportunities to be realized by reducing downtime,
shifting from capital products to disposable devices, and developing
procedure based medical business model

Diversification of customer
Shift from product segment based strategies to customer segmentneeds in Scientific Solutions oriented strategies
BusinessContraction of digital
camera market

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No data copy / No data transfer permitted

Further contraction of DSLR and other digital camera markets, need totransition from value and price focused mass-marketing approach torespond to needs of core users and provide them with unique value atappealing prices

Todayʼs Agenda
1. Corporate Philosophy and Vision
2. Positioning of 16CSP
3. Review of Medium-Term Vision (From FY2013)
4. Operating Environment
5. 16CSP

14

2016/3/30

Policies

Priority Strategies



Positioning of Each Business within Portfolio

16CSP Framework and Management Goals

No data copy / No data transfer permitted

Strengths and Business Domain

Business to Specialist15

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Policies (1)１

To事業ポートフォリオの再構築と経営資源の再配分
be the greatest “Business to Specialist” Company
We will strive to be the most valuable partner to experts and customers
with high aspirations through the timely provision of appropriate solutions
that meet their high-level needs
We will achieve this goal by utilizing our innovative thinking, expertise inadvancing technology, operational excellence, and high ethical standards
Through these efforts as well as through sustainable growth, Olympus willmeet the expectations of all stakeholders and act as a good corporate
citizen16

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Policies (2)2

事業ポートフォリオの再構築と経営資源の再配分
OneOlympus
We will maximize performance of the entire Olympus Group by sharing values
and strategies and making full use of the management resources (people,money, assets, and knowledge) on a global and Groupwide basis
We will pursue optimization on a Groupwide basis to maximize performance.
We encourage sharing the results throughout the GroupWe will strive to a balance between establishing an appropriate level ofheadquarters control (centripetal force) and realizing highly empowered
operating sites (centrifugal force)17

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Priority Strategies
Take action to grow businesses
Acquire necessary management resources in a timely manner and fully
leverage these resources
Advance forward-looking preparation to realize continued growthPursue further business efficiency improvements
Enhance management on global and groupwide basis
Strengthen Quality/Regulatory Assurance and Internal control, promotestrict compliance18

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Priority Strategies– (1)Strategy

Take action to grow businesses

Expand lineups and promote sales of strategic products
Shift from installation based medical business model to procedure
based medical business modelPursue growth opportunities in peripheral businesses

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Priority Strategies– (2)Strategy

Acquire necessary management resources in a timely manner andfully leverage these resources

Manage portfolio of business in fields with low growth potential andshift management resources to growing business fields
Recruit and develop capable human resources in a timely manner
Optimize global R&D systems and production systems (productionsite planning)20

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Priority Strategies– (3)Strategy

Advance forward-looking preparation to realize continued growth

Develop businesses and conduct upfront investments from a longterm perspective (technology research, exploration, anddevelopment)
Promote developing new business to advance "Minimally invasivetreatment"
Advance long-term measures for expanding businesses in emerging
countries

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Priority Strategies– (4)Strategy

Pursue further business efficiency improvements

Reduce costs and improve efficiency by optimizing product lineups

Standardize processes and improve inventory management22

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Priority Strategies– (5)Strategy

Enhance management on global and groupwide basis

Strengthen and improve the efficiency of Functions

Develop a mindset to realize One Olympus

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Priority Strategies– (6)StrategyStrengthen Quality/Regulatory Assurance and Internal control,
promote strict compliance

Enhance Quality Management System and organization for further
business expansion in Medical field
Further promote Internal Control function
Construct and implement compliance systems suited to a truly globalcompany

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Positioning of Each Business within Portfolio
Directive

25

Prioritize allocation of management resources to Medical Business

FY2016（Forecast）

FY2021（Target）

Net
Sales
¥ 816
billion

NetSales¥1,100billion

MedicalBusiness

Expand our business scope focused onearly diagnosis and minimally invasive
therapies in order to boost earnings
capacity.

ScientificSolutions
Business

Customer group oriented strategies will
be advanced to establish and reinforce
earnings foundations.

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Long-term vision

Imaging
Business

Appropriate response to changes in andcontraction of the digital camera market
will be swiftly taken. Technologies andresources will be utilized on groupwidebasis.

NewBusinessInitiatives will be strengthened to create
new businesses.

16CSP Framework and Management Goals
Generate management resources (capital, funds, etc.)
Priority Strategies
 Take action to grow businesses

ManagementGoals

Effectively utilize capital and funds

EBITDA
Average annual
growth rate:
double-digit Growth investments (R&D, M&A, etc.)

 Acquire necessary management
resources in a timely manner andfully leverage these resources

Business Growth Appropriate shareholder returns (totalreturn ratio of 30%)

 Pursue further business efficiency
improvements

Capital Efficiency

 Advance forward-looking
preparation to realize continued
growth Enhance management on globaland groupwide basis

 Strengthen Quality/Regulatory
Assurance and Internal control,
promote strict complianceOperating
Margin15%
Profitability

ROE
15%

 Internal reserve enhancement

Equity Ratio
50%
Financial
Soundness

Optimally allocate management resources26

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