38th Annual J.P. Morgan Healthcare Conference

Olympus Corporation | Yasuo Takeuchi , President and CEO | 15 January, 2020

Disclaimer
 This material contains forward-looking statements that reflect management’s current views, plans, andexpectations based on information available at the time of preparation. These forward-looking statements are
not guarantees of future performance and involve known and unknown risks, uncertainties, future businessdecisions, and other internal and external factors that may cause the Company’s actual results, performance,
achievements, or financial position to be materially different from any future results expressed or implied bythese forward-looking statements.
 Additionally, this information is subject to change without notice. Accordingly, other information should be
used in addition to this material when making investment decisions.
 Olympus Corporation assumes no responsibility for any damage resulting from the use of this material.

Page 2

Corporate Strategy

01

We’re Olympus

OUR PURPOSE

Making people’s lives healthier,safer and more fulfilling
In line with our Corporate Philosophy, we are
evolving our corporate culture to be competitive andperformance-driven and focusing on creating
value to our customers

Olympus – Medical Division Snapshot

634.3 70%

20,000Billion yen

Global market share

Patents

Total Medical
revenue FY2019

in gastrointestinalendoscopic equipment

across our
product portfolio

~3%

~8%

39

CAGR

CAGR

FY2017-FY2019

FY2017-FY2019

Growth inendoscopy

Growth intherapeutics

A global footprint
with a mix of upstream
and downstream
operations across
39 countries

Page 5

Corporate Strategy

Medical revenue
by region

02

Our Corporate Strategy

Our strategic aspiration and performance metrics

Sustain

Our aspiration
is to become a globally-leading
medtech company contributing topeople’s lives by delivering
innovative solutions that benefit
patients, healthcare
professionals, payors andproviders

1 Adjusted for extraordinary items

Page 7

Corporate Strategy

5-6% growth annually>20%

consolidated
Deliver
corporate operating margin1

leaders

Becomein the therapeuticareas where we compete(GI, urology and respiratory)

Our strategic pillars

A

Focus the corporate portfolio, centeringon Medical

Maintain leadership in reusable endoscopy

B

Page 8

Corporate Strategy

Complement our portfolio with single-use
endoscopes to accelerate growth and address
unmet needs
Evolve the endoscopy commercial model – shift
towards service-based offerings and procedurebased business models

C

Focus and scale prioritized therapeutic areas(GI-ET, urology and respiratory)D

Develop a leading position in next-generation
minimally invasive surgery by delivering
integrated technologies designed to improve
clinical and economic outcomesOur corporate portfolio – Medical is primary focus
Our corporate portfolio

Increasing our focus
Size of bubble = FY2018 revenue

Operating margin1 %20%

Medical - ESD
Medical - TSD
IMD
SSD
5% CAGR1 FY2018 Adjusted

Page 92 FY2018-FY2019 YoY growth rate

Corporate Strategy

Olympus’ growth2 FY18-19, %We will regularly assess
our portfolio for fit withour corporate aspirationand focus our growthinvestments in MedicalFurther strengthen leadership in endoscopy
To enhance the value we bring in early diagnosis, we aim to have the most comprehensive endoscopy portfolio on
the market, supported by evolution of the commercial model

Maintain leadership in
reusable endoscopy
through continued innovationand commercial excellence

Complement our
portfolio with singleuse endoscopes toprovide a comprehensive setof product offerings

Page 10

Corporate Strategy

Maintainleadership in
endoscopy

Evolve thecommercial model
towards service-based andprocedure-based offerings

Launch of New Endoscopy System
Setting a new standard for endoscopic diagnosis and therapy with our new endoscopy system
New endoscopy system aims tointroduce technologies that set a new
standard for detection,
characterization, staging and treatment

Detection

Characterization

CADe1

 Wider depth of view makes it easier to use
Super wide
depth of view the magnification function on the endoscope

CADx2

1. CADe – Computer-aided detection 2. CADx – Computer-aided diagnosis

Page 11

Corporate Strategy

 Leverage AI-enabled software to improve
lesion detection

 Real-time diagnosis of lesions using AIenabled software

Staging

Magnification  High definition magnified image allows formore accurate staging
technology

Treatment

Vesselvisualizing
technology

 Visualization of vessels can improve
efficiency and error rate of endoscopic
treatment

3D imaging

 3D imaging improves efficiency andshortens the learning curve of endoscopic
treatmentIncreasing demands for Disposable Endoscope
Where single-use endoscopes create differentiated value

Infection control requirements
Single-use endoscopes may eliminate the need for reprocessing and maintenance, which can be beneficial
where a higher-level of infection control is required e.g., high risk patients, focusing on / depending on patients’
needs

Durability requirements
In cases of repeated procedures that quickly erode the durability of reusables, or in areas where smaller diameterare required, single-use endoscopes may provide our customers with a valuable option, e.g., ureteroscope,cholangioscope

Procedure-specific requirements
As reusables are not typically procedure-specific, single-use endoscopes provide a more specialized option thatcan be tailored to more specific needs/procedures e.g., bronchoscope in the ER (sterile, ready-to-use and highly
mobile)Page 12

Corporate Strategy

Strong Momentum in China
China is our fastest-growing market

We will make investment to capture more value in China

ESD revenue growth p.a., 2016-18
17-20%

China

1-2%

US
Japan

 Promote national policies to enhance local
stakeholder relationships

-1%
0-1%

EMEA

 Further strengthen the commercial platform
especially to cover Tier 2 hospitals and below*Emerging Market total : 20%$0.6-0.7B

70%+12% p.a.

2x number ofEndoscopy*
market in 2019

market share inendoscopy*

growth in
healthcare
spending1

endoscopic*
procedures
2012-2022

20,000physiciansparticipated in our training programs in China over the
過去5年間で当社のlast 5 years
トレーニングプログラムに参加

SOURCE: Global Data, 1 Historical growth in last 10 years, expected to maintain *Gastrointestinal area

Page 13

Corporate Strategy

 Continue to grow the pool of qualified healthcare
professionals and conduct technical research tobetter understand customers’ needs e.g., throughphysician training programs

 Proactively pursue local innovation activities toaccelerate the introduction of China-specific products
e.g., collaborate with local hospitals/academia, acquire
start-ups
 Engage with governing bodies to jointly shape thelocal healthcare landscapeStrategic Target for Endoscopy BusinessWe have initiatives in place over the next 3 years to help realize our long-term strategy in endoscopy

Product
innovation

Maintainleadership in
reusableendoscopy Contribute to improving quality of endoscopic procedure by supporting
healthcare professionals (HCPs) in the detection, characterization, staging andtreatment of irregular lesions
 Introduce AI-enabled CAD (computer-aided diagnosis) to new endoscopy
systemCommercial
excellence Build clinical evidence to demonstrate the positive impact of new Olympus
product features on the quality of endoscopic diagnosis

Regional
growth Continue to grow the pool of qualified HCPs in underpenetrated high-growthmarkets

Prioritizing
focus areas

 Target scopes for duodenum, biliary duct and urinary duct

Strengthening
R&D andmanufacturing

Evolve thecommercialmodel Initiate trials of evidence or procedure-based payment models for targeted products and regions
 Scale up pilot programs of wrap-around services

Corporate Strategy

revenue
growthCAGR in ESD
In the next 3 years

Complement
portfolio withsingle-use

Page 14~6%

 Strategic investment in R&D and manufacturing for single-use endoscopes

Focus and scale our TSD businessTo accelerate growth in TSD and enhance our value in minimally invasive therapy,
we will focus on category leadership across three therapeutic areas
FOCUS
THERAPEUTIC
AREAS IN TSD
3
1
2

1 GI-ENDOTHERAPY

Page 15

Corporate Strategy

UROLOGY

3

RESPIRATORYENDOTHERAPY~$4.4B~$1.8B~$0.3B

market#3 position

market#2 position

market#1 position

Expand and accelerate portfolio inexisting product categories andexplore growth opportunities inadjacent areas
1 Bronchoscopic Lung Volume Reduction

2

Establish leadership in BPH andenhance position in stone
management through portfolio
expansion

Strengthen leadershipby capturing the BLVR1 market
and expand opportunities
in early diagnosis and treatmentof lung cancer

High Single-Digit Growth in P3Y
We have realized growth of over 8.0% CAGR in TSD business by introducing new products~8.7%

OthersPT
ENT
ENT

revenue growth
CAGR

Urology and
UG
Gynecology

In the past 3 years

EnergyENG
Devices
GI andET
Respiratory

FY2017/3
Page 16

Corporate Strategy

THUNDERBEAT OpenFine Jaw

THUNDERBEAT Open
Extended Jaw

SnareMaster
Plus

EZ Shot 3 Plus

EZDilate

ViziShot 2

FY2018/3

ViziShot 2 FLEX

VorticCatch V

FY2019/3

PeriViewFLEX

Strategic Target: Therapeutic Solutions
have initiatives in place to drive growth in TSD in the next 3 years
Our key near-term growthWe
initiatives
GI-Endotherapy

Urology

RespiratoryEndotherapy

 Expand clinically differentiated product offerings across all key categories,
including ERCP, GI stent and hemostasis devices through both internal
initiatives and M&A
 Expand presence of our BPH offerings in the urology suite and office Enhance product portfolio in stone management with launch of new fiber
laser technology and other endo-urology devices

 Drive growth through adoption of intrabronchial valve system
 Expand EBUS indications and advance strong pipeline of EBUS needles~8%
revenue
growthCAGR in TSD

Other therapeutic areas

 Expand energy solutions offering with launch of advanced energy device,
introducing next-gen innovation in precision resection and reliable vessel
sealing

Commercial excellence Strengthen sales and market development teams across therapeutic areas
 Invest in additional clinical data and reimbursement efforts

Page 17

Corporate Strategy

In the next 3 years

Our corporate strategy – Growth Enablers
Improving our operating and financial
performance through a major transformational
program across the whole business over the
next 3 years

Building capabilities fit for growth including
strengthening our QA/RA function and driving
efficiency in our R&D operations

Evolving our corporate culture focusing on
building a competitive and performance-oriented
culture with customer and stakeholder centricity

A focus on customer and value will underpin
all activities in our business to ensure we
address our customers’ unmet needs andclearly communicate with them the value of our
products
Page 18

Corporate Strategy

Transform Olympus is all about transforming the way we work
We have embarked on a major efficiency improvement program, Transform Olympus, across the company
Planning process Detailed benchmarking
vs. global peers
 Advice from outside
subject matter experts
 Top down targets set
 Bottom up developmentof Transform initiatives
 1,000+ Transform
initiatives, each with an“owner” and a timeline
for accountability tracking
 Transform initiatives tobe included in P&L
budgets
Page 19

Corporate Strategy

Targeted areas
Research &Development
SCM &Manufacturing

Example initiatives
 Discontinue projects with low ROI
 Simplify project specifications to focus on core value-add
 Move to monthly review of supply / demand match Centralized sourcing initiatives
 Establish global pricing governance council to improve ASPs

Sales

Indirect expenses
Human
Resources Optimize salesforce effectiveness in targeted regions
 Implement global integrated facilities management service program Global travel policy to define clear rules
 Introduce regular performance review system
 Targeted structural reforms to align organization with strategic priorities

Transform Olympus will position us for long term growth
The outcome of Transform Olympus will be seen in three areas within 3-4 years
Higher Profit

High Performance Culture

Identified Profit Improvement Opportunity:
Corporate:
Central corporate
expenses25%

Commercial:
Sales and marketingand services

Product:
COGS and R&D

Total impact 40%
on operating
margin
35%

~35%

>20%
consolidated corporate operating margin1
1 Adjusted for extraordinary items

Page 20

Corporate Strategy

 Employees trained incontinuous improvement andexecution
 Clear definition of roles andaccountability
 Performance management
through appraisal and rewards
system Cross functional collaborativeteams
 Allocation of talent globally
based on skills
 Agile decision making

Higher Long-term Growth
Capacity Greater ability to target areasof high unmet clinical /economic need for productdevelopment
 More frequent new productlaunches with excellent quality /regulatory outcomes Higher long-term organic
growth rates
 Capability to execute andintegrate both tuck-in andtransformative acquisitions

03

Our Growth andPerformance Impact

2023/3 Financial guidance

OperatingMargin1

1 Adjusted for extraordinary items

Page 22

Corporate Strategy

Approx.

2020/3

Target 2023/3

11%

>

20%

Sequencing of our growth and transformation initiatives
3 years
Compete to Grow
Transform to Perform
Focus and Simplify
to have immediate, early impact
on corporate performance Targeted acquisitions to fill portfolio
gaps in TSD therapeutic areas
 Transform Olympus quick wins:– Early procurement impact– R&D portfolio and SKU rationalization

to position Olympus optimallyfor profitable growth Full impact of Transform Olympus
realized: bottom-line optimization andimproved org. health New functional capabilities (incl.
procurement, portfolio & inventory
management, and ramp up of Global
Business Services

to capture growing value pools thatdrive long-term sustainability Larger M&A activities
 Fully operational, at scale single-use
business At scale investment, potentially including
larger M&A deals in therapeutics and next
generation MIS

 Ramp up of single-use business

Performance impact in 3 years> 20% operating margin1
1 Adjusted for extraordinary items

Page 23

Corporate Strategy

2023/3 Supporting financial indicators
2020/3

Free cash
flow growth1

¥

ROIC1

EPS
Growth1¥50Billion

Target 2023/3>

20%

CAGR from FY2020/3

10%

>

¥47

>

Approx.

20%
25%

CAGR from FY2020/3

1 Adjusted for extraordinary items

Page 24

Corporate Strategy

Cash allocation – M&A and Return to Shareholders

Business
investment

Shareholders’returnPage 25

Corporate Strategy

 Prioritize allocation of funds toward growth investments as well as quality
enhancement
 Strategic consideration of M&A based on business strategy

 Maintain current policy to achieve 30% total shareholders return by FY
2021 as stated in 16CSP(Olympus will achieve its 16CSP target of a 30% total return ratio in FY2020/3)

 Maintain the proactive shareholder return policy considering corporate
priorities and shareholders’ values

OUR PURPOSE

Making people’s lives healthier,safer and more fulfilling
In line with our Corporate Philosophy, we are
evolving our corporate culture to be competitive andperformance-driven and focusing on creating
value to our customers