Medical Service Business Unit (MSBU) Strategy
Yoshihito Shimizu
Head of Medical Service Business UnitOlympus Corporation
March 30, 2016

Todayʼs Agenda

1. Business Overview
2. Recognition of Current Conditions
3. Business Strategies
4. Targets and Indicators

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Todayʼs Agenda

1. Business Overview
2. Recognition of Current Conditions
3. Business Strategies
4. Targets and Indicators

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Positioning of Medical Service Business within Olympus

Recognized as a core competency of Olympus that supports overall Medical
Business growth by continually strengthening customer contact points



Target for allocation of necessary management resources for establishing
service system foundations in emerging countries that are projected togrow rapidly and for strengthening systems one step ahead of competitors

Collaborative partner to manufacturing functions in streamlining andenhancing repair service systems

Core business pursuing improved earnings capacity and steady operating
income growthMSBU

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Distribution of Sales and Business Portfolio
FY2016 Net Sales (Forecast)

Medical Service Business Unit (MSBU)*

General Repairs
ET72.0SurgicalDevices*
205.6

Medical BusinessFY2016 Net Sales（Forecast）¥615.0 billion• Sales of repair services through repair bases worldwide(excluding service contracts)• Sales of repair services at facilities through field services
GI*
337.4

* FY2016 MSBU net sales have been allocated to GI
and Surgical Devices fields

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Service Contracts (Major coverage details as follows)• Single-year or multi-year contracts• Partial or complete repair costcoverage• Priority provision of loaners• Periodic inspections of contractedequipment• Provision of failure prevention
training to facility staff

Overview of Medical Service Business (Industry-Leading Global Service Network) Service network consists of more than 200 bases worldwide
 Safety and reliability provided anywhere in the world based on the belief that medical treatment
does not stop at the doors of the hospital6

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Todayʼs Agenda

1. Business Overview
2. Recognition of Current Conditions
3. Business Strategies
4. Targets and Indicators

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Recognition of Current Conditions：Review of Medium-Term Vision Period (From FY2013)

Strategies
Strengthen repair service
systems supporting businessexpansion

Enhance preventative
maintenance activities

Reinforce global service
foundations

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Measures and Evaluation◎

 Enhanced repair QCD in emerging countries as planned Completed consolidation of domestic repair bases(Shirakawa and Nagano)△ Began advancing preventative maintenance activities
matched to market needs
 Failed to conduct sufficient initiatives in surgical field○ Installed necessary infrastructure for conducting
service activities in markets

Recognition of Current Conditions (Olympusʼ Initiatives)Emerging Markets(Asia, Latin America, Middle East andAfrica) Ongoing strengthening of repair
service systems (including agents)
 Lacking ability to provide field services
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Solution
ServiceContract
Business

Service Level

 Repair and field service systems
established, allowing for provision ofhigh-quality services
 Ratio of service contracts to net sales
at high level of approx. 60% Approach to surgical field insufficient

Low(Japan, U.S., and Europe)

HighDeveloped Countries

Contract
Business(the greatest“Business toSpecialist”
Company)(prevention)(convenient)

On-siteservice(repair,troubleshoot)Repair(inhouse)

Low

Benefit for Customers

HighRecognition of Current Conditions (Operating Environment) Extended usage period for medical equipment due to cost reductions by
medical institutions
 Increasing number of procedures due to the aging population,subsequent demand for environment in which medical equipment isalways available for use Shift from single-year to multi-year contracts, trend toward medical
institutions seeking to avoid fluctuations in expense amounts
 Always-on-site services provided by competitor surgical manufacturers
 Repair services and used products sales provided by 3rd parties inEurope, U.S. and Asia
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Todayʼs Agenda

1. Business Overview
2. Recognition of Current Conditions
3. Business Strategies
4. Targets and Indicators

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Business Strategies

１

Introduce service contracts that realize high levels ofcustomer satisfaction, increase number of such contracts,
and improve profitability

２

Expand service operations on surgical products

３

Provide services that improve medical institution efficiency

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Priority Measures
MeasureDetails Offer breakthrough service contracts

１

Increase service contracts２

 Provide training to allow customers to conduct
Strengthen service operations
inspections themselves
on surgical products Offer always-on-site services

３

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Efficiently deploy repair
services and improve
productivity

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 Realize reliable equipment operation withpreventative maintenance Re-establish repair service infrastructures in allregions (reorganize existing bases, establish newbases, etc.)
 Step up coordination efforts with Manufacturing
Group to improve productivity and reduce repair
costsP.M.1. Increase service contracts
 Offer attractive service contracts
 Realize reliable equipment operation with preventativemaintenanceValue Currently Provided
 Impeccable repair quality realized
through coordination withManufacturing Group Short repair turnaround times
 Customer service through field services
utilizing wealth of knowledge andexperience Speedy provision of loaners
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Value to Be Provided Going Forward Services optimized for each customer
 Training based on failure cause
 Contract fees determined by procedure
numbers

 Always-on-site services

P.M.2. Strengthen surgical service operations
 Provide training to allow customers to conduct inspections
themselves
 Offer always-on-site services

Customer Needs
 Zero malfunctions during surgery
 Pre-surgery equipment setup
 Post-surgery equipment
inspection
 Malfunction duration reduction

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Value to Be Provided Going Forward Provision of training, manuals, andinspection equipment to allow
customers to conduct inspections
themselves
 Always-on-site services
 Speedy provision of loaners orreplacements

P.M.3. Efficiently deploy repair services and improve productivity

 Re-establish repair service infrastructures in all regions(reorganize existing bases, establish new bases, etc.)
 Step up coordination efforts with Manufacturing Group for
improving productivity and reducing repair costsRepair Service Infrastructure EnhancementEstablishment of 2-domestic-repair-base(completed in Dec. 2013)
Strengthening of 2 intensive repair
bases in North America (scheduled tocommence in 2017)
Reconstruction of European repair
infrastructures
Reinforcement of Middle East, Africa andLatin American repair bases

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Productivity Improvement
 Improvement of productivity throughcoordination with Manufacturing GroupFurther utilization of factory consultingand kaizen activities



Ongoing repair cost reductionRepair period shortening through processreforms

 Efficiency gains via repair baseconcentration

Todayʼs Agenda

1. Business Overview
2. Recognition of Current Conditions
3. Business Strategies
4. Targets and Indicators

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Targets and Indicators

MSBU Net Sales: CAGR of 5%
 Services: CAGR of 6% / General Repairs: CAGR of 0.5%
 Further increase sales
 Increase number of high-value-added service contracts
 Expand operations in emerging markets
 Grow markets by increasing product sales
 Expand service operations on surgical products

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Disclaimer

This presentation is for your general knowledge and background only.
Olympus makes no representations warranties or other expressed or
implied warranties or guarantees regarding the accuracy, reliability orcompleteness of the information. Proper attribution should be provided forany use of the information contained in this presentation. Under nocircumstance shall Olympus or its employees, consultants, agents or
representatives be liable for any costs (whether direct, indirect, special,incidental, consequential or otherwise) that may arise from or be incurredin connection with the information provided or any use thereof.

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