Management Policies for Fiscal 2019
Hiroyuki Sasa
President and Representative Director
Olympus Corporation
May 11, 2018

Disclaimer






2

This material contains forward-looking statements that reflect management’s current
views, plans, and expectations 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 fromany future results expressed or implied by these forward-looking statements.
Additionally, this information is subject to change without notice. Accordingly, otherinformation should be used in addition to this material when making investment
decisions.
Olympus Corporation assumes no responsibility for any damage resulting from the useof this material.

2018/2/9

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Voluntary Adoption of IFRS The Company has chosen to voluntarily adopt International Financial Reporting Standards(IFRS). The first document to which these standards were applied was the consolidated
financial statements for the three months ended June 30, 2017.
 Figures for the fiscal year ended March 31, 2017 have been restated based on IFRS forthe purpose of comparisons.

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Today’s Agenda

 Management Policies for Fiscal 2019
1.Review of the First Two Years of 16CSP(Medium-Term Management Plan)
2.Policies for Pursuing Future Growth Consolidated Financial Results for Fiscal 2018
 Full-Year Forecasts for Fiscal 2019
Note: For the fiscal years as of / ended March 31)
4

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1. Review of the First Two Years of 16CSP(Medium-Term Management Plan)

Note: 16CSP is the five-year medium-term management plan that began with fiscal 2017.
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Review of First Two Years of 16CSP: (1) Revenue (Consolidated & Medical Business)
 Strong growth of Medical Business drives increases in consolidated revenue Record-breaking revenue achieved in Medical Business despite mainstay gastrointestinalendoscopes being in the later stages of their product life cycles
Revenue（Billions of yen）

Medical Business

16CSP

After establishment of current management team

800.0

600.0

400.0

558.3

608.9

616.3
570.4

492.3
200.0

0.0

6

2018/2/9

349.2

394.7

2012/3 *2013/3 *2014/3
2015/3
2016/3←――――――――――――――――( JGGAP ) ――――――――――――――→No data copy / No data transfer permitted

2017/3
2018/3←――――( IFRS ) ―――→* The figures above exclude the impacts of the transfer of the Information & Communication Business.

Review of First Two Years of 16CSP: (2) Business Progress (Medical Business) Steady investments and other measures for growing mainstay Medical Business as corebusiness underpinning consolidated performance
Priority Measures of 16CSP (Medical)
1. Expand leading GI market share andimprove profitability while realizing
substantial growth in endotherapy andsurgical business operations
2. Shift from installation-based Medical
Business model to procedure-based
Medical Business model
3. Expand operations in emerging countries
4. Strengthen ability to respond to GPOs /IDNs*1
5. Strengthen QA/RA*2 functions
6. Improve productivity*1 GPOs: Group Purchasing Organizations; IDNs: Integrated Delivery Networks*2 Quality Assurance / Regulatory Assurance

7

2018/2/9

No data copy / No data transfer permitted(Progress)
 Smooth progress in converting rival companies’
customers into Olympus customers by utilizing 4K systems
in the surgical device field Endotherapy device operations expanded as planned(particularly accelerated of sales promotions in the ERCP field)
 Construction of development and production systems in North
America to bolster production capacity and efficiency withregard to THUNDERBEAT as this product enjoys ongoingdouble-digit growth Double-digit growth for two consecutive years in Asia/Oceania
due to strong performance in all fields
 Training and service centers established in Thailand and Dubai
to further expansion of emerging markets
 Rapid progress in business negotiations with several major
IDNs in North America, the largest market for the Medical
Business, thanks to coordination with ISM (acquired in June2017)
 Favorable progress in augmentation of repair infrastructure
centered on Europe and North America

Changes in the Operating Environment (Disparities from Initial 16CSP Outlook)
Macroeconomic Environment
No major changes in operating environment trends in comparison with initial 16CSP outlook, but accelerated changes
in operating environment including strengthening of regulatory assurance and technological progress

Operating Environment
No changes frominitial operating environment outlook••

Medical••Changes surpassing initial outlook (disparities)

Ongoing double-digit growth in China and other Increasingly more rigorous medical equipment
emerging countries
application and registration requirements in EU-MDR*1
Continuous market growth accompanying rise in
and other countries’ regulations
case numbers
Move to limit healthcare expenses in developed  Accelerated drive to tighten reprocessing*2
countries
requirements centered on North America
Intensified competition due to market entry byglobal MedTech companies and companies from
*1 European Union Medical Devices Regulation*2 Cleaning, disinfection, and sterilization
emerging countries

Scientific
Solutions•

Ongoing growth of aviation, automotive, andother infrastructure maintenance sectors ofindustrial field fueled by inspection demand Stable growth in emerging countries, but shrinking markets
in developed countries due to stagnant government researchbudget in life science field

Imaging•

Continuous contraction of digital camera
market Growth in mirrorless camera market but rapid changes inoperating environment stemming from full-fledged market
entry of competitors

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Impacts of Operating Environment Changes on Business
Major Business Impacts of Operating Environment Changes
 Delays in the launches of major new products stemming from constraints ondevelopment resources as a result of prioritizing response to regulatory,
product quality issues and reprocessing requirements for existing products
MedicalScientific
Solutions9

2018/2/9

 Slow progress in surgical device operations as a result of delayed supply of new
product (VISERA ELITE II) due to production issues at launch as well as delayed
introduction of new products in North America following postponement of approval
receipt Growth relatively unchanged year on year in life science field, despite noteworthy
growth in emerging countries, due to stagnant government research budget indeveloped countries Currently strong performance in all regions in industrial field, but sluggish growthin comparison with forecasts due to initial market slump

No data copy / No data transfer permitted

Review of First Two Years of 16CSP: (3) Consolidated Performance First-half of 16CSP positioned as period for investing in second-half growth, investments
during first two years of 16CSP conducted accordingly Structure promising consistent profit* established
Operating profit（Billions of yen）

Profit

16CSP

After establishment of current management team
104.5
91.0

100

73.4
60

35.5

20

10 2018/2/9

71.2
42.8

35.1
8.0

-20

-60

62.6

81.0
57.1

13.6

-8.7

-49.0

Resumption ofdividends

2012/3
2013/3
2014/3
2015/3
2016/3←―――――――――――――――― (JGAAP) ――――――――――――――→No data copy / No data transfer permitted

2017/3
2018/3←―――― (IFRS) ―――→

* Profit attributable to owners of the parent

Review of First Two Years of 16CSP: (4) Major Indicators (16CSP Targets) ROE and equity ratio as projected Operating margin and EBITDA lower than anticipated Issues recognized with regard to business growth potential (disparity between outlook and reality)

2021/3

KPI

2017/32017/3

2018/3（IFRS）(16CSPManagement Goals)

ROE

19%

11%

14%

15%

Operating Margin

10%

9.6%

10.3%

15%

EBITDA¥129.8 billion（-16%）¥124.0 billion¥133.9 billion(+8%)¥240.0 billion

Equity Ratio

43%

41%

45%

50%

(JGAAP)(Capital Efficiency)(Profitability)(Business Growth)(Financial Soundness)
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growth)2. Policies for Pursuing Future Growth

12 2018/2/9

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Initiatives for Accomplishing 16CSP Targets
 Steadily implement priority measures described in 16CSP through efficient management
resource use and Business Process Reengineering Project

Priority Strategies of 16CSP
1. Take action to grow businesses
2. Acquire necessary management resources in a timely manner and fully leverage theseresources
3. Advance forward-looking preparation to realize continued growth
4. Pursue further business efficiency improvements
5. Enhance management on global and groupwide basis
6. Strengthen Quality/Regulatory Assurance functions and Internal control, promote strict
compliance

13 2018/2/9

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Review of 16CSP: Revenue / Operating profit
 Revision to foreign exchange assumptions for 16CSP revenue
and operating profit forecasts
 Reviewed forecasts to be accomplished two to three years
later than scheduled

Revenue

740.6

786.5

800.0

¥/USD: ¥105¥/EUR: ¥130

150.0

600.0

100.0
71.2

400.0

81.0

81.0

2018/3

2019/3

50.0

200.0

14 2018/2/9¥/USD: ¥115¥/EUR: ¥130

(Billions of yen)

1,000.0

0.0【Foreign exchange rate
assumptions for FY2019】

Operating profit(Billions of yen)

800.0

【At time of 16CSP
formulation】

2017/3

2018/3

2019/3(Forecast)

No data copy / No data transfer permitted

2023-2024/3

0.0

2017/3(Forecast)2023-2024/3

Policies for Pursuing Future Growth: (1) Medical Business No major changes planned for strategies or numeric targets as growth is anticipated to be in linewith forecasts following introduction of new mainstay products

Basic Policies (Main Points)

Products for Pursuing Future Growth*

Gastrointestinal (GI) Endoscopes
 Steadily develop and commercialize new products
 Bolster sales promotion programs prior to introductionof next-generation systems
 Step up response to regulatory and reprocessing
requirements
 Secure earnings through business process
reengineering and streamlining

Next-generation
Next-generation endoscope cleaningendoscopy system
deviceNext-generation
Endobronchialultrasound scope

Motor-driven
enteroscope

Ultrawide angle
colonoscope

Surgical Devices
 Quickly address new product launch delays andsupply issues
 Achieve growth rates higher than those of the market
by soliciting value of strategic products Growing sales of single-use devices
 Improve profitability

Endotherapy Devices


THUNDERBEAT
Type-SInfrared (IR)observation

New 3D scopes

surgical endoscopy system
VISERA ELITE II

operating room system integration（ISM: IP image management）

4K surgicalendoscopy
systemContinuously bolster product lineups and reinforce sales organizations and systems to promote sales of single-use devices

15 2018/2/9

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Policies for Pursuing Future Growth: (2) Scientific Solutions and Imaging Businesses
Scientific Solutions Business Plan to revise our strategies for the life sciencefield
 Steady implementation of priority measures toachieve initial profitability improvement target(operating margin of 10%)changing our focus to boosting profitability rather thanpursuing sales scale
Accelerate expansion of portfolios targeting focus customer
segments (manufacturing, infrastructure maintenance, andenvironment and natural resource) with the aim of achieving
profitable growth in industrial field
LS Research

Manufacturing

Infrastructure
Maintenance

FV3000IPLEX NX
（laser scanning(Industrial endoscope)
confocal microscope)
16 2018/2/9

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Imaging Business Progress as initially forecast
 No changes to strategies or numeric targets(generate steady profits without concern forsales scale)Continue promoting structural reforms to ensure enduring
profitability
Bolster production capacity and efficiency after
transferring production for Shenzhen, China to Vietnam
plant
Continue to strengthen lineup of high-margin mirrorlesscameras and interchangeable lenses and advance sales
strategies matched to needs of specialists

Environment &Natural Resource

VANTA(X-ray fluorescence(XRF) analyzer）

OM-D E-M1 MarkⅡPEN E-PL9

f/1.2 prime lens seriesNotification: Investor Day 2018

Date:

September 5, 2018

Major Topics:

Business progress centered on 16CSP, medium-term management plan
(Presentation, Q&A session, and product exhibition)

Presenters:

President and Representative Director: Hiroyuki Sasa
Director, Vice President and CFO: Yasuo Takeuchi
Representatives from the Medical Business, regional representative
officer of Americas, etc.

17 2017/5/2

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Management Policy

To be the greatest “Business to Specialist” Company
Pursue business growth and profitability improvements based
the most fundamental elements of customers’ demands andneeds as a “Business to Specialist” Company

18 2018/2/9

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Consolidated Financial Results for Fiscal 2018
Full-Year Forecasts for Fiscal 2019
Yasuo Takeuchi
Director, Vice President and CFO
Olympus Corporation
May 11, 2018

Fiscal 2018 (1)Consolidated Financial Results
１ Revenue: Up 6% YoY driven by strong performance centered on the mainstay Medical Business
2 Profit: Double-digit YoY growth in all profit figures
Full Year（Apr.-Mar.）（Billions of yen）

FY2017FY2018１

YoY

After foreignexchange
adjustment

FY2018 Forecasts（Feb. 9)vs. forecasts YoY
Changevs. forecasts (%)

740.6

786.5

＋6%

＋2%

784.0

+2.5

0%

(% of revenue)

478.5(64.6%)

510.5(64.9%)

＋7%

＋2%

520.0
(66.3%)-9.5-2%

Selling, general and administrative
expenses(% of revenue)

397.7(53.7%)

426.6(54.2%)

＋7%

＋4%

430.0
(54.8%)

-3.4

-1%

-

-

-4.0

-

-

-1%

86.0
(11.0%)-5.0-6%

Revenue
Gross profit

Other income and expenses etc.

-9.6

-2.9 2(% of revenue)

71.2（9.6%)

81.0（10.3%)＋14%(% of revenue)

62.5(8.4%)

76.7(9.8%)＋23%

79.0(10.2%)-2.3-3%

Profit attributable to owners of parent(% of revenue)

42.8(5.8%)

57.1（7.3%)＋33%

63.0(8.0%)

-5.9

-9%

¥108

¥111

¥111

¥119

¥130

¥128

Operating profit
Profit before tax¥/US$¥/Euro20

2018/5/11

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Dividend Payments in Fiscal 2018
Year-end dividend of ¥28 per share

Fiscal 2018 (1) Factors Influences Consolidated Operating Profit
Full Year（Apr.-Mar.）（Billions of yen）

Higher sales

Foreign exchange
Influences＋13.9

OthersChanges in costof sales ratio

＋10.7

＋6.2

-4.2

Increased Medical
Business sales

71.2

Higher SG&A
expenses-16.7

Lower loss related tosecurities litigation, gain on
sales of fixed assets, etc.

81.0

Expenses for strengthening Medical
Business functional organizations andother one-time costs, etc.

＋9.8
FY2017
Operating profit
21

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FY2018Operating profit

Fiscal 2018 (2) Results by Business Segment
Medical: Record-breaking 4Q and full-year revenue in the Medical Business as it drives consolidated performance

Scientific Solutions: Revenue up 7% YoY due to favorable market

Imaging: Operating loss posted due to expenses incurred in relation to the ceased operation of a Chinese manufacturingsubsidiary (operating profit of ¥0.3 billion was recorded when excluding these expenses)
Full Year（Apr.-Mar.）（Billions of yen）
MedicalScientific
Solutions
Imaging

OthersElimination
andcorporate

22

2018/5/11

YoY

After foreignexchange
adjustment

FY2017FY2018After foreignexchange
adjustment

YoY

Revenue

570.4

616.3

+8%

＋4%

160.1

169.1

＋６%

＋4%

Operating profit

114.7

121.8

+6%

-1%

26.7

34.0

＋28%

+22%

Revenue

93.4

100.0

+7%

＋3%

29.8

30.0

＋1%

0%

Operating profit

5.9

6.4

+8%

-10%

4.1

2.9

-28%

-29%

Revenue

62.8

60.3

-4%

-8%

16.0

13.0

-19%

-20%

Operating profit

0.2

-1.2

-¥1.4 billion-¥2.1 billion

-0.7

-2.7

-¥2.0 billion-¥2.4 billion

Revenue

14.0

9.9

-29%

-30%

2.8

2.4

-16%

-15%

Operating profit

-1.1

-5.0

-¥3.8 billion-¥3.8 billion

-1.9

-2.1

-¥0.3 billion-¥0.3 billion

-

-

-

-

-

-

-

-

Operating profit

-48.5

-41.0

＋¥7.4 billion＋¥6.9 billion

-12.9

-10.9

+¥2.1 billion+¥1.7 billion

Revenue

740.6

786.5

＋6%

＋2%

208.8

214.4

＋3%

＋1%

Operating profit

71.2

81.0

＋14%

-1%

15.2

21.2

+39%

+25%

Revenue

Consolidated
Total

FY2018FY20174Q（Jan.-Mar.）No data copy / No data transfer permitted

Fiscal 2018 (3) Medical Business
Revenue

Full Year（Apr.-Mar.）Operating profit(Billions of yen)

After foreignexchange
adjustment

FY2017FY2018

YoY

＋8%

＋4%

160.1

169.1

＋6%

+4%

336.8

＋6%

＋2%

89.7

94.7

＋6%

+5%

182.1

200.4

＋10%

＋6%

52.4

54.9

＋5%

+4%

Endotherapy
Devices

69.5

79.1

＋14%

＋7%

18.0

19.5

＋8%

+3%

Operating profit

114.7

121.8

+6%

-1%

26.7

34.0

＋28%

+22%

Operating profit
margin

20.1%

19.8%

19.1%

16.7%

20.1%

(Billions of yen)

616.3

FY2017FY2018

570.4

616.3

Gastrointestinal
Endoscopes (GI)318.7

Surgical Devices

Revenue

570.4



114.7

FY201723

2018/5/11

121.8

Revenue

FY2018No data copy / No data transfer permitted

4Q（Jan.-Mar.）Operatingprofit

YOY

After foreignexchange
adjustment

19.6%

GI: Positive growth achieved, despite products in developed countries being in the laterstages of their product cycles, due to favorable performance in emerging countries
Surgical devices: Favorable sales of new surgical endoscopes and solid performance ofenergy devices
Endotherapy devices: Robust growth continues on the back of strong sales of products
for ERCP and other strategic products
Full-year operating profit up 6% YoY, operating margin relatively unchanged YoY
Gross profit margin down due to product mix changes
Higher SG&A expenses due to incurring expenses for strengthening manufacturing andservice systems and other costs

Fiscal 2018 (3) Medical Business
Local currency basis growth rates

Field

FY2017

RegionGI
Endoscopes

Japan
N. America
EuropeAsia/Oceania
All Regions

FY2018

4Q

Full
Year

4Q

0%
0%
+8%
＋14%
+4%

-2%
0%
+6%
+18%
+4%

-3%
＋7%
＋7%
＋6%
＋5%

Conditions by field

Full
Year

-2%
+1%
-1%
＋10%
＋2%

•

•
•

Surgical
Devices

Endotherapy
Devices24

2018/5/11

Japan
N. America
EuropeAsia/Oceania
All Regions

-7%
-1%
＋35%
＋7%
＋6%

-2%
+2%
＋10%
＋10%
＋4%

+12%
＋6%
-6%
＋3%
＋4%

＋9%
＋2%
＋6%
＋10%
＋6%

Japan
N. America
EuropeAsia/Oceania
All Regions

＋4%
+7%
+5%
＋7%
＋5%

＋7%
+10%
＋6%
＋9%
＋7%

＋3%
0%
＋3%
＋8%
＋3%

＋7%
+4%
+3%
＋16%
＋7%

No data copy / No data transfer permitted

•

•

•
•

Japan, North America, and Europe: Growth in line withprevious fiscal year due in part to mainstay products being
in the later stages of their product cycles
Asia/Oceania: Exceptionally strong performance in China
Japan: Solid growth fueled by benefits of new VISERA ELITE
II and favorable performance of energy devices
North America: Positive growth, despite mainstay products
being in the later stages of their product cycles, due to theachievement of successful business negotiations througheffective coordination with ISM
Europe: Negative 4Q growth due to rebound from highgrowth seen in previous fiscal year
Positive growth in all regions as a result of solid sales of
products for ERCP*.
Particularly strong performance in Asia/Oceania* ERCP: Endoscopic Retrograde Cholangio Pancreatography

Fiscal 2018 (4) Scientific Solutions Business
Revenue(Billions of yen)(Billions of yen)

100.0

93.4

Full Year（Apr.-Mar.）Operating profit
FY2017FY2018

Revenue

93.4

100.0

Operatingprofit (loss)

5.9

6.4

6.3%

6.4%

Operatingprofit margin

Revenue

5.9
FY201725

2018/5/11

6.4
FY2018No data copy / No data transfer permitted

Operatingprofit4Q（Jan.-Mar.）

After foreignexchange
adjustment

FY2017FY2018

＋7%

＋3%

29.8

30.0

＋1%

0%

＋8%

-10%

4.1

2.9

-28%

-29%

5.6%

13.6%

9.7%

YOY

YoY

After foreignexchange
adjustment

9.7%

Full-year revenue up 7% YoY following favorable sales in industrial field supported byfirm resource prices and beneficial conditions in semiconductor and electronic
component markets
・Japan: Favorable sales of new industrial endoscopes
・North America: Sales contributions from non-destructive testing equipment
・Europe: Large-scale orders received for XRF analyzers contributed to revenue increase・China: Higher sales of biological and industrial microscopes

Full-year operating profit up 8% YoY thanks to beneficial foreign exchange rates andhigher revenue

Fiscal 2018 (5) Imaging Business
Revenue(Billions of yen)

62.8

0.3*
-1.2

FY201726

2018/5/11

FY2018No data copy / No data transfer permitted

4Q（Jan.-Mar.）
After foreignexchange
adjustment

FY2017FY2018

-4%

-8%

16.0

13.0

-19%

-20%

46.8

-1%

-5%

13.3

10.2

-23%

-25%

10.2

8.6

-15%

-18%

1.6

1.7

+6%

+6%

Others

5.3

4.9

-7%

-10%

1.2

1.1

-6%

-6%

Operating profit(loss)

0.2-1.2-¥1.4 bil.

-¥2.1 bil.

-0.7

-2.7

-¥2.0 bil.

-¥2.4 bil.

Operatingprofit margin

0.2%

-

-

-

-

Operating profit(loss)*

-

0.3

-

-

-1.2

Operatingprofit margin*

-

0.5%

-

-

-

(Billions of yen)

60.3

0.2

Full Year（Apr.-Mar.）Operating profit
FY2017FY2018YOY

Revenue

62.8

60.3

Mirrorless

47.4

Compact+¥0.1 bil.

YoY

After foreignexchange
adjustment-¥0.5 bil.

* Figures exclude impacts of ceased operations of Chinese manufacturing subsidiary

Revenue
Operatingprofit

Full-year revenue down 4% YoY as a result of reduced sales of compact cameras andvoice recorders as well as mirrorless camera sales remaining flat from the previous fiscal
year

Full-year and 4Q operating losses posted due to recording of expenses in relation to
production system reforms (ceased operations of Chinese manufacturing subsidiary)
Operating profit recorded for second consecutive year when excluding impacts of ceased
operations of Chinese manufacturing subsidiary



-

-

Statement of Financial PositionTotal equity: Higher retained earnings due to the recording of profit attributable to owners of parent of ¥57.1 billion
Equity ratio: Rose to 45.2% as a result of higher retained earnings and reduced interest-bearing debt
End Mar.
2017

End Mar.
2018

Current assets

505.7

514.3

+8.5

Inventories

125.3

139.3

+14.0

Non-current assets

454.3

464.4

+10.1

Property, plant andequipment

159.7

168.2

+8.5

Intangible assets

75.9

73.4

-2.5

Goodwill

95.6

97.2

+1.6

Total assets

960.0

978.７

+18.6

(Billions of yen)

ChangeCurrent liabilities
bonds/long-term loans
payableNon-current liabilities
bonds/long-term loans
payableTotal equity(Equity ratio)
Total liabilities and equity

End Mar.
2017

End Mar.
2018

286.5

305.9

+19.5

68.8

88.8

+20.0

277.4

228.5

-48.9

217.2

159.2

-58.0

396.2

444.3

+48.0

41.1%

45.2%

+4.1pt

960.0

978.７

+18.6

ChangeInterest-bearing debt: ¥248.0 billion(-¥38.0 billion from March 31, 2017)27

2018/5/11

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Consolidated Cash Flows

Free cash flow: Came to a positive ¥41.8 billion due to profit generated by business activities, which offset capital
expenditures for augmenting European manufacturing and service bases and outflows related to the acquisition of
ISM*

Full Year(Billions of yen)

Change

740.6

786.5

＋45.9

71.2

81.0

＋9.8

9.6％

10.3%

+0.7pt

CF from operating activities

102.1

95.1

-6.9

CF from investing activities

-20.8

-53.3

-32.5

81.2

41.8

-39.4

CF from financing activities

-43.6

-51.1

-7.4

Cash and cash equivalents at end of period

199.5

191.2

-8.2

Depreciation and amortization

52.9

52.9

0

Capital expenditures

60.7

65.3

+4.6

Revenue
Operating profit(% of revenue)

Free cash Flow28

FY2018FY2017

2018/5/11

No data copy / No data transfer permitted*Image Stream Medical, Inc., acquisition completed in June 2017

Forecast for Fiscal 201929

2018/5/11

No data copy / No data transfer permitted

Forecasts of Consolidated Financial Results for Fiscal 2019

Revenue projected to increase 2% YoY due to strong performance in the Medical Business
Operating profit to rise 9% YoY when excluding foreign exchange influences despite impacts of additional expenses
related to ceased operations of Chinese manufacturing subsidiary in Imaging Business
FY2018(Results)(Billions of yen)
Revenue

FY2019(Forecasts)

ChangeYoY

YoY(After foreignexchange adjustment)

786.5

800.0

+13.5

+2%

+4%

(% of revenue)

510.5(64.9%)

527.0(65.9%)

+16.5

+3%

+6%

Selling, general and administrative expenses(% of revenue)

426.6(54.2%)

438.0（54.8%)

＋11.4

+3%

+5%

-2.9

-8.0

-5.1

-

-

(% of revenue)

81.0（10.3%)

81.0(10.1%)

0

0%

+9%

(% of revenue)

76.7(9.7%)

76.0(9.5%)-0.7-1%

Profit attributable to owners of parent(% of revenue)

57.1（7.3%)

59.0（7.4%)

+1.9

+3%

EPS

¥167

¥173

¥/US$

¥111

¥105

¥/Euro¥130¥130

Gross profit

Other income and expenses, etc.
Operating profit
Profit before tax

30

2018/5/11

No data copy / No data transfer permitted-¥6(yen appreciation)-

Dividend Forecast in Fiscal 2019
Annual dividend of ¥30 per shareSegment Forecasts for Fiscal 2019

Medical: Double-digit operating profit growth expected owing to enhanced earnings capacity
Scientific Solutions: Higher revenue and profit when excluding foreign exchange influences
Imaging: Operating loss to be posted due to recording of expenses related to ceased operations of Chinese
manufacturing subsidiary (operating profit of ¥2.5 billion projected when excluding these expenses)(Billions of yen)

MedicalScientific
Solutions
Imaging
Others31

FY2018(Results)

FY2019(Forecasts)

ChangeYoY

YoY(After foreignexchange adjustment)

Revenue

616.3

634.0

+17.7

+3%

+6%

Operating profit

121.8

135.0

+13.2

+11%

+17%

Revenue

100.0

100.0

0

0%

+3%

6.4

7.0

+0.6

+9%

+31%

Revenue

60.3

60.0

-0.3

0%

+1%

Operating profit

-1.2

-7.0

-5.8

-

Revenue

9.9

6.0

-3.9

-39%

-39%

Operating profit

-5.0

-6.0

-1.0

-

-

-

-

-

-

-

Operating profit

Elimination andcorporate

Revenue
Operating profit

-41.0

-48.0

-7.0

-

-

Consolidated
Total

Revenue

786.5

800.0

+13.5

+2%

+4%

81.0

81.0

0

0%

+9%

2018/5/11

Operating profit

No data copy / No data transfer permitted

Details of Performance by Segment
Medical Improved profitability stemming fromnew product sales promotions
Introduction of new scopes continuing on
from the previous fiscal year in
gastrointestinal endoscope field
Promotion of VISERA ELITE Ⅱ sales andgrowth in energy device sales in all regions
in surgical device field
Higher sales in endotherapy device field due
to enhanced product lineup(Billions of yen)

121.8

135.0

Imaging

Scientific Solutions
 Higher operating profit
following accelerated
growth in industrial fieldSolid performance inindustrial field supported by
improved market conditions
Higher profitability in life
science field to be achievedby bringing costs toappropriate level

 Establishment of structure promisingconsistent profits through structuralreformsOngoing focus on high-margin mirrorlesscamerasThird consecutive year of operating profit
when excluding impacts of expenses related
to production system reforms (ceased
operations of Chinese manufacturingsubsidiary)(Billions of yen)(Billions of yen)

6.4

7.0

0.3*

2.5*

-1.2
-7.0
FY2018FY2019(Forecast)

FY2018FY2019(Forecast)

FY2018FY2019(Forecast)* Figures exclude impacts of ceased operations of Chinese manufacturing subsidiary32

2018/5/11

No data copy / No data transfer permitted

Investments (R&D Expenditures, Capital Expenditures, Depreciation and Amortization)
Full-Year Results and Forecasts(Billions of yen)
（億円）
89.5

FY2017FY2018

Details of R&D Expenditures
FY2019（Forecast）

86.0(Billions of yen)
R&D expenditures(% of revenue)

79.2

60.7

65.3 66.0(Billions of yen)

Depreciation andamortization33

2018/5/11

No data copy / No data transfer permitted

79.2

89.5

(10.7%)(11.4%)FY2017FY2018

Capitalization of R&D
expenditures*2

7.0

10.3

Amortization

4.8

7.0

End Mar. 2017

End Mar. 2018

28.3

32.5

R&D assets

Capital expenditures

FY2019(Forecast)

FY2018*1

86.0(10.8%)

Reference
52.9 52.9 53.0

R&D expenditures

FY2017FY2019(Forecast)

12.0*1. R&D expenditures are calculated by applying the same standards to all subsidiaries as
used by the Company.
*2. The amount for capitalization of R&D expenditures is included in the above amount for
R&D expenditures.

Appendix

34

2018/5/11

No data copy / No data transfer permitted

【Supplementary Materials】 Forecasts of Consolidated Financial Results for Fiscal 2019(Full-year basis)
Factors Influences Consolidated Operating Profit (YoY)（Billions of yen）

Medical+20.5

Full Year

Scientific
Solutions+2.0

Imaging-7.0

81.0

Others-1.0Higher sales mainly for
Gastrointestinal Endoscopes

Eliminationand corporate-7.5

Foreignexchange
Influences-7.0

Lower gain on sales of
fixed assets, etc.

81.0

0FY2018Operating profit

35

2018/5/11

No data copy / No data transfer permitted

FY2019Operating profit(Forecasts)

【Supplementary Materials (JGAAP/IFRS) 】 FY2017 Full Year Results (1) Consolidated
Full Year（Billions of yen）

36

FY2017 Results(JGAAP)

FY2017 Results(IFRS)

ChangeRevenue (IFRS) /Net sales (JGAAP)

748.1

740.6

-7.5

Operating Profit (IFRS) /Operating income (JGAAP)

76.5

71.2

-5.3

Profit before tax (IFRS) /Income before provision for income taxes(JGAAP)

81.7

62.5

-19.2

Profit attributable to owners of parent (IFRS) /Net income attributable to owners of the parent(JGAAP)

78.2

42.8

-35.4

2018/5/11

No data copy / No data transfer permitted

【Supplementary Materials (JGAAP/IFRS) 】 FY2017 Full Year Results (2) Factors Influencing Operating Profit

Full Year(Billions of yen)

Stop onamortization of
goodwill＋8.6

Capitalization ofdevelopment expenses＋1.6

Retirement
benefit-related
adjustments-1.3

Reclassification

Others

-4.6

-9.6

•

76.5
•
•
•
•

Lease-related adjustments, change indepreciation method for property,
plant and equipment, etc.

Loss related to securities litigation: -¥6.9 billion
Net loss of investment in affiliated companies carried on the equity method : -¥1.3 billion
Loss on sales of investments in subsidiaries and affiliates: -¥0.8 billion
Impairment loss on fixed assets: -¥0.2 billion

71.2-¥5.3 billion
Operating income(JGAAP)37

2018/5/11

No data copy / No data transfer permitted

Operating Profit(IFRS)

【Supplementary Materials (JGAAP/IFRS) 】 FY2017 Full Year Results (3) Factors Influencing Profit(Billions of yen)

Stop onamortization of
goodwill＋8.6

Full Year
Capitalization ofdevelopment expenses＋1.3

Retirement
benefit-related
adjustments-1.9

Tax-related
adjustments

-22.7

78.2

Others-20.7•

Recognition of gains on sales of investment securities
under total accumulated other comprehensive income
instead of extraordinary income: -¥16.5 billion

42.8-¥35.4 billion
Net income attributable toowners of the parent(JGAAP)38

2018/5/11

No data copy / No data transfer permitted

Profit attributable toowners of parent (IFRS)【Supplementary Materials (JGAAP/IFRS) 】 FY2017 Full Year Results (4) By segment
Full Year（Billions of yen）
MedicalScientific
Solutions
Imaging

OthersElimination andcorporate
Consolidated
Total
39

2018/5/11

FY2017 Results(JGAAP)

FY2017 Results(IFRS)

ChangeRevenue (IFRS) / Net sales (JGAAP)

575.3

570.4

-4.9

Operating Profit (IFRS) /Operating income (JGAAP)

115.5

114.7

-0.8

93.2

93.4

＋0.2

5.3

5.9

＋0.6

65.6

62.8

-2.8

0.5

0.2

-0.3

Revenue (IFRS) / Net sales (JGAAP)

14.0

14.0

0

Operating Profit (IFRS) /Operating income (JGAAP)

-4.6

-1.1

＋3.5

-

-

-

Operating Profit (IFRS) /Operating income (JGAAP)

-40.2

-48.5

-8.3

Revenue (IFRS) / Net sales (JGAAP)

748.1

740.6

-7.5

76.5

71.2

-5.3

Revenue (IFRS) / Net sales (JGAAP)
Operating Profit (IFRS) /Operating income (JGAAP)
Revenue (IFRS) / Net sales (JGAAP)
Operating Profit (IFRS) /Operating income (JGAAP)

Revenue (IFRS) / Net sales (JGAAP)

Operating Profit (IFRS) /Operating income (JGAAP)

No data copy / No data transfer permitted