FY 2020-2022 Medium-Term Management Plan
(Version Updated Due to the COVID-19 Pandemic: Adjusted Upward)

May 12, 2021
Teruhisa Ueda
President & CEO
Shimadzu Corporation

Contents of Presentation on May 20, 2020

Contents
I. Review of the Previous Medium-Term
Management Plan･･･････ p. 4-p. 8• Results from Previous Medium-Term Management
Plan and FY 2019 Results• FY 2019 Net Sales by Business Segment• Collaborations with Research Institutions• Investment in R&D and Capital Equipment• M&A

II. Overview of the New Medium-Term
Management Plan･･･････ p. 10-p. 16• Basic Concept“Become a Company That Solves Challenges in Society
in Collaboration with Partners All Around the World”
Accelerate Creating Systems for Solving Challenges inSociety• Key Points of the New Medium-Term Management Plan
• Top Priority Measure: Promoting Infectious Disease
Countermeasure Projects• Four Growth Strategies• Investment in Capital Equipment and R&D• FY 2022 Performance Targets• Capitalization Policy

III. Strategic Measures in the New Medium-Term･･･････ p. 18-p. 25
Management Plan
• Strengthening the Foundation for Growth: Reforming Business
Portfolios• Sales Plan by Business Segment• Strengthening Key Businesses for Analytical & Measuring
Instruments Segment(1) Liquid Chromatographs (LC)(2) Mass Spectrometers (MS)• Strengthening Businesses outside Japan• Strengthening Businesses with Recurring Revenues• Expanding Businesses in Growth Fields: Startup Incubation
Center

FY 2020-2022 Medium-Term Management Plan

2

Revised on May 12, 2021

Contents for Today —Update Due to the COVID-19 Pandemic—
II. Overview of the New Medium-Term
Management Plan･･･････ p. 4-p. 15

III. Strategic Measures in the New Medium-Term
Management Plan･･･････ p. 16-p. 25• Changes in Business Environment Due to the COVID-19
Pandemic and New Key Topics• Key Changes in the Medium-Term Management Plan
• Basic Concept• Key Points of the New Medium-Term Management Plan
• Important Emergency Challenges: Infectious Disease
Countermeasure Projects• Important Emergency Challenges: Infectious Disease
Countermeasure Projects Phase II• Four Growth Strategies• Investment in Capital Equipment and R&D• Performance Targets: FY 2022 Performance Targets• Capitalization Policy• Strengthening the Foundation for Growth: Reforming Business
Portfolios• Sales Target by Business Segment• Strengthening Key Businesses for Analytical & Measuring
Instruments Segment(1) Liquid Chromatographs (LC)(2) Mass Spectrometers (MS)• Strengthening Businesses outside Japan• Implementing DX Measures• Strengthening Businesses with Recurring Revenues• Expanding Businesses in Growth Fields: Startup Incubation Center• Implementing Sustainability Management
Reference

I. Review of the Previous Medium-Term Management Plan･･･････ p. 27-p. 32• Results from Previous Medium-Term Management Plan and FY 2019
Results• FY 2019 Net Sales by Business Segment• Collaborations with Research Institutions• Investment in R&D and Capital Equipment• M&A
FY 2020-2022 Medium-Term Management Plan

3

Revised on May 12, 2021

II. Overview of the New Medium-Term Management Plan
II. Overview of the New Medium-Term Management Plan･･･････ p. 4-p. 15• Changes in Business Environment Due to the COVID-19 Pandemic and New Key Topics• Key Changes in the Medium-Term Management Plan

• Basic Concept• Key Points of the New Medium-Term Management Plan
• Important Emergency Challenges: Infectious Disease Countermeasure Projects• Important Emergency Challenges: Infectious Disease Countermeasure Projects Phase II• Four Growth Strategies• Investment in Capital Equipment and R&D• Performance Targets: FY 2022 Performance Targets• Capitalization Policy

FY 2020-2022 Medium-Term Management Plan

4

Newly Added on May 12, 2021

Changes in Business Environment Due to the COVID-19
Pandemic and New Key Topics➢Due to the major changes in our business environment during the past year caused by the pandemic, new measures are
essential for achieving sustained growth.
Changes in Business Environment Due to Pandemic

1. Prolonged COVID-19 pandemic➢ New infections of variant forms are increasing (in India, etc.).
➢ Vaccination-based preventive measures are progressing.
➢ Investment in research of infectious disease countermeasures

2. Various risks increased due to nationalism➢ Increased risk of technology leaks➢ Intentions to consolidate supply chains domestically➢ Stricter export controls

3. Acceleration of measures for achieving carbon
neutrality➢ Measures by various countries to achieve carbon neutrality areaccelerating.
➢ Measures associated with transition to EV are accelerating.
➢ Hydrogen use, renewable energies, and other new measures areaccelerating.

4. Rapid advancement in digital technologies andchanges in work practices➢ Rapid advancement in remote/online technologies➢ Working practice changes using the latest technologies, such as
teleworking

New Key Topics and Measures at Shimadzu

1. Implementing phase II of infectious disease
countermeasures➢ Offer new purpose-specific testing methods.
➢ Manage testing data via network and link to other software.
➢ Expand joint R&D for infectious disease countermeasures globally.

2. Managing new risks➢ Strengthen system security.
➢ Reexamine global manufacturing supply chains.
➢ Strengthen export control capabilities.

3. Strengthening sustainability management➢ Strengthen SDGs and ESG measures.
➢ Implement measures for achieving carbon neutrality.
➢ Offer new solutions for measuring hydrogen, measuring batteryrelated quantities, etc.

4. Rapid advancement in digital technologies andchanges in work practices➢ Strengthen remote operability and active use of AI in products.
➢ Implement DX measures for offering customer solutions andreforming businesses.
FY 2020-2022 Medium-Term Management Plan

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Newly Added on May 12, 2021

Key Changes in the Medium-Term Management Plan
(FY 2020 to FY 2022)(1) Final-year targets of medium-term management plan adjusted upward➢ Performance targets for key businesses➢ Performance targets for businesses being reorganized(2) Strategies and measures reassessed due to upward adjustments➢ Create Phase II infectious disease countermeasure projects➢ Measures for key models(3) Measures for new topics➢ Implement DX measures➢ Sustainability management (including carbon neutrality)

FY 2020-2022 Medium-Term Management Plan

6

Contents of Presentation on May 20, 2020
II. Overview of the New Medium-Term Management Plan—1/7

Basic Concept: Become a Company That Solves Challenges in Society
in Collaboration with Partners All Around the World➢ During the previous medium-term management plan, we started initiatives to “become a company that solves challenges in society—Creating and Implementing Systems for Solving Challenges in Society—

Challenges
in society

Customerchallenges

Launching new
businesses

Mainlyexpandingexisting
businesses

Previous Medium-Term
Management PlanFY 2017 to FY 2019

Challenges
in society

Customerchallenges

Current Medium-Term
Management PlanFY 2020 to FY 2022

Achieve ongoing growthand become an entity evenmore needed by customers
and society.

Engage in Solving Challenges in Society

Shimadzu

Current Plan

Become a Company That Solves Challenges in Society
in Collaboration with Partners All Around the World

Previous Planin collaboration with partners all around the world” and deployed necessary investments and joint research accordingly.
➢ Based on those initiatives, the new medium-term management plan specifies creating systems for using Shimadzu products andservices to solve challenges in society, commercializing businesses based on promoting those solutions in society, and thereby
creating new markets.

R&D partners

Jointly develop and release new products.

Create Systems for Solving Challenges inSociety
Establish businesses based on new products,
technologies, or services.
Strategic Partners
Partners for strategically promoting solutions insocietyBusiness Partners
Partners that actually use the new systems

FY 2020-2022 Medium-Term Management Plan

7

Revised on May 12, 2021
II. Overview of the New Medium-Term Management Plan—2/7—Key Points of the New Medium-Term Management Plan—
SloganBecome a Company That Solves Challenges in Society in Collaboration with
Partners All Around the World—Creating and Implementing Systems for Solving Challenges in Society—FY 2022
Performance Target

Measures for Important
Emergency Challenges

Four Growth
Strategies
Strengthen theFoundation for
GrowthNew: Net sales of at least 430.0 billion yen, operating income of at least 57.0 billion yen,
and an operating margin of at least 13.3 %Original: Net sales of at least 400.0 billion yen, operating income of at least 46.0 billion yen, andan operating margin of at least 11.5 %Infectious Disease Countermeasure Projects Phase II

Strengthen/expand
key businesses

Strengthen/expand
businesses outsideJapan

Expand businesses
with recurring
revenues

Expand businesses
in four growth fields• Strengthen/expand business portfolio• Develop human resources and reform human resource systems• Implement DX measures• Strengthen financial and development functions• Strengthen governance• Manage sustainability
FY 2020-2022 Medium-Term Management Plan

8

Contents of Presentation on May 20, 2020
II. Overview of the New Medium-Term Management Plan—3/7

Important Emergency Challenges—Promoting Infectious Disease Countermeasure Projects—➢ Given that fighting the infectious disease pandemic is a critical challenge for society, we will strengthen measures to offer solutions for

Infectious Disease
Countermeasures

Coronavirus
Countermeasures

analyzing viral, bacterial, and other pathogens by developing new products, in addition to offering our current line of instruments andreagents.
➢ We will contribute to society by actively collaborating with academic institutions, hospitals, healthcare institutions, and others to “create
systems for fighting infectious diseases,” rather than simply offering physical products. Collaborations will be focused on two
perspectives. One is to prevent the spread of the new coronavirus, which is currently a serious problem for society. The other perspective
is for developing countermeasures for infectious diseases in general.
Testing Accuracy Control and Therapeutic Drug Development
Pathological Diagnosis
Virus Testing
Infection Prevention
SupportNew Coronavirus Detection Reagent Kit

Enables PCR test in only 70
minutes using simple pretreatment

Mobile X-Ray System(Pneumonia Examination)

Network of Infectious Disease
Countermeasures
Virus Testing

Pathogen Testing

A review of thereagent kit is postedon the National
Institute of Infectious
Diseases website.

Simultaneous Multi-Pathogen
Genetic Detection System
Simultaneously detects multiple genes
involved in viruses and bacteria that cancause infectious diseases
Product line of about
20 types of kits for
detecting respiratory
infectious diseases.

Datamanagement
network

Patients can be examined for pneumonia
from their bedside in a patient room or ICU.

New Measures

System for Measuring Blood
Concentration of Candidate Therapeutic
Drugs for the Coronavirus

Using a stable isotope reagent (standard
substance), an LCMS system can be used tomonitor the concentration of candidate
coronavirus therapeutic drugs measured in the
bloodstream.

New Therapeutic Drug Development
Support System
Joint development with outside entities globally➢Analysis of metabolic changes associated withviral infections, for example• Improve image resolution.
• Strengthen network systems.
• Develop virus elimination systems basedon optical or other technologies.
Mobile X-Ray System

Microorganism
Identification MS
FY 2020-2022 Medium-Term Management Plan

9Newly Added on May 12, 2021

Infectious Disease Countermeasure Projects —First-Year Results—➢ Improved ability to concurrently implement multiple cross-departmental projects and collaborate between departments.
➢ Aimed to create systems for fighting infectious diseases, rather than offering only products, by actively collaborating with academia,

hospitals, healthcare institutions, and others.
➢ Contributed to international society by engaging in countermeasures for preventing the spread of COVID-19 and fighting infectious
diseases in general.
Pathological Diagnosis(Pneumonia Examination)

Virus Testing
Products

PCR testing system
PCR testing reagent

Creating Systems

PCR testing business
Jointly operated with Oike
Clinic.

Mobile X-ray system(pneumonia examination)

Kyoto Sangyo University PCR
Testing Center

System for measuring blood concentrationof candidate therapeutic drugs for thecoronavirus

Support for Preventing Infection
Patients can be examined forpneumonia from their bedside in apatient room or ICU.

Provided support
for establishingcenter.

Established new virus testing method using
exhaled breath and deployed healthcare
methods using exhaled breath, including
predicting progression to severe diseases(Collaboration with
Tohoku University)

Displaying
results

Therapeutic Drug Development Support

Standards testing fordisinfectant ethanol

Infectious disease
countermeasures
Patient self-interview
systemVirus proteins

Energy metabolites
Patient infectedwith COVID-19

Inflammatory metabolites

Virus genomes

FY 2020-2022 Medium-Term Management Plan

10Newly Added on May 12, 2021
II. Overview of the New Medium-Term Management Plan—3/7

Important Emergency Challenges—Promoting Infectious Disease Countermeasure Projects Phase II—➢ In addition to previous measures, also implement collaborations in and outside Japan for preventing infections, such as developing new

testing methods and building testing data management systems.

Virus Testing
New PCR testing
reagent(for variants, etc.)

Virus Monitoring

Testing Data Management System

PCR testing system Displaying results
Management
database

Monitoring coronaviruses in sewer
water to predict virus spread
Epidemiological Survey of Sewer Water
Week 1

Week 2

Week 3

Virus proteins

N-Protein
Energy metabolites

S-Protein
M-Protein

Inflammatory metabolites

E-Protein
Gene

Without
symptoms

Test order

Rapid virus testing
MALDI-TOF/MS

Virus testing and severity
prediction
LCMS

Diagram of Novel Coronavirus

CreatelabelsSupport for establishing PCR
testing centers incompanies/universities

Not detected

Results
notification

Healthmanagementdata

Not detected

Detection 1

Facility B

Not detected

Not detected

Human Infection Testing

Virus genomes(created based on National Institute of Infectious
Diseases website and other sources)

Creating
Systems

Facility A

Withsymptoms

Test results

Products

Water effluent from facility toilets surveyed by periodic monitoring (at least once a week)

Data management system

Not detected

Negative

Positive
Isolateapproprivately.

Identify infected subjects, including those tested positive
without symptoms, and then use data to prevent infection
spread.

Large-scale variant
analysis based onwhole genome
analysis
PCR/pretreatment

Whole-genome
sequencing

Specimens

Overview of
Kyoto Model
PCR testing
system and kits

FY 2020-2022 Medium-Term Management Plan

11

Content in Red Added on May 12, 2021
II. Overview of the New Medium-Term Management Plan—4/7—Four Growth Strategies—
Four Growth Strategies

Key Measures➢

Strengthen/expand key
businesses

Strengthen/expand
businesses outsideJapan
Strengthen businesses
with recurring revenues

➢
➢
➢
➢

➢

➢
➢

Expand businesses infour growth fields

➢

➢
➢
➢

Strengthen competitiveness of key product lines, mainly liquid chromatographs (LC) and mass
spectrometers (MS). Develop new markets and strengthen measures necessary for increasing market
share, especially outside Japan.
Strengthen high-end products with higher resolution and/or sensitivity.
Expand/improve product line of fully automatic pretreatment systems and other products based ontechnologies such as AI, IoT, or robotics.
Strengthen businesses outside Japan and expand businesses especially in pharmaceutical, chemical,
healthcare, environmental testing, and government/academia fields.
Offer various kinds of solutions globally by strengthening partnerships with strong partners in various
regions of the world and by strengthening measures in pharmaceutical, food science, environmental, orother regulatory compliance fields.
Strengthen the product line of consumables and offer a diverse variety of solutions, such as new service
packages.
Also develop business models based on new billing systems, attract new customers, and develop new
fields.
Advanced healthcare: Accelerate commercialization in preventive, diagnostic, treatment, and other fields,such as dementia and cancer treatment.
Environmental/energy: Strengthen ability to offer solutions for electric mobility, storage batteries, andrenewable energy.
Materials: Promote materials informatics, which combines data from measuring materials and analyzing
components.
Infrastructure: Develop businesses that combine existing seeds with new technologies.
Use Startup Incubation Center to accelerate commercialization of businesses in the four growth fields.
FY 2020-2022 Medium-Term Management Plan

12

Content in Red Added on May 12, 2021
II. Overview of the New Medium-Term Management Plan—5/7—Investment in Capital Equipment and R&D—
➢ Capital equipment investment: Expand/improve the business base mainly outside Japan, such as by strengthening sales bases and Innovation Centers.
➢ R&D: Develop technologies and strengthen the competitiveness of key businesses, mainly for liquid chromatographs and mass spectrometers.
Accelerate R&D in advanced fields, such as infectious disease countermeasures, advanced healthcare, innovative biotechnologies, and carbon
neutrality.
➢ M&A and capital participation: Strengthen mainly LC and MS businesses (expand reagent, consumable, and instrument product lines and expand
sales/service networks).

Capital Equipment Investment: 54.0 billion yen (14.5 billion yen invested in first year)• Strengthening the business base outside Japan
North America
Sales/service: Expand laboratory training center; Manufacturing: Expand analytical instrument manufacturing
capacity.
EuropeSales/service: Expand/improve clinical laboratory and establish new branch.
China
Development: Establish joint laboratory for clinical software, etc.; Manufacturing: Expand analytical instrument
manufacturing capacity.
Other Asian countries Manufacturing: Strengthen in-house manufacturing of analytical instruments.
• Other investments
New research building at Technology Research Laboratory (completed October 2020), strengthen manufacturing function (at Sanjo Works,etc.), and so on.

R&D: 53.0 billion yen (15.7 billion yen invested in first year)• Key businesses: LC and MS• Key topics: Infectious disease countermeasures, advanced healthcare, food science,
carbon neutrality, advanced analysis, the brain/five senses and innovative
biotechnology, AI, etc.

“Shimadzu, Society and Innovation” describes our involvement with customers and partners and describes, in terms of
Shimadzu engineers, how Shimadzu technologies and products help solve challenges in society and generate innovation forachieving a better society.

FY 2020-2022 Medium-Term Management Plan

13

Revised on May 12, 2021
II. Overview of the New Medium-Term Management Plan—6/7—Performance Targets—
FY 2022 corrected performance targets: Net sales of at least 430.0 billion yen (increased 30.0 billion yen) andoperating income of at least 57.0 billion yen (increased 11.0 billion yen)
➢ The first year, FY 2020, was impacted by the pandemic, but significantly exceeded the target specified at the beginning of the year

due to infectious disease countermeasure projects, emergency management measures, and other measures.
➢ By steadily implementing strategic measures specified in the new medium-term management plan, we plan to restore a growthtrend by the second and third years (FY 2021 and FY 2022, respectively).

New Target

Units: Billions of yen

FY 2020

FY 2022 Target

Net Sales
Operating Income
Operating Margin

385.4
41.8
10.9%

393.5
49.7
12.6%

At least 430.0
At least 57.0
At least 13.3%

ROE

10.8%

11.3%

At least 10%

Average Foreign
Exchange Rate

US$€

Units: Billions of yen

Comparison
to Original
TargetFY 2019

Net Sales
Operating Income
Operating Margin
Average Foreign
Exchange Rate

US$€

Increasefrom FY 2019

44.6
15.2
—

¥108.78¥120.86¥106.11¥123.75¥105.00¥120.00

FY 2022 Original Target

FY 2022 New Target

Increasefrom Original Target

Percent Increase
from Original Target

30.0
11.0

7.5%
23.9%
1.8%

At least 400.0
At least 46.0
At least 11.5%

At least 430.0
At least 57.0
At least 13.3%¥105.00¥115.00¥105.00¥120.00—

Percent Increase
from FY 2019

11.6%
36.2%
2.4%

FY 2020-2022 Medium-Term Management Plan

14

Content in Red Added on May 12, 2021
II. Overview of the New Medium-Term Management Plan—7/7—Capitalization Policy—➢

In addition to maintaining an ROE of 10 % or higher, strengthen/reassess each business portfolio in terms of investment
effectiveness.
➢ Provide value to stakeholders and contribute to society in balance with investing for future growth, mainly in R&D andcapital equipment.
➢ We will continue to maintain stable dividends based on a target 30 % total shareholder return.

ROE
Dividend (yen)Total Shareholder Return

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021 (Estimate)

5.5%

9.4%

11.1%

11.5%

11.7%

10.8%

11.3%

At least 10%

13

18

20

24

28

30

34

35

20.8%

22.2%

23.3%

23.7%

25.4%

27.8%

27.8%

27.9%

Shimadzu Integrated Reporthttps://www.shimadzu.com/ir/library/annual.html

FY 2020-2022 Medium-Term Management Plan

15

Content in Red Revised on May 12, 2021

III. Strategic Measures in the New Medium-Term Management Plan
III. Strategic Measures in the New Medium-Term Management Plan ････ p. 16-p. 25• Strengthening the Foundation for Growth—Reforming Business Portfolios• Sales Target by Business Segment• Strengthening Key Businesses for Analytical & Measuring Instruments Segment(1) Liquid Chromatographs (LC)(2) Mass Spectrometers (MS)• Strengthening Businesses outside Japan• Implementing DX Measures• Strengthening Businesses with Recurring Revenues• Expanding Businesses in Growth Fields—Startup Incubation Center• Implementing Sustainability Management

FY 2020-2022 Medium-Term Management Plan

16

Revised on May 12, 2021
III. Strategic Measures in the New Medium-Term Management Plan—1/7—Strengthening the Foundation for Growth— Reforming Business Portfolios➢ Improve the profitability of current businesses and reassess the future growth potential of each business and business category.

Reallocate
Resources

GrowthGrowth➢ Create new businesses based on synergies between different business segments.

Key
Businesses

Analytical & Measuring Instruments✓ Key models (liquid chromatographs, mass spectrometers, etc.): Expand/improve product lines, including
pretreatment systems.
✓ Models designated for strengthening/profitability improvement (testing machines, environmental
measuring instruments, etc.): Strengthen sales expansion outside Japan.
✓ Columns/reagents: Expand/improve consumables business and strengthen maintenance services.

Businesses forStrengthening

Industrial Machinery✓ Expand global turbomolecular pump market share, expand industrial furnaces, and strengthen service
business.
✓ Strengthen hydraulic equipment supply capabilities in Japan and China and expand market share in China,
North America, and Europe.

Businesses for
Rebuilding

Medical Systems✓ Expand added value by strengthening software functionality, such as with image processing and AI
technologies.
✓ Expansion in North America: Increase penetration of hospital networks and strengthen direct sales/service
capabilities.

Businesses for
Reorganization

Aircraft Equipment✓ Reduce expenses further and accelerate business reorganization.

FY 2020-2022 Medium-Term Management Plan

17

Revised on May 12, 2021
III. Strategic Measures in the New Medium-Term Management Plan—2/7—Sales Target by Business Segment—➢ Analytical & Measuring Instruments: Given investment activity in pharmaceuticals and life sciences, expand key models,such as liquid chromatographs and mass spectrometers, and businesses withrecurring revenues.
➢ Industrial Machinery: Given investment in semiconductor field due to 5G, for example, expand TMP business, andexpand market share especially at major semiconductor manufacturing equipment manufacturers.
➢ Medical Systems:
Strengthen software and expand business in North America.
➢ Aircraft Equipment: Reduce expenses further and accelerate business reorganization.

Units: Billions of yen

Analytical & Measuring
Instruments
Industrial Machinery
Medical Systems
Aircraft Equipment
Other
Total

FY 2019

FY 2020

FY 2022 Original Target

FY 2022 New Target

Versus Original Target

Increasefrom FY 2019

Percent Increase
from FY 2019

236.2

248.6

254.0

270.0

16.0

33.8

14.3%

43.0
70.2
30.0
6.0
385.4

45.1
66.9
28.6
4.4
393.5

50.0
66.0
25.0
5.0
400.0

60.0
72.0
23.0
5.0
430.0

10.0
6.0
(2.0)
0.0
30.0

17.0
1.8
(7.0)
(1.0)
44.6

39.4%
2.6%
-23.4%-16.3%
11.6%

FY 2020-2022 Medium-Term Management Plan

18

Content in Red Changed on May 12, 2021
III. Strategic Measures in the New Medium-Term Management Plan—3/7—Strengthening Key Businesses for Analytical & Measuring Instruments Segment (1)—Liquid Chromatographs (LC)Policies: (1) Expand line of pretreatment/detector products, etc., (2) Strengthen core products, (3) Expand/improve dedicated systems andconsumables, and (4) Expand use of AI/networking
Points forStrengthening

Units:
Billions of yen

Expand/Improve
Product LinesLC Net Sales

Pretreatment
Detector

Increase MS
Efficiency

FY 2019
Results

63.9

Expand New Pretreatment
System Product Line• Improve line of specialized
pretreatment units.

• Strengthen multi-analyte pretreatment
systems.

FY 2020
Results

FY 2022 New Target(Original Target)

67.0(Versus FY 2019)75.0 (73.0)

Strengthen Core Products• High-end LC (UHPLC and new detectors)

Percent Increase(Versus FY 2019)

11.1

17.4%

Expand/Improve Specialized
Systems• Specialized analyzers• Application
systems• Standard and all-in-one LC models

Compliance with
Regulations• Develop robotic pretreatment
systems.

Increase• Supercritical SFC• Preparative LC• Columns
andconsumableparts

Develop new demand for
integrated HPLC systems
with monolithic columns,
on-site analyzers, etc.

Vials
(Sample vials)

Utilize AI Technology

HPLC columns

Monolithic columns (new)Networking with IoT/AI
Compatibility
FY 2020-2022 Medium-Term Management Plan

19

COVID-19 Testing Added on May 12, 2021
III. Strategic Measures in the New Medium-Term Management Plan—4/7—Strengthening Key Businesses for Analytical & Measuring Instruments Segment (2)—Mass Spectrometers (MS)Policies: Expand business by (1) expanding product lines, (2) strengthening application systems, and (3) strengthening databases.
Units:
Billions of yen
MS Net Sales

FY 2019
Results

FY 2020
Results

40.5

43.7

Smaller Size

Utilize AI
Technology

Compliance with
Regulations

Increase(Versus FY 2019)

Percent Increase(Versus FY 2019)

10.5

51.0

25.9%

Expand/Improve Product Lines

Points for Strengthening MS
Improve Basic
Performance

FY 2022 Target(No Changes)

Increase Competitivenessand Expand Market Share

LCMS

GCMS

Expand Application Fields

MALDI MS

Direct MS

Develop New Fields

Imaging Mass
Spectroscope

Compact MS

Toxicological drugs: GCMS/LCMS; Residual pesticides: GCMS/LCMS; COVID-19

Strengthen
testing
Fully-automatedclinical:
LCMS; Dementia: Amyloid MS; Microorganism
Application Systems
identification: MALDI

Strengthen
Databases

Metabolites, lipids/disease markers, forensics, environmental pollutants,functionally-enhanced foods, residual pesticides, and infectious diseases

FY 2020-2022 Medium-Term Management Plan

20

Contents of Presentation on May 20, 2020
III. Strategic Measures in the New Medium-Term Management Plan—5/7—Strengthening Businesses outside Japan—
Strengthening Innovation Centers and Manufacturing/Sales Functions

Strengthen
Manufacturing/Sales

Innovation Centers◼ Innovation Centers: Create new value that can be offered by working together with customers to help improve understanding and solve customer challenges.
◼ Strengthen manufacturing and sales: Build the foundation for additional business growth by strengthening production locations in China and sales bases inNorth America and Europe.
Clinical AI Innovation Center(China)Environmental Innovation Center(China)Transport Innovation Center(Japan)Pharmaceutical Innovation Center(North America)

Environment

Materials

Healthcare

Healthcare

Herbal Remedies (Guangzhou)
× Analysis × AI (Shenzhen)

Work with water quality regulatory
authorities and research
institutions (Hangzhou).

Work with automotive
manufacturers.

Engage in dialogue withregulatory authorities.

(Analytical/Medical)

Manufacturing(Analytical)

Manufacturing(Medical)Sales and Service(Analytical)

Strengthen locations
in Europe.

Expand production in China.
(local production for local
consumption)

Strengthen production
capacity in China.

Strengthen locations inNorth America.

Sales and Service

21Newly Added on May 12, 2021

Implementing DX Measures➢ Strengthen measures to expand/improve offering of information/services to customers (business DX).
➢ Perform business processes more intelligently and expand business opportunities by centralizing global information(business process DX).

Business DX

Businesses with recurring
revenues

・ Use IoT and web camera
technologies to monitor
instrument operating status.
・ Promote supplying consumables.

Provide technicalinformation

・ Deploy DX for exhibitions/events.
・ Deploy DX for technicalpresentations.

Provide optimal products
and information.

Implement DX measures

Cloud(New DX Strategy Management
Department already established)
Remote monitoring of water quality

Conduct online exhibitions.

Business process DX

R&D

Perform business processes
more intelligently.

Shimadzu DX Measures
・ Build sophisticated information platform.
・ Expand opportunities to offer products, services, andconsumables to customers.
・ Standardize and centralize regional information
globally.

・ Share technical and marketing
information.
・ Improve R&D efficiency.

Sales and marketing

・ Obtain global understanding ofcustomer needs.

Manufacturing

・ Use AI/robotics to optimize
systems and improve quality.

FY 2020-2022 Medium-Term Management Plan

22

Contents of Presentation on May 20, 2020
III. Strategic Measures in the New Medium-Term Management Plan—6/7—Strengthening Businesses with Recurring Revenues—
Deploying New Businesses with Recurring Revenues Using AI/IoT➢ Use
AI, IoT, or other technologies to launch new forms of business that generate subscription income or other recurring
Technologies
revenues.
➢ Also build and maintain a foundation of data platforms necessary for such businesses.
Improve Quality of Life Using Body Data or Other
Medical Information

Reduce Labor Requirements and Improve Productivity ofDevelopment, Manufacturing, and Inspection Processes

Individuals, medical institutions, etc.

Companies and research institutions (measurement technicians, operators, etc.)

Health advice andinformation

Pay-as-you-go or regularmonthly payments

E-learning and working practicereforms

Vital sign and examination
information

Diagnostic assistance andpreventive maintenanceOperating and labor
information

Preventive maintenance andoperation management

Start Businesses with
Recurring Revenues

Pay-as-you-go or regularmonthly payments

Data Platform—Use IoT/AI to collect/analyze data, expand customer contacts, and establish closer relationships—

Aim to offer consumables, software, and services optimized for the actual customer objectives
and usage conditions.
Expand/improve consumables product lines and services.
Build infrastructure, such as an e-Shop.

Strengthen partnerships withstrategic and business partners.

FY 2020-2022 Medium-Term Management Plan

23

Contents of Presentation on May 20, 2020
III. Strategic Measures in the New Medium-Term Management Plan—7/7—Expanding Business in Growth Fields— Promoting Solutions in Society➢ Specify specific areas to target for creating new businesses, such as dementia examinations/interventions or infectious disease testing,develop products and perform feasibility studies involved in those target areas, and transfer the businesses to one of the businesssegments. Alternatively, also function as a gatekeeper that reviews exit strategies, such as selling or withdrawing from the business.
➢ Engage in open innovation intended to commercialize the business and create systems for actually solving challenges in society.

Specific Areas➢ Advanced healthcare◆ Dementia
examination/intervention◆ Infectious disease testing◆ Cytoplasm use,etc.

➢ Materials➢ Environment/energy➢ Public infrastructure,etc.

Business Concept

Product Development

Feasibility Study

Commercialize
Business

Startup Incubation Center
Establish Divisional
Department

Within Shimadzu• Technology Research Laboratory• Corporate Product Design Center• Corporate Strategy Planning
Department,
etc.

Outside Shimadzu• Startup companies• Research institutions• Corporations,etc.

Cultivatebusinesses• Feasibility study• Product improvements and outside

partnerships for business
commercialization• Marketing and quality assurancefunctions• Compliance with Pharmaceuticaland Medical Device Act or otherregulations, establishing rights, etc.

Exit

Establish
Corporation

Sell
Withdraw

Accelerate Open Innovation
Work together with strategic partners, business partners, or startups toensure the products/technologies that solve challenges in society are
actually implemented in society.
FY 2020-2022 Medium-Term Management Plan

24

Newly Added on May 12, 2021

Implementing Sustainability Management◼ Use sustainability management to implement environmental, social, and governance (ESG) measures, such as “zero-carbon commitment” measures andinfectious disease countermeasures.
◼ Improve our ESG rating from ESG assessors and aim to achieve a positive cycle of improvement that further strengthens measures.

Key Concepts of Sustainability Management
Zero-carbon commitment
Participate in all majorinternational and domestic
initiatives.

Infectious disease
countermeasures

Society(S)

Propose and support
testing capabilities atclinics, universities,
companies, etc.
Governance(G)

Consistent with circular economy
Increase service life of
Shimadzu instruments (updateparts and software).

Information
disclosure withintegrated
reports and on
the website

Health management: Contribute to the health andlongevity of society by using products and technology to help
maintain the health of employees and their family members.
Contribute to maintaining the health of employees/their families
and the health and longevity of society through our businesses.
Training human resources (reskilling) and cultivating diversity
Multiple jobs within the company, etc.

Strengthen internal controls

Comply with revised CG codes

Hierarchical level-specificcommittees and training

Use integrated reports andwebsite to disclose overview

Promotemeasures toimprove rating.

Implement concrete measures
to improve rating.

Build a positive cycleof improvement.

Environment(E)

Improving ESG Rating⚫ Nikkei SDGs Management Survey(system for assessing about 700
companies in Japan)
FY 2021
within top 30

FY 2019
within top 117

FY 2020
within top 39⚫ CDP(countermeasures for climate change
and water)
FY 2021
FY 2020
C-rating

B-rating⚫ FTSE (index used by GPIF)

Aim to use index by 2022.

Instill corporate philosophy, management principle, and CSR charter throughout the company.
FY 2020-2022 Medium-Term Management Plan

25

This document contains forward-looking statements. Forecasts of future businessperformance that appear in this document are predictions made by the company’s
management team that are based on information available when these materials wereprepared and are subject to risks and uncertainties. Consequently, actual results may
differ materially from the forecasts indicated above. Factors that may influence actual
business performance include, but are not limited to, economic conditions within andoutside Japan, changes in technologies in markets, and fluctuations in exchange rates.

Contents of Presentation on May 20, 2020

I. Review of the Previous Medium-Term Management Plan
I. Review of the Previous Medium-Term Management Plan ･･･････ p. 27-p. 32• Results from Previous Medium-Term Management Plan and FY 2019 Results• FY 2019 Net Sales by Business Segment• Collaborations with Research Institutions• Investment in R&D and Capital Equipment• M&A

FY 2020-2022 Medium-Term Management Plan

27

Contents of Presentation on May 20, 2020
I. Review of the Previous Medium-Term Management Plan—1/5—Results from Previous Medium-Term Management Plan—(FY 2017 to FY 2019)
Basic Policy: “Become a Company That Solves Challenges in Society in Collaboration with Partners All
Around the World”
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Changes in the External Business Environment (Political and Economic)• Uncertainties in the business environment increased, such as US-China trade frictions
and Brexit.
• In China, demand subsided in the food safety field and special demand forenvironmental testing (water quality) was temporary.
• In the US, there was a reactionary decline after measures to stimulate transition todigital medical equipment.
• From January 2020, effects of the new coronavirus outbreak became prominent,
especially in China. With travel restrictions and cities being locked down, limitations on
business activities impacted business results.

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Record-breaking results were achieved through the endof the third quarter of FY 2019, but both net sales andoperating income decreased (year-on-year) in the fourth
quarter (January to March) due to the new coronavirus.

Key Measures• Response to local needs was strengthened at the four Innovation Centers outside Japan.
• In China, products for new needs in pharmaceutical and chemical fields were
strengthened.
• In North America, sales channels were strengthened by M&A and sales were improved
with new medical products designed specifically for North America.
• The impact from the coronavirus was the greatest during the fourth quarter in China,
but industrial machinery (turbomolecular pumps) sales were strong for 5G applications.

FY 2020-2022 Medium-Term Management Plan

28

Contents of Presentation on May 20, 2020
I. Review of the Previous Medium-Term Management Plan—2/5—Results from Previous Medium-Term Management Plan (FY 2017 to FY 2019)—
Net Sales by Business Segment

Net Sales as Percent of Medium-Term Management Plan Final-Year (FY 2019) Target by Business Segment➢ Analytical & Measuring Instruments: Net sales only reached 93 % of target, due to stagnating market conditions during the second half ofthe plan, the coronavirus pandemic, and other factors, but has increased 12.9 % since FY 2016 and been a driver of overall results.
➢ Medical Systems: Record net sales resulted in 99 % of target. Sales increased for mobile X-ray systems used to diagnose pneumonia
caused by the coronavirus and also for angiography systems.
➢ Industrial Machinery: Given recovering capital investment levels for semiconductor manufacturing equipment, turbomolecular pumpsales drove results to achieve 108 % of target, but industrial furnace sales for ceramic applications also increased.
➢ Aircraft Equipment: Commercial aircraft equipment sales increased in North America and Ministry of Defense aircraft equipment sales
increased in Japan to achieve 104 % of target.

Units: Billions of yen

FY 2016
Results

Analytical & Measuring
Instruments
Medical Systems
Industrial Machinery
Aircraft Equipment
Other
Total

Medium-TermTargets

Results

FY 2019
Medium-TermTargets% of Target

Versus FY 2016
Increase

Percent Increase

209.2

253.0

236.2

93%

27.0

12.9%

64.4
36.2
26.7
6.0
342.5

71.0
40.0
29.0
7.0
400.0

70.2
43.0
30.0
6.0
385.4

99%
108%
104%
85%
96%

5.8
6.9
3.3
0.0
43.0

9.0%
19.0%
12.4%
-0.1%
12.5%

FY 2020-2022 Medium-Term Management Plan

29

Contents of Presentation on May 20, 2020
I. Review of the Previous Medium-Term Management Plan—3/5—Developing and Commercializing New Technologies throughStronger External Collaborations—➢ Open innovation-based collaborations with advanced customers and key opinion leaders (KOLs) aimed at solving challenges in society

were strengthened.
➢ Measures to create new technologies and businesses through joint research or investment involving academia or startup companies
were accelerated.
➢ The new medium-term management plan specifies establishing new businesses by creating new products, services, or applications
based on the results achieved from such measures.
Examination/Improvement of Mild Cognitive
Impairment: MCBI

Healthcare and Life
Sciences

Omics Applications: Osaka University➢ Create new products and businesses foromics applications and especially formetabolomics, which involves acomprehensive analysis of all moleculesin biological organisms.

➢ Improve mild cognitive
impairment (MCI) examination
accuracy.
➢ Confirm efficacy for MCI
recovery measures.
Blood Test for MCI
LC/MS

Confirmation of
Recovery Level from
Cognitive Impairment
NIRS

Oncogenomics Measures: iLAC

Next-Generation
Sequencer for
Analyzing Whole
Genomes

Metabolite/Protein
Analysis Using MS

Healthcare and Life
Sciences

Established Osaka University Shimadzu
Omics Innovation Research Laboratories(within the Osaka University campus in
Suita, Osaka Prefecture)

Healthcare and Life
Sciences➢ Participate in next-generation
genome information service
business.
➢ Develop next-generation
cancer diagnostic systemusing MS (multi-omics
analysis).

Development of Functionally-Enhanced Foods andStandardization of Testing Methods: NARO*

Food Science➢ Joint development and standardization of
new simple, quick, and accurate techniques
for analyzing food components withfunctional benefits
NARO Shimadzu Kyoto Laboratory
for Food Innovation within
Shimadzu Corporation (Kyoto)* NARO: National Agriculture and Food
Research Organization

FY 2020-2022 Medium-Term Management Plan

30

Contents of Presentation on May 20, 2020
I. Review of the Previous Medium-Term Management Plan—4/5—Investment in R&D and Capital Equipment—➢ Three-year total of R&D expenses was 49.0 billion yen, with R&D expenses 4.4 % of sales in FY 2019 (4.3 % in FY 2017).
➢ Strengthened R&D base, mainly at the Healthcare R&D Center and other sites in Japan, and expanded/strengthened medical systems,

hydraulic equipment, and other manufacturing capabilities.
➢ Made various capital equipment investments intended for future growth, with additional investments planned in the EU and the U.S.
during the new medium-term management plan.

Research Support

Ratio of R&D Expenses to Sales
FY 2019: 4.4 % (plan: 5 %)Manufacturing

3-year total: 49.0 billion yen(plan: 53.0 billion yen)

Capital Equipment Investment 3-year total: 56.6 billion yen (plan: 70.0 billion yen)

Service

R&D Investment

Healthcare R&D Center

Technology Research Laboratory

Application Development Center(New facility in Kyoto)(New building at Keihanna)(New facility in Kawasaki)• Investment: 9.3 billion yen• Promote integrated Analyticaland Medical solutions.

• Investment: 8.6 billion yen• Develop more sophisticated and diversified
analytical/measuring technologies.

• Investment: 0.7 billion yen per year
• Established facility for collaborating
on innovation.

Shimane Shimadzu(new building)

Tianjin Plant in China(new building)Philippines Plant(new building)• Investment: 1.7 billion yen• Expanded Medical Systems
production capacity.

• Investment: 2.2 billion yen• Expanded hydraulic equipment
production capacity.

• Investment: 0.37 billion yen• Expanded plant andproduction lines.

Strengthened Operations in China(Beijing/Guangzhou/Xian)Strengthened Industrial Machinery
Service Business
New Building at SKV in Korea• Built new analysis center.
• Established new seminar room.

• Investment: 0.55 billion yen• Expanded/improved TMP maintenance.
FY 2020-2022 Medium-Term Management Plan

31

Contents of Presentation on May 20, 2020
I. Review of the Previous Medium-Term Management Plan—5/5—Strengthening Business by M&A—
➢ Analytical & Measuring Instruments reagent/consumables product line expanded/improved and sales/service capabilities for products

and consumables strengthened in Korea.
➢ Medical Systems and Industrial Machinery products/services outside Japan switched to direct sales model to improve profitability andexpand businesses.

Analytical & Measuring Instruments: Aftermarket Sales and Service
Acquired French Reagent Manufacturer➢ Acquired Alsachim in France.
➢ Strengthened MS business in clinical fields by
including stable isotope reagents.

Changed Consumables Sales Subsidiary in
China to Wholly-Owned

Acquired Sales Subsidiary in Korea andEstablished New Company➢ Changed consumables sales subsidiary towholly-owned and established new company.
➢ Strengthened business for chromatography
columns, vials, and other consumables in China.

➢ Established sales/service subsidiary.
➢ Expanded business in Korea, mainly forpharmaceuticals, life sciences, and academia.

Medical Systems: Sales and Service

Industrial Machinery: Sales and Service

Acquired Sales Subsidiary in North America

Acquired Servicing Company in Germany➢ Acquired Core Medical Imaging, Inc. in the U.S.
➢ Strengthened sales and service in North America(Northwest region).

➢ Acquired Infraserv in Germany.
➢ Strengthened turbomolecular pump service capabilities in Europe.
➢ Strengthened relationships with major semiconductor
manufacturing equipment manufacturers.

FY 2020-2022 Medium-Term Management Plan

32