FY2017 Toshiba Tec Management Policy（Mid-Term Business Plan: MTBP）

August 30, 2017

Takayuki Ikeda
President & Chief Executive OfficerToshiba Tec Corporation© 2017 Toshiba Tec Corporation

Agenda1. Summary of FY2016

2. Business Environment/Strengths of TTEC
3. MTBP Vision, Policy & Strategy
4. Core Business
5. Solutions ＆ Service Business Development
6. FY2019 Financial Target

7. CSR Management© 2017 Toshiba Tec Corporation2

1-1. Trends of Business Results (Total)
FY2016：0perating income increased due to the recovery of theoverseas retail businessNet sales slightly decreased due to the impact of yen
appreciation
Net Sales/Operating Income (Billion yen)

498.9

524.6

532.8

520.0

403.7

497.6

3.9%
15.9
FY2012532.3※

5.0%
24.8

FY2013

2.9%

3.3%
17.1
FY2014

1.6 0.3%
FY2015※ Net sales calculated by the same exchange rates of FY2015

14.0（Forecast ofprevious MTBP)

14.6（Actual）

FY2016© 2017 Toshiba Tec Corporation3

1-2. Achievements and Issues

Achieve-ment■A steady progress of structural reforms
in the GCS business■Strategic moves to expand solutions
business center on the retail business■A healthy and stabilized financial baseIssues■Strengthening of our ability to makeproposals in selling solutions■Improving service business efficiency© 2017 Toshiba Tec Corporation4

1-3. Recovery of the GCS business
Operating loss significantly reduced in FY2016
by implementing structural reforms
FY2016 Actual
1st half／2nd half

FY2015
Actual
0G/M Increase
Expense reduction

OperatingLoss/Income

Effects ofstructural reforms, etc.

Amortization

・Head count
optimization
・Restructuring ofsubsidiaries© 2017 Toshiba Tec Corporation5

1-4. Strategic moves to expand solutions business
Expansion of solutions businessthrough collaboration with business partners
16/OctField test of sales promotion for tourists at Karuizawa,
using a beacon in collaboration with smart phone

17/FebField test of electronic receipt system(equipped with personal data protection function)<Field test to visualize pre-purchase information>

Mar

Initiate business collaboration with ABEJA, a strong
solution provider in the AI fieldMar

Field test to visualize pre-purchase information byusing RFID technology with Adastria

AprDelivery of RFID readable self-checkout system
to GU, one of the group companies of the Fast
Retailing GroupJulyField test of “Store Channel” service, a small businessregion advertising platform※ (x/y) represents the month of press release＜Field test of electronic receipt system＞<RFID readable self-checkout system>< Store Channel>© 2017 Toshiba Tec Corporation

6

1-5. Recovery to a stabilized financial base
A healthy financial position allows us
to adopt flexible growth strategies moving forward
Billion yen
100

86
72

80

55

60

47.3

40

43.0
22.7

46.1

51.1

Cash &Cashequivalents

32.8

20

1.90

3.1

1.1

2.0

3.4

1.2

1.1

1.00.7 LoansPayable

2012／3E 2013／3E 2014／3E 2015／3E 2016／3E 2016／9E2016／12E 2017／3E 2017／6E© 2017 Toshiba Tec Corporation

7

Agenda1. Summary of FY2016

2. Business Environment/Strengths of TTEC
3. MTBP Vision, Policy & Strategy
4. Core Business
5. Solutions & Service Business Development
6. FY2019 Financial Target

7. CSR Management© 2017 Toshiba Tec Corporation8

2-1. Retail market at tipping point①
The need for attracting customers & improving store management
has been increasing among retailers at tipping point of their business styleBusiness environments of retailers
Econ  Difficulty in employment due
to lack of manpower, rise of-omy wage levels etc.
 Rapid growth of EC

Society-Blurring lines between physicalstores and EC

Factors for investment
Attracting customers
Provision of convenience, safety
and experience :1.Omni-Channel service
2.Traceability of commodities
3.Promotion with big data analysis-More convenient and comfortable
shopping environment

Improving store management

 Much concern on food safety

4. Streamline store operations

Politics

 Promotion of IC tag

5. Streamline manufacture andlogistics

Tech-nology

 Adoption of state-of-the -art Promotion of BMS*

technologies like AI, IoT,RFID, Robotics, big data etc.
* BMS：Business Message Standards

Expansion of business
opportunities throughout store,manufacture & logistics© 2017 Toshiba Tec Corporation

9

2-2. Retail market at tipping point②
Catering to Omni-channel service
causes logistic costs to rise for retail business
Implement of Omni-channel service
 Expand lineup of EC items dealtwith Bolster “Last one mile” capability【Reference】

EC & Home delivery market (Japan)(trillion Yen）
25
20

Parcel volumeincreases
correspondingto growth ofEC market(million units）
4200
4100
4000
3900

15

Rise of logistics cost to sales*13800
3700

1036003500

5 All industries :+0.34%
 Retail industry etc. : +0.38%

3400

03300
2013

2014

2015
EC市場ECRetailers work on saving
logistics cost

2016

2020

<Estimate>
Projection

宅配便Home delivery※2※3

Source：*1: JILS
*2：MITI, NRI(Projection)*3：MLIT, Mizuho Bank(Projection)© 2017 Toshiba Tec Corporation10

2-3. Printing market at tipping point
MFP:Under slow demand of H/W, many suppliers move tohigher value-added service business
AI/IJ*: Substantial growth is expected by aiming at new customers
Business environments

MFP

Slow demand of Ｈ/ＷIntense competition bysuppliers in limited demand

Rapid growth of EC entails
streamline of operational
process throughout store,
manufacture and logistics

AI

IJ



Potential demand in manufacture and applications for“food, clothes & shelter”
Diversifying needs lead toproduction with large
variety & small volume*AI/IJ：Auto ID／Ink Jet

Business opportunities【Office】
Total office solutions covering
device management,
document filing and services【Supply Chain】
Visualization of process
throughout manufacture andlogistics【IJ print head】
Growing demand for higher
image quality and watercolor
ink technology© 2017 Toshiba Tec Corporation

11

2-4. Toshiba Tec’ strengths
Pursue growing business opportunities in the LMR※ markets
by leveraging Toshiba Tec’s globally-developed strengths(Ex) Trend of investment by retailers
1 Improvement ofoperational efficiency
at stores

2

Promotion by
big data analysis

3

Strengthening oftraceability

4 Streamlining oflogistics &manufacturing

5 Response to theOmni-channel

Toshiba Tec’s strengths#1 retail customer base

POS units sold
Global top share・Japan approx. 50％
・Global approx. 25%

Wide H/W& S/W lineup

Global support network

Stores・Logistics・manufacturing：

Cover 120 countries & regions
・Location of sales & service：
more than 300
・Number of maintenance staff：
more than 5,000

POS system・BCS・RFID, etc.
Office：ECO Hybrid, etc.

Aim at becoming a global one-stop solution company※LMR：Logistics・Manufacturing・Retail Store© 2017 Toshiba Tec Corporation

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Agenda1. Summary of FY2016

2. Business Environment/Strengths of TTEC
3. MTBP Vision, Policy & Strategy
4. Core Business
5. Solutions & Service Business Development
6. FY2019 Financial Target

7. CSR Management© 2017 Toshiba Tec Corporation13

3-1. Our Vision for FY2019
Alliance among groups/Creativity & Innovation

We will continuously aim atbecoming
a global one-stopsolution company

Taking advantage ofour retail customer base

Expansion ofsolutions andservice business

Strengthening ofcore businesses

Establish profit stability
through cost reduction &productivity improvement© 2017 Toshiba Tec Corporation14

3-2. Positioning of FY2017 MTBP
Plant the seeds of growth for the future by investing profits
from core businesses to solutions & service business
LMR domains
CR & Productivity
improvement

Productivity
improvement

Establishment ofprofit stability

Strengtheningofcore business

Securerevenue

Office domain• Improve R&D productivity• Improve operational efficiency & quality of service business＜Retail＞• Respond to changes of businessenvironment (labor shortage, inbound, etc.)＜Logistics/Manufacturing＞• Satisfy various customer needs by offeringa versatile product lineup equipped with
AI/IJ technologies＜Office＞• Increase revenue
by selling both core& differentiatedproducts- MFP 5 series- Hybrid Loops• Expand service maintenance business and improve its profitability

Invest profits from core businesses to solutions & service business
Growth throughsolutions &service business

Plant the seedsof growth• Enhance business domains to logistics& manufacturing
Penetrate into vertical markets• Strengthen officesolution via
cloud computing• Promote a business plan of integrated dataservice, etc.
© 2017 Toshiba Tec Corporation15

3-3. Solution roadmap
Establish a robust business foundation by implementing both offensive
and defensive approaches along with expanding business domains
from traditional store/office to manufacturing and logistics
Operation
streamlining
Solutions

Digital promotion
Solutions

DigitalSignage

MFPPOS

Office＋ Consumer

Printing & AI
Solutions for
manufacture/logistics

IJ
headRFID

Tracing Solutions

BCPRetailer

LogisticManufacture© 2017 Toshiba Tec Corporation

16

Agenda1. Summary of FY2016

2. Business Environment/Strengths of TTEC
3. MTBP Vision, Policy & Strategy
4. Core Business
5. Solutions & Service Business Development
6. FY2019 Financial Target

7. CSR Management© 2017 Toshiba Tec Corporation17

4-1. Core Business (Domestic Retail)Continuously launch products responding to the changing
demands of the market, such as labor saving, inbound,IC credit, consumption tax increase, etc.
FY2016FY2017FY2018FY2019FY2020

FY2021

Sales expansion of products meeting the labor saving（Self-checkout, Semi-self、Self-order）
Sales expansion of products meeting new demands of inbound（Duty-free、Multiple currency payment、Multiple languages）

Response to the credit card
equipped with integrated circuit(IC)Response to consumer tax increase and reduced tax
rate (at the time of POS・ECR replacement, etc.）© 2017 Toshiba Tec Corporation18

4-2. Core Business (Overseas Retail)
Reorganize the business foundation aiming at a medium
and long-term growth by promoting a trilateral structure
America・Europe

Increase in-house share &number of customers
Increase sales to theexisting customers byproviding wider range ofproducts
Enhance professional
services business

Emerging
countries
Strengthen relationshipwith business partners
Strengthen maintenancebusiness by standardizing
the menu
Increase competitiveness byintroducing low-cost models

Penetrate into the marketof medium sized retailers© 2017 Toshiba Tec Corporation19

4-3. Core Business (Printing)Respond to a variety of printing needs in the market by adding
differentiated solutions to our main products and services
Printing

EcoSolution

MFP 5 series
developed byplatform
designHybrid
Paper reusesystem

OfficeOne to One leaflets

AIIJ

Support versatile
fields of storesand SCM by auto
recognition technology

The highest levelof resolution
in the industry
by unique ink
Total
circulation structure

Printing
Business

Paper reuse system

Printing of coupon/report at store

Inventory count/Product searchSpecial printing ofadvertisement/packaging© 2017 Toshiba Tec Corporation20

4-4. Core Business (Service)
Improve both customer satisfaction (CS) and operational efficiency
by creating a one-stop maintenance service structure
事業領域を跨った保守サービスのワンストップ化でCS向上を推進
bridging the retail and printing businesses①Started to integrate maintenance & service organizations, being traditionallyoperated by products, to realize one-stop service②Enhance areas of synergies from H/W maintenance to IT related and consulting①RetailService
Hardware
SoftwarePrinting
Service・Enhance & integrate existing
application
Hardware・Customize application meeting the②Further promotion of customer needs
Softwarecommonalization

Consulting

Consulting

Professional
Services

Professional
ServicesManagedIT ServicesFieldMaintenance【Professional Services】

ManagedIT Services
FieldMaintenance【Managed IT Services】
・MPS（Managed・Printing・Service）
・Remote monitoring of HW/SW
・Test services
・Comprehensive introduction andoperation, including IT fieldcommonalize© 2017 Toshiba Tec Corporation

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Agenda1. Summary of FY2016

2. Business Environment/Strengths of TTEC
3. MTBP Vision, Policy & Strategy
4. Core Business
5. Solutions & Service Business Development
6. FY2019 Financial Target

7. CSR Management© 2017 Toshiba Tec Corporation22

5-1. Solutions & Service Business (Retail)Offer dealers substantial support on digitalpromotion and versatile payment service system
FY2017
Digitalpromotion

FY2018

One-To-One
promotion

Optimizationof promotion

Marketing
automation

assistanceDecision
makingassistanceStoreoperations
streamlining

Totaldataservice
StoreOperation
solutions streamlining operations
Payment solutions
Checkout
solutions

FY2019Credit ICPre-order/
Pre-payment “No-retaining”

Multipayment

Boost up
semi-SelfPOS

Cutting edge
checkout
solutionsstate*

Evolution ofSelf POS*State in which credit-card merchants do not store, process or pass over credit-card information in or
through machines or on the network owned by the merchants.
© 2017 Toshiba Tec Corporation23

5-2. Solutions & Service Business (Printing)Total office solutions via cloud computing
MFP remote diagnosis/maintenance

Print management,
Document security

Versatility
Via cloudcomputing

Operability via
cloud computing&UI customization

・Centralized managementof networked devices

・Print management
by grouping devices

Document
Management
File conversion,
workflow
automation

Document filing& search

File Storage
ファイル
サーバ
Document Management

・Forward scanned
document toassigned destinations

スキャン------

規定のフォーマットで保存
検索情報の付与(OCR)

Capture &Workflow
ソリューション

作成 (登録)廃棄保存

10年の保存義務処理(回覧/承認)

保管(検索/閲覧)キーワードで検索

管理者

所定のフォーマットで保存
検索情報などの付加(OCR)

スキャン

配信
Capture &Workflow
ソリューション

------

・Consolidated
management ofelectronic files &document life cycle© 2017 Toshiba Tec Corporation24

5-3. Solutions & Service Business (Retail/Printing)Target market up to now

Customer

Store

Extension to CRM

Backyard

Warehouse

Manufacturer

Supplier

Extension to SCM (business enhancement to LMR domains)

Response to customer’s buying behavior Vertical marketing to manufacturer/logistics

Promotionalmarketing

Convenience &Comfortability

・Digital promotion
・Data analysis

・Omni-channel・O2O
・Versatile payment(Traffic line/layout)

SCM Streamlining

Safety & Security

・Manufacturing line
・Logistics line
・Visualization

・Traceability（Food, Medicine etc.）（D/B+RFID etc.）“Total data service solution platform” integrates every step from Supplier to Customer【Our strengths】【Retail customer base】【Variety of HW/SW lineup】【Global service support】【Alliance among groups】© 2017 Toshiba Tec Corporation25

5-4. Strategies to achieve the Vision for FY2019
Further strengthen our capability to provide solutions andimprove service business efficiency to accelerate
solutions & service business development

Strengthen
capability toprovide solutions

Improveefficiency

Collaboration
with versatile
partners
Establish
optimizedstructure

Pursue every opportunity, including
business alliance and M&A, to help us
strengthen solutions business
Strengthen regional management andprovide solutions mostly fitting to eachregion by establishing optimized sales andservice structures by regions

Accelerate one-stop operation ofOne-stop
maintenance and service business byservice operation
bridging individual business organizations
Continuous
Innovation・
Improvement ofQuality

Improve both operational efficiency andquality of service business by utilizing thelatest technologies, such as IoT, etc.
© 2017 Toshiba Tec Corporation

26

Agenda1. Summary of FY2016

2. Business Environment/Strengths of TTEC
3. MTBP Vision, Policy & Strategy
4. Core Business
5. Solutions & Service Business Development
6. FY2019 Financial Target

7. CSR Management© 2017 Toshiba Tec Corporation27

6-1. Financial Target in FY2019
Aim at a 5% operating income in FY2020
by establishing profit stability as well as achieving
growth through creativity & innovation(Billon Yen)FY2016FY2017FY2019(Actual)(Forecast)(Target)Net Sales

497.6490.0※

530.0

Operating
Income

14.6

16.0

23.0

Rate ofSales

2.9 ％

3.3 %

4.3 %

Net Income

7.8

6.0

10.0

Exchange
Rate

108.73Yen/USD
119.30Yen/EUR

105Yen/USD
115Yen/EUR

110Yen/USD
120Yen/EUR※A primary reason for FY2017 net sales reduction vs FY2016 is a transfer of TOSEI business,a domestic subsidiary, to the 3 rd party at the end of FY2016© 2017 Toshiba Tec Corporation28

6-2. Resources Injections
Concentration and selection of resource allocationin line with cash flows generation～Active investment for future business growth～■Capital investment
FY2014-16
Actual・Molds for new products, etc.
・Equipment for production
increase
・Renewal, Rationalization

FY2017-19
PlanBillion yen

81.3
42.8※89.0

67.0■M&A, etc.
・Aimed at creating & expanding
new business domains
・Aimed at strengthen solutions
business■R&D
Capital investment,
M&A, etc.

R&D※GCS related costs, such as acquisition expenses and IT investments
made for their business integration are excluded from FY2014-16 actual.

・Value creation & productivity
improvement© 2017 Toshiba Tec Corporation

296-3. Sales & Operating Income Targets (by segment)
Dual implementation of a growth strategy andestablishment of profit stability by segment(Billon yen)

RSNet
Sales
Operating
IncomePSNet
Sales
Operating
IncomeNetSales

※

CAGR

CAGR

(Target)(2016/2019)(2016/2019)

324.0

100

FY2016FY2017FY2019(Actual)(Forecast)

320.8

314.0

11.3

10.0

11.0

189.1

188.0

218.0

3.4

6.0

12.0

497.6

490.0

530.0

14.6

16.0

23.0

100

(Billion yen)

【Net Sales】
497.6 490.0(Printing)
189.1 188.0

105

105

102

102

218.0
※
CAGR
105%

※

CAGR
100%
2016

※ excluding foreign exchange rate changes530.0(Retail)320.8 314.0 324.0

Total
OperatingIncome※CAGR102%

2017

2019

© 2017 Toshiba Tec Corporation

30

Agenda1. Summary of FY2016

2. Business Environment/Strengths of TTEC
3. MTBP Vision, Policy & Strategy
4. Core Business
5. Solutions & Service Business Development
6. FY2019 Financial Target

7. CSR Management© 2017 Toshiba Tec Corporation

31

7. CSR Management
Aim at continuously meeting all stakeholders’ expectations
 Corporate governanceImprove the efficiency and transparencyof management
Reinforce the functions for the Boardof Directors and the Board of Corporate
Auditors
Establishment of nominating & compensationcommittees

 Internal control function
Execution of appropriate process andthorough management
Improvement in transaction processof accounting operation
Promotion of Compliance Environmental Management
Conduct business management in harmony
with promotion of environmental
management
Encourage positive information disclosureand communication© 2017 Toshiba Tec Corporation32

© 2017 Toshiba Tec Corporation33

Forward-looking statements concerning TOSHIBA TEC's future
performance contained in this presentation represent certain
reasonable assumptions based on economic, financial andcompetitive data and information currently available. However,actual results will be affected by the business and competitiveenvironment and may differ materially from forecasts.

© 2017 Toshiba Tec Corporation34