FY2019Toshiba Tec
Management Policy
Mid-Term Business Plan
FY2019~FY2021 (FY2019 MTBP)

November 6, 2019
Takayuki Ikeda
President & Chief Executive OfficerToshiba Tec Corporation© 2019 Toshiba Tec Corporation

Contents

01 Mid-Term Vision & FY18-19 Review
02 Mid-Term Business Plan Overview
03 Financial Plan, etc.

© 2019 Toshiba Tec Corporation

1

Mid-Term Vision

We will continuously aim at becoming a solution
partner to provide stores and offices with value
creation and innovation from on-site viewpoint© 2019 Toshiba Tec Corporation2

Basic Strategy in FY19 MTBPFY19Expandsolutionsbusiness
Strengthencorebusiness

FY20FY21 Drive recurring and subscription
business models
 Commercialize data service
business
 Vertical deployment to logistics
and manufacturing fields

Establish profit stability through cost reduction &productivity improvement© 2019 Toshiba Tec Corporation3

Vertical Deployment from Stores & Offices to LM*
Provide solutions to “Connected fields” with both
existing business resource and new business model
Retail solutions

RetailfieldStore

Improve efficiency/Visualization/
Cost reduction/
Customer(employee/consumer)
convenience
Supply chain solutions

ManufacturingLogistics

ManufacturingfieldOfficePrinting solutions*LMR・・・Logistics(L), Manufacturing(M), Retail (R)LMR* solutions
Improve efficiency/Visualization/
Cost reduction/
Customer(employee)convenience© 2019 Toshiba Tec Corporation

4

FY18 Results & FY19 Forecast
FY19 O/I ratio is supposed to improve by 0.4 point
ROE retains two-digit ％
476.8

480.0

480.0

(Unit : Billion Yen)

Sales

18.0

20.0

20.0

O/I
FY18Actual

FY19Plan

FY19Forecast

O/I ratio

3.8％

4.2％

4.2％

ROE

12.9％

-12.6％© 2019 Toshiba Tec Corporation5

FY18-19 Achievements
Introduced services inresponse to variety ofcashless payment methods

Provided retail and logistics
customers with labor savingsolutions

New MFP lineup with customer Established organization andvalue, cost effectivenesssystems for new businessand R&D efficiency
creation© 2019 Toshiba Tec Corporation

6Organization Change
Optimize product development and sales support systems
catering to customer characteristic and business climate
FY19

FY20～

Over-seas
Overseas

Printing

AI*

Domestic

RetailCommonize product elements, technologies and solutions
between domestic & overseas businesses*AI・・・Auto IDJapaneseretailers
expand Asia
marketsStrengthenoverseas support
function bydomestic team

RFID* retailsolutions

AI* businesscombined byretail business

Printing & sensingSolutions*RFID・・・Radio Frequency ID

AI* businesscombined byprintingbusinessCommonize
process for
product planningand R&D
Value- added
solutions withcompetitive priceCollaboration
between domestic
and overseas in
LM* fields© 2019 Toshiba Tec Corporation

7

Key Issues
Shift into high gear to implement measures from a
medium to long term perspective
１ Maximize profit from new solution businesses

Grow to highly profitable service as well as
increase sales in both retail and printing business
23

Recover profitability of printing business
Maintain core business (office) and expand newdomains (LMR*)
Strengthen competitiveness in overseas retailbusiness
Retain existing customers and acquire new customers
promptly introducing strategic products (hardware,solutions and new generation platform)*LMR・・・Logistics(L), Manufacturing(M), Retail (R)© 2019 Toshiba Tec Corporation

8

Key Points of FY19 MTBP
Set up business structure to secure long term profit from eachbusiness group, by investment toward the growth of retail
solutions, and by improving earing power of printing solutions
Retail Solutions Business Group

Printing Solutions Business GroupFY21 O/I ROS

FY21 O/I ROS

15.0 Bil. Yen/4.9％

12.0 Bil. Yen/6.2％

Turning point of business structure

New areas(LMR) as growth driver

Foster new solution business Improve O/I by 3.0 points
through constant investments© 2019 Toshiba Tec Corporation

9

Contents

01 Mid-Term Vision & FY18-19 Review
02 Mid-Term Business Plan Overview
03 Financial Plan, etc.

© 2019 Toshiba Tec Corporation

10

Retail Solution/Market Environment(Domestic)
Labor shortage & rise of personnel expenses
・Cost reduction
・Operation efficiency/IT technology
・Expansion of Self-Checkout market

Growth of e-Commerce (EC) raises management
risk for bricks-and-mortar stores・Surge of Omni-channel solution
・Enhanced additional value for stores
・Cost reduction
・Operation efficiency/IT technology

Change of store style caused by various payment
methods & hardware, and proliferation of IoT・Acceleration to lock-in existing customers
・Expansion of cashless payment© 2019 Toshiba Tec Corporation11

Retail/Basic Strategy
Provide total solutions throughout value chain
originated from store④SC*Optimization solution【Issues】
・Labor shortage
・Waste loss
【Issues】
・Labor shortage
・Consumer’s
convenience

Manufacturing・Logistics

Store①Labor Saving/
New purchase experience③Data service
Consumer（Data analysis）

Payment・Delivery【Issues】
・Promotion expense

・Sales opportunityloss【Issues】
・Proliferation of EC
・Consumer’s
convenience②Multi-payment solution*SC・・・Supply Chain© 2019 Toshiba Tec Corporation

12

Retail/①Labor Saving of Stores & New Purchase Experience

Evolution of payment methods & our solutions
STEP 1(present)

STEP
1～2

STEP
2～3

STEP
3StoreConsumer

Consumer

Consumer

Store/Consumer

Consumer

Consumer

Consumer

FixedFixed

In-store free

Checkout freeSemi-SCO*

Cart POS
Full-SCO*
Self-Auto Scan
(RFID, etc)

Cart POS

Commodity
registration
PaymentPaymentLocation

Oursolutions*SCO: Self-Checkout(Through Checkout)

POS App.
(Smartphone)

Unmannedstore system

Cart POS
Full-SCOPOS App(Smartphone)
Auto-scan13

Retail/②Multi-Payment Solution
Provide various types of payment solutions smoothly
facilitated by TD Payment Corporation,a subsidiary of Toshiba Tec group
Big change
surrounding
Japanese
retailers

Provide Multipayment
solutions

METI “Cashless Vision”

Cashless settlement ratio 40% by 2025
Amended Installment Sales Act

Non retention of credit card information
and IC card adaption by Mar 31, 2020・Non retention of credit card information
・Various code/e-money payment
・Payment linked to Smart Receipt(e-receipt)

14

Retail/③④SC* Optimization Solution & Data Service
Generate new value from supply chain originated by store
Provide data service and various SCM・CRM solutions
ConsumerStore
Backyard
Warehouse
Manufacturer

SCM

Safety&Security

Promotion

・Robot・Tracing system
・Voicerecognition ・Inventory/transportation
・Demandmanagement
forecast・Inventory
adjustment・Digital・Omni-channel
promotion・O2O・Various payment ・Optimize
traffic line &methods
layout・Cart POS・Walk-through・Smart Receipt(e-Receipt)

Vertical Marketing to LM*

Response to change ofconsumer’s buying behavior

SupplierToshiba
TecConvenience

Versatile sensor technologies (RFID, Smart receipt, etc.)
Collaboration with global/local partners
New Generation Platform（NGP）＊SC・・・Supply Chain LM・・・Logistics & Manufacturing© 2019 Toshiba Tec Corporation15

Retail/①∼④Develop Retail Infrastructure by Smart Receipt
Accelerate the proliferation of Smart Receipt (e-receipt)
verifying its contribution to regional revitalization“Project to Living Convenience in Okinawa with Smart Receipt”【Verification】
・Accessibility and convenienceof Smart Receipt by consumer
・Customer gathering power and【Period】 Sept. ’18~ Apr. ’19 (7 mos.)sales promotion by store/maker【Participants】
64 stores/9 enterprises inOkinawa pref.

© 2019 Toshiba Tec Corporation

16

Retail/①∼④ Case Introduction of Smart Receipt

Increase the consumer’s opportunity to use
Smart Receipt through cooperation with major point cardcompanies and/or retailers’ membership app
Mobile T Card（Point Card Company)

In 2020, Smart Receipt willbe built in Mobile T Card app

POCKET PARCO（Shopping Mall）

Membership app “POCKETPARCO” supports Smart
Receipt for members

Collaboration
Nov. 22 Open
“Shibuya PARCO”

17

Retail (Domestic)/Path to the Growth

Formulate the business basis toward the vision(both organic & with alliance)
Target of new solution sales is 15% against the sales in FY23

Sales of domestic retail(image)

Major new solutions

Newsolutions

Flat in existing business*Exclude tentative
sales increase in FY19
(rapid increase in demand
before TAX hike)

Existingbusinesslike POSData service◆Smart Receipt (e-receipt)
Payment solutions◆Cashless payment

Labor saving solutions◆Self-Checkout, Cart POS
RFID solutions◆Various types of sensors*RS・・・Retail Solution© 2019 Toshiba Tec Corporation18

Retail/New Generation Platform
Retail ecosystem initiative collaborating with third
parties like software application vendors
１ Micro services

Add various types ofretail service app inmodule style2

Subscription
Model

Subscribed byapp plugged-in

Bundle Service Application
GeneralSpecialty
Merchandise

3 Data service

Data collection & analysis
on the value chain bystandardization of data
format and app I/FHospitality

・・・

New Generation Platform (NGP）
Utilize existing software/Accelerate new solutions/Enhance maintenanceability

Manufac-turing

Logistics

StoreConsumerAppvendor© 2019 Toshiba Tec Corporation19

Retail (Overseas) /Strategic Products
Introduce various types of self-checkout products into
the labor saving retail markets growing worldwide
Convertible Lane
Space saving type

System7

Versatile model catering
to customize needs
Variation

To be releasedin Asia/Europe(Photo image:Asia version)

Countertop
compact-type
Self-CheckoutBase model forAsia

Customized bydomestic model“SS-950U”
KioskCashlessSolutions
・Frictionless solutions
・Consumer mobile
・Associate mobile
・Expanded lineup byNext Generation Platform+micro services including
3rd parties© 2019 Toshiba Tec Corporation20

Printing Solution/Market Environment
Office MFP market has matured in North
America and Europe
・Slow sales of hardware but color MFP is likely to grow・More paper-less, smaller document volume in officeenvironment

Labor shortage in office operation especiallyat small and medium sized enterprises
・Operation efficiency by means of cloud computing,
IT and AI is required・More needs for document management solutions

Demand increase of solutions for efficiency andproductivity improvement in LMR* areas
・On-site solutions for store, logistics & manufacturing
・Solutions for back office operations*LMR・・・Logistics(L), Manufacturing(M), Retail (R)© 2019 Toshiba Tec Corporation21

Printing/Basic Strategy
Expand business by 【B】 axis
Improve profit ratio strengthening business baseby 【A】 and 【C】 axes
【A】 Reinforce office business【C】axis・Strategic new products
・Solutions line up matching
the needs from SMB* offices【B】axis【B】 Expand LMR business・Deploy vertical marketing toLogistics, Manufacturing &Retail (LMR)【C】 Enhance productivity【A】axis*SMB・・・Small and Medium sized Businesses

・Increase R&D/production efficiency
・Increase sales/service efficiency© 2019 Toshiba Tec Corporation22

Printing/Key Measures
LMR* markets drive growth of printing business
A・Ｂ軸による事業拡大×Ｃ軸＝利益率改善
A・Ｂ軸による事業拡大×Ｃ軸＝利益率改善【C】 axis

Reinforce
office business

ExpandLMR business

Enhanceproductivity

Service【B】 axis・Managed IT Service(MIS)・Security solutions

Hardware Solutions【A】 axis

・Document
ManagementSolutions (DMS)・Solutions lineup・Competitive products(A4 MFP, etc.)
・Direct sales

Digital signagesolutions
・RFID solutions
・Collaboration withIT service companies
POSprinterIn-line
printing

Barcode printerRegional sales/service strategies

MarketOfficeRetailL・M

・Improvemaintenanceservice efficiency
・Improve backoffice efficiency

・R&D process
reform・Partnershipwith vendors
・Commonplatform・Cost reduction*LMR・・・Logistics(L), Manufacturing(M), Retail (R)© 2019 Toshiba Tec Corporation23

Printing/Core Business (Office area)
Strengthen business base in office MFP market

Introduce strategic new products
・Launch own designed A4 MFP products (FY20)

Offer variety of solutions and services to SMB*・Extend solutions lineup using SDK*
・Invest on DMS* field・Plan to start MIS* in France following US, Australia,Canada, UK and German

Reinforce cost competitiveness・Improve R&D efficiency through common platform
・Increase productivity of service technician
・Improve operation efficiency of back office*SMB: Small & Medium sized Businesses SDK: Software Development Kit*DMS: Document Management Solutions MIS: Managed IT Service© 2019 Toshiba Tec Corporation24

Printing/LMR Areas
Increase sales of LMR* business by focusing onour product strengths, solutions and customer basePrinting ＆sensing

LMR*solutions

Global retailcustomer base

・MFP
・Barcode printer(BCP)・RFID (Reader/Writer)
・Digital Signage
・POS printer“On-site“ solutions

・Sales collaboration
with Toshiba Global
Commerce Solutions,
Inc. (Subsidiary ofretail solutions)・Format & labeling・Contents management
・Digital signage for stores

Back office solutions
・Digitalization & Storage(OCR）
・Capture & Workflow
・Document management

・Propose value
creation to our global
retail customers andits supply chains

FY19-21 CAGR target for LMR business >116%*LMR・・・Logistics(L), Manufacturing(M), Retail (R)© 2019 Toshiba Tec Corporation25

Printing/Enhance Productivity (Profitability improvement plan)

Secure profit level in every field of production, sales,
R&D and service②Cost reduction+1.0％

Variableexpenses

Procurement
innovation④Sales price reduction+ foreign exchange, etc.
△1.5％

Improve production
line efficiency③Others+0.5％
Improve the rangeof models

FY18-21 improvement①+②＋③＋④＝＋3.2％

Margin Fixed-alexpenses
profitProfit①Fixed expenses+3.2％
Increase productivity ofR&D
Improve maintenance service
Efficiency
Improve efficiency of backoffice operation© 2019 Toshiba Tec Corporation26

Foster & Commercialize New BusinessSearch・Technical research・Incubation bybusiness group
・Invention
challenge program

Partneracquisition

StageInternalcreation

Organize a mechanism capable of generating new
business by alliances with partners
Verification/
POC/Start-up

POC

Investment/GrowthDiversification/Expansion

Commercialization

Businessacquisition(Proof ofConcept)

Sourcing location
・Japan, Israel・USA(Silicon Valley)

Toshiba Tec Accelerator
Program

Corporate
Venture Capital(CVC)

UseofVC

Directinvest-ment

Businesscollaboration© 2019 Toshiba TEC Corporation27

Toshiba Tec Accelerator Program (’18’s result)Sought business ideas from five categories
Adopted eight venture capitals’ and held the demonstration
event in May, ‘19

New purchaseexperience

Supply chain“x” Automation

Innovation with existing
technologies/products

Toshiba Tec Accelerator Program 2018 8 ParticipantsInnovation for
the future’19’sregistration
started fromOctober

Venture capital
KedomoMonopos

Title of idea
New world realized by IoT funding
Saas/PaaS business for retailers

Sassor『SSF-kit』that helps Smart Factory

SPACER
VRC
Accel
Skyfarm
Double Frontier

New solutions realized by delivery locker ”SPACER”
3D Innovation "Sasage"
Fusion of image processing & MFP by "GRADIA"
Next generation last one mile logistics platform "New PORT"
Substitute shopping service "Twidy" from Japan© 2019 Toshiba TEC Corporation28

Corporate Venture Capital (CVC) Activity Status
Started fund investment in DNX Co. (VC) on July ‘19
Generate new market/
new businessBusiness area

Core domain
Retailsolutions
LM*solutions
Officesolutions

・Maintain
existing
customers
・Acquire newcustomers

Relateddomain

Innovation

Exploration
through ourown channel

Exploration byventure capitalwith highexpertise

・Product
improvement

Targeting/Investment based on the information from VC

Invest in DNX (Jul ‘19)

Targeting/Investment by CVC*LM・・・Logistics(L) & Manufacturing(M)© 2019 Toshiba TEC Corporation

29

Contents

01 Mid-Term Vision & FY18-19 Review
02 Mid-Term Business Plan Overview
03 Financial Plan, etc.

© 2019 Toshiba Tec Corporation

30

Financial Plan (All total)
Improve the profit ratio by focusing on sustainable
and profitable service business, and on continued
productivity enhancement
FY19

FY21

Sales

480.0

490.0 101.0%

O/I

20.0

27.0

+7.0

4.2%

5.5%

+1.3%

12.0

16.0

+4.0USD/Yen

107.34105.00△2.34

EUR/Yen

120.84120.00△0.84(Billion Yen)vs SalesPBTForecastPlan

vs FY19

FY22Target

6.0%

Foreign Exchange© 2019 Toshiba Tec Corporation

31

Operating CF, Capital Investment, Investments & Loans
Maximize operating cash flow (CF)Establish growth path by proactive investments
Generate Operating CF

Investment Plan

FY19～21 Cumulative total

FY19～21 Cumulative total

81 Billion Yen

62 Billion Yen(Billion Yen)

19242928*CapitalInvestment

45 Bil.

Investment& loan

17 Bil.

Actual Forecast PlanPlan

New models, Production
increase , R&D
Automation, Streamlining,
System reinforcement
Data service, Paymentsolutions
Channel investment,
Solutions lineup*w/o effects of new lease accounting standards© 2019 Toshiba Tec Corporation32

Shareholder Return
Basic policy
On the basis of solid profitability, shareholder
return is to be decided under consideration of theappropriate balance with growth investment

Strengthening profitability
ROE target is more than 10%

Dividend payout ratio
The guideline for payout ratio is 30%, aiming at
continuous and stable dividends along with profitgrowth© 2019 Toshiba Tec Corporation33

Challenges for SDGs
Toshiba Tec, as a solution partner, focuses on its efforts toimplement the SDGs along with customers by contributing its value
creation in “retail”, “office”, “logistics” & “manufacturing”

Society Issues■Economic
development of■Integration of EC
community andand bricks-andsocial cost saving mortar stores■Variety ofcheckout andpayment methods■Build a social
infrastructure forbusiness ecosystem

Customer Issues■Sustainable use■Work-stylereform and■Strengthen marketing ■Move to a paperless of resources andwaste management
measures against ■Improve efficiency
societylabor shortage■Diminish food wasteand productivity

Toshiba Tec Challenges for SDGs

© 2019 Toshiba Tec Corporation34

RFID Showroom & Lab in Toshiba Tec (SDGs related）
Help customers with improvement of operation efficiency andproductivity in store, logistics and manufacturing

Logistics solutions

Store solutions「TEC UX Lab」(Oval Court Mark East Bldg., Tokyo)
offers visitors demonstrations and firsthandexperiences of RFID solutions

RFID
packagesystem
RFID mirror signage
Walk-through type
RFID tunnel gate

RFID
securitygate

RFID
SCORFID
smart shelf

RFID POS

Conveyer type RFIDtunnel gate

RFID tag print system
RFID
picking cart

RFID logistics
package© 2019 Toshiba Tec Corporation

35

“Loops” Paper Reusing System
Contribution to the environment with only one technology to“erase” printed text and “reuse” paper
The contribution the hybrid MFP “Loops” makes to the SDGs has beenrecognized, and eventually won two awards: Excellence Award at the
1st EcoPro Awards and Eco Mark Award 2018 Excellence Award, for enabling
regular printing as well as erasable printing on one single device.

© 2019 Toshiba Tec Corporation36

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

東芝コーポレートブランド ― PowerPoint フォーマット：β版 ―END© 2019 Toshiba Tec Corporation38