FY2018 Toshiba Tec Management Policy（Mid-Term Business Plan for FY2018–FY2020）

August 31, 2018

Takayuki Ikeda
President & Chief Executive OfficerToshiba Tec Corporation© 2018 Toshiba Tec Corporation

01 Introduction

03 Productivity Improvement

1-1 Mid-to-long term vision
3-1 Company-wide activities
1-2 FY2017 Achievementsfor productivity improvement
1-3 FY2017 Business Performance 3-2 Retail solutions business
1-4 Positioning of FY2018 MTBP
3-3 Printing solutions business

02 Value-Creation

04 Mid-Term Business Plan

4-1 Financial Plan
2-1 Focus Areas
4-2 Operating CF & Resources Injections
2-2 Business synergies／Returns to shareholder
2-3 Our Mission
4-3 Enhancing our ESG involvement
2-4 Total Retail Solutions
2-5 Printing Solutions
2-6 Development of new business© 2018 Toshiba Tec Corporation1

01Introduction
1-1 Mid-to-long term vision
1-2 FY2017 Achievements
1-3 FY2017 Business Performance
1-4 Positioning of FY2018 MTBP

© 2018 Toshiba Tec Corporation2

1-1 Mid-to-long term vision
Plant theseeds ofgrowth

Securerevenue

Productivity
Improvement© 2018 Toshiba Tec Corporation3

1-2 FY2017 Achievements

Plant the seeds of growth

Secure revenue
POS unit sales in JapanNo.1 share 16 years in a row

Productivity Improvement
Structural reforms foroverseas retail businessParticipation in national
projects initiated by METI■Electronic receipts as social
infrastructure■Information sharing for
supply chain using RFID

Joint business with 3 rd party■Pre-order/Payment system■Data analysis of physical storesby usage of AI technology

A3 MFP unit sales
Global: 107% vs FY2016
China: No.1 share 18 years in a row
Profitable operation
Promote measures forthe growth© 2018 Toshiba Tec Corporation4

1-3 FY2017 Business Performance
Exceeded sales & O/I forecast by big margin thanks torecord high performance by domestic retail business andsteady contribution by other core businesses.
(Billions of yen)

FY2017FY2017

Difference(Previous Fcst)(Actual)Net Sales

490.0

513.3

＋23.3

Operating
Income16.0

24.5+ 8.5

Rate ofSales

3.3 ％

4.8 %

+1.5 ％

6.0

17.5

+11.5

Net Income
Exchange
Rate

105Yen/USD
115Yen/EUR

111.21Yen/USD
129.34Yen/EUR© 2018 Toshiba Tec Corporation5

1-4 Positioning of FY2018 MTBPFY2018FY2019FY2020“Value-creation” and “Productivityimprovement” constitute the twinpillars of FY2018 MTBP strategy-FY2022

Achieve growth- New solutions- New biz domains

Accelerate investments inR&D, equipment and channel

Build the basis for future growth・Strengthen investments in R&D, alliances and development of new business.
・Establish a feasible organization for accelerating its successful commercialization.

© 2018 Toshiba Tec Corporation

6

02
Value-Creation
2-1 Focus Areas
2-2 Business synergies
2-3 Our Mission
2-4 Total Retail Solutions
2-5 Printing Solutions
2-6 Development of new business© 2018 Toshiba Tec Corporation7

2-1 Focus Areas
Accelerate solutions business into vertical markets(logistics & manufacturing) as well as into our corebusiness domains, such as retailers and offices.
Officesolutions

LM
Total Retail solutions（Store＆SCM） (Logistics・Manufacturing)
solutions
Self
IJ
Terminal Head
POSsystem

MFP

Office＋RFID

Consumer

BCP

Retailer

MFP
Logistics

RFID
BCP

IJ
Head

Manufacturing

Value chain originating from retailers
Vertical markets© 2018 Toshiba Tec Corporation82-2 Business synergies
Enhance company-wide value-creation and productivity improvement bycapitalizing on the strengths of both the retail and printing solutions businesses

Retail Solutions (e.g., POS System)Development

Procurement

Manufacturing

HW, SW,ServiceSales

HumanResources

Know-How

FacilityAssets

Sales
ChannelCustomer
Base

Develop ment

Procurement

Manufact uring

HW, SW,
Service

Sales

Maintenanceサービス
ServiceCostReduction

Maintenance
ServiceNetwork

Maintenance

New
Business

Differen-tiation

ServicePrinting Solutions (e.g., MFP or BCS)
© 2018 Toshiba Tec Corporation

92-3 Our Mission
Act with the spirit of customer value-creation first
Businessdevelopment ofour customers

Adaptation toenvironmental
changes

Provide solutions forretailers, offices,logistics andmanufacturing

Work style reform(Increase operationalefficiency)

New shopping
experiences© 2018 Toshiba Tec Corporation10

2-4 Total Retail Solutions
Provide consumers with new shopping experiences
as well as retailers with seamless retail operation
between internet and physical store
HomeStore

Shopping/dining

・Face recognition
・Advanced order ・AI promotion
・On-linesupermarket

Returning
homePayment
・Shopping guideby AR

・Auto productregistration
・Cashless・Various payments

・Product
information

・Selectablecollection sites

・Vice recognition order・Recommendation by AI
Advanced order

Physical store© 2018 Toshiba Tec Corporation11

2-4 Total Retail Solutions
Streamline operations and save labor by adopting
Robot
Applicable to retail data solution andlogistics/manufacturing associated with stores

Moving/transporting robot
Supermarket/Specialty“Backyard to storefront”
Delivery→Stocktaking→Price tag check

Deliver a drink towindow seat A-1 .

Hello!
Take a counter seat, please.

Service/responding robot“Stress-free dining”
Restaurant

Reception/guide→Recommendation/Order-taking→Serving/Clearing© 2018 Toshiba Tec Corporation12

2-4 Total Retail Solutions
Prepare solutions in the field of stores, consumers,
and SC* under Integrated Platform concept
TTEC’sCustomer
management
appConsumerSC＊“A” Co’s
Customermanagement
app[Store]POS＋PLATFORM

TTEC’sStockmanagement
app

TTEC’sPaymentsystemapp“Ｂ” Co’s
Paymentsystemapp

Integrated Platform capableof meeting various needs ofcustomers (Globalization, Reformation, Cross-industrial
collaboration, etc.)■Increase number of customers
by coordination between real
store and EC■Enhance productivity througheasy installment of applications■Visualization of business
management by collecting
various kinds of data

＊SC：Supply Chain (logistics and manufacturing)© 2018 Toshiba Tec Corporation132-4 Total Retail Solutions
Develop Data Service Business
Provide solutions service for value chain originating from store
by utilizing TTEC’s data service platform
AI engine

AI

Alliance withbusinesspartners

Data analysis tool

BICollaboration
withToshiba Corp.

DMP

TTEC’s data service platform

Cloud service Sensor data

DMP* Electronic Checkout
receipt
Data＊DMP: Data Management Platform＊BI: Business Intelligence

Dataanalysis
Datacollection/integration/
extraction

Datasolutions

Provide dataanalysis &solutions

ConsumerStore
Logistics
Manufacturing© 2018 Toshiba Tec Corporation14

2-5 Printing Solutions (Office＆LMR*)

ServiceDocument solutions

HardwareManaged IT serviceSolutions

Expand growth in both existing market (Office) and verticalmarket(LMR)

Digital signage
solutions

LM solutions

Inlineprinting

Digital signage

MFP

Barcode printerExisting market (Office）

Vertical market(LMR）＊LMR：Logistics, Manufacturing, Retail© 2018 Toshiba Tec Corporation15

2-5 Printing Solutions (Office)Total management of office equipment by
Managed IT Service evolving from Managed Print
Service of MFP and printers
Issue for SMB* offices“Lack of IT administrators”
Security reinforcement/Labor
saving/Streamlining/Automation

Managed Print Service
Managed IT Service■Backup■Security■Hosting■Remote maintenance■Help desk

＊SMB：Small and Medium Business© 2018 Toshiba Tec Corporation16

2-5 Printing Solutions (LMR)
Help customers with labor saving and operation efficiency byextending solution lineup across LMR markets in addition toindividual ones
Manufacturing
OHSAKI CHEMICAL ALCHOHOL(disodiumﬂammy)

CAS No. : 123-45-6789
UN No. : 777
Gross Weight : 111 g• Keep away from heat.
• Keep away from clothing and other combustible materials.
• Take any precaution to avoid mixing with combustibles.
• Wear protective neoprene gloves, safety goggles and faceshield with chin guard.
• Wear fire/flame resistant clothing.
• Do not breathe dust or mists.
• Wash arms, hands and face thoroughly after handling.

Colorh ttp ://va r.g e/en/First aid:
• IF ON SKIN (or hair) or clothing: Rinse immediately contaminated clothing
and skin with plenty of water before removing clothes. Wash contaminatedclothing before reuse.
• IF IN EYES: Rinse cautiously with water for several minutes. Remove
contact lenses, if present and easy to do. Continue rinsing.
• IF INHALED: Remove person to fresh air and keep comfortable forbreathing.
• IF SWALLOWED: Rinse mouth. Do NOT induce vomiting.
Immediately call poison center.
• Specific Treatment: Treat with doctor-prescribed burn cream.

MediaLogistics
物流 + Store

店舗

Document
digitalization

Fire:
In case of fire: Use water spray. In case of major fire and large
quantities: Evacuate area. Fight fire remotely due to the risk ofexplosion.

OHSAKI CHEMICAL CORPORATION
1-11-1, Ohsaki, Shinagawa-ku, Tokyo, Japan 141-8562(Phone) +81-50-3681-5504

Data
aggregation

Shipping slip-Label
Integration
HQ-Store
workflow
RFID system

Inlineprinting
Digital signage

Hybrid POP(Paper output/Signage)© 2018 Toshiba Tec Corporation17

2-6 Development of new business
Develop new business through open innovation
Hold Corporate Accelerator Program with 01Booster Inc.

▶Develop and accelerate new solutions and service business▶Create innovations
through collaboration with Startups© 2018 Toshiba Tec Corporation

18

03
Productivity Improvement
3-1 Company-wide activities
for productivity improvement
3-2 Retail solutions business
3-3 Printing solutions business© 2018 Toshiba Tec Corporation19

3-1 Company-wide Productivity Improvement
Promote core strengths in manufacturing
Raise the funds to expand growth areas

SHOPStreamlining ofvalue chainサービス

CC-2サービス

サービス

D-6

B-6

DEurope

Asia

Australia

JapanAmerica

Optimization ofR&D structureStandardization andmodularization of HW/SW
across BUs

Digitalization of service

Sharing ofservice resources

B

B-1

C-1
BA

Consolidation ofplatform© 2018 Toshiba Tec Corporation20

3-2 Retail solutions business
Stronger collaboration within the group enabled us to reduce thetotal cost incurred from the design, R&D, set-up, installation tomaintenance and shorten the installation lead time.
Engineering chain
Modularization
Standardization

ProductPlanningDesign&Development

TrialProduction

Supplychain

Procurement

Reduction indevelopment
costAuto setting

Manufac-turing

Reduction inReduction inProcurement cost Manufacturing
process

Setup(TER)*1Delivery搬送

Auto setting Remote maintenance
Cable-lessCable-lessInstallation

2(TTSS)*(TTSS)*2

Reductionin duration＊1 TER CORPORATION＊2 TOSHIBA TEC SOLUTION SERVICES CORPORATION(TTSS)

Reductionin duration

Maintenance(TTSS)

Reductionin duration© 2018 Toshiba Tec Corporation21

3-3 Printing solutions business
Improve contribution margin (ratio) by increasing productivity inevery phase of R&D, production, sales and maintenance service

R&D

Promote and enhance platform
development

Enhance cost competitiveness by collaborating with theProduc Monozukuri team-tion Realize productivity improvement by utilizing IoTtechnology and automation

Sales

Revitalize a new customer acquisition program
Enhance of SFA（Sales Force Automation）
Remote monitoring（Cloud cooperation）

MaintenanceImprove service skills
Service© 2018 Toshiba Tec Corporation

22

04
Mid-Term Business Plan
4-1 Financial Plan
4-2 Operating CF & Resources Injections／Returns to shareholder
4-3 Enhancing our ESG involvement© 2018 Toshiba Tec Corporation23

4-1 Financial Plan（Total）
Aim at a 6% operating income in FY2022 throughgreater “Value-creation” and “Productivity improvement”
with aggressive investment

FY2018FY2020Growth Rate

(Forecast)(Plan)(vs FY2018)

Net Sales

500.0530.0

Operating
Income

18.0

26.5

+8.5

Rate ofSales

3.6 ％

5.0 %

+1.4 ％

8.0

13.0

+5.0

110Yen/USD
130Yen/EUR

110Yen/USD
130Yen/EUR(Billions of yen)

Net Income
ExchangeRate＊ Exchange rate in FY2018 has been unchanged from a previous
forecast on May 9th, 2018.

CAGR

3％

© 2018 Toshiba Tec Corporation24

4-1 Financial Plan（Sales & O/I by Segment)
Achieve sustainable growth by enhancing new solutions
business and increasing sales to vertical markets(Billions of yen)

530.0

500.0

RSBG

209.0
Net Sales

New solutions sales・sales tovertical markets

ROS 6%ROS 5%

18.0
8.5
9.5

233.0

O/I

Net Sales

FY18(Forecast)

80.0

・Solutions to connect
Internet and real stores・Payment solutions(e.g.) ・Data servicesolutions
・RFID solutions
・LM solutions, etc.

310.0

303.0

ROS 3.6%
PSBG

565.0

34.0

26.5
11.5
15.0
O/I

FY20(Plan)

Net Sales

O/I

FY22(Target)© 2018 Toshiba Tec Corporation25

4-2 Operating CF & Resources Injections/
Return to shareholders(Billions of yen)

Resources Injections／
Return to shareholders

Operating Cash Flow

Dividend payout
ratio 30% (Target)

24.0
25.0
22.0

Investments & Loans

13.0 B yen

71.0 B yen

Value-Creation

Capitalinvestment
47.0 B yen

Productivity
Improvement

FY18 FY19 FY20
© 2018 Toshiba Tec Corporation26

4-3 Enhancing our ESG involvement
Leverage our business strengths to contributetoward an affluent and sustainable society

Labor saving
Operational efficiency
Consideration for
global environment

Sharedvalue
Participation in SDGs

Enhancement ofcorporate value
Labor saving
Operational efficiency
Reduction of food waste

Consideration forglobal environment© 2018 Toshiba Tec Corporation27

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.

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