FY2014
Consolidated Business ResultsandRetail Business Plan

June 16, 2015

© 2015 Toshiba Tec Corporation

Agenda1.FY2014 Results
2.FY2015 Forecasts

3.Retail Business Plan

© 2015 Toshiba Tec Corporation2

1. Key Points of FY2014
 Final results were the same as in the previous forecast (May. 11)
 Due to the underperformance of the overseas retail business in thesecond half of the year, operating income(18.7 billion yen) and net
income (-0.3 billion yen) were far below the previous year despite thegrowth of sales.
Net Sales: 525.3 billion yen (YoY: +26.4billion yen)
Increased by 5% due to the sales increase of overseas printing business, domestic
business, and foreign currency exchange gains.
Operating Income: 18.7 billion yen (YoY: -4.4 billion yen)
Although the overseas printing business and domestic business grew, the GM ofoverseas retail business(GCS) decreased and the expenses increased. As a result, O/I
decreased by 19% YoY to 18.7 billion yen.
Net Income: -0.3 billion yen (YoY: -7.4 billion yen)
Decreased due to the increase of non-operating expenses associated with the foreignexchange loses, reversal of deferred tax assets and imbalance of regional income
structure which temporary raised the corporate tax rate.
Free Cash Flow: 8.1 billion yen (YoY: +29.8 billion yen)
Improved due to the decrease of payment to acquire the business of GCS (FY13: 21.8
billion yen -> FY14: 0.0 billion yen) .
Dividend
The annual dividend of 13 yen per share has been approved. (YoY: +5 yen).

© 2015 Toshiba Tec Corporation

32. FY2014 Consolidated Results(Billions of yen)

FY2014FY2013Difference

ActualActualVS.FY2013

498.9+26.4

525.3

Net Sales

105%(Growth rate)

18.7

23.1

△4.4(3.6%)(4.6%)(△1.0%)

12.0

20.1

△8.1

(Rate of Sales)(2.3%)(4.0%)(△1.7%)

Income(loss) from continuing
operations, before income
taxes and minority interests

11.3

14.4

△3.1

(Rate of Sales)(2.1%)(2.9%)(△0.8%)

△0.3

7.1

△7.4

(△0.1%)(1.4%)(△1.5%)

8.1

△21.7

29.8

US$

109.16

99.75

9.41

EUR

139.43133.37

6.06

Operating Income(Rate of Sales)

Ordinary Income

Net Income(Rate of Sales)

Free Cash Flow
Foreign currencyexchange rate

© 2015 Toshiba Tec Corporation4

3. Operating Income Analysis of FY2014
 The effect of currency exchange rate change on gross profit andselling, general & administrative expenses (SG&A) add up to +0.8
billion yen.
 The major factor of decrease in the operating income was the increasein the SG&A related to GCS business etc .

Gross Profit (+9.1)

Others+2.3
FY2013OperatingIncome+8.5

Increase inNet Sales-1.7

Currency
Exchange-7.7

R&D+1.8-0.6

PersonnelExpenses

Currency
Exchange23.1

Billions of yen

SG&A (-13.5)

Others-7.0

・Increase in sales expenses
・Initial expenses for ITsystem© 2015 Toshiba Tec Corporation

FY2014
OperatingIncome

18.75

4. Net Sales & Operating Income by Segment(Billions of yen)

SystemSolutions
BusinessGroup

GlobalSolutions
BusinessGroup

Consolidated
Total

Net Sales

FY2014
Actual

199.3

Difference
vs.
FY2013

vs.
Forecast

+4.0

+3.3

102%102%10.2+0.5△0.8(Rate of Sales)(5.1%)(+0.1%)(△0.5%)Net Sales

340.4

+22.9

△8.6

107%

98%

8.5

△4.9

△6.5

(Rate of Sales)(2.5%)(△1.7%)(△2.4%)Net Sales

525.3

+26.4

△4.7105%

99%

18.7

△4.4

△7.3(3.6%)(△1.0%)(△1.3%)(Growth rate)
Operating Income(Growth rate)
Operating Income(Growth rate)
Operating Income(Rate of Sales)© 2015 Toshiba Tec Corporation

61. FY2014 Results
2. FY2015 Forecasts

3. Retail Business Plan

© 2015 Toshiba Tec Corporation

7

1. FY2015 Forecast, Overall(Billions of yen)

FY2015FY2014

DifferenceForecast

ActualVS.FY2014

560.0

Net Sales

525.3

107%

(Growth rate)

25.0

18.7+6.3(4.5%)(3.6%)(+0.9%)

22.0

12.0

+10.0(3.9%)(2.3%)(+1.6%)

7.0△0.3+7.3(1.3%)(△0.1%)(+1.4%)

US$120.00

109.16+10.84

EUR130.00

139.43△9.43

Operating Income(Rate of Sales)

Ordinary Income(Rate of Sales)

Net Income(Rate of Sales)
Foreign currency
exchange rate+34.7© 2015 Toshiba Tec Corporation8

2.（Topics）Organization Realignment dated April 1
As of April 1, we have changed from an organization aligned byregion to one aligned by products and services.
Until March31, 2015

From April 1, 2015

Corporate Staff
Group

Corporate Staff
Group

The Board ofDirectors

System Solutions
Business Group

The Board ofDirectors

Retail Solutions
Business Group（New）

Presidentand CEOGlobal Solutions
Business Group

Presidentand CEO

Printing Solutions
Business Group（New）

Inkjet BusinessGroupAuto ID Solutions
Business Group（New）

Production &Procurement Center

Inkjet BusinessGroup
Production,Procurement & SCMCenter© 2015 Toshiba Tec Corporation（Rename）

93. New segmentation
Content of old segment(until Mar,15)
System Solutions BusinessJapanese POS systems businessJapanese MFP businessJapanese Auto ID systems business

Global Solutions Business
Overseas POS systems business
Overseas MFP business
Overseas Auto ID systems business
ODM business
Inkjet head business

Content of new segment(From Apr,15)
Retail Solutions Business
Global POS systems businessJapanese MFP businessJapanese Auto ID systems business
ODM business

Printing Solutions Business
Global MFP business

Overseas Auto ID systems business
Inkjet head business© 2015 Toshiba Tec Corporation

104. FY2015 Forecast by Segment (in new segmentation)(Billions of yen)

RetailSolutions
BusinessGroup

PrintingSolutions
Business
Group

Consolidated
Total

Net Sales

FY2015FY2014

Forecast

Actual

350.0

325.1

Difference

vs. FY2014

+24.9
108%

(Growth rate)

13.0

1.3

+11.7

(Rate of Sales)(3.7%)(0.4%)(+3.3%)Net Sales

230.0

213.1

+16.9

Operating Income

108%(Growth rate)12.0

17.4

△5.4

(Rate of Sales)(5.2%)(8.2%)(△3.0%)Net Sales

560.0

525.3

+34.7

Operating Income

107%(Growth rate)
Operating Income(Rate of Sales)

25.0

18.7+6.3(4.5%)(3.6%)(＋0.9%)

Note: FY2014 is in new segmentation© 2015 Toshiba Tec Corporation

11

1.FY2014 Results
2.FY2015 Forecasts

3.Retail Business Plan

© 2015 Toshiba Tec Corporation12

1-1．FY2014 Review
Future growth can be expected despite severe business conditions
in every market and increasingly tough competition【Market Environment】
(JPN)

(N.A)

(EUR)

(AP)

- Deterioration of retailers performances due to the effects of consumption
tax increase.
- Acceleration of mergers & alliances in the retail industry.
- Retail market is growing under the steady economic improvement- However, customers are taking a wait-and-see attitude toward new H/Winvestment, considering the market shift to omni-channel.
- Economic conditions are on a moderate recovery track, but customers
are cautious about new investments because of political and security
uncertainties in some countries.
- Maintain high growth rate at a slower pace.

【TTEC】 Sales comparison (FY2014 vs FY2013)(Japan) FY2014 sales increased compared with the same period of the previous year
despite the slower recovery in retail industry.
Full Year 102%, 1st half 104%、2nd half 101%
(Overseas) FY2014 sales exceeded those of a previous year owing to favorable
currency exchange rates.
Full Year 106%, 1st half 107%、2nd half 104%
* Excluding currency benefit, FY2014 sales were below a previous year.
© 2015 Toshiba Tec Corporation13

1-2. FY2014 Results (vs FY2013/vs Forecast dated Jan28)(Billions of yen)

RetailSolutions
BusinessGroupPrinting
SolutionsBusinessGroup

Consolidated
Total

FY2014

Difference

Actualvs FY2013

vs Foreast dated
Jan28

325.1+9.4△2.8103%

99%

1.3

△9.3

△7.7

(Rate of Sales)(0.4%)(△3.0%)(△2.3%)Net Sales

213.1+16.0

△2.0

108%

99%

17.4

+4.9+0.4(Rate of Sales)(8.2%)(+1.9%)(+0.3%)Net Sales

525.3

+26.4

△4.7

105%

99%

18.7

△4.4

△7.3(3.6%)(△1.0%)(△1.3%)Net Sales(Growth rate)
Operating Income(Growth rate)
Operating Income(Growth rate)

Operating Income(Rate of Sales)

Note: Figures are in new segmentation© 2015 Toshiba Tec Corporation142．Issues in Retail Business
IssuesthroughFY14

1. Deterioration in profitability in overseas
maintenance business Declining productivity in the course of business transfer

2. Delay in Structural Reforms

 Delay in both H/C optimization outside Japan andreorganization of sales subsidiaries

3. Delay in delivery of solutions to customers
 SW customization is requested to adapt to omni-channel

4. Decline of sales to Business Partner(BP) route Lack in management and support

Issuesidentifiedin 4Q

1. Unexpected sales shift to FY2015 at TGCS
 Rescheduled delivery due to customers’ requests
 Delay in winning orders due to the effects of strong US$(⇔ emerging countries’ currency depreciation)

2. Increases in operating transition costs
incurred in overseas business Initial expenses for TGCS global unified IT systems
 Increased expenses for SW Customization

3. Increases in sales related fixed expenses Marketing Expenses/Consulting Fees
© 2015 Toshiba Tec Corporation15

3. Market Trends
Investment priority will be shifted from H/W to S/W and systemomni-channel solutions will be further developed in the retail market～2014

In-Store

Macro
Trend

Diversifying
checkout

2015

2016

2017

・・・・・・・・ 2020

Retailers/CVS: Efficiency/Manpower saving/Reduction in waiting time
Specialty stores/Restaurants: Customer service and communication skills

CAGR (14/17)
103%

Development of Smart Payment
Increasing demand for security management

～2014

2015

2016

2017

・・・・・・・・ 2020

Out-Store

Development of EC Market/Enhanced penetration of smart devices
CAGR (14/17)

140%

MacroTrend

Omni-Channel development/New business model using smartphones
Further development ofconsumer behavioranalysis

Initiating promotion
utilizing smartphones
Development ofdemand forecast

Ordering system
controlling opportunity
loss and waste loss

© 2015 Toshiba Tec Corporation16

4. Future Vision of Retail Business
Expand solutions business based on our global top share customer base
Expand our business domain up to data service
solutions area, going through in-store solutions andout-store solutions areas
Smart Recipt®

Integrated Solutions(Shopworks/ShopDirector)
工場

Analysis・Big Data
• Food disposal loss analysis• Customer preference• Trends analysis

POCO2O

Omni-channel shopping solutions
・One point (centralized) management
Onlineof customer information
消費者
TCxGravity
・Strengthen CRM/SCM solutions
倉庫ERP

Store System

店舗

Total System(Specialty・Food&Beverage)

Data ServiceSolutions

Out-Store
Solutions

TCxAmplify

TCxFlight

In-Store
Solutions

Diversifying checkout
IS-910T ・Utilization of recognition technology

POS・More efficient checkout
・Better services for customers
・Better after services(POS : Point of Sale, POC : Point Of Commerce(shopping management))© 2015 Toshiba Tec Corporation

17

5．Key challenges for future growth
1. Restructuring Management Structure Reorganize company-wide management structure
Change to a sales and service organization aligned by region
 Increase efficiency in distribution channels, including logistics

2. Early establishment of stable profitability
 Strictly control and reduce transition costs in overseas business
Execute structural reforms focusing on overseas business Strengthen organization structure in overseas maintenance/service
Strengthen products competitiveness through collaboration between
inside and outside Japan

3. Strengthening existing businesses
 (Japan) Cope proactively with the following changes:- Consumption tax increase/MA replacement cycle/Inbound/Manpower saving

 (Overseas)Strengthen support structure for the followings- MA/BP/European & Asian operations/Manpower saving

4. Expanding new businesses (solution business)
 Expand omni-channel solution offerings
 Strengthen the lineup of local-fit products/solutions
 Expand the menu for maintenance/service
 Expedite start of Data Service Solution business© 2015 Toshiba Tec Corporation18

6-1. Management structure (Future vision)
Establish a sales and service organization by region aimed atachieving further growth by promoting our ability to offer
local-fit solutions.

C E ORetailBusinessPrinting Business
Auto ID BusinessAmericas RegionalSalesEurope Regional Sales
A si a Re g i o n a l S a l e s
Domestic Regional Sales© 2015 Toshiba Tec Corporation19

6-2. Reduction of transition costs in overseas business
Improve profitability by reducing transition costs
 Reduction of IT expenses for TGCS unified global system• Expenses were duplicated during the transition
from the existing system to the new one• Accumulated extra expenses due to thedevelopment delay in new IT system

Will be eliminatedby stable operationof new system

Leverage the effect of cost reduction by new operation system
to improve profitability
 Reduction of customization expenses for omni-channel solutions• Expand sales of omni-channel solutions by strengthening thecapability to identify an individual demand for each customer• Enhance customization skills and increase development efficiency© 2015 Toshiba Tec Corporation20

6-3．Implementation of Structural Reforms
Improve cost structure by optimizing H/C and increasing efficiency
through integration of subsidiaries
 Optimize H/C by region and function• Execute adequate H/C distribution overseas
 Increase efficiency in R&D/Staff/Sales
 Strengthen strategic functions⇒ increase H/C in service and solutions

 Reorganize sales subsidiaries to adapt to business conditions• Further integrate existing subsidiaries
 Promote integration in Europe Share back office operations to achieve
further efficiency© 2015 Toshiba Tec Corporation21

6-4．Strengthening of Products Competitiveness &Maintenance & Services Structure
Establish robust business foundation by promoting cost reduction &strengthening maintenance and service business.
 Strengthen product competitiveness through CR and R&D alliance• Accelerate CR activities
 Promote joint purchases
 Reduce distribution costs• Strengthen development process alliance⇒ Resource optimization
 Concentration of R&D locations
 Common platform Strengthen overseas maintenance/service business structure• Deploy every measure to reduce costs
 Reduce costs in operations /parts/employment• Enhance TTEC Group synergy effects
 Promote integrated operations between retail andprinting maintenance business© 2015 Toshiba Tec Corporation22

6-5. Acceleration Sales expansion in New Business
Expand business domains to out-store and data service solutions
from in-store solutions

 Enhance product lineup for Omni-channel solutions• Enhance versatility by promoting alliance with Microsoft Dynamics• Accelerate realization of TCxGravity sales to major retailers

 Expand the menu of maintenance/service• Expand menu of maintenance/service• Expand sales of professional services

 Enrich product lineup for Data Service Solutions• Expand scale of Smart Receipt business Started services in the northeastern area of Japan,
aiming to develop the business both in and outsideJapan.
© 2015 Toshiba Tec Corporation

23

Human Smart Community
by Lifenology – the technology life requires© 2015 Toshiba Tec Corporation24

Forward-looking statements concerning TOSHIBA TEC's futureperformance contained in this presentation represent certainreasonable 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.

© 2015 Toshiba Tec Corporation25

© 2015 Toshiba Tec Corporation26