FY2016 3Q Financial Results...©2017 Topcon Corporation 2 Ⅰ. FY2016 3Q Financial Results Ⅰ-1. FY2016 3Q Financial Results Ⅰ-2. Overview of Each Business

FY2016 3Q Financial Results January 31, 2017 TOPCON CORPORATION Director and Executive Officer, CFO General Manager of Accounting & Finance Div. Haruhiko Akiyama

©2017 Topcon Corporation 1

FY2016 Full Year Plan

Ⅲ Appendix

Ⅰ FY2016 3Q Financial Results

Ⅱ

CONTENTS

FY2016 3Q Financial Results


Ⅰ. FY2016 3Q Financial Results Ⅰ-1. FY2016 3Q Financial Results

Ⅰ-2. Overview of Each Business


1Q-3Q Sales Trend

0.0

4.0

8.0

0.0

20.0

40.0

60.0

80.0

100.0

FY20131-3Q

FY20141-3Q

FY20151-3Q

FY20161-3Q

96.2

POC=Positioning Company

6.5 8.0

5.7

88.6

4.2

79.3

91.5

87.4

4.4

FY2016 3Q <Business has recovered steadily>

Net Sales

Operating Income

Net Sales w/o FX effects

Net Sales (billion yen)

Operating Income w/o FX effects

Operating Income (billion yen)

Strong yen

Exc

hang

e R

ate 121.49

JPY/USD 107.88 JPY/USD

¥13.61

133.67 JPY/EUR

119.13 JPY/EUR

¥14.54

POC: - Operating income increased approx. 300% YoY - Growth in IT Construction

-Operating income increased on a YoY basis -Despite of the strong yen, practically, the sales increased and the operating income improved markedly w/o FX effects


FY2016 3Q累計実績 <営業利益は増益>

[Consolidated]

FY2015/1-3Q FY2016/1-3Q

Actual Actual YoY FY15 Exchange Rate Conversion

Conversion YoY YoY%

Net Sales 91,542 87,422 -4,119 96,230 4,688 105%

Gross Profit (Gross Profit Ratio)

46,716 (51.0%)

45,125 (51.6%)

-1,590

SGA 42,565 40,713 -1,852 Operating Income (Operating Income Ratio)

4,150 (4.5%)

4,412 (5.0%)

261

6,540 (6.8%)

2,390

158%

Non-Operating Income (Expenses) -956 -1,403 -447 -1,062 -106

Ordinary Income 3,194 3,009 -185 5,478 2,284 172% Extraordinary Income (Loss) -271 -174 96 Income Before Income Taxes and Minority Interests 2,923 2,834 -88

Net Income 1,098 878 -219 2,697 1,599 246%

Exchange Rate (Average)

ＵＳＤ ¥121.49 ¥107.88 ¥-13.61 ¥121.49

ＥＵＲ ¥133.67 ¥119.13 ¥-14.54 ¥133.67

(unit: million yen)

FY2016 3Q Financial Results <Increased operating income on a YoY basis>

*The previously reported amount in FY2015 Q1 to Q3 is retrospectively adjusted by determining provisional accounting of business combination.


[Consolidated] FY2015/1-3Q FY2016/1-3Q

Actual Actual YoY FY15 Exchange Rate Conversion

Conversion YoY YoY%

Net Sales

Positioning 44,711 40,734 -3,977 45,833 1,122 103% Smart Infrastructure 23,089 22,445 -644 24,117 1,028 104%

Eye Care 29,305 30,078 773 33,077 3,772 113% Others 4,285 2,596 -1,689 2,646 -1,639 62% Elimination -9,849 -8,431 1,417 -9,444 405 Total 91,542 87,422 -4,119 96,230 4,688 105%

Operating Income

(Operating Income Ratio)

Positioning 1,021 (2.3%)

3,010 (7.4%)

1,989 (295%)

3,387 (7.4%)

2,366

332%

Smart Infrastructure

2,436 (10.6%)

1,702 (7.6%)

-733

2,268 (9.4%)

-168

93%

Eye Care 2,571 (8.8%)

1,716 (5.7%)

-854

3,076 (9.3%)

505

120%

Others 79 (1.8%) -123 -202 -123 -202 -

Goodwill Amortization -1,957 -1,894 63 -2,066 -109

Total 4,150 (4.5%)

4,412 (5.0%)

261

6,540 (6.8%)

2,390

158%

(unit: million yen)

FY2016 3Q Financial Results by Business <Dynamic improvement in Positioning Business>


FY2015/1-3Q

FY2015/1-3Q FY2015/1-3Q FY2016/1-3Q FY2016/1-3Q

FY2016/1-3Q

POC: Growing sales in IT Construction ECB: A successful launch of Maestro

24.8 27.0 25.3 24.6

6.2

107％

123％

5.0

SIB: Sales increase in i-Construction business

FY2015/1-3Q FY2016/1-3Q

Domestic and Overseas Sales (YoY, at constant currency)

POC=Positioning Company/ SIB=Smart Infrastructure Business/ ECB=Eye Care Business

Japan North America

Europe

China Asia/Oceania Others

(Billion yen) (Billion yen) (Billion yen)

(Billion yen) (Billion yen) (Billion yen)

FY2015/1-3Q FY2016/1-3Q 10.9 10.0

109％

101％

FY2015/1-3Q FY2016/1-3Q 17.7 15.8

112％

6.9

106％

6.5 POC/SIB: Strong sales

POC: Strong sales

POC/ECB: Strong sales SIB/ECB: Strong sales

* "i-Construction" is a registered trademark of National Institute for Land and Infrastructure Management, MLIT, JAPAN.


4.2

1.1

1.2

6.5

-2.1

4.4

0.0

2.0

4.0

6.0

8.0

FY2015 1-3Q Sales increase anddecrease, Product

mix

Reduction of fixedcost/ Lowering

COGS

FX Effects FY2016 1-3Q

(unit: Billion yen)


FY2016 1-3Q Operating Income Breakdown <Increased operating income on a YoY basis>


Ⅰ. FY2016 3Q Financial Results Ⅰ-1. FY2016 3Q Financial Results

Ⅰ-2. Overview of Each Business


Overview Review of 3Q Financial Results

Positive factors Business has recovered steadily Operating income increased on a YoY basis - Sales growth of IT Construction/ Successful launch of 3D OCT Maestro in the US - Effects of lowering COGS/ reduction of fixed cost

ー Negative factors Impacts of strong yen - Sales decrease: -8.8B yen,

Operating income decrease: -2.1B yen Exchange rate (YoY): JPY/ USD… ¥13.61 higher, JPY/EURO…¥14.54 higher


Positive factors Growing sales in IT Construction (YoY 115%) IT Agriculture showed 2 straight quarters of growth on a YoY basis Major operating income improvement (increased threefold from the

same term last year) New products, lowering COGS/ reduction of fixed cost have contributed

Topics

■ OEM agreement with SAME DEUTZ-FAHR* (Released: Nov. 17th, 2016)

- Enter into a long-term partnership for OEM supply of IT agriculture products and development of next-generation IoT Ag solutions * SAME DEUTZ-FAHR is the Italy’s leading manufacturer of tractors

Overview of Each Business Review of 3Q Financial Results


Positive factors A sales increase in the i-Construction business in Japan (YoY150%) A sales increase in growing India’s market (YoY130%)

ー Negative factors Market stagnation in Middle East and South America

Topics

■ Established another i-Construction Training Center (Released: Dec. 22nd, 2016)

- Following those in Fukushima and Kobe, 3rd one was established in Kitakyushu to adapt to a demand increase for i-Construction in Japan.

■ Acquire software developing company Mirage Technologies S.L.. (Released: Dec 8th, 2016)

- Acquired Mirage Technologies S.L. in anticipation of the transition to cloud-based processing for 3D Mass data.

Overview of Each Business

* "i-Construction" is a registered trademark of National Institute for Land and Infrastructure Management, MLIT, JAPAN.

Review of 3Q Financial Results


Positive factors A successful launch and a good reputation of 3D OCT Maestro in

US with positive feedback China: strong sales in optometry market, sales growth of OCT (YoY

130%)

■ Acquire leading distributor Mehra Eyetech in India (Released: Dec. 2nd, 2016)

- Strengthen direct selling system of OCT and IT solution products in India by acquiring the leading distributor

Topics

ー Negative factors European market: Declining price competitiveness by strong yen

Overview of Each Business Review of 3Q Financial Results


Ⅱ. FY2016 Full Year Plan Ⅱ-1. FY2016 Full Year Plan Ⅱ-2. Summary


00.0

5.0

10.0

1Q 1H 1-3Q FullYear

1Q 1H 1-3Q FullYear

8.8

0.7

9.5

0.7

3.7

Actual Plan

FY2015 FY2016

4.5

121.34 121.50 121.49 120.16 109.07 106.43 107.88 107.21 USD

133.86 134.60 133.67 132.36 122.47 119.12 119.13 118.18 EUR

Exch

ange

Rat

e

4.2 4.4

Dynamic improvement in Positioning Business Although operating income in 1H decreased, 3Q turned into positive in a YoY comparison Increased sense of uncertainty over the economic environment in Europe and the United States

Operating Income Operating Income (billion yen)

(JPY)

FY2015 Result Transition and FY2016 Full Year Plan


［Consolidated］ FY2015 FY2016 Full Year Full Year Announced on

Oct. 28th, 2016 Actual Plan YoY(%)

Net Sales 130,735 125,000 96％ 125,000

Operating Income (Operating Income Ratio)

8,803 (6.7%)

9,500(7.6%) 108% 9,500 (7.6%)

Ordinary Income 7,366 7,500 102% 7,500

Net Income＊1 4,197 4,200 100% 4,200

ROE 6.9% 7.5% 7.5%

Dividends ¥24 ¥16 ¥16

Exchange Rate＊2 (Average)

US$ ¥120.16 ¥107.21 ¥105.77 EUR ¥132.36 ¥118.18 ¥117.22

＊1 According to change in Japanese Accounting Standards, the former Net Income is shown as "Profit (loss) attributable to owners of parent" on financial statements.

(unit: million yen)

＊2 Assumed exchange rate after January 2017 is ¥105/US$, ¥115/EUR

FY2016 Full Year Plan


［Consolidated］

FY2015 FY2016

Full Year Full Year Announced on Oct. 28th, 2016 Actual Plan YoY (%)

Net Sales

Positioning 61,977 56,000 90% 56,000

Smart Infrastructure 32,989 33,000 100% 33,000

Eye Care 43,834 44,000 100% 44,000

Others 4,997 4,000 80% 4,000

Elimination -13,063 -12,000 -12,000

Total 130,735 125,000 96% 125,000

Operating Income

(Operating Income Ratio)

Positioning 2,385 (3.8%)

4,500 (8.0%) 189% 4,500

(8.0%)

Smart Infrastructure 3,909 (11.8%)

3,500 (10.6%) 90% 3,500

(10.6%)

Eye Care 4,850 (11.1%)

4,000 (9.1%) 82% 4,000

(9.1%)

Others 196 (3.9%)

0 (0.0%) - 0

(0.0%)

Goodwill Amortization -2,538 -2,500 -2,500

Total 8,803 (6.7%)

9,500 (7.6%) 108% 9,500

(7.6%)

Exchange Rate (Average)

USD ¥120.16 ¥107.21 ¥105.77

EUR ¥132.36 ¥118.18 ¥117.22

FY2016 Full Year Plan by Business (unit: million yen)


Ⅱ. FY2016 Full Year Plan Ⅱ-1. FY2016 Full Year Plan Ⅱ-2. Summary


Summary

0.0

5.0

10.0

15.0

20.0

0.0

40.0

80.0

120.0

FY2013 FY2014 FY2015 FY2016 Plan

16.0 128.6 130.7

8.8

116.7

11.7

125.0

9.5 (108%)

139.0

12.5 (142%)

Trends of Financial Results Annually Net Sales

(billion yen) Operating Income (billion yen) Net

Sales Operating Income

Net Sales w/o FX effects


Exc

hang

e R

ate 120.16

JPY/USD 107.21 JPY/USD

¥12.95

132.36 JPY/EUR

118.18 JPY/EUR

¥14.18

Strong Yen


Revision of “TOPCON WAY”

-Corporate Identity- Topcon contributes to enrich human life by solving the societal challenges

within healthcare, agriculture and infrastructure.

-Management Policy- Topcon focuses on leading-edge technology

to provide new value through innovation and manufacturing.

Topcon respects diversity and acts as a global company.

Topcon places the utmost priority on compliance and continues to be a trustworthy partner to all stakeholders.

Revised the “TOPCON WAY” established in April 2011, and implemented a new “TOPCON WAY” on January 1, 2017.


Topcon for Human Life 医・食・住


Appendix Ⅲ.


9.1

6.9

9.9

6.6

8.4 7.5

1.5

0.6

1.5

0.3

1.1

0.3 0.0

1.0

2.0

3.0

0.0

5.0

10.0

FY15/2Q 3Q 4Q FY16/1Q 2Q 3Q

Net Sales Operating Income

Net Sales (billion yen) Operating Income (billion yen)

1. Consolidated

11.6 9.8

14.5

8.8 10.8 10.5

1.6

0.5

2.3

0.5 0.8

0.4 0.0

1.0

2.0

3.0

0.0

5.0

10.0

15.0

20.0

FY15/2Q 3Q 4Q FY16/1Q 2Q 3Q

Net SalesOperating Income


2. Positioning

3. Smart Infrastructure

17.0

13.3

17.3

12.8 14.3 13.6

1.1

-0.7

1.4

0.7

1.7

0.5

-1.0

0.0

1.0

2.0

3.0

0.0

5.0

10.0

15.0

20.0

25.0

FY15/2Q 3Q 4Q FY16/1Q 2Q 3Q

Net SalesOperating Income


35.3

28.6

39.2

26.2 31.7 29.5

3.6

-0.3

4.7

0.7

3.0

0.7

-1.0

1.0

3.0

5.0

7.0

9.0

0.0

10.0

20.0

30.0

40.0

FY15/2Q 3Q 4Q FY16/1Q 2Q 3Q



4. Eye Care Operating Income (billion yen)

Financial Results (Quarterly)


27.4 31.3 31.4 30.6

27.2 28.8

2.9 3.7

1.7

0.7

2.5 2.0

0.0

2.0

4.0

0.0

10.0

20.0

30.0

40.0

FY14/1H FY14/2H FY15/1H FY15/2H FY16/1H FY16/2H



59.4 69.2

62.9 67.8

57.9 67.1

5.9

10.1

4.5 4.3 3.8 5.7

0.0

5.0

10.0

15.0

0.0

20.0

40.0

60.0

80.0

100.0


Net Sales Operating IncomeNet Sales (billion yen) Operating Income (billion yen)

15.6 18.3

16.2 16.8 15.0

18.0

2.2

3.7

1.9 2.0 1.4

2.1

0.0

2.0

4.0

0.0

10.0

20.0




1. Consolidated

18.6 22.7

19.5

24.3

19.6

24.4

1.5

3.6

2.1 2.8

1.3

2.7

0.0

2.0

4.0

0.0

10.0

20.0

30.0




2. Positioning

3. Smart Infrastructure 4. Eye Care

Operating Income (billion yen)

Financial Results and Forecast (Semiannually)

These materials contain forward-looking statements, including projections of future operating performance. Such statements are based on management’s best judgment, given the materials available to them at the time these statements are made. However, please be aware that actual performance may differ from projected figures owing to unexpected changes in the economic environment in which we operate, as well as to market fluctuations. The original disclosure in Japanese was released on January 31, 2017 at 16:30(UTC+9).

Inquiries: Corporate Communication Div. Public, Investor Relations and Shareholder Relations Dept. TOPCON CORPORATION Tel: +81-3-3558-2532 E-mail: [email protected] URL: http://global.topcon.com/invest/

Cautionary Note regarding Forward-Looking Statements

Documents

FY2016 3Q Financial Results...©2017 Topcon Corporation 2 Ⅰ. FY2016 3Q Financial Results Ⅰ-1. FY2016 3Q Financial Results Ⅰ-2. Overview of Each Business