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Financial Results

FY2017 3Q Presentation

Date January 30, 2018
Presenter Haruhiko Akiyama, Director and Executive Officer, CFO

Presentation Materials


. FY2017 3Q Financial Results (13pages)[1,552KB]
. FY2017 Full Year Plan(4pages) [657KB]
. Appendix(3pages) [368KB]

Summary of the Presentation

1. Consolidated earnings for the third quarter of FY2017.

Drastic growth in earnings
Net sales increased 16% year on year to 101,660 million yen mainly thanks to increased sales in Japan, the U.S.A., Europe, Asia and Oceania region.
This increase in net sales resulted in operating income of 6,227 million yen (141% YoY) and ordinary income of 5,319 million yen (177% YoY). As a result, net income attributable to owners of parent was 2,946 million yen (336% YoY).


FY2017 3Q Financial Results

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

Financial Results by segment
[Positioning Company]
Sales of IT construction and IT agriculture were firm, resulting in net sales of 52,589 million yen (129% YoY). Operating income increased significantly to 4,485 million yen (149% YoY) thanks to increase revenues.

[Smart Infrastructure Business]
Net sales were 25,506 million yen (114% YoY) and operating income was 2,680 million yen (157% YoY) thanks to increased sales driven by the accelerating popularity of i-Construction in Japan and sales growth in India and other parts of Asia as well as Middle Eastern regions.

[Eye Care Business]
Net sales were 32,828 million yen (109% YoY). Although sales decreased in Europe, sales growth for the 3D OCT and the fundus camera NW400 favorable sales in India and other parts of Asia, as well as Latin America, and Middle Eastern regions. However, operating income was 1,207 million yen (70% YoY) due to the impact of increased expenses from anticipatory investments in R&D, etc., and the impact of sluggish sales in Europe.

2. FY2017 Consolidated Earnings Targets

We conducted an upward revision of our full-year earnings forecast previously released on October 27, 2017. Due to the impact of increased gains on currency differences, we revised our forecast for ordinary income upward by 500 million yen to 10,500 million yen (up 5% from previous forecast) and net income upward by 200 million yen to 5,900 million yen (up 4% from previous forecast).
We will continue to monitor transitions in earnings and market trends, and will quickly disclose a revised forecast in the event of a need to reevaluate our earnings forecasts.

FY2017 Full Year Plan
*1 According to change in Japanese Accounting Standards, the former Net Income is shown as "Profit attributable to owners of parent" on financial statements.
*2 Assumed exchange rate after January 2018 is ¥105/dollar and ¥115/euro.

Q&A

Please tell us why the Eye Care Business recovered more in 3Q than in 1-2Q, your projections for 4Q and beyond, and your specific projections for seed capital investments.

Seed capital investments for 3Q were slow compared to 1-2Q. Although sales on the European market continue to be sluggish, we are generating income thanks to favorable sales of the Maestro on the US market. Thanks to FDA approval for the Triton in January, we were able to reduce expenses compared to 1-2Q. However, as we are planning new product launches, we anticipate we will continue to incur expenses related to FDA approval.

Please tell us about your projected timing for launching an IoT business related to the Eye Care Business.

This is currently under construction and we are planning for commercialization end of fiscal 2018.

Please tell us the percentage of IT agriculture business represented by the domestic market. Will it be easy to reuse your Auto Steering System?

The use of IT agriculture in Japan is only just getting started so sales were relatively small this fiscal year, still in the low billions of yen. With implementation in small-scale farms, reuse is possible since installation and removal are simple.

What rate of installation is possible for small- and mid-sized tractors, which represent over 80% of the domestic market in Japan?

We began full-scale installation in small- and mid-sized tractors beginning this fiscal year so it is difficult to make long-term projections on installation rates. However, we think the latent market is significant.

Are new product releases planned for the Eye Care Business during the second half of the year on schedule?

We acquired FDA approval for the Triton in January and are planning to start sales in the U.S.A. beginning in February, which is on schedule with our plans. New products currently have not been launched but we are planning for release in 4Q.

Regarding sales to small-scale farms in Japan, is the ability to reuse systems the result of a technological breakthrough? Also, will additional costs be required to expand sales channels in mainland Japan?

The system is popular because it matches the needs of Japanese farmers, who appreciate that installation or removal is simple and can be done in about 1 hour, and that operation at super-low speeds is possible. As for sales channels, we are partnering with domestic tractor manufacturers to utilize their sales channels so we will not incur any new costs.

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

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