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Mid-Term Business Plan

[Mid-Term Business Plan (Group Organization)]
[Mid-Term Action Plan]
[Growth Strategies by Segment]
  Positioning
  Eye Care
  Finetech

<Mid-Term Business Plan 2012>
Topcon Group is a global company comprised of three core business units "Positioning," "Eye Care" and "Finetech."

Mid-Term Business Plan (Group Organization)

Mid-Term Business Plan 2012(FY2010 to FY2012)

Financial Targets (Consolidated)
(Million yen)

[Consolidated]	2008	2009	2010	2011	2012
Net Sales	112,666	94,862	104,000	117,000	133,000
Operating Income(loss) (OP Ratio)	(6,944) (-%)	1,405 (1.5%)	2,700 (2.6%)	6,500 (5.6%)	12,000 (9.0%)
Ordinary Income(loss)	(9,326)	545	1,400	5,200	10,700
Net Income(loss)	(9,992)	133	200	2,700	6,400
ROE	-%	0.3%	0.5%	6.6%	14.4%
Total Asset Turnover Ratio (times/year)	0.87	0.77	0.86	1.00	1.10
D/E Ratio	124.9%	127.2%	117.7%	112.8%	97.8%
Earning per Share (yen)	10 yen	4 yen	4 yen	6 yen	14 yen
Dividend Payout	-%	277.0%	185.2%	20.6%	20.3%

*Our earnings forecasts during FY2010 to FY2012 assume exchange rates of ¥90/US$ and ¥120/EURO.

Financial Targets (by Segment)
(Million yen)

[Consolidated]		2008	2009	2010	2011	2012
Net Sales	Positioning	58,031	49,350	52,000	60,000	70,000
	Eye Care	33,503	31,561	34,000	37,000	40,000
	Finetech	21,131	13,950	18,000	20,000	23,000
	Total	112,666	94,862	104,000	117,000	133,000
Operating Income	Positioning	(5,275)	6	500	3,000	7,000
	Eye Care	1,620	1,963	2,000	3,000	4,000
	Finetech	(3,288)	(564)	200	500	1,000
	Total	(6,944)	1,405	2,700	6,500	12,000

Mid-Term Action Plan

１:Sales growth strategies
	①	TM-1 products (Time to Market No1)
		-	All three business units will launch TM-1 products and ensure profitability and sustainable growth.
	②	New fields of business
		-	All three units will enter new business fields and cultivate growing businesses. (Positioning: Agriculture, Mobile Mapping, 3D Measurement/ Eye Care: OCT, IT Solutions/ Finetech: LED, Substrate, high revenue devices)
		-	Seeking M&A opportunities and alliance partners.
	③	Emerging counties and low-price markets
		-	Positioning and Eye Care business will reinforce sales structure based on China and India, expand production capacity in China, and increase variation of low-price products.
		-	Finetech business will focus on Asia where its clients exist.

	2: Total cost reduction strategy
	①	Creating optimized production system as a global company All three units will integrate and optimize development/production sites and accelerate overseas procurement.
	②	Restructuring the operation process All three units will focus on improvement of product quality and development efficiency. Pursue every avenue to find the suitable model for SCM.

Growth Strategies by Segment

Positioning

In terms of the constructing market, our basic business, we will drive IT adoption and focus on the growing fields such as “precision agriculture,” “mobile mapping” and “3D measurement.” As an emerging countries strategy, we will also expand production capacity in China, reinforce our sales companies in India, found new sales companies in Middle East and develop sales in Africa from base in Spain

Sokkia Integration

Keep Producing Synergy Effects of Integration

Integrate Organizations
Consolidation/Integration of Production Bases
Consolidation/Integration of Development Divisions
→ Standardize product platforms

Synergy Effect Plan

〔Foundational Business〕 Construction

Facilitate Information Technologies in Civil Engineering, Construction and Architecture
Expand Use of Telematics
Expand Sales in New Markets
― South America, China, India, Africa

Telematics Utilization

Sales for Construction

〔Growing Business〕 Precision Agriculture

“Agricultural Revolution” through Technological Innovation
Accelerate OEM Business Strategy
Expand Sales in New Markets
― South America, China, India, Africa

Sales for Precision Agriculture

〔Growing Business〕 Mobile Measurement

Mobile Surveying / Mobile Mapping
― Next Mainstream of GIS

IP-S2、IP-S2 Lite

Sales for Mobile Measurement

〔Growing Business〕 3D Measurement

Integration of conventional technologies and innovative imaging technology
― Efficient 3D measuring by innovations

3D Measurement

Sales for 3D Measurement

Expansion into Emerging Markets

China: Increase local production capability
India: Reinforce structure of sales companies
Middle East: Establish sales company
Africa: Develop sales from base in Spain

Expansion into Emerging Markets

Eye Care

As we stay focused on retinal camera which is our basic business, we will focus on growing fields such as “3D OCT,” “IT solutions” and “surgical equipment” as well. In addition, to cultivate emerging countries, we will launch low-end products called “e-line” and expand production capacity in China.

〔Foundational Business〕Retinal Camera

Screening market for top three diseases continued growth
Cover wide-ranging market with a full lineup

Retinal Camera Global Market Share

〔Growing Business〕 3D OCT

Market expansion targeting OD / Private MDs
Improved/modularized diagnosis/analysis software
Link with IMAGEnet to create synergies

3DOCT

OCT Unit Sales

〔Growing Business〕 IT Solutions

Expand IT Solutions Business through
Global Development, Sales, Maintenance Structure

IT Solutions

Sales for IT Solutions

〔Growing Business〕 Surgical Equipment

Advance Alliances, M&A

Surgical Equipment

Expanded Sales in Emerging Countries

Finetech

Our focus is shifting to produce profitable products along with the change in our product portfolio. In order to realize it, we have entered the substrate business and will launch “3D Inspection System” and ”Projection Steppers”. We will also focus on “LED Visual Inspection System” and “FPD backlight measurement” as well. In addition, in the field of devise, we will focus on profitable products such as pico-projectors, optical engines for super-wide angle projector and automotive devices.

Reorganizing Business Portfolio