トプコン（7732） – [Delayed]FY2021 Q3 Presentation Material

FY2021 Q3Financial ResultsJanuary 28, 2022TOPCON CORPORATIONDirector and Managing Executive Officer, CFOGeneral Manager of Accounting and Finance Div.Haruhiko AkiyamaCompany Profile Movie1ContentsFY2021 Q3 Financial ResultsⅠ. FY2021 Q3 Financial ResultsⅡ. FY2021 Full Year PlanⅢ. SummaryⅣ. Appendix©2022 Topcon Corporation2Ⅰ. FY2021 Q3 Financial ResultsⅠ-１. FY2021 Q3 Financial ResultsⅠ-２. Overview of Each Business©2022 Topcon Corporation3FY2021 Q3 OverviewRecord high124.8103.1100.793.01,4001,2001,000120100800402002000(unit: billion yen)80600Sales60400Operating IncomeSignificant increase in sales and profitRecord high in both sales and profitvs. FY2020vs. FY2019Sales 134%124％Operating Income 711% 338%FY2018Q3 YTDFY2019Q3 YTDFY2020Q3 YTDFY2021Q3 YTD©2022 Topcon Corporation4FY2021 Q3 Financial ResultsRecord high sales and profitNet SalesGross Profit（Gross Profit Ratio）SGAOperating Income(Operating Income Ratio)Non-Operating Income(Expenses)Ordinary IncomeExtraordinary Income(Loss)Income Before Income Taxesand Minority InterestsNet IncomeExchange Rate（Average）USDEUR FY202092,99145,676(49.1%)44,2211,455(1.6%)-1,39460-221-160-1,322¥105.87¥122.30（unit：million yen）YoY%+34%+40%+611%Q3 YTDFY2021124,83463,959(51.2% )53,61110,347(8.3% )-1,1019,2462929,5385,752¥111.38¥130.85YoY31,84218,2829,3908,8912939,1855139,6997,075¥5.51¥8.55©2022 Topcon Corporation5FY2021 Q3 Financial Results by BusinessSignificant increase in sales and operating income for all business segmentsQ3 YTD（unit：million yen）FY2020FY2021YoY%PositioningSmart InfrastructureNet SalesEye CareOthersEliminationTotalPositioningEye CareOthersEliminationTotalSmart InfrastructureOperatingIncome(OperatingIncome Ratio)49,06123,80428,976838-9,68892,9913,087(6.3%)2,944(12.4%)-1,211(-4.2%)-340-3,0241,455(1.6%)67,81228,02741,360867-13,233124,8347,248(10.7%)4,405(15.7%)1,983(4.8%)-264-3,02510,347(8.3%)YoY18,7514,22312,38328-3,54531,8424,1611,46176-18,891+38%+18%+43%+34%+135%+50%+611%3,194Turns profitable©2022 Topcon Corporation6FY2021 Q3 Operating Income YoY Breakdown(unit: billion yen)20.020015015.010.01005.0500+0.4-6.9+16.2(Main Factors)- Selling activity expenses- Strengthening of sales capability(including employment expenses)- R&D investment+1.7-2.6(Main Factors)- Delays in shipments and sales- Component costs surge- Logistics costs surge10.31.5FY2020Q3 YTDSales Volume,Product MixManufacturingCostFixed CostFX EffectsSpecial FactorsFY2021Q3 YTD©2022 Topcon Corporation7Ⅰ. FY2021 Q3 Financial ResultsⅠ-１. FY2021 Q3 Financial ResultsⅠ-２. Overview of Each Business©2022 Topcon Corporation8Overview of Each Business PositioningRecord high sales and operating income Net SalesOperating Income（Operating Income Ratio）Exchange Rate USD（Average） EURFY202049,0613,087(6.3%)¥105.87¥122.30Q3 YTDFY202167,8127,248(10.7%)¥111.38¥130.85(unit: million yen)YoY%18,7514,161¥5.51¥8.55Q3 YTD trend+38%(unit: billion yen)+135%700Net salesOperating income53.652.549.1Review of Financial ResultsOverall- Significant increase in sales and profit driven by active housing and infrastructure investment demands in the U.S. and Europe- Increasing impact of component and logistics surge and material shortagesIT Construction and IT Agriculture- Continuing strong sales for both aftermarket and OEMSurveying and laser products- Robust sales thanks to continued booming housing construction market mainly in the U.S. and Europe 4.52.43.1FY2018FY2021Q3 YTD Q3YTD Q3 YTD Q3 YTDFY2019FY202067.87.22001801601401201008060402008006005004003002001000©2022 Topcon Corporation9Overview of Each Business Smart InfrastructureRecord high sales and operating income (unit: million yen)Net SalesOperating Income（Operating Income Ratio）Exchange Rate USD（Average） EURFY202023,8042,944(12.4%)¥105.87¥122.30Q3 YTDFY202128,0274,405(15.7%)¥111.38¥130.85YoY4,2231,461¥5.51¥8.55Q3 YTD trend%+18%+50%(unit: billion yen)Net salesOperating incomeReview of Financial ResultsGeneral- Solid sales in Japan, substantially sales surpassed in the U.S. and Europe- Increased the impact for surges of component costs and material shortagesSurveying instruments- Sales were strong, but due to a component shortage, the backlog of orders have not reached to the proper levelIT Construction・IT Agriculture- Realizing the impact of the delay in purchasing and expanding impacts on sales26.123.723.83.93.02.928.04.4FY2018FY2021Q3 YTD Q3YTD Q3 YTD Q3 YTDFY2019FY2020500450400350300250200150100500©2022 Topcon Corporation10Overview of Each Business Eye CareRecord High sales, turning profitable(unit: million yen)FY2020FY2021YoY%Q3 YTD trendNet SalesOperating Income（Operating Income Ratio）Exchange RateUSD（Average） EUR28,976-1,211(-4.2%)¥105.87¥122.30+43%(unit: billion yen)Turns600profitableNet salesOperating income12,3833,194¥5.51¥8.55Q3 YTD41,3601,983(4.8% )¥111.38¥130.8541.433.333.929.0Review of Financial ResultsOverall- Despite COVID-19, demands remain strong, especially in major markets- Increased the impact for surges of component and logistics costsScreening Business- Strong sales in Europe, the U.S., and ChinaMaestro: Large orders from multiple optical chain stores in the U.K.TRC-NW 400 : Strong demands continue for hospitals and screening centers in ChinaTele-optometrySales to major chains in Europe and the U.S. continue to be strong at a record high pace-1001.30.92.0-1.2FY2018FY2021Q3 YTD Q3YTD Q3 YTD Q3 YTDFY2019FY20205004003002001000300250200150100500-50©2022 Topcon Corporation11Ⅱ. FY2021 Full Year PlanⅡ-1. FY2021 Full Year PlanⅡ-2. Topics of Each Business©2022 Topcon Corporation12FY 2021 Full Year PlanUpward revisionOutlook for business environment in Q4＜Positive factors ＞ Continuing growing demands for surveying equipment and ITconstruction thanks to solid demands for housing and civilinfrastructure investment mainly in the U.S. and Europe The demands for IT agriculture is also on the rise due to high cropprices and labor shortages Continued steady capitalchain markets in the U.S. and Europeinvestment of ophthalmic and optical＜Negative factors ＞ Expanding impacts of delays in shipments and sales due to component shortages Increasing effects from component and logistics costs surgeBased on Q3 results and above environment outlook in Q4, we revised full year plan as belowQ4 Exchange rate assumptions :$= 108 yen/€= 128 yen remain unchangedRevised PlanPrevious Plan(As of October 29, 2021)Revised Plan(As of January 28, 2022)Actual(FY2020)Sales \160.0B \165.0BOperating Income \12.5B \13.5BOrdinary Income \10.5B \11.5B 　　 　\137.2B 　 　 \6.6B 　　 　 \5.6BNet Income \6.5B \7.0B \2.4BDividends¥20¥20¥10Change +20%+105% +106% +195%©2022 Topcon Corporation13FY2021 Operating Income YoY BreakdownUpward revision despite expanding impacts of component shortages and tightening supply chains25.0250(Unit: billion yen)20.020015.015010.01005.05006.6+1.0-7.2+16.3(Main Factors)- Selling activity expenses- Strengthening of sales capability(including employment expenses)- R&D investmentDown by 1.5 billion yen from Q2 plan+1.8-5.0(Main Factors)- Delays in shipping and sales- Component costs surge- Logistics costs surge13.5FY2020Sales Volume,Product MixManufacturingCostFixed CostFX EffectsFY2021Special Factors©2022 Topcon Corporation14FY2021 Full Year PlanSales 1.2 times, Operating Income 2 times, Net Income 3 times YoY（unit: million yen）FY2021(Operating Income Ratio) (4.8%) (8.2%)FY2020Full YearActual137,2476,5935,5872,3763.6%Net SalesOperating IncomeOrdinary IncomeNet IncomeROEDividendsExchange Rate(Average) \10USDEUR¥106.17¥123.73Q4( Assumption)Full YearPlan165,00013,50011,5007,00010%¥20¥108¥128YoY%Full YearPlan** Announced on Oct. 29+20%+105%+106%+195%160,00012,500(7.8%)10,5006,500 9% \202H( Assumption)¥108¥128©2022 Topcon Corporation15FY2021 Full Year PlanNet SalesOperatingIncome(Operating Income Ratio)PositioningSmart InfrastructureEye CareOthersEliminationTotalPositioningSmart InfrastructureEye CareOthersEliminationTotalFY2020Full YearActual71,41633,98244,2511,165-13,568137,2476,064(8.5%)4,972(14.6%)122(0.3%)-536-4,0286,593(4.8%)FY2021YoY%+27%+9%+22%+20%+73%+1%+1,949%+105%（unit: million yen）Full YearPlan* Announced on Oct. 2988,00037,00052,0001,000-18,000160,0009,500(10.8%)5,000(13.5%)2,500(4.8%)-300-4,20012,500(7.8%)Full YearPlan91,00037,00054,0001,000-18,000165,00010,500(11.5%)5,000(13.5%)2,500(4.6%)-300-4,20013,500(8.2%)©2022 Topcon Corporation16Ⅱ. FY2021 Full Year PlanⅡ-1. FY2021 Full Year PlanⅡ-2. Topics of Each Business©2022 Topcon Corporation17Business TopicsPositioningExhibited at a U.S. Large Construction Exhibition for the first time in 2 yearsConvincing the strong momentum of the U.S. construction marketWorld of Concrete(U.S. Construction Exhibition) Reference: videohttps://www.topcon.co.jp/invest/popup/WOC2022.htmlVenueDateAttendees : Las Vegas, NV, USA: Jan 18th – 20th , 2022: 60,000 visitors every yearsReceived inquiries exceedingpre-COVID-19 levels New products launchGuidance system forsmall to medium-sized construction machinery Expanding the base range of applicable machine in the market Utilizing success stories in the Japanese marketVenue AppearanceTopcon BoothReconfirmed the strong momentum of the U.S. construction market Total stationwith scanner Realizing efficiencies for survey & 3D measurement with two-in-one function Dramatically reducing work processesCompact Track LoaderSmall Sized Excavator©2022 Topcon Corporation18Business TopicsSmart InfrastructureFull-scale start of building construction DX and introduction of new products to accelerate promotionExpanding lineup of products for building constructionThe 6th “Japan Build 2021″Venue : Tokyo Big SightDate: December 6-8, 2021 Number of attendees: More than 30kNew product launch for building constructionHigh precision positioning navigator dedicated tobuilding construction✔ Doubling productivity!Manpower saving inessencial process, marking workRaku-ichiConventional workNEWOur SolutionsFor markingAppTwo people working in analog✔ One person with digital surveying equipment✔ Time saving✔ Improvement of accuracyRaku-zumi✔ First participation in a large-scale building construction exhibition✔ Approaching new targets including housing companies and building construction companies✔ Strong inquiries for new products©2022 Topcon Corporation19Scene of the venueTopcon BoothBusiness TopicsEye CareWorld’s largest ophthalmological society held physically in two yearsAmerican Academy of Ophthalmology (AAO)Venue: New Orleans, USADate: November 12-15, 2021✔ Number of attendees: more than 12,000Physical : 80%Online : 20%✔ Increasing inquiries and orders Scene of the venueTopcon BoothThe exhibition ofthe Maestro 2The exhibition of the ChronosConfirmed strongophthalmological marketsin the U.S. ©2022 Topcon Corporation20Ⅲ. Summary©2022 Topcon Corporation21Summary17001600150014001300120011001000900800700600500400300200100(unit: billion yen)0Upward revision: Sales 1.2 times, Operating Income 2 times, Net Income 3 times YoY from FY2020Net salesOperating income138.9137.2Record high165.013.56.65.4FY2019ActualFY2020ActualFY2021PlanIncrease Sales・Profit ・DividendNet SalesFY2021 Plan¥165.0BYoY+20%Operating Income¥13.5B+105%Ordinary Income¥11.5B+106%Net Income¥7.0B+195%Dividends¥20FY2020 Actual¥10200190+5.0180Increase 170from the plan 160previously announced150140+1.0130120Increase from the plan 110previously 100announced9080706050403020©2022 Topcon Corporation22Topcon for Human Life©2022 Topcon Corporation23Ⅳ. Appendix©2022 Topcon Corporation24Financial Results (Quarterly)ConsolidatedSalesOperating Income44.338.9(unit: billion yen)42.443.6PositioningSalesOperating Income(unit: billion yen)22.422.622.722.534.034.530024.52.21.6-2.340020010001005006.30.217.716.91.60.9150250100500△ 502001501005001501005070605040302010014.40.66.3△ 100-1.95.13.53.53.43.03.12.31.8FY20/Q1ActualQ2ActualQ3ActualQ4ActualFY21/Q1ActualQ2ActualQ3ActualFY20/Q1ActualQ2ActualQ3ActualQ4ActualFY21/Q1ActualQ2ActualQ3ActualSmart InfrastructureSalesOperating Income（億円）10.210.38.68.98.79.1(unit: billion yen)SalesOperating Income(unit: billion yen)Eye Care15.316.113.912.210.411.41.51.22.01.32.01.21.21.30.30.2-0.51.5FY20/Q1ActualQ2ActualQ3ActualQ4ActualFY21/Q1ActualQ2ActualQ3ActualFY20/Q1ActualQ2ActualQ3ActualQ4ActualFY21/Q1ActualQ2ActualQ3Actual©2022 Topcon Corporation25806040200△ 2080757065605550454035302520151050△ 5△ 10△ 15△ 20△ 25△ 30△ 35Financial Results (Semiannually)ConsolidatedPositioningSalesOperating Income(unit: billion yen)SalesOperating Income(unit: billion yen)69.569.458.578.881.337.136.945.35.432.139.33.93.81.67.47.02.91.72.2FY19/1HActualFY19/2HActualFY20/2HActualFY21/1HActualFY19/1HActualFY19/2HActualFY20/1HActualFY20/2HActualFY21/1HActualSmart InfrastructureEye CareSalesOperating Income(unit: billion yen)SalesOperating Income17.116.319.119.022.222.6(unit: billion yen)27.525.3-0.8FY20/1HActual14.91.82.52.53.23.21601106010-406040200400300200100030020010000.6-0.52.50.516.8-2.4FY20/1HActual6040200140120100806040200-20-401,00080060040020002001000FY19/1HActualFY19/2HActualFY20/1HActualFY20/2HActualFY21/1HActualFY19/1HActualFY19/2HActualFY20/2HActualFY21/1HActual©2022 Topcon Corporation26Financial Results and Plan (Annually)ConsolidatedSalesOperating Income145.6148.7138.9137.2(unit: billion yen)165.0PositioningSalesOperating Income(unit: billion yen)91.074.977.774.071.412.113.65.4FY19Actual6.6FY20ActualFY17ActualFY18ActualSmart InfrastructureOperating IncomeSales13.5FY21Plan(unit: billion yen)37.040036.636.733.434.08.08.410.56.1FY17ActualFY18ActualFY20ActualFY21Plan4.5FY19ActualEye CareSalesOperating Income (unit: billion yen)54.046.547.744.844.3300250200150100500140120100806040200900800700600500400300200100050040030020010001,8001,6001,4001,2001,0008006004002000300200100020018016014012010080604020070503010△ 106.45.15.05.05.02.92.0FY17ActualFY18ActualFY19ActualFY20ActualFY21PlanFY17ActualFY18Actual2.5FY21Plan0.1FY19Actual0.1FY20Actual©2022 Topcon Corporation27Sales by regionFY2020 / Q3 YTDFY2021 / Q3 YTD¥93.0BAsia/ Others¥19.7B21%23%Japan¥21.6B24%32%Europe¥22.3BNorthAmerica¥29.4BYoY+34％¥124.8BAsia/ Others¥27.4B22%19%Japan¥24.2B26%33%Europe¥32.0BNorthAmerica¥41.2B©2022 Topcon Corporation28Capital Expenditure and R&D / Forex SensitivityProjections4.2Capital ExpenditureDepreciation*R&D8.4（unit: billion yen）7.0（unit: billion yen）8.0（unit: billion yen）16.016.014.97.46.8FY19ActualFY20ActualFY21PlanFY19ActualFY20ActualFY21Plan*Excluding Goodwill AmortizationFY19ActualFY20ActualFY21PlanForex Sensitivity（impact by ¥1 change）USD：Operating Income ¥0.15B – ¥0.2BEUR：Operating Income ¥0.07B – ¥0.1B©2021 Topcon Corporation29Non-Financial Information Please refer to Topcon Report 2021 (Integrated Report)Content Topcon Way Message from the CEO Value Creation Story Business Overview Selected as “DX Stocks” for two consecutive years ESG at Topcon Financial HighlightsRepresentative Director,President and CEO Satoshi Hirano Growth Trajectory The Present and Future Carrying on Isms and SDGsOutside DirectorYoshiharu Inaba(Fanuc Corporation, Chairman and Representative Director) Topcon’s Governance Similarity with Fanuc■Website: https://global.topcon.com/invest/library/integration/©2022 Topcon Corporation30Non-Financial Information Sustainability page on our website explaining the social issues we addressed and SDGs, etc.■Website: https://global.topcon.com/sustainability/sdgs/©2022 Topcon Corporation31Initiatives for SDGs: Contribution to CO2 emission reductionTopcon’s automation technologies for construction and farming machinery itselfcontribute to reduce environmental impactIT ConstructionIT AgricultureReduction in CO2 emission fromour products(Topcon’s estimation)*1: Source – Ministry of Land, Infrastructure, Transport and Tourism i-Constructionpromotion consortium”Progress of i-Construction” (2019)https://www.mlit.go.jp/tec/i-construction/pdf/03.5_kikaku_siryou6.pdf*2: Basis of calculationBased on the numbers with multiplying the estimated annual CO2 emissions per unit of construction machinery and the estimated reduction rate of working hours through the use of ICT, calculating the CO2 emissions reduction multiplying the estimated number of ICT automated construction machinery in operation worldwide and the estimated share of our company.By automating construction machinery,operating time reduced by approximately 30% * 1By Auto Steering System for farming machinery,Operating time reduced by approximately 20% * 3Global600,000 tons/year*2Reduction in CO2 emission fromour products(Topcon’s estimation)Global500,000 tons/year*4By leveraging the strength of vendor neutral strategy,penetrate automation technologyfor existing construction and farming machinery*3: Source: AEM “The Environmental Benefits of Precision Agriculture in the United States” (2020)https://newsroom.aem.org/asset/977839/environmentalbenefitsofprecisionagriculture-2#.YBdQZR2Lc74.linkExpecting further CO2 reduction by spreading of the automation technologies*i-Construction is a registered trademark of Ministry of Land, Infrastructure, Transport and Tourism’s National Institute for Land and Technology Policy.*4: Basis of CalculationBased on the numbers with multiplying the estimated annual CO2 emissions per unit of farming tractor and the estimated reduction rate of working hours through the use of Auto Steering System, calculating the CO2 emissions reduction multiplying the estimated number of tractors with Auto Steering System in operation worldwide and the estimated share of our company.©2021 Topcon Corporation32©2022 Topcon Corporation33Cautionary Note regarding Forward-Looking StatementsThese 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 28, 2022 at 15:00(UTC+9)Inquiries: Corporate Communication Div.Corporate Communication Dept. TOPCON CORPORATIONTel: +81-3-3558-2532E-mail: investor_info@topcon.co.jpURL: https://global.topcon.com/invest/©2022 Topcon Corporation34