トプコン（7732） – [Delayed]FY2021 Financial Results

FY2021Financial ResultsMay 12, 2022TOPCON CORPORATIONPresident & CEOSatoshi HiranoCompany Profile Movie1ContentsFY2021 Financial ResultsⅠ. FY2021 Financial ResultsⅡ. FY2022 Full Year PlanⅢ. SummaryⅣ. Appendix©2022 Topcon Corporation2Ⅰ. FY2021 Financial ResultsⅠ-1. FY2021 Financial ResultsⅠ-2. Overview of Each Business©2022 Topcon Corporation3FY2021 OverviewSignificant increase in sales and profit,big upswing from previously published planRecord high176.4148.7138.9137.21,9001,8001,7001,6001,5001,4001,3001,2001,1001,000900800700600500400(unit: billion yen)300Net sales200Operating 100income0FY2018FY2019FY2020FY2021＋¥11.4BPreviouslypublished plan¥165.0B(Initial plan:¥149.0B)＋¥2.4BPreviouslypublished plan¥13.5B(Initial plan:¥10.0B)YoY129%241%- Net Sales- Operating IncomePreviousyear3.6%- ROE- Dividends¥10Actual14.0%YoY+10.4%Record high¥36+¥26Factors of the upswingfrom the previously published plan Captured stronger-than-expected demand Reduced component shortage effects to smaller-than-expected because of concerted efforts by the engineering, procurement, and manufacturing©2022 Topcon Corporation4FY2021 OverviewFinancial HighlightsCash-generating capabilityOperating Cash FlowFinancial soundness/Investment capacityD/E RatioAsset efficiencyTotal Assets TurnoverCapital efficiencyROEShareholder returnFY2019FY2020¥7.9B¥19.4BFY2021Record high¥20.5B0.910.760.520.861.4%0.833.6%1.0014.0%Record highDividends / Payout Ratio¥24 / 271%¥10 / 44%¥36 / 35%©2022 Topcon Corporation5FY2021 ResultsNet SalesGross Profit(Gross Profit Ratio)SGAOperating Income(Operating Income Ratio)Non-Operating Income(Expenses)Ordinary IncomeExtraordinary Income(Loss)Income Before Income Taxesand Minority InterestsNet IncomeROEDividendsPayout RatioExchange Rate(Average)USDEURFY2020Actual137,24767,895 （49.5%）61,3016,593 （4.8%）-1,0065,587-6674,9192,3763.6%¥1044％¥106.17176,421 90,093（51.1%）74,178 15,914（9.0%）-1,094 14,820 -174 14,645 10,699 14.0%¥3635%¥112.86ActualYoY％Plan* Announced on January 28(unit: million yen)+29%165,000+141%13,500（8.2%）9,232 +165%11,500FY202139,174 22,19812,877 9,320-88 492 9,725 8,323 +350%7,00010%¥25* Released on March 14¥123.73©2022 Topcon Corporation¥131.01¥6.69¥7.28(Q4 Assumption(¥108¥1286FY2021 Financial Results by BusinessRecord high sales for all business segments, significant increase in sales and profit（unit: million yen）PositioningSmart InfrastructureNet SalesOperatingIncome(OperatingIncomeRatio)Eye CareOthersEliminationTotalPositioningEye CareOthersEliminationTotalSmart InfrastructureActualYoYYoY%Plan※Announced on January 28FY2020Actual71,41633,98244,2511,165-13,568137,2476,064（8.5%）4,972（14.6%）122 (0.3%)-536-4,0286,593（4.8%）FY202125,2765,05813,10118-4,28039,1745,484+35%+15%+30%+29%+91%849+17%3,081+2,525%170-2659,320＋141%91,00037,00054,0001,000-18,000165,00010,500（11.5%）5,000（13.5%）2,500（4.6%）-300-4,20013,500（8.2%）96,69239,04057,3521,184-17,848176,42111,548（11.9%）5,821（14.9%）3,203（5.6%）-365-4,29315,914（9.0%）©2022 Topcon Corporation7FY 2021 Operating Income YoY BreakdownSignificant increase in operating income due to maximum capturing of strong demand,despite expanding impacts of component and logistics cost surges and component shortages30030.0(Unit: billion yen)+0.6-9.7(Main Factors)- Delays in shipments and sales due to component shortages- Component costs surge- Logistics costs surge+22.2+1.9-5.7(Main Factors)- Selling activity expenses- Strengthening of sales capability(including employment expenses)- R&D investment15.925.025020020.015015.010.01005.05006.6FY20202021年3月期Sales Volume,売上増・MixProduct MixManufacturing原価低減CostFixed Cost固定費FX Effects為替影響FY20212022年3月期Specialspecial factorFactors©2022 Topcon Corporation8Ⅰ. FY2021 Financial ResultsⅠ-1. FY2021 Financial ResultsⅠ-2. Overview of Each Business©2022 Topcon Corporation9Overview of Each BusinessPositioningRecord high sales and operating income FY2020FY2021（unit: million yen）ActualActualYoY%Plan* Announced on January 28(unit: billion yen)Yearly TrendNet SalesOperating Income(Operating Income Ratio)ExchangeRate(Average)USDEUR71,4166,064（8.5%）¥106.17¥123.7396,69225,276+35%91,0001,0005,484+91%10,500（11.5%）11,548（11.9%）¥112.86¥131.01¥6.69¥7.2880077.774.071.496.711.5Net salesOperating income8.46.14.5Review of Financial ResultsOverall- Significant increase in sales and profit capturing strong demand driven by active housingand infrastructure investment in the U.S. and Europe- Reduced the impact of component shortages by demonstrating company-wide maneuverability while the effects of component and logistics costs surge increaseIT Construction and IT Agriculture- Continuing strong sales for both aftermarket and OEMSurveying and laser products- Strong sales thanks to continued booming housing construction market6004002000FY2018 FY2019 FY2020 FY2021©2022 Topcon Corporation10Overview of Each BusinessSmart InfrastructureRecord high sales, robust operating income（unit: million yen）FY2020FY2021Yearly TrendActualActualYoY%Plan※Announced on Jan. 28(unit: billion yen)Net salesOperating incomeNet Sales33,98239,0405,058+15%37,000Operating Income(Operating Income Ratio)ExchangeRate(Average)USDEUR4,972（14.6%）¥106.17¥123.735,821（14.9%）¥112.86¥131.01¥6.69¥7.28849+17%5,000（13.5%）Review of Financial ResultsOverall- Solid sales in Japan, significant sales surpassed in the U.S. and Europe, recovery trend in Asia- Enhancing growth investment in start-up building construction DX (Digital Transformation)- Reduced the impact of component shortages by demonstrating company-wide maneuverability while the effects of component costs surge increaseSurveying instruments- Strong sales for total stationsIT Construction and IT Agriculture- The orders are very strong thanks to new products effect while some sales slip to the next fiscal year due to the component shortages600500400300200100036.76.433.434.05.05.039.05.8FY2018FY2019FY2020FY2021©2022 Topcon Corporation11Overview of Each BusinessEye CareRecord high sales, significant increase in operating incomeFY2020FY2021（unit: million yen）ActualActualYoY%Plan※Announced on Jan. 28(unit: billion yen)Net SalesOperating Income(Operating Income Ratio)ExchangeRate(Average)USDEUR44,251122（0.3%）¥106.17¥123.7357,35213,101+30%54,0003,081+2,525%2,500（4.6%）3,203（5.6%）¥112.86¥131.01¥6.69¥7.28Review of Financial ResultsOverall- Sharp increase in profit thanks to strong sales in the U.S., Euope, and China- Reduced the impact of component shortages by demonstrating company-wide maneuverability while the effects of component and logistics costs surge increaseScreening Business- Strong sales in major markets as satedy progress of the investment effect・Maestro : Large orders from multiple major optical chain store in the U.S. and Europe: Strong demands for hospitals and screening centers in China・TRC-NW 400Active collaboration in the AI diagnosis fieldDigital Optmetry System- Sales to major chain stores in Europe and the U.S. continue to be strong at a record high pace8007006005004003002001000Yearly TrendNet salesOperating income57.447.744.844.32.93.20.10.1FY2018FY2019FY2020FY2021©2022 Topcon Corporation12Ⅱ. FY2022 Full Year PlanⅡ-1. Progress of the Third Mid-term Business PlanⅡ-2. FY2022 Full Year PlanⅡ-3. Strategic Plans for Each Business©2022 Topcon Corporation13Progress of the Third Mid-term Business PlanMessage on FY2020 Presentation Material(May 11, 2021)- Proved our strength as an Essential Businessamid COVID-19 pandemic- Vision is intact- Timeline is inevitable to change⇒ Timeline is extended for another one year (originally three-year plan) while the financial targets remain unchangedFY2021 Results- Proved our strength as an Essential Business amidprolonged COVID-19 pandemic- Has returned to originally planned growing trend- Increasing unexpected effects of component and logistics costs surge and component shortages- Implemented measures to the best extent such as securing component, design changes, and price revisionsGiven the external environment getting opaquer and more unpredictable, Aim to achieve the financial targets (Mid-term Business Plan)extended by one year©2022 Topcon Corporation14Ⅱ. FY2022 Full Year PlanⅡ-1. Progress of the Third Mid-term Business PlanⅡ-2. FY2022 Full Year PlanⅡ-3. Strategic Plans for Each Business©2022 Topcon Corporation15FY2022 Full Year PlanReview of FY2021Significant upswing from the initial plan as of the beginning of this fiscal year 1st upward revision160.02nd upward revision165.0Actual176.415.9Projecting plan has beenextremely difficultChange from the initial plan+27.4 billion yenNet salesOperating income +5.9 billion yen190+¥27.4B12.513.5130+¥5.9BVariable factors- Captured stronger-than-expected demand- Expanding impact of component and logistic cost surge and component shortages- Reduced the impact of component shortages by demonstrating company-wide maneuverability more than expected2,1001,900Initial Plan(unit: billion yen)1,700Net salesOperating income1,500149.01,3001,10090070050010.0250230210170150110907050Q1Q2Q3Q4©2022 Topcon Corporation16FY2022 Full Year PlanStrong demand is expected to continuewhile more growing concerns compared to last fiscal year● Prolonged supply chain issue( component shortages and logistic confusion, such as cost surge, etc..)・Growing concern● Uncertainty due to Ukraine situation● Worsening effects of tighter sanctions against Russia on world economy (Soaring energy, material and commodities prices)● Covid-19 variants’ resurgence and stagnation of Chinese economy● Concern of further tightening monetary policy due to accelerating inflation in the U.S. Given the increasing uncertainty as above,projecting the plan for this fiscal year as below FY2021ActualFY2022ActualFY2022Third Mid-termBusiness PlanNet salesOperating IncomeOrdinary IncomeNet Income¥176.4B¥159.0B¥14.8B¥10.7B¥190.0B¥18.0B¥17.0B¥12.0B¥180.0B¥20.0B–©2022 Topcon Corporation17FY2022 Full Year PlanOrdinary Income14,82017,000FY2021FY2022ActualPlanYoY(Unit: million yen)Third Mid-term Business Plan176,421190,000+8%180,00015,914(9.0%)18,000(9.5%)10,69912,00014.0%¥3635%14%¥4035%¥112.86¥120.00¥131.01¥130.00+13%+15%+12%+¥4¥7.14-¥1.0120,000(11.1%)—13～15%Over 35%¥110.00¥125.00Net SalesOperating Income(Operating Income Ratio)Net IncomeROEDividendsPayout RatioExchange Rate(Average)USDEUR©2022 Topcon Corporation18FY2022 Full Year Plan by BusinessPositioningSmart InfrastructureNet SalesOperatingSmart InfrastructureIncome(OperatingIncomeRatio)Eye CareOthersEliminationTotalPositioningEye CareOthersEliminationTotalFY2021FY2022ActualPlanYoY106,000+10%(Unit: million yen)Third Mid-termBusiness Plan96,69239,04057,3521,184-17,848176,42111,548(11.9%)5,821(14.9%)3,203(5.6%)-365-4,29315,914(9.0%)42,00062,0001,000-21,000190,00013,000(12.3%)5,000(11.9%)4,500(7.3%)-300-4,20018,000(9.5%)+8%+8%+8%+13%-14%+40%93,00043,00062,0001,000-19,000180,000—-+13%20,000©2022 Topcon Corporation19Ⅱ. FY2022 Full Year PlanⅡ-1. Progress of the Third Mid-term Business PlanⅡ-2. FY2022 Full Year PlanⅡ-3. Strategic Plans for Each Business©2022 Topcon Corporation20Strategic PlansPositioningBusiness Outlook- Expecting increase of infrastructure demand while there is concern of negative impact on housing construction- Despite benefit from high crop price increase, uncertainty is increasing due to increase fuel and fertilizer cost for agricultural machinery- Increase of productivity improvement demand due to labor shortage and fuel cost increasedue to rising interest rates Strategic Plans- IT Construction：Expanding the base range by new products for small to medium sized construction machinery- Capturing new business opportunities from increasing infrastructure investments71.4(unit: billion yen)6.11,2001,2001,0001,000800800600600400400Net sales200Operating income2000096.711.5106.013.0300250200150100500FY2020ActualFY2021Actual©2022 Topcon CorporationFY2022Plan21IT Construction：Expanding the base range by new products for small to medium sized construction machineryPositioningLaunch new product “MC Mobile” for the untapped market of small to medium sized machinery Image of construction machinery market (Unit base)Current targeted marketLarge construction sitesLarge Construction Machinery Realizing the hugepotential marketCapturing productivity improvement demand due to labor shortageand fuel cost increaseMC MobileUntapped marketSmall to medium sizeconstruction sitesSmall to medium sized construction machineryCompact truck loader（Small sized dozer）Mini excavator✔Easy installation✔Compatible for various brands of machinery✔Reasonably priced for small to medium sized machinery©2022 Topcon Corporation22Capture new business opportunities fromincreasing infrastructure investmentsAggressively capturing new demandsThe Infrastructure investment and jobs act(Enacted in November 2021)Budget size：More than 1.2 trillion USD✔ Infrastructure related investment consists 90%✔ Increase of public investments is expected for 8 yearsPositioningIT Construction contributes for productivity improvements and labor savingsConstruction site at an airportHighway constructionInfrastructure related：1,098 billion USD（roads, bridges, rail loads, waterworks,airports and etc.）Reference:https://www.congress.gov/bill/117th-congress/house-bill/3684/texthttps://www.grassley.senate.gov/news/news-releases/myths-and-facts-infrastructure-investment-and-jobs-actPaving for airport runwayRail load construction monitoringPhotos of IT Construction at various construction sites©2022 Topcon Corporation23Strategic PlansBusiness OutlookSmart Infrastructure-Japan: Strong demand in construction and agriculture continues while automation needs are increasing due to a shortage of workers – Asia: Economic activities are revitalized thanks to the recovery from COVID-19 pandemicDomestic IT Construction and IT Agriculture: Continue to focus on small to medium sized construction sites and medium sized farmersStrategic Plans- Accelerating penetration by strategic products- Accelerating growth investments for further business expansionMarket development in Asia for IT Construction and IT AgricultureDevelopment of construction market by our DX (Digital Transformation) solution1,000900800700600500400300(unit: billion yen)200Net salesOperating 100income034.05.0FY2020Actual39.05.8FY2021Actual42.05.0FY2022Plan300250200150100500©2022 Topcon Corporation24Accelerating market penetrationby strategic productsDomestic IT Construction and IT Agriculture: Continue to focus on small to medium sized construction sites and medium sized farmers’ marketIT Construction✔ ICT Machine Guidance System “KUI-NAVI SHOVEL”Accelerating market penetration to small to medium sized construction machinery marketKUI-NAVI SHOVELSales of “KUI-NAVI”(Unit)Cumulative sales:10,000 units or moreIT agriculture✔ Simple model of Auto steering systemAccelerating market penetration to small to medium sizedagricultural machinery marketsSimple model of automatic steering systemSmart InfrastructureKUI-NAVIControl DisplayGNSS ReceiverElectric power steeringImage of domestic tractor market size (unit)current target marketlarge agricultural machineryuntapped market small to medium sized agricultural machineryBig potential with low penetration rate- 3D Machine Guidance Systemreasonably priced for mini excavatorsA large potential customers using “KUI-NAVI”!- Leveraging “KUI-NAVI” which is widely used in the sites as a sencor =>Targeting existing “KUI-NAVI” users FY2013FY2019 FY2020 FY2021- New product reasonably priced for small to medium sized agricultural machines- Accelerating market penetration through specializing for the function of the auto steering which users need most ©2022 Topcon Corporation25Accelerating growth investmentsfor further business expansionSmart InfrastructureFocusing on creating new markets from a medium- to long-term perspective*DX : Digital TransformationMarket development in Asia for IT Construction and IT AgricultureDevelopment of construction market by our DX solution*✔ Established Topcon Positioning Asia (April 2020)=>New organization strategically leading business expansion in Asian region✔ Initiation of full-scale market development by recruting talented resource and strengthening of organization.✔ Applying similarly the successful business case of construction and agriculture field in Japan✔ Strengthening the organization by recuruiting talented resource✔ Expanding Product Line for the new markets✔ New business development for distribution and partnership, Strengthening allianceThe market size of building construction is twice as much as that of civil worksHigh growth potential in Asia and the Middle EastJapan’s building construction marketWorld’s building construction marketCAGRNorth America, Europe and Oceania : 11%Asia and Middle East : 0%(excluding Japan and China)Civilworks23738%Civilworks3,04231%39462%Buildingconstruction631(unit: US$billion)7,54669%10,588BuildingconstructionFY2011FY2016FY2021North America, Europe and OceaniaAsia and Middle East (excluding Japan and China)Source: “Annual Data” National Bureau of Statistics of China, “Construction Spending” The U.S. Bureau, “KEY FIGURES 2019” European Confederation of Construction Industries and “Estimate of Construction Investment” Ministry of Land, Infrastructure, Transport and Tourism Currency rate : 1USD = 6.57CNY, 1USD = €0.82, 1USD = ¥103.6©2022 Topcon Corporation26Strategic PlansBusiness Outlookrelating to healthcare- Stable capital investment of major optical chain store in the US and Europe will continue, focusing on the investment- Patient of chronic eye disorder will increase due to worldwide aging population and growth of diabetesStrategic Plans- Further expansion of screening businessThe focused screening business has blossomed and entering a recovery phase of the upfront investment- Tele-optometry business expansionCapturing Tele-optometry needs, based on the growth of digital optometry systemEye Care1,000800600400200Net salesOperating 0income(unit: billion yen)44.30.1FY2020Actual57.43.2FY2021Actual25020015010050062.04.5FY2022Plan©2022 Topcon Corporation27Expansion of Tele-optometry BusinessEye CareConsistent capturing Tele-optometry needs, based on the growth of digital optometry systemStrong Sales of Digital Optometry SystemDigital technologyFace-to-face OptometryOptometry systemOperation by Tablet PCSales ofOptometry System (Q’ty)FY21Record high SalesBenefits of installing Digital optometry System Capable of Tablet PC Operation for Optometry system(Capable for operation by an operator from a control room in the same facility) Digital patient data management Scalable to Tele-optometryFY2019 FY2020 FY2021ResultExpansion and promote of Tele-optometryAn Optometrist is possible to cover the multiple stores by on-line optometry*1CloudTele-optometry softwareImplemented by Topcon RDx(Developed by Topcon Healthcare Solution Inc.)Optical Store1Optical Store2Optical Store3*2Benefits for the optical store✔Business efficiency for Optical Store✔Increasing of Customer turnover*1 RDx: Currently available in the U.S. only*2 Diagnostic support services at reading centers, offered in the U.S. only as of now©2022 Topcon Corporation28Further expansion of Screening BusinessThe focused screening business has blossomedand entering a recovery phase of the upfront investmentMaestro2*2- Driving large orders from major optical chain stores in U.S. and Europe*1 NW400*3China-Started local manufacturing (Jan. 2022)to and applying the bid by domestic production-Continuing sales by collaborating with major medicaland health care group and AI development companies Eye CareGrowth Trend ofScreening BusinessSales of Screening Equipment（Q`ty）*2*3(Total global sales of Maestro1, 2and NW400)FY21Record high SalesEffect of COVID-19TRC-NW400Driving the large orders from the major optical chain stores in the U.S.*1 *1 Diagnostic support services at reading centers, offered in the U.S. only as of now*2 Product name :3D OPTICAL COHERENCE TOMOGRAPHY 3D OCT-1 (Type: Maestro2) *3 Product name: NON-MYDRIATIC RETINAL CAMERA TRC-NW400FY2015FY2019 FY2020 FY2021Result©2022 Topcon Corporation29Ⅲ. Summary©2022 Topcon Corporation30SummarySales, Operating Income, and Dividends will be Record High(unit: billion yen)Net salesOperating income176.4137.215.96.6【Full Year Plan】190.0Capture the strong demand fully despite increasing uncertainty18.0Net salesPlan¥190.0BYoY+8%Operating Income¥18.0B+13%Ordinary Income¥17.0B+15%Net Income¥12.0B+12%DividendsPlan¥40＋¥4ExchangeRate(Average)USDEURFY2020Actual¥106.17¥123.73FY2021Actual¥112.86¥131.01FY2022Plan¥120.00¥130.00©2022 Topcon Corporation31Round the world with a sharp DX.©2022 Topcon Corporation32Ⅴ. Appendix©2022 Topcon Corporation33Sales by regionFY2020¥137.2BFY2021¥176.4BAsia/ Others¥29.0B21%23%Japan¥31.2B24%32%Europe¥33.3BNorthAmerica¥43.7BYoY+29％Asia/ Others¥37.7B21%Japan¥33.9B19%34%26%Europe¥44.8BNorthAmerica¥60.0B©2022 Topcon Corporation34Financial Results (Quarterly)ConsolidatedPositioningSalesOperating Income(unit: billion yen)51.5SalesOperating Income(unit: billion yen)28.944.338.942.443.65.13.53.53.45.5500400300200100024.5-2.3FY20/Q1Actual34.034.51.62.222.422.622.722.53.03.12.31.84.317.716.914.41.60.90.6Q2ActualQ3ActualQ4ActualFY21/Q1ActualQ2ActualQ3ActualQ4ActualFY20/Q1ActualQ2ActualQ3ActualQ4ActualFY21/Q1ActualQ2ActualQ3ActualQ4ActualSmart Infrastructure（億円）Eye CareSalesOperating Income(unit: billion yen)SalesOperating Income(unit: billion yen)10.210.38.68.98.79.110.915.313.911.412.210.416.116.06.31.21.31.51.2-0.50.20.31.51.21.31.21.32.02.0△ 100-1.9FY20/Q1ActualQ2ActualQ3ActualQ4ActualFY21/Q1ActualQ2ActualQ3ActualQ4ActualFY20/Q1ActualQ2ActualQ3ActualQ4ActualFY21/Q1ActualQ2ActualQ3ActualQ4Actual100506.30.20150100500△ 5070605040302010025020015010050015010050806040200△ 2080757065605550454035302520151050△ 5△ 10△ 15△ 20△ 25△ 30△ 35©2022 Topcon Corporation35Financial Results (Semiannually)ConsolidatedPositioningSalesOperating Income(unit: billion yen)SalesOperating Income(unit: billion yen)95.178.881.37.47.08.969.569.458.53.81.6-0.851.46.145.35.439.33.937.136.932.12.92.21.7FY19/1H FY19/2H FY20/1H FY20/2H FY21/1H FY21/2HActualActualActualActualActualActualFY19/1H FY19/2H FY20/1H FY20/2H FY21/1H FY21/2HActualActualActualActualActualActualSmart InfrastructureEye CareSalesOperating Income(unit: billion yen)SalesOperating Income(unit: billion yen)32.117.116.314.919.119.020.022.222.627.525.31601106010-406040200500400300200100030020010001,000800600400200020010002.52.51.83.23.22.616.8-2.40.6-0.52.52.70.5FY19/1H FY19/2H FY20/1H FY20/2H FY21/1H FY21/2HActualActualActualActualActualActualFY19/1H FY19/2H FY20/1H FY20/2H FY21/1H FY21/2HActualActualActualActualActualActual©2022 Topcon Corporation366040200140120100806040200-20-40Financial Results and Plan (Annually)ConsolidatedPositioningSalesOperating Income(unit: billion yen)SalesOperating Income(unit: billion yen)176.415.9190.018.0148.713.6138.9137.25.46.6106.013.096.711.577.78.474.071.46.14.5FY18ActualFY19ActualFY20ActualFY21ActualFY22PlanFY18ActualFY19ActualFY20ActualFY21ActualFY22PlanSmart InfrastructureEye Care500SalesOperating Income(unit: billion yen)SalesOperating Income(unit: billion yen)36.76.439.042.033.434.05.05.05.85.057.462.04.53.247.744.844.32.90.10.13002502001501005001401201008060402001,1001,000900800700600500400300200100070060050040030020010002,2002,0001,8001,6001,4001,2001,00080060040020004003002001000200180160140120100806040200140120100806040200FY18ActualFY19ActualFY20ActualFY21ActualFY22PlanFY18ActualFY19ActualFY20ActualFY21ActualFY22Plan©2022 Topcon Corporation37Capital Expenditure and R&D / Forex SensitivityProjectionsCapital Expenditure（unit: billion yen）Depreciation*R&D（unit: billion yen）（unit: billion yen）17.516.214.910.05.34.27.47.88.5FY20ActualFY21ActualFY22PlanFY20ActualFY21ActualFY22Plan*Excluding Goodwill AmortizationFY20ActualFY21ActualFY22PlanForex Sensitivity（impact by ¥1 change）USD：Operating Income ¥0.15B – ¥0.2BEUR：Operating Income ¥0.07B – ¥0.1B©2022 Topcon Corporation38Non-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 Corporation3939Non-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 Corporation4040Initiatives for SDGs: Contribution to CO2 emission reductionTopcon’s automation technologies for construction and farming machinery itselfcontribute to reduce environmental impactIT ConstructionIT AgricultureBy 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.link*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.Reduction 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.Expecting 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.©2022 Topcon Corporation41Selected for an ESG Investment Index of FTSE RussellIt is one of the indices used by the Government Pension Investment Fund (GPIF)as a passive investment benchmark for ESG investingFTSE Blossom Japan Sector Relative Index(https://www.ftserussell.com/products/indices/blossom-japan) is an index created by global index provider FTSE Russell that reflects the performance of Japanese companies that demonstrate strong environmental, social and governance (ESG) practices relative to their respective sectors and is designed to be sector neutral. To promote the transition to a low-carbon economy, companies with particularly high greenhouse gas emissions are included only if their improvement efforts are positively evaluated using the TPI Management Quality Score*.*TPI Management Quality Score: It assesses companies’ preparedness for the transition to a low carbon economy and supports efforts to address climate change.Released on April 12 : https://global.topcon.com/news/9664/©2022 Topcon Corporation42©2022 Topcon Corporation433343Cautionary 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 May 12, 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 Corporation44