Nikon : Second Quarter 2019 Presentation Material

Financial Results for the Second Quarter of the Year ending March 31, 2020

November 7, 2019

Masashi Oka

Representative Director

Senior Executive Vice President & CFO

NIKON CORPORATION

Agenda

1. Financial results for the second quarter of the year ending March 31, 2020
2. Forecast for the year ending March 31, 2020

1

Summary for the 1H of the Year ending March 31, 2020

1H Results

YoY Results

• Revenue: ¥291.0B
• Operating profit: ¥17.5B
• Revenue down ¥44.7B
• Operating profit down ¥13.1B
• • Imaging Products:Profit down on lower sales volumes of digital cameras, mainly DSLR.
  • Precision Equipment:Profit down as Semiconductor Lithography business profit growth could not cover lower profits in FPD.
  • Industrial Metrology & Others:Profit down as customers reined in capex.
  • Corporate P/Lnon-attributable to any reportable segments :

Foreign exchange valuation losses associated with the liquidation of the China plant, which was suspended in 2017, were incurred as restructuring relevant expenses, but there was also gain from the sales of unused land and improved.

vs. previous

forecast

• Revenue surpassed by ¥1.0B
• Operating profit surpassed by ¥2.5B
• • Despite headwinds from shrinking Imaging Products Business profits, increased profit in other businesses more than picked up the slack.

Note: Amounts in this statement are rounded down to the hundred millions of yen.

2

First Half of the Year ending March 31, 2020: Financial Highlights

Billions of yen

Revenue

Operating Profit

% vs Revenue

Profit before income taxes

%vs Revenue

Profit attributable to owners of the parent

• vs Revenue

FCF

Exchange rate︓

US $

EURO

FY2019/3 1H

(A)

335.7

30.6

9.1％

33.8

10.1％

22.8

6.8%

31.2

¥110 ¥130

Previous

forecast(Aug. 6)

(B)

290.0

15.0

5.2％

17.0

5.9％

13.0

4.5％

―

¥107 ¥124

1H

(C)

.0

17.5

6.0%

20.1

6.9%

16.3

5.6%

3.8

¥109 ¥121

Change	Change
(C)-(A)	(C)-(B)
-44.7	+1.0
-13.1	+2.5
-13.7	+3.1
-6.5	+3.3
-27.4	―
Impact on Revenue
-6.9	+0.1

Impact on Operating Profit

-2.2-0.3

FCF decreased YoY due to less contributions from advances received and the changes of payment

terms for the domestic partner companies, etc.

3

First Half of the Year ending March 31, 2020: Financial Highlights by Segments

Billions of yen

Imaging Products

Business

Precision

Equipment Business

Healthcare Business

Industrial

Metrology and

Others

Corporate P/L non-attributable to any reportable segments

Consolidated

Revenue

Operating

Profit

Revenue

Operating

Profit

Revenue

Operating

Profit

Revenue

Operating

Profit

Revenue

Operating

Profit

Revenue

Operating

Profit

FY2019/3 1H	1H	Change
(A)	(B)	(B)-(A)
150.9	119.0	-21%
13.2	2.0	-¥11.2B
121.6	115.1	-5%
29.8	25.4	-¥4.4B
29.4	30.0	+2%
-2.3	-1.2	+¥1.1B
33.7	26.7	-21%
2.7	2.4	-¥0.3B
－	－	－
-12.8	-11.1	+¥1.7B
335.7	291.0	-13%
30.6	17.5	-¥13.1B

Corporate P/L non-attributable to any reportable segments includes thegain from unused land sales of ¥3.8B and the loss

from restructuring relevant expenses of ¥1.7B.

Note: Corporate P/L non-attributable to any reportable segments includes elimination of intersegment transactions that amount to ¥0.01B for 1H of FY2019/3 and -¥1.7B for 1H of FY2020/3.

4

2ndQuarter of the Year ending March 31, 2020: Financial Highlights

Billions of yen

Revenue

Operating Profit

% vs Revenue

Profit before income taxes

% vs Revenue

Profit attributable to owners of the parent

% vs Revenue

FCF

Exchange rate︓

US $

EURO

FY2019/3 Q2	Q2		Change
(A)	(B)		(B)-(A)
168.8	.1	-20.7
11.6	8.2	-3.4
6.9％
	5.5％
11.9	9.4	-2.5
7.0％		6.3％
6.5	8.1	+1.6
3.9%		5.5%
3.6	4.5	+0.9
¥111	¥107		Impact on Revenue
	-5.0
¥130	¥119		Impact on Operating Profit
			-1.3

Although Operating Profit decreased due to the exchange rate impact and additional temporary expenses, etc.

Profit attributable to owners of the parent increased ¥1.6B YoY due to the reduction of tax expenses.

5

First Half of the Year ending March 31, 2020: Imaging Products Business

Billions of yen

Revenue

Operating

Profit

% vs Revenue

Digital Camera-

Interchangeable Lens

type

(units sold: 1,000)

Interchangeable

Lens

(units sold: 1,000)

Compact DSC

(units sold: 1,000)

FY2019/3 1H

(A)

150.9

13.2

8.7％

1,070

1,650

850

Previous

Forecast (Aug.6)

(B)

120.0

3.0

2.5%

―

―

―

1H

.0

2.0

1.7％

800

500

Change	Change
(C)-(A)	(C)-(B)
-31.9	-1.0
-11.2	-1.0
-270	―
-340	―
-350	―

• YoY:The unit sales of the full-frame camera increased mainly in Europe and US thanks to ML camera. However, revenue was adversely affected by the reduced sales of DSLR cameras especially in Asia including China, resulting in significant revenue/profit reductions.
• Actual vs. forecast:Revenue slightly fell short of the forecast. OP missed the target due to the lower-than-expected revenue and the yen appreciation against Euro, etc.

6

First Half of the Year ending March 31, 2020: Precision Equipment Business

Billions of yen

Revenue

Operating Profit

% vs Revenue

FPD Lithography

Systems

(units)

Semiconductor

Lithography Systems

New/Refurbished

(units)

FY2019/3	Previous
Forecast（Aug.6）
1H (A)
(B)

121.6 110.0

29.823.0

24.5％20.9％

36―

8/9―

	Change	Change
(C)	(C)-(A)	(C)-(B)
.1	-6.5	+5.1
.4	-4.4	+2.4
	22.1％
18	-18	―
	+6/-5	―

• YoY:For FPD lithography business, Revenue and OP decreased due to a substantial reduction of G8 sales as Chinese manufacturers' investment for TV panel had shifted from G8 to G10.5 in spite of G10.5 sales improvement. For Semiconductor lithography business, both Revenue and OP increased thanks to a growth in sales of new systems including ArF immersion systems, etc.
  Actual vs. forecast:For both FPD and Semiconductor, the 1H sales units and the product mix were changed by preponement and postponement of installation, resulting in overachievement of the planned revenue and OP.

7

First Half of the Year ending March 31, 2020:

Healthcare Business

	FY2019/3 1H	Previous	1H	Change	Change
	Forecast（Aug.6）
Billions of yen	(A)	(C)	(C)-(A)	(C)-(B)
(B)
Revenue	29.4	30.0	.0	+0.6	±0
Operating
-2.3	-3.0	.2
Profit	+1.1	+1.8
% vs Revenue	-7.8％	-10.0%	-4.0％

• YoY:Biological microscopes improved its revenue in the Americas and Japan, almost fully compensating the revenue drop in Europe and Asia. Retinal diagnostic imaging systems marked the record of 1H sales. Overall business posted the revenue increase. Deficit was suppressed by focusing investment themes, etc.
• Actual vs. forecast:Revenue hike in retinal diagnostic imaging systems offset the reduced revenue of biological microscopes, meeting the business revenue target. The deficit amount was reduced more than expected due to the product mix change and expense postponement to the 2H.

8

First Half of the Year ending March 31, 2020:

Industrial Metrology Business and Others

	FY2019/3 1H	Previous	1H	Change	Change
	Forecast(Aug.6)
Billions of yen	(A)		(C)-(A)	(C)-(B)
（B）
Revenue	33.7	30.0	.7	-7.0	-3.3
Operating
2.7	1.0	.4
Profit	-0.3	+1.4
% vs Revenue	8.0％	3.3％	9.0％

• YoY:Revenue was largely decreased by delayed investment of customers in both Industrial Metrology and Other businesses, but the impact on OP was suppressed by the product mix change, etc.
• Actual vs. forecast:Customers delayed investment amid economic slowdown mainly in Asia including China, and it hindered revenue from reaching the plan but OP was improved by the product mix change, cost improvement, expense reduction, etc.

9

Agenda

1. Financial results for the second quarter of the year ending March 31, 2020
2. Forecast for the year ending March 31, 2020

10

Forecast for the Year ending March 31, 2020

• Company total forecast: Revised down ¥50B to ¥620B

Revenue

• Imaging Products: Revised down ¥25B based on a review of 2H market outlook, sales plan and Euro FX assumptions.
• Precision Equipment: Revised down ¥15B as sales in FPD and Semiconductor Lithography business will be postponed to the next FY.
• Industrial Metrology & Others: Revised down ¥10B to reflect customers pushing out capex spend.

Operating

profit

• Company total forecast: Revised down ¥32B to ¥20B
• • Imaging Products: Revised down ¥22B mainly on shrinking revenue, stronger yen and restructuring relevant expenses.
  • Precision Equipment: Revised down ¥5B mainly due to postponement of sales into next FY.
  • Industrial Metrology & Others: Revised down ¥2B mainly on reduced revenue.
  • Corporate P/Lnon-attributable to any reportable segments: Revised down ¥3B due to 1H results and increase in corporate costs in 2H. (Corporate costs up ¥1.3B vs. previous forecast.)

Profit

attributable to •Company total forecast: Revised down ¥25B to ¥17Bowners of the

parent

11

Forecast for the Year ending March 31, 2020:

Financial Highlights

	FY2019/3	Previous	Forecast	Change	Change
	Forecast(Aug.6)
Billions of yen	(A)	.7）(C)	(C)-(A)	(C)-(B)
（B）
Revenue	708.6	670.0	.0	-88.6	-50.0
Operating Profit	82.6	52.0	.0	-62.6	-32.0
% vs Revenue	11.7％	7.8％	3.2％
Profit before	87.9	55.0	.0
income taxes	-64.9	-32.0
% vs Revenue	12.4％	8.2％	3.7％
Profit attributable to	66.5	42.0	.0
owners of the parent	-49.5	-25.0
% vs Revenue	9.4％	6.3％	2.7％
EPS	¥167.86	¥106.89	¥43.26	-¥124.6	-¥63.6
Annual Dividends	¥60	¥60	¥60	±0	±0
FCF	43.5	40.0	.0	-28.5	-25.0
Exchange rate︓	¥111	¥106		Impact on Revenue
US $		-17.8	-1.6
EURO	¥128	¥125		Impact on Operating Profit
	-4.6	-1.2

Note: EPS (Basic Earning per Share) = Profit attributable to owner of the parent / Average number of shares during the term

Only the new forecast is calculated by approx. 0.393B shares, an average over the number of shares at the end of FY2019/3, approx. 0.396B, and the expected number of shares at the end of FY2020/3.

12

Forecast for the Year ending March 31, 2020:

Financial Highlights by Segments

			FY2019/3	Previous	New	Change	Change
			Forecast(Aug.6)	Forecast(Nov.7）
	Billions of yen		(A)	(C)-(A)	(C)-(B)
		（B）	(C)
	Imaging Products	Revenue	296.1	260.0	235.0	-20.6%	-9.6%
	Operating	22.0	12.0	-10.0	-¥32.0B	-¥22.0B
	Business	Profit	(22.6)	(12.0)	(-5.0)
	Precision	Revenue	274.5	270.0	255.0	-7.1%	-5.6%
	Operating	81.7	56.0	51.0	-¥30.7B	-¥5.0B
	Equipment Business
		Profit	(81.7)	(56.0)	(51.0)
	Healthcare Business	Revenue	65.4	65.0	65.0	-0.6%	±0%
	Operating	-1.9	-1.0	-1.0	+¥0.9B	±¥0.0B
		Profit	(-1.9)	(-1.0)	(-1.0)
	Industrial	Revenue	72.5	75.0	65.0	-10.3%	-13.3%
	Metrology and	Operating	6.9	6.0	4.0	-¥2.9B	-¥2.0B
	Others	Profit	(7.5)	(6.0)	(4.0)
	Corporate P/L non-	Revenue	－	－	－	－	－
	attributable to any	Operating	-26.1	-21.0	-24.0	+++¥2.1B	-¥3.0B
	reportable segments	Profit	(-25.6)	(-21.0)	(-22.3)
	Consolidated	Revenue	708.6	670.0	620.0	-12.5%	-7.5%
	Operating	82.6	52.0	20.0	-¥62.6B	-¥32.0B
		Profit	(84.4)	(52.0)	(26.7)

Note: OP figures in parentheses are the operating profit excluding the restructuring relevant expenses.

Corporate P/L non-attributable to any reportable segments includes elimination of intersegment transactions that amount to ¥0.6B for FY2019/3 and -¥1.7B for FY2020/3.

13

Forecast for the Year ending March 31, 2020: Imaging Products Business

Revenue

Operating Profit

• Revenue: Forecast revised down ¥25B, down ¥61.1B YoY
• • Over-estimationof market size/share is corrected for 2H forecast and future planning.
  • Sales unit forecast of DCIL, interchangeable lens and CDSC is revised down.
  • Shift toward ML cameras and the product mix change in the full- frame category have not been accelerated as expected.

Digital Camera-Interchangeable Lens type (units:1,000)

Market Scale	10,040	8,500	7,800
Nikon	2,060	1,600	1,500
Interchangeable Lens（units:1,000）
Market Scale	16,960	14,500	13,500
Nikon	3,170	2,600	2,500
Compact DSC(units:1,000)
Market Scale	8,220	6,000	6,000
Nikon	1,600	1,000	900

• Operating Profit: Forecast revised down ¥22B, down ¥32B YoY
• • OP suffers from sales unit reduction, product mix change, and Euro FX impact.
  • Efforts to reduce Sales and R&D expenses continue, but the forecast is substantially revised down by posting of the restructuring relevant expenses.

14

Forecast for the Year ending March 31, 2020: Precision Equipment Business

Revenue		Operating Profit

400B

300	274.5	270.0	255.0
200
100	81.7	56.0	51.0
0	FY19/3	FY20/3	FY20/3
	Actual	Forecast	Forecast
FPD Lithography Systems（units） （Aug.6）	（Nov.7）

Market Scale	142	100	90
(CY18/19)
Nikon	70	37	32

Semiconductor Lithography Systems（New/Refurbished, units）

Market Scale	300	250	250
(CY18/19)
Nikon	21/20	31/14	30/11

• Revenue: forecast revised down ¥15B, down ¥19.5B YoY
• • FPD: No change is made forhigh-priced G10.5 sales units.
    G8 (5 units) sign-off is postponed to the next FY due to customer reasons.
  • Semiconductor: Customer CAPEX continues to be steady, but one ArF immersion system sales is postponed to the next FY because the supplier production facility was damaged by the typhoon.
  • Market slowdown weakened the refurbished system demand. Sales volume forecast is revised only with minor impact on the revenue.
• Operating Profit: forecast revised down ¥5B,

down ¥30.7B YoY

• OP for FY2019/3 is approx. ¥66.7B excluding the temporary profit from litigation settlement.
• OP is revised down ¥5B due to postponed sales of FPD and semiconductor lithography system.

15

Forecast for the Year ending March 31, 2020:

Healthcare Business

Revenue		Operating Profit

•Revenue: forecast unchanged, down ¥0.4B YoY

-Both biological microscope and retinal diagnostic imaging system are performing steadily as planned, yet almost flat revenue is expected due to the negative FX impact.

•Operating Profit: forecast unchanged, up ¥0.9B YoY

-Focused investment is conducted in the regenerative medicine and ophthalmological diagnosis fields to halve the deficit, aiming to generate profit in the next FY as planned.

16

Forecast for the Year ending March 31, 2020: Industrial Metrology Business and Others

Revenue

Operating Profit

• Revenue: forecast revised down ¥10B, down ¥7.5B YoY
• • Due to economical downturn, customers mainly in Asia including China postponed CAPEX: sales plan of relevant products is revised.
  • Revised down from the previous year.
  • Industrial metrology: Results are being demonstrated to expand the market share ofX-ray inspection systems and non-contact 3D metrology systems.
• Operating Profit: forecast revised down ¥2B,

down ¥2.9B YoY

• To minimize the revenue drop impact on OP, efforts are made to reduce costs and expenses.
• Investment for future growth in the component business, etc. will continue.

17

Forecast for the Year ending March 31, 2020:

Shareholder Return

Annual	•¥60 (¥30 interim): unchanged
Dividend	(same as the previous FY)

• Buy-backamount: ¥30B
• Number of shares: up to36,000,000 shares

equivalent to 9.2％of the outstanding shares (excluding Treasury Stock)

Buy-back

• Buy-backperiod:November 8, 2019 to March 24, 2020
• Holding policy: Newly acquired own shares will be all canceled by the end of this fiscal year (planed).

Note: ¥30B is equivalent to approximately 21.6M shares(equivalent to 5.5% of the outstanding shares) as of the end of October 2019.

18

Progress of Medium-Term Management Plan and Management Policy

Toshikazu Umatate

Representative Director

President & CEO

NIKON CORPORATION

① FY 2020/3 Overview

1H

Performance

2H

Environment

• Achieved overall plan for revenue, operating profit and Profit attributable to owners of the parent
• • Imaging Products Business unachieved plan however other segments were mostly in line.
• Urgent need for further risk controls, particularly in Imaging Products business as challenges remain inside and outside the company
• • Imaging Products Business:Business environment has deteriorated further as market shrinkage accelerates and competition intensifies. Increased costs from Z-mount system lineup expansion also a burden.
  • Precision Equipment and Industrial Metrology & Others:Revised down the plan as customers control and delay investments.

Full year

plan

• Significantly revise down plan for this year. Accelerate restructuring of Imaging Products Business and initiatives aimed at profit growth.
• • Fundamentally transform Imaging business structure to revitalize amid harsh environment.
  • Proactively consider collaboration with external resources and strategic investments to build foundation for future growth.

Urgent need to rebuild management structure to achieve major KPIs in the new medium-term management plan.

21

②-1. Imaging Products Business: Challenges and Positioning

Business

challenges

• Fundamentally rectify structure and strategy, and address challenges appropriately to halt profit erosion.
• • Market deterioration in DCIL including ML cameras is worse than expected.
  • Sales plan for ML cameras was overestimated.
  • Across the business as a whole, slow execution on drawn out decision making.
  • The competitive environment will intensify further on price and technological development alike.

• Generate enough profits to justify its existence as business unit and expand applications of core technologies.

Positioning-Strengthen brand and continue to deliver imaging experiences that contribute to the life and creative activities of users.

• Apply our cultivated imaging technology assets tolong-term growth areas.

Imaging Products Business will continue to respond the expectations of stakeholder and

contribute to enhancement of enterprise value.

22

②-2 Imaging Products Business: Business Environment

Focus on the professional and hobbyist segment, which has performed steadily through the harsh

environment. Strengthen marketing focused on loyal customers, and creating the next generation of core 持続的企業価値の基盤構築に向けて、成⻑投資と経営改⾰を両輪で推進する

users. Transform to a business that can generate a solid profit despite shrinking market.

DCIL Sales Plan		Approximation of Nikon's
of the Previous		Imaging Products Business
Restructuring	DCIL Market Estimate	Revenues
¥ Billion	Million units	¥ Billion

23

②-3. Imaging Products Business: Direction of Restructuring

Fundamentally transform business unit, surpassing the scale of previous restructuring, to rebuild business unit that stably generates cashflow.

• Business strategy:PursueIntensifyboth growthfocus oninvestmentsprofessional andandhobbyistmanagementsegment.reforms to build a base for
• • Focus strategy on further enhancing customer satisfaction among professionals and hobbyists, including

lens lineup expansions.

sustainable enterprise value.

•Restructuring:Build an organization that can generate stable profits under new strategy and harsh market environment.

⇒Reconstruct operation system of the Imaging Business Unit.

Strengthen the management system, including enhancement of the Board of Directors' governance.

⇒Withinmedium-termmanagement plan,cut ¥50B in business costs* vs. FY2018 (including ¥20B in fixed costs).

Development:Maintain development of core technologies, be more selective in product development and shift resources to long-term growth areas.

Sales:Drastically revise sales strategy. Optimize sales companies. Thoroughly drive efficiencies.

Production:Optimize plant function and size (Open up plants to use by other business segments)

Other:Optimize staffing on a global basis.

• Profit plan:In FY2019 & FY2020 the outlook is harsh given priority placed on thorough restructuring. Restructuring relevant expense is ¥5.0B for this FY, and almost same amount of expenses will be planned to post in next FY.

In FY2021 and beyond,generate profits in excess of capital costs on a stable basis.

Note: Business costs refers to SG&A and fixed costs included in COGS.

24

③-1 Growth Strategy: Progress

Progress of Material Processing Business focused by Medium-Term Management Plan

Optics-based machine tools

• Launched the optical processing machine: Lasermeister 100A
• Announced the second optical processing machine: High precision flat surface processing machine in September, 2019.

Supply of components, development of differentiated technologies

・Contribute to develop more advanced machine tools by applying measurement and camera related technologies.

25

③-2.Growth Strategy:Business domains for Optical Processing Machine

Generating New Core

Pillars of Profit

Create new manufacturing markets and industries

in Monodzukuri field

High

Precision

Low

						Realized in collaboration with
		Lithography
		systems	"Optics-based machine tools"		machine tool manufacturers
			Pioneer new areas inaccessible by current	Area of discussion
			lithography systems and machine tools	today
			Redefine high precision & ultra-miniature
			processing through optical technology
			Enable high precision by utilizing precision			Strengthen/expand existing
			control technology cultivated in lithography
			business			applications
		Develop core products and solutions				Supply key components
			※1
		Expansion of scale is also				Develop technological differentiators
						Machine tools
		in search of alliances and M&A
Small	Minimum processing dimension		Large

26

③-3.Growth Strategy:Core Products, Optical processing machine series.

Optical processing machine : G1	Lasermeister 100A
	Molding and	Welding
	additive manufacturing
			•Launched in April, 2019
			•Received orders mainly for prototyping

Optical processing machine : G2High precision flat surface processing machine

High precision flat work finish

Measurement beam

Laser beam

Measurement

&

machining

Capable of sub-micron machining

• Showcased at exhibition in September, 2019
• Received numbers of demonstration requests forhigh-precision and special machining applications

Plan to launch unique G3 and G4 Optical processing machines. In parallel, bolstering our contract processing business and customer application development.

27

③-4. Growth Strategy: Business alliance with DMG MORI CO., LTD.

Technological alliance

Offer measurement and

camera related technologies

Sales alliance

Share the global sales network

to sell optical processing machines

• Apply Nikon's measurement and camera related technologies on DMG MORI's machine tools to jointly develop more advanced products.
• Utilize DMG MORI's global sales network to sell Nikon's optical processing machines.

28

④Management Direction During Medium-term Management Plan

Financial

target

Management

resources

Restructuring

Shareholder

returns

ROE of 8% or more (Keep that level in final year of plan FY2021 and beyond)

Capital allocation:Prioritize strategic investments in establishing foundation for growth, such as Material Processing Business.

Human resources:Accelerate allocation toward long-term growth areas

Cost reduction: ¥18B

Imaging Products Business:Reduce an additional ¥50B in business costs

Total return ratio of 40% or more, made up of annual DPS of at least ¥60 plus flexible share buybacks

Maintain the KPIs, and policies for capital allocation and shareholder returns of medium-term management

plan, despite the restructuring cost posting until next FY mainly for Imaging Products Business.

29

Reference Data

30

Forecast for the Year ending March 31, 2020 Financial Highlights

Billions of yen

Revenue

Operating Profit

% vs Revenue

Profit before income taxes

% vs Revenue

Profit attributable to owners of the parent

% vs Revenue

ROE

FCF

Exchange rate︓ US $

EURO

FY2017/3	FY2018/3		FY2019/3			FY2020/3 Forecast
Full Year	Full Year	1H	2H	Full Year	1H	2H	Full Year

749.2	717.0	335.7	372.9	708.6	291.0	329.0	620.0
0.7	56.2	30.6	52.0	82.6	17.5	2.5	20.0
0.1％	7.8％	9.1％	13.9％	11.7％	6.0％	0.8％	3.2％
3.0	56.2	33.8	54.1	87.9	20.1	2.9	23.0
0.4％	7.8％	10.1％	14.5％	12.4％	6.9％	0.9％	3.7％
3.9	34.7	22.8	43.7	66.5	16.3	0.7	17.0
0.5%	4.8%	6.8%	11.7%	9.4%	5.6%	0.2%	2.7%
0.7%	6.3%		11.2%			3%
56.6	90.2		43.5			15.0
¥108	¥111	¥110	¥112	¥111	¥109	¥105	¥107
¥119	¥130	¥130	¥127	¥128	¥121	¥120	¥121

Note: From FY2019/3, a part of sales promotion expenses is deducted from revenue, which had been booked as SG&A previously. FY2019/3 Revenue is an amount after deducting ¥8.3B.

31

Forecast for the Year ending March 31, 2020: Financial Highlights by Segments

Billions of yen

Imaging Products Revenue

BusinessOperating Profit

Precision Revenue

Equipment Operating

Business Profit

Healthcare Revenue

BusinessOperating Profit

Industrial Revenue

Metrology and Operating

Others Profit

Corporate P/L Revenuenon-attributable to any Operatingreportable segments Profit

Revenue

Consolidated Operating

Profit

FY2017/3	FY2018/3		FY19/3			FY20/3 Forecast
Full Year	Full Year	1H	2H	Full Year	1H	2H	Full Year
383.0	360.7	150.9	145.2	296.1	119.0	116.0	235.0
17.1	30.2	13.2	8.8	22.0	2.0	-12.0	-10.0
(28.1)	(36.0)	(13.6)	(9.0)	(22.6)	(2.0)	(-7.0)	(-5.0)
248.0	226.3	121.6	152.9	274.5	115.1	139.9	255.0
13.4	53.3	29.8	51.9	81.7	25.4	25.6	51.0
(48.1)	(53.3)	(29.8)	(51.9)	(81.7)	(25.4)	(25.6)	(51.0)
55.7	56.8	29.4	36.0	65.4	30.0	35.0	65.0
-0.6	-3.2	-2.3	0.4	-1.9	-1.2	0.2	-1.0
(-0.1)	(-3.2)	(-2.3)	(0.4)	(-1.9)	(-1.2)	(0.2)	(-1.0)
62.4	73.2	33.7	38.8	72.5	26.7	38.3	65.0
3.7	5.0	2.7	4.2	6.9	2.4	1.6	4.0
(5.5)	(7.8)	(3.5)	(4.0)	(7.5)	(2.4)	(1.6)	(4.0)
－	－	－	－	－	－	－	－
-32.8	-29.1	-12.8	-13.3	-26.1	-11.1	-12.9	-24.0
(-27.5)	(-29.1)	(-12.8)	(-12.8)	(-25.6)	(-9.4)	(-12.9)	(-22.3)
749.2	717.0	335.7	372.9	708.6	291.0	329.0	620.0
0.7	56.2	30.6	52.0	82.6	17.5	2.5	20.0
(54.1)	(64.9)	(31.8)	(52.6)	(84.4)	(19.2)	(7.5)	(26.7)

Note: From FY2019/3, a part of sales promotion expenses is deducted from revenue, which had been booked as SG&A previously. FY2019/3 Revenue is an amount after deducting ¥8.3B. Figures in parentheses are the operating profit excluding the restructuring relevant expenses.

32

First Half of the Year ending March 31, 2020: Financial Position Breakdown

ASSETS

Cash & Cash

Equivalents

Trade & other receivables

Inventories

Other current financial /current assets

Non-current assets

LIABILITIES/ EQUITY

Advances

received

Interest-bearing

debt

Other

liabilities

Total equity

Note: A breakdown of interest-bearing debt as of September 30, 2019 is ¥29.9B in bonds and ¥111.4B in other borrowings. Equity ratio is ratio of equity attributable to owners of the parent to total assets.

Cash and Cash Equivalents excludes time deposits with maturities of thee months or more.

33

Forecast for the Year ending March 31, 2020:

Capital Expenditures, Depreciation and Inventory

CAPITAL EXPENDITURES,	INVENTORY BREAKDOWN
DEPRECIATION

Industrial

Metrology and

Others

Healthcare

Precision

Equipment

Imaging

Products

Note: In FY2020/3, "CAPITAL EXPENDITURES" includes the leased assets of approximately ¥3.0B upon the adoption of IFRS16.

"DEPRECIATION" includes the amortization of capitalized R&D costs from the FY2018/3 and depreciation of the leased asset of approx. ¥4.0B in FY2020/3, as mentioned above.

34

First Half of the Year ending March 31, 2020: Revenue Breakdown

BY SEGMENT

Billions of yen

Industrial

Metrology and

Others

9%

Healthcare 10%26.7

30.0

20/3

41%Imaging

Products

119.0

40%

Precision 115.1

Equipment

			BY REGION
				Billions of yen
				Japan
Others	18%	14%
		39.8
			53.6
				20/3	United
	23%		31%	States
China		66.4		89.4

14%

41.5

Europe

Note: The outside and inside circles show the breakdown of F2020/3 1H revenue of ¥291.0B and FY2019/3 1H revenue of ¥335.7B, respectively.

35

Forecast for the Year ending March 31, 2020:

R&D Expenditures

R&D EXPENDITURES

R&D EXPENDITURES BREAKDOWN

		Corporate
		(Undistributed)
		Industrial	14%
		9.0
		Metrology	8％
	10.2%	and Others
		5.0
	9.0%
8.5%	8.5%		11%
7.9%			7.0
		Healthcare
			32%
			20.0

Billions of yen

Imaging 20/3Products

Forecast

35%

22.0

Precision Equipment

（including R&D for Material

Processing Business)

Note: R&D expenditures after FY2018/3 includes capitalization of some development expenditure.

36

Cash Flow History

150B
	114.1				125.0
		107.5
100			97.3
			90.2	82.6
	70.9	71.3
				68.9
	62.9				56.2
	46.3
50			56.6
31.8	43.4	35.2		43.5
			24.3	15.5
			0.7
0
		-24.9-24.9	-18.1		-19.9	-25.3-21.5
-50	-43.1			-40.6	-34.8
-100			-83.1
14/3	15/3	16/3	17/3	18/3	19/3
	Operating	Cash Flows	Net cash used	Free cash flow	Net cash used
	Profit	from operating	in investing activities		in financing
		activities				activities

Note: FCF (free cash flows) = CF from operating activities + CF from investing activities; Japanese Standard is employed for FY2015/3 and prior, and IFRS is adopted for FY2016/3 and after. FCF + CF from financial activities + Effect of exchange rate changes on cash and cash equivalents = net increase (decrease) in cash and cash equivalents

37

Shareholder Return History and Forecast

Restructuring period	New Medium-term
Management Plan period

							60		60 or more
60
	Annual dividend
	Interm dividend
		32	32			36
30	31				30	30	30	30
	19			18	16	14
		10	10		12
		8
0	13/3	14/3	15/3	16/3	17/3	18/3	19/3	20/3	21/3	22/3
								Forecast	Forecast	Forecast

Note: Buy-back of shares at approx. ¥10.0B was conducted in Q1 of FY2020/3. Another buy-back of approx. ¥30B is planned in the period between Q3 and Q4 of FY2020/3.

38

Imaging Products Business: Sales Units

SALES IN UNITS BY PRODUCT CATEGORY

1,500K Units

				1,300
	1,080						1,020
1,000			940
				890
				850
		770
	720		720	690		760			740
					640
			590 620
					570				570
					500		500
500					460	430	450	450
				420
					400		350 300		350
									270
										230
0	18/3-Q1	18/3-Q2	18/3-Q3	18/3-Q4	19/3-Q1	19/3-Q2	19/3-Q3	19/3-Q4	20/3-Q1	20/3-Q2

DCIL(Digital Camera Interchaneable Lens Type)		Interchaneable Lens		CDSC(Compact Digital Still Camera)

39

Forecast for the Year ending March 31, 2020:

Precision Equipment Business Sales Units

FPD LITHOGRAPHY SYSTEMS SALES	SEMICONDUCTOR LITHOGRAPHY
SYSTEMS SALES BY TECHNOLOGY
BY GENERATION
（INCL. REFURBISHED）

60 Units

	40
G10.5	20
G7/8
G5/6	0

	41	45	41
	12
	7	12
30		ArF immersion
11
5	13	13
8	3	3	ArF
5		3	KrF
20
12	17	13	i-line
18/3	19/3	20/3	20/3
Actual	Actual	Forecast	Forecast
		(Aug.6)	(Nov.7)

Note: The unit sales of new semiconductor lithography systems is 17 units in FY2018/3, 21 units in FY2019/3and 30 units (forecast) in FY2020/3.

40

Precision Equipment Business: Sales Units

		FPD LITHOGRAPHY SYSTEMS SALES IN UNITS
30 Units		BY GENERATION

20	21			19	19
4			17	18
			2	4	16
				4
			14		3
		13
		1					6
			11			6
10		7	8	12			9	9
17
		13		6	4
							7
							8		3
		6	5	6	3		4	11
0		1		2
18/3-Q1	18/3-Q2	18/3-Q3	18/3-Q4	19/3-Q1	19/3-Q2	19/3-Q3	19/3-Q4	20/3-Q1	20/3-Q2

G10.5 G7/8 G5/6

41

Precision Equipment Business: Sales Units

		SEMICONDUCTOR LITHOGRAPHY SYSTEMS SALES
20 Units		IN UNITS BY TECHNOLOGY（INCL. REFURBISHED）

								18
15								4
			13
				2		10		4		11
10				2
				1		1		3
		6	6	3	7	3	6		7
	5		2	1		2	4
5	1			2
2	1	3				9	2
	1		6			2
		1	5	5		1
	2			4
	3		1
	2					2
0	1					1
18/3-Q1	18/3-Q2	18/3-Q3	18/3-Q4	19/3-Q1	19/3-Q2	19/3-Q3	19/3-Q4	20/3-Q1	20/3-Q2

ArF immersion ArF KrF i-line

42

Forecast for the Year ending March 31, 2020:

Foreign Exchange Impact

	Exchange rate	Financial Impact from Fluctuation by 1 yen
	FY2020/3	Revenue 2H	Operating Profit 2H
	Forecast for 2H
US $	¥105	Approx.	Approx.
¥1.3billion	¥0.2billion
EURO	¥120	Approx.	Approx.
¥0.3billion	¥0.2billion

Note: The foreign exchange impact above is made on the assumption that emerging-market currencies move according to the influence of US$ and Euro.

43

Disclaimer Regarding Forecast and Projections

Forward-looking statements for earnings and other performance data contained herein are based on information currently available to the Company, and all potential risks and uncertainties are taken into account. The Company asks that investors understand that changes in conditions may cause actual performance to significantly differ from these projections.

44