Scientific Solutions Business Strategy
Toshihiko Okubo Division Manager Scientific Solutions Business Strategy Division Olympus Corporation March 30, 2016 Todayʼs Agenda
1.Business Overview
2.Recognition of Current Conditions
3.Market Trends
4.Business Strategies
5.Targets and Indicators
2 2016/3/30 No data copy / No data transfer permitted Todayʼs Agenda
1.Business Overview
2.Recognition of Current Conditions
3.Market Trends
4.Business Strategies
5.Targets and Indicators
3 2016/3/30 No data copy / No data transfer permitted Business Direction of Scientific Solutions Business
We contribute to the health and safety of society by offering optimal solutions based on innovative products and inspiring support that matches the evolving needs of life science and industrial professionals and exceeds their expectations.
Inspection Analysis Measuring
4 2016/3/30 No data copy / No data transfer permitted Sales Distribution and Positioning
FY2016 Net Sales (Forecast)
Life sciencefield Sample preparation Pathological Research Cell culture Education processes examinations 106
80
FY2016 Net Sales Biological (Forecast) 15 microscopes Micro Internal Nondestructive Material Industrial field ¥816 billion inspections inspections inspections analysis
615
X-ray fluorescence Industrial Industrial Nondestructive (XRF) microscopes endoscopes testing equipment analyzers
5 2016/3/30 No data copy / No data transfer permitted Birth of Existing Product Segments
Life science field Industrial field
Nondestructive X-ray Industrial Industrial fluorescence Biological microscopes testing microscopes endoscopes equipment (XRF) analyzers
Business established by Businesses continued since founding branching Businesses acquired out from medical endoscopes
6 2016/3/30 No data copy / No data transfer permitted Distribution of Sales in Scientific Solutions Business
Life science field Industrial field
Industrial Japan Biological microscopes Asia microscopes 16% Industrial 27% endoscopes 42% 32% Nondestructive 58% testing equipment 25% Americas
X-ray Europe, fluorescence Middle East, and Africa (XRF) analyzers
7 2016/3/30 No data copy / No data transfer permitted * Based on forecast figure for FY2016 net sales Todayʼs Agenda
1.Business Overview
2.Recognition of Current Conditions
3.Market Trends
4.Business Strategies
5.Targets and Indicators
8 2016/3/30 No data copy / No data transfer permitted Customer Segments and Scientific Solutions Business
Customer Product segment Application segment
LS Research Life science field research
Sample preparation and cell Wetlab Biological culture processes microscopes
Clinical Pathological examination
Medical and biology education Education institutions
9 2016/3/30 No data copy / No data transfer permitted Customer Segments and Scientific Solutions Business
Customer Product segment Application segment
Aircraft and high-speed rail Infrastructure Power generation equipment and Maintenance petrochemical plants General structures
Integrated manufacturing process X-ray Nondestructive Industrial Industrial fluorescence quality management testing Manufacturing microscopes endoscopes (XRF) equipment Defect analysis analyzers Material research
Resource inspection and mining Environment & Metal and material analysis Natural Environmental pollution Resource assessments
10 2016/3/30 No data copy / No data transfer permitted Recognition of Current Conditions Review of Medium-Term Vision Period (FY2013~) FY2013 FY2015 FY2016 (Billions of yen) Target Actual Target* Actual Forecast Net sales 97.0 85.5 108.0 103.9 106.0 Operating income 5.5 3.5 8.0 6.8 8.0 Operating margin 6% 4% 7% 7% 8%
Measure Evaluation Aggressively expand Introduced new digital industrial microscopes, ultracompact △ videoscopes, guided wave technologies for realizing more-efficient product portfolio nondestructive testing, automated cell counters for cell culture, etc. Successfully improved operating margin by withdrawing from and liquidating unprofitable businesses, rationalizing domestic and overseas Reform earnings structures ○ production bases, reorganizing sales organizations, and improving asset efficiency through structural reforms Acquire shares in emerging Constructed sales systems in Indian subsidiary ○ Launched affordable models of industrial endoscopes, XRF analyzers, markets ultrasonic nondestructive testing facilities, etc. Strengthen customer Shifted from product segment based system for business activities to △ customer segment based system, defined 7 priority customer segments, contacts and made progress in constructing systems for strategies
11 2016/3/30 No data copy / No data transfer permitted * Targets are figures set when announcing the medium-term vision in June 2012. Recognition of Current Conditions
Conglomeration of individually optimized, Strategies and resource allocation through product-segment-specific organizations Companywide optimization
Differing target applications and Improved development and sales customers efficiency from clarified target customer Maturing technologies and markets for segments certain product segments Solutions provided from customer Inefficiency born out of redundant perspective functions and processes Global optimization pursued through complete overhaul of function and regional frameworks Investments focused on growth fields
12 2016/3/30 No data copy / No data transfer permitted Todayʼs Agenda
1.Business Overview
2.Recognition of Current Conditions
3.Market Trends
4.Business Strategies
5.Targets and Indicators
13 2016/3/30 No data copy / No data transfer permitted Market Trends
Market Scale* Customer Market Trends Field (Growth Share* Competitors segment (Operating Environment) Forecasts)
Growing needs in areas ranging from observation to analysis in drug discovery ¥80.0~¥100.0 Zeiss(Germany) LS Approx. and regenerative medicine markets billion Leica (Germany) Research 25% Market heavily influenced by government (CAGR:1-2%) Nikon(Japan) Life science budget trends
Future cell culture support industry market ¥6.0~¥8.0 Zeiss(Germany) Approx. Wetlab growth projected in drug discovery and billion Leica (Germany) (Cell cultures) 35% regenerative medicine fields (long term) (CAGR:6-7%) Nikon(Japan)
14 2016/3/30 No data copy / No data transfer permitted * Source: Olympus Corporation Market Trends
Market Scale* Customer Market Trends Field (Growth Share* Competitors segment (Operating Environment) Forecasts)
Dominating top share held by Olympus due to establishment of anatomic pathology workflow in microscope field ¥20.0~¥30.0 Zeiss(Germany) Clinical Approx. (Pathological Expanding range of examination methods billion Leica (Germany) Life science 60% examination) stemming from introduction of new (CAGR:3-4%) Nikon(Japan) technologies into overall examination market in conjunction with population aging and advances in cancer treatments
Zeiss(Germany) Growing possibilities for education systems ¥8.0~¥10.0 Approx. Leica (Germany) Education using digital imaging at medical education billion 35% Nikon(Japan) facilities (CAGR:1-2%) Motic(China)
15 2016/3/30 No data copy / No data transfer permitted * Source: Olympus Corporation Market Trends
Market Scale* Customer Market Trends Field (Growth Share* Competitors segment (Operating Environment) Forecasts) Infrastructure aging expected in developed countries and new infrastructure construction anticipated in ¥70.0~¥90.0 Infrastructure Approx. emerging countries Maintenance billion GE(U.S.) Ongoing growth in aircraft and high- 35% speed rail demand (CAGR:7-8%) Severe lack of inspection technicians Industrial Long-term growth in automotive, GE(U.S.) aviation, electricity, and other markets ¥100.0~ Zeiss(Germany) Approx. Manufacturing Advances in process efficiency ¥120.0 billion Leica(Germany) improvements as illustrated by Industry 25% Nikon(Japan) 4.0, etc. (CAGR:4-5%) KEYENCE(Japan)
Rising need anticipated for energy and materials in emerging countries and for Environment & ¥7.0~¥9.0 energy, materials, and recycling in Approx. ThermoFisher Natural developed countries billion (U.S.) Resource 25% Growing expectations for food and (CAGR:4-5%) environmental safety
16 2016/3/30 No data copy / No data transfer permitted * Source: Olympus Corporation Todayʼs Agenda
1.Business Overview
2.Recognition of Current Conditions
3.Market Trends
4.Business Strategies
5.Targets and Indicators
17 2016/3/30 No data copy / No data transfer permitted Business Strengths (SWOT Analysis)
Superior technological prowess and quality for Technological maturity of certain optical, imaging, ultrasound, and XRF products Top-class market for all product segments Increased manufacturing and sales costs Global sales, marketing, and service networks for certain products 強み 弱み Lost opportunities and low efficiency due to product segment based business operation S W O T Long-term demand growth for social infrastructure construction in emerging countries and aging social infrastructure maintenance機会 in 脅威 developed countries Emergence of alternative technologies Continuous growth in demand in aviation, Economic slowdown in emerging automotive, and other manufacturing industries countries New needs arising from regularization of Ups and downs for specific customer regenerative medicine segments
18 2016/3/30 No data copy / No data transfer permitted Basic Policies
Realize continuing organic growth and keep operating margin consistently above 10% through initiatives tailored to customer segments
Actively expand portfolios targeting customer segments from which particular growth can be anticipated in consideration of Company strengths and market growth potential (add on to numerical targets described later on)
Expand development of solutions for drug discovery and regenerative medicine markets in pursuit of long-term growth
19 2016/3/30 No data copy / No data transfer permitted Market and Solution Portfolio Expansion Remote Examination and Labor-Efficient Monitoring Scope of
16CSP Drug Discovery Infrastructure Target Expansion of Manufacturing Maintenance and Industrial Cell Culture Markets Education Support
Current Wetlab Product (Cell Culture Segments Support)
Current Product Clinical Segments LS Research Environment & (Pathological Drug Discovery Natural Resource Examination) Support
Long term 5 years
20 2016/3/30 No data copy / No data transfer permitted Advancement of Customer Segment Oriented Strategies
Field Market Trends Customer (Operating Olympusʼ Strengths Strategy segment Environment)
Growing needs in areas ranging from 3D and macro Focus on cerebral nerves, cancer, observation to observation and stem cell markets and optimize LS analysis in drug technologies product lineups Research discovery and Contacts with Provide drug discovery workflow
Life science この他、各BUによって様々なKPIのご設定があろうかと思います。regenerative researchers solutions 内容に応じて、⾃由に表現いただければと思います。medicine Global sales and markets service networks High performance Future cell and reliability culture support industry market Expand solutions for cell culture growth Contacts with market Wetlab projected in cell culture Conduct R&D targeting regenerative drug discovery market medicine support industry and regenerative medicine fields
21 2016/3/30 No data copy / No data transfer permitted Regenerative Medicine Support Industry Initiatives Provide solutions for all cell culture processes that adapt core image acquisition, analysis, and data management technologies
2019-2020 Develop 2016-2018 Expand solutions operations in Solidify foundations (5th year) industry market
Bolster lineup of Current solutions regenerative medicine (General cell culture) research products
New solutions (Regenerative medicine research)
Respond to establishment Inverted Microscope of regenerative medicine CKX53Cell Counter Model R1 industry
22 2016/3/30 No data copy / No data transfer permitted Advancement of Customer Segment Oriented Strategies Field Customer Market Trends Olympusʼ Strengths Strategy segment (Operating Environment)
Top share held by Olympus due to establishment of anatomic pathology workflow utilizing microscopes Large Expanding range of Improve diagnosis microscope examination methods support technologies この他、各BUによって様々なKPIのご設定があろうかと思います。market share Global sales and Life science Clinical stemming from Provide pathological and contacts service networks 内容に応じて、⾃由に表現いただければと思います。introduction of new examination workflow with technologies into overall solutions pathologists examination market in conjunction with population aging and advances in cancer treatments
Contacts with High performance Growing possibilities for medical and and reliability education systems using Offer digital education Education biology digital imaging at medical solutions education education facilities institutions
23 2016/3/30 No data copy / No data transfer permitted Advancement of Customer Segment Oriented Strategies Field Customer Market Trends Olympusʼ Strengths Strategy segment (Operating Environment)
Infrastructure aging expected Expand in developed countries and new solutions for infrastructure construction improving anticipated in emerging Contacts with Infrastructure inspection countries major Maintenance quality Ongoing growth in aircraft customers Provide and high-speed rail demand この他、各BUによって様々なKPIのご設定があろうかと思います。 automation Severe lack of inspection solutions technicians Industrial 内容に応じて、⾃由に表現いただければと思います。 Optimize Long-term growth in High-speed, Global customer automotive, aviation, electricity, highly reliable sales and Expand segment Manufacturing and other markets inspection service productivity and Advances in process efficiency technologies networks improvement industry improvements as illustrated by Integration High solutions specific Industry 4.0, etc. capabilities performa nce and sales Rising need anticipated for reliability Expand scope systems energy and materials in of analysis Element and Environment & emerging countries and for technology material Natural energy, materials, and recycling applications analysis in developed countries Explore Resource technologies Growing expectations for food emerging and environmental safety markets
24 2016/3/30 No data copy / No data transfer permitted Todayʼs Agenda
1.Business Overview
2.Recognition of Current Conditions
3.Market Trends
4.Business Strategies
5.Targets and Indicators
25 2016/3/30 No data copy / No data transfer permitted Targets and Indicators (FY2021)
Net sales: ¥130.0 billion
(Billions of yen) 売上⾼Net sales 営業利益Operating 営業利益率Operating Profit利益率 margin income margin
Operating income: ¥13.0 billion 1,500150 15% (Operating margin: 10%) 130.0 106.0
1,000100 85.5 10% 10% Structural reforms for improving 8% profitability already implemented 50050 5% Organic growth to be realized through 4% 13.0 selective reinforcement of existing 8.0 businesses (green portion of graph to 3.5 0 0% right) 2013年3⽉期FY2013 FY2016 2016年3⽉期 2021年3⽉期FY2021 Product and technology portfolio (Forecast) (Target) expansion targeting additional sales growth
26 2016/3/30 No data copy / No data transfer permitted