Wacom Co., Ltd. · TSE:6727

Wacom — Investor Presentation (May 2018)

28 slides from Wacom's investor presentation, May 2018

  1. Slide 1: Wacom Chapter 2 Medium-Term Business Plan

    Wacom Chapter 2 Medium-Term Business Plan FY36 ending March 2019 - FY39 ending March 2022

  2. Slide 2: Wacom opens Chapter 2: Technology Company

    Wacom opens “Chapter 2 ” Taking a new step as “Technology Company” All Rights Reserved. Copyright © 2018 Wacom Co., Ltd. 2

  3. Slide 3: Vision: for a creative world

    In addition to our Vision of “for a creative world” - A world alive with creativity - All Rights Reserved. Copyright © 2018 Wacom Co., Ltd. 3

  4. Slide 4: Life-long Ink

    We advocate the concept of “Life-long Ink” Embark on ever-lasting journeys of creativity with our customers All Rights Reserved. Copyright © 2018 Wacom Co., Ltd. 4

  5. Slide 5: Unlimited Possibilities of Digital Ink

    Unlimited Possibilities of Digital Ink Digital Ink captures “track and context” of human being’s handwriting/drawing Including, but not limited to: Who wrote or drew it and when, where in what state of mind etc. All Rights Reserved. Copyright © 2018 Wacom Co., Ltd. 5

  6. Slide 6: Corporate Level Strategy and Direction

    Corporate Level Strategy and Direction 1. Technology Leadership 2. Island & Ocean 3. Extreme Focus All Rights Reserved. Copyright © 2018 Wacom Co., Ltd. 6

  7. Slide 7: Technology Leadership Company

    Technology Leadership Company Bring about “Technology Innovation” through dialogues with customers Harness the power of handwriting/drawing with “Technology Innovation” All Rights Reserved. Copyright © 2018 Wacom Co., Ltd. 7

  8. Slide 8: Align/Drive Island & Ocean Businesses

    Align/Drive “Island” & “Ocean” Businesses “Island” ＝Branded Business “Ocean” ＝Technology Business Aligning two businesses with different missions for driving growth as a whole All Rights Reserved. Copyright © 2018 Wacom Co., Ltd. 8

  9. Slide 9: Extreme Focus

    Extreme Focus Carry out “extreme selection and concentration” Across Wacom’s entire Business & operation domains All Rights Reserved. Copyright © 2018 Wacom Co., Ltd. 9

  10. Slide 10: High-priority Issues

    High-priority Issues • “Technology Innovation” through dialogues with customers • Organization/Operation update • Solid financial structure securing profitability • Enhancement of management quality through BOD* update * BOD: Board of Directors All Rights Reserved. Copyright © 2018 Wacom Co., Ltd. 1

  11. Slide 11: Strategy: Brand Business

    Strategy: Brand Business • Challenge to revive strength • Improve process of product planning / product development • Improve the satisfaction level of customer service • Raise the level of quality • Technological innovation for future growth • Innovation of basic pen experience • Deliver completely

  12. Slide 12: Strategy: Technology Solution Business

    Strategy: Technology Solution Business • Maintain leading position in the existing market (smartphones/tablet/PC) • Create new innovative digital pen experience with IT industry customers • Establish collaborations with platform partners • Build up digital “paper & pen” eco-system • Develop new mark

  13. Slide 13: Challenge to revive fundamental strength by organization update

    Challenge to revive fundamental strength by organization update Focus on customer and change to a simplified organization structure • Establish “Ink Division” • Establish “CTO Office” • Technological Innovation • Re-construct product development • Development Scheme process • Customer Relations • Re

  14. Slide 14: Optimization of SG&A cost

    Optimization of SG&A cost Toward the lowest SG&A ratio to sales in the past 10 years 1. Intensive investment in R&D in order to enhance Technology Leadership 2. Further productivity improvement and cost reduction in Non-R&D areas. All Rights Reserved. Copyright © 2018 Wacom Co., Ltd. 14

  15. Slide 15: Improve management quality

    Improve management quality Update of Board of Directors (BOD) 1. Intensive strategy discussions living up to the definition as Technology Leadership Company 2. Comprehensive discussion in optimized scale 3. Ensure fairness and transparency by increasing the rate of outside directors to 50% All Right

  16. Slide 16: Management Target by FY 03/2022

    Management Target by FY 03/2022 Profitability : Consolidated Operating Margin 10 ％ Business size : Consolidated Sales 100 billion yen Capital efficiency : Consolidated ROE 15～20％ All Rights Reserved. Copyright © 2018 Wacom Co., Ltd. 16

  17. Slide 17: Capital Policy and Shareholder returns

    Capital Policy and Shareholder returns Capital Structure: Further enhance our financial soundness in order to respond actively to changes in the business environment (by measures such as expansion of investments) Capital Efficiency: ROE as an indicator to determine capital efficiency measured by the

  18. Slide 18: MTP: Consolidated P/L & Financial Indicator

    MTP: Consolidated P/L & Financial Indicator （unit: JPY million） FY 03/18 FY 03/19 FY 03/22 CAGR (FY35) (FY36) (FY39) Net Sales 82,263 85,000 100,000 5% Brand Business 48,173 50,300 60,400 6% Technology Solution biz 33,648 34,700 39,600 4% Operating Profit 3,527 4,000 10,000 Operating Margin 4.3% 4.7

  19. Slide 19: Consolidated forecast for FY 03/19 (FY36)

    Consolidated forecast for FY 03/19 (FY36) All Rights Reserved. Copyright © 2018 Wacom Co., Ltd. 19

  20. Slide 20: Summary of Consolidated forecast for FY 03/19

    Summary of Consolidated forecast for FY 03/19 (FY36) • Sales: JPY 85 billion (YOY+3％) • Operating Profit: JPY 4 billion (YOY+13％) • Net Profit: JPY 3 billion (YOY +26％) (Note) ‘Net Profit’ is equivalent to ‘Profit attributable to owners of parent’. All Rights Reserved. Copyright © 2018 Wacom Co., Lt

  21. Slide 21: Summary of forecast by business for FY 03/19

    Summary of Consolidated forecast Brand Business for FY 03/19 (FY36) Sales: JPY 50.3 billion (YOY+4.4％) Operating Profit: JPY 9.7 billion(YOY+50％) • Sales expansion in Creative Business • Increase in sales and gross profit, owing to new models announced in the previous FY and positive change in produ

  22. Slide 22: Investment, depreciation and R&D for FY03/19

    Investment, depreciation and R&D R&D expense for FY03/19 (FY36) JPY 5 billion （YOY +14.0％） • Key items: New products development and next-generation technology research, etc. in order to promote Technology Leadership Capital expenditure JPY 2.3 billion（YOY +52.0％） • Key items: Metal mold for product

  23. Slide 23: Shareholders Return Policy for FY 03/19

    Shareholders Return Policy for FY 03/19 (FY36) Basic policy of profit distribution • Aims to provide stable and sustainable dividend payment and to exercise flexible treasury stock acquisition, while attaining sufficient retained earnings to enhance future business development and financial base. Di

  24. Slide 24: Consolidated forecast for FY 03/19: Supplementary material

    Consolidated forecast for FY 03/19 (FY36) Supplementary material All Rights Reserved. Copyright © 2018 Wacom Co., Ltd. 24

  25. Slide 25: Assumptions for FY 03/19 (FY36)

    Assumptions for FY 03/19 (FY36) Forex rate assumptions USD 1 = JPY 105 （YOY +5.8 yen, +5.2% weaker yen） EUR 1 = JPY 130 （YOY +0.6 yen, + 0.4% weaker yen） Sensitivity to currency fluctuations: 12-month forecast Unit of sensitivity In case of stronger JPY 1.00 In case of the weaker JPY, read the follo

  26. Slide 26: Consolidated forecast for FY 03/19 (FY36)

    Consolidated forecast for FY 03/19 (FY36) H1 FY35(result) H1 FY 36（forecast) YOY （unit: million yen） 04/17-09/17 04/18-09/18 Growth rate Sales 40,689 41,330 1.6% Operating Profit 1,501 3.7% 830 2.0% -44.7% Ordinary Profit 1,642 4.0% 670 1.6% -59.2% Net Profit 1,674 4.1% 660 1.6% -60.6% FY35(result)

  27. Slide 27: Forecast by Business Segment for FY 03/19

    Forecast by Business Segment for FY 03/19 (FY36) （unit: million yen) FY 35 FY 36 YOY （result） （forecast） 04/17-03/18 04/18-03/19 Amount Ratio Sales 82,263 85,000 2,737 3.3% Brand biz 48,173 50,300 2,127 4.4% Tech. Solution biz 33,648 34,700 1,052 3.1% Other biz 442 0 -442 -100.0% Operating profit 3,

  28. Slide 28: Disclaimer

    Disclaimer Forward-looking statements regarding future events and performance contained in this presentation are based on currently available information and involve risks and uncertainties, including macroeconomic conditions, trends of the industry in which the company is engaged and progress in ne

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