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Company PresentationMenicon Co. Ltd
(TSE 1st Section: Ticker 7780)
Who We Are
1
1
2
3
4
5
We are the oldest contact lens manufacturer in Japan.
We have achieved sales growth for over 15 consecutive years.
We have a full product line up, such as Daily disposable, 2week, 1month, Soft contact lens and RGP.
We have a membership system, MELS Plan that contributes to eye safety of contact lens users and stable earnings of the Company.
We are conducting our corporate activities through a R&D, Manufacturing and Sales structure that puts the safety of our customers’ eyes first.
About Menicon
2
Menicon began when founder Kyoichi Tanaka developed Japan's first corneal contact lens in 1951.
Our Strength
3
Full Product Line up
MELS Plan
Business
R&D, Manufacturing,
Sales
Product Lineup
4
Daily 1MONTH
2WEEK
Hard Contact Lens
Products
Monthlyfees
MELS Plan Virtuous Circle
5
Menicon- Stable revenue
- Benefits returned tothe customer with
our service- Investment in research
& development
Store(affiliated facility)- Reliable customer
follow-up- Stable revenue
(freedom from price competition)
Service
Sales commissions
Customers(MELS members)- High-quality lenses- Reasonable service
- Peace of mind
Sales in Japan
6
Menicon Shop 48
Ace contact 77
Fuji contact 13
City contact 18
Total 156
MELS Plan shop 1,537
Contact lens shopAbout8,000
＜2017/12 /31＞
✓ Menicon Group retail shop “Miru Partner”
✓ Retail shop network, “MELS Plan shop”
◆Menicon Group ◆Retail shop
✓ Expanding sales of Daily disposable
✓ Silicone Hydrogel Contact Lens“1day Menicon PremiO”
Daily Disposable
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✓ Flat pack daily disposable “Magic” (Japan)
“Miru 1day Menicon Flat Pack”(Global)
Daily Disposable
8
1. Open 2. Pick up 3. Wear
The design of the package allows users to remove the lenses without needing to check which side is correct, without touching the inside of the lenses.
Menicon
Competitors
4. Wear
CLEAN &EASY
1. Open 2. Pick up 3. Flip
Net Sales
9
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
FY1975 FY1980 FY1985 FY1990 FY1995 FY2000 FY2005 FY2010 FY2015
MELS Plan
Contact lens, others
*Note: From FY2013, Consolidated financial result
(JPY m)✓ We have achieved sales growth for
over 15 consecutive years.
Expansion ofmember ranksof MELS Plan
Productstrategy
Strengtheningand expansion
of overseas businesses
Investment in new
businesses
Vision 2020
10
Growth ofMELS Plan
Growth ofoverseas
businesses
Growthof new
businesses
Achievement of Our Medium-term Business plan Vision 2020Toward Achievement of Sales of JPY100bn and
Operating Profit Margin of 10%
Appendix
Menicon Today
11
JPY 110 bn+ market cap
3,000+ employees
*consolidated
1.22 mnnumber of MELS
plan members
85+ countriesproduct distributed
JPY 72 bnannual revenue
14.5 yearsaverage number of
years of employment*non-consolidated
*Note: company data as of last fiscal year end. Market cap as of end of December 2017
Annual Sales/Operating Profit
12
62,209 63,131 67,332
72,052 77,247
2,294
2,863
3,457
3,910
4,451
0
1,000
2,000
3,000
4,000
5,000
0
20,000
40,000
60,000
80,000
FY2013 FY2014 FY2015 FY2016 FY2017(Forecast)
Net sales(JPY m)
Operating profit(JPY m)
Net sales Operating profit
Research & Development
13
✓ Development of various daily disposableastigmatic lens, cosmetic lens and bifocal lens
✓ Basic research
2.7
3.4 3.4
4.4%
5.1%
4.8%
4.0%
4.5%
5.0%
0.0
1.0
2.0
3.0
4.0
FY2014 FY2015 FY2016
R&Dexpenditure
(JPY bn)
% of consolidated
net sales
Manufacturing
14
✓ A high-quality mass manufacturing system
Kakamigaharafactory (Japan)
Seki factory (Japan) Singapore factory
FY2017 Highlights - Summary
15
FY 2016ForecastFY 2017
Change YoY Change
Net sales 72,052 77,247 +5,195 7.2%
Cost of sales 33,192 36,176 +2,984 9.0%
(Cost rate) 46.1% 46.8% (+0.7pt) ---
Gross profit 38,859 41,071 +2,212 5.7%
Operating income 3,910 4,451 +541 13.8%
(Operating margin) 5.4% 5.8% (+0.4pt) ---
Ordinary income 4,036 4,616 +580 14.4%
Profit attributable to ownersof parent
2,543 3,017 +474 18.6%
Basic earnings per share JPY57.16 JPY85.70 +28.54 ---
JPY Million
Note: Basic earnings per share are calculated, assuming that the stock split was conducted at the beginning of 2018.
FY2017 Highlights - Net Sales
16
YoY change
+JPY5.1bn（+7.2%）
1) Contact lens sales+JPY1.9bn
2) MELS Plan+JPY2.6bn
3) Effects of FOREX Rates
+JPY0.5bn
Key reasons1) 2) daily disposable sales increased.
3) Compared to the previous Forecast, we revised FOREX rate. 14％ weak yen per １Euro , ８％ weak yen per１USD.
JPY77.2bn
FY2017 Highlights - Operating Income
17
YoY change
+JPY0.5bn（+13.9％）
Gross profit+JPY2.1bn
Selling, general and
administrative expenses
+JPY1.6bn
Key reason
Gross profit increased along with sales growth.
JPY4.4bn
Expansion of Our Overseas Business
18
China• Expanding sales of specialty contact lenses, with a focus on
orthokeratology.• Expanding sales of daily disposable and hard contact lenses.
North America• Full-scale entry to the US market.• Daily disposable sales expansion with volume retailers.
Europe• Trust gained through our history with hard contact lenses.• Expanding sales of specialty and order-made contact lenses.• Daily disposable sales expansion with volume retailers.
FY2016 Sales:JPY5,467m
FY2016 Sales:JPY756m
Asia regionFY2016 Sales:
JPY1,090m
New Businesses
19
We have launched new businesses by taking advantage of technologies and know-how which have been cultivated throughout our history.
Environmental and Bioscience Business
Veterinary Medicine Business
Life Science Business
Eye care Project Event Business
Shareholder Return
20
15 15
19
25
0%
10%
20%
30%
40%
0
5
10
15
20
25
30
FY2014 FY2015 FY2016 FY2017estimate
Dividend per Share Dividend Payout Ratio
(JPY)
Note: Dividends are calculated, assuming that the stock split was conducted at the beginning of FY2014.
Balance sheet
21
AssetsFY2017 3Q(Dec 2017)
Cash and equivalents 14,042
Accounts receivables 8,057
Inventories 11,638
Other current liabilities 2,376
Net property, plant & equipment 26,781
Goodwill 3,972
Patents 1,563
Investment securities 777
Other fixed assets 4,281
Total assets 73,487
JPY Million
Liabilities & Shareholder’s equityFY2017 3Q(Dec 2017)
Accounts payables 3,905
Accrued expenses 2,546
Short-term borrowings 2,333
Current portion of bonds 2,585
Current portion of long-term borrowings
2,382
Other current liabilities 4,944
Bonds 5,833
Long-term borrowings 5,728
Other fixed liabilities 2,451
Total liabilities 32,707
Total shareholder’s equity 40,741
Minority interest 39
Total equity 40,780
Capital ratio 55.4%
D/E 0.47x
Net D/E 0.12x
Total debt 19,079
Disclaimer on Forward-Looking Statements
• This material includes certain forward-looking statements about the Menicon Group. To the extent that statements in this material do not related to historical or current facts, they constitute forward-looking statements.
• These forward-looking statements are based on the current assumptions and judgments of the Menicon Group in light of the information currently available to it, and involve know and unknown risks, uncertainties and other factors, which may affect the statements made in this material.
Menicon Co., Ltd. Finance & Investor Relations Dept.TEL: +81-52-935-1646E-mail: menicon-ir@menicon.co.jp
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