Fiscal year ending December 2020 First three months...• Promote telework and working from home Telework rate of 61.5%, including for sales and support Aim for further improvements

Copyright©2020 OTSUKA CORPORATION All Rights Reserved.

Fiscal year ending December 2020First three months

(January – March)Business Results

April 30, 2020

OTSUKA CORPORATION


(Millions of yen)

Consolidated Non-Consolidated

Amount Change to Last year Amount Change to

Last year

Net sales 224,329 +2.6% 202,009 +2.3%Operating profit 16,147 +10.2% 14,123 +10.4%Ordinary profit 16,484 +9.3% 15,606 +10.9%

Profit* 10,882 +8.4% 10,825 +10.9%

1

Summary of Business Results,January - March, 2020

*Profit attributable to owners of parent


191,225

218,681 224,329

11,851

14,64816,14712,222

15,087 16,484

10,042 10,882

8,064

0

50,000

100,000

150,000

200,000

250,000

1Q 2018 1Q 2019 1Q 20200

4,000

8,000

12,000

16,000

20,000

Net sales Operating profitOrdinary profit Profit*

2

Net sales and ProfitsConsolidated

(Millions of yen)

Net salesOperating profitOrdinary profitProfit*

*Profit attributable to owners of parent


73,952 76,179 79,734

117,273142,502 144,594

0

50,000

100,000

150,000

200,000

250,000

1Q 2018 1Q 2019 1Q 2020

224,329218,681191,225

3

Net sales by segmentsConsolidated

(Millions of yen)SI Business S&S Business


35,523 38,26036,748

40,83238,69637,677

15,59213,41111,459

87,186108,663 107,323

0

50,000

100,000

150,000

200,000

250,000

1Q 2018 1Q 2019 1Q 2020

202,009197,520

171,847

4

Net sales by 4 segmentsNon-Consolidated

(Millions of yen)SI related products Custom-made software, etc.

Supplies

Maintenance, etc.


191.2 198.6193.7

176.2

218.6

231.4 216.9 219.4224.3

0

50

100

150

200

250

1Q 2Q 3Q 4Q

FY 2018 FY 2019 FY 2020

5

Consolidated Quarterly change of Net sales

(Billions of yen)


7,167

14,25015,645

12,222

16,318

12,677

19,623

15,08716,484

0

5,000

10,000

15,000

20,000

1Q 2Q 3Q 4Q

FY 2018 FY 2019 FY 2020

6

Quarterly change of Ordinary profit

Consolidated

(Millions of yen)


5.2

-1.2

25.2

37.4

25.424.6

15.914.1

10.8

16.6

7.8

14.8

3.25.6

16.321.8

33.2

16.417.0

12.55.3

6.18.7 7.6

7.4 13.4

6.95.5

-0.5

11.2

2.92.7

5.5

4.9

8.4

2.3

6.4

3.83.8

7.07.1

4.8

4.1

4.34.42.93.45.4

5.7

5.7 7.05.3

-5.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0SI related products Custom-made software etc.Supplies Maintenance, etc.

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1QFY 2017 FY 2018 FY 2019 FY 2020

7

Non-Consolidated

Quarterly Net Sales by 4 segments( % change year-on-year )

( % )

SI related products -1.2Custom-made software etc. 16.3 Supplies 5.5Maintenance, etc. 4.1


21.51% 30.30% 48.19%

21.02% 28.36% 50.62%

21.25% 28.58% 50.17%

0% 20% 40% 60% 80% 100%

1Q 2018

1Q 2019

1Q 2020

Less than 1 billion of yen 1 to less than 10 billions of yen 10 billions of yen and above

8

Net sales structure on customers’ total annual business scale

Non-Consolidated

* “Less than 1 billion yen” includes public offices.


Manufacturingindustries

24.06%Wholesaleindustries

17.72%

Buildingindustries

8.83%

Retailingindustries

3.46%

Education,Public offices

8.40% Serviceindustries

28.47%

Lease, Creditfirms, etc.

9.06%

9

Sales breakdown by customers’ type of industryNon-

Consolidated

1Q 2020


207,707224,119

246,308

9,2449,0148,865

52.4 52.154.4

2.2 2.1 2.00

50,000

100,000

150,000

200,000

250,000

300,000

As of Mar. 31, 2018 As of Mar. 31, 2019 As of Mar. 31, 20200

20

40

60

80

100

Equity Interest-bearing debtEquity ratio Interest-bearing debt ratio

10*OTSUKA CORPORATION has adopted “Partial Amendments to Accounting Standard for Tax Effect Accounting” from 2019 and is applying this retroactively to 2018. Therefore, the figures for Equity ratio and Interest-bearing debt ratio at the end of March 2018 are expressed after retroactive adjustment.

Equity andInterest-bearing debtConsolidated

(Millions of yen) ( % )


<Amount of Sales> (Millions of yen)

1Q 2018 1Q 2019 1Q 2020

Amount AmountChange to Last year

AmountDifference to

Last yearChange to Last year

“tanomail” 40,350 41,509 +2.9% 42,947 +1,437 +3.5%SMILE 2,664 2,706 +1.6% 2,894 +187 +6.9%ODS 14,446 14,231 -1.5% 13,670 -560 -3.9%OSM 17,860 18,530 +3.8% 20,500 +1,969 +10.6%<As reference: Number of Sales> (Units)

Copier 11,020 10,507 -4.7% 9,486 -1,021 -9.7%(of whichColor copier) 10,659 10,203 -4.3% 9,259 -944 -9.3%

Server 8,681 8,254 -4.9% 7,155 -1,099 -13.3%PC 298,409 458,136 +53.5% 374,780 -83,356 -18.2%Client Total 311,450 469,499 +50.7% 385,596 -83,903 -17.9%

(ODS: Otsuka Document Solutions OSM: Otsuka Security Management)

11

Key strategic businessNon-Consolidated


0

100,000

200,000

300,000

400,000

500,000

1Q 2Q 3Q 4Q

2016 2017 2018 2019 2020

12

Quarterly Number of PCs SoldQuarterly Number of PCs Sold

(Units)


0

5,000

10,000

15,000

1Q 2Q 3Q 4Q

2016 2017 2018 2019 2020

13

Quarterly Number of Copiers SoldQuarterly Number of Copiers Sold

(Units)


22,234

7,152

6,004

4,555

3,776

42,947

122,367128,733

107,934100,980

117,381

166,649159,932

153,500146,046

139,106

545 3,302 9,61919,885

33,03646,369

59,06271,088

82,49389,192

92,990

3,051

4,218

2,854

2,0291,475

1,560

2,4652,313

2,207

1,1281,408

25,21216,766

11,335

3,2452,552

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

“MA tanomail”

“tanomail plus”

TANOSEE

Started “tanomail”

Alliance withLION OFFICE PRODUCTS CORP.

“tanomail” achievedsales of over

100 billion yen

1420201Q

Years to 2019are full years

Annual sales transition of “tanomail”Non-Consolidated

(Millions of yen)Other “tanomail” business“tanomail”

Procurement service for large company

Private brand

Procurement ASP service

Number of “tanomail”registered accountsMarch 2020 1,661,443 accountsMarch 2019 1,561,216 accounts

“personal tanomail”

Mail-order Servicefor individual


4.184.19 4.19 4.19

4.20

4.22

4.24

4.26 4.26

4.15

4.20

4.25

4.30

2018 1Q 2018 2Q 2018 3Q 2018 4Q 2019 1Q 2019 2Q 2019 3Q 2019 4Q 2020 1Q

15

(Copier customers)(Copier customers)(Products)

Trends in the number of products per one company

Non-Consolidated

Copyright©2020 OTSUKA CORPORATION All Rights Reserved. 16

Impact of the Spread of COVID-19on OTSUKA Corporation

• Impact on the holding of eventsCancellation of community events, voluntary restraintin holding seminars, etc.

• Procurement and supply of products<Hardware products>Despite the sense of a product shortage, the impact of the coronaviruswas limited thanks to collaboration with manufacturers and the securingof products in advance.

<Supply products>A shortage of hygiene products and household-use paper continued.Logistics also experienced some areas of disruptions.

Furthermore, office demand for copying (printing) and demand for paper is expected to decrease owing to the impact of telework. At present, this is forecast to have a negative impact of around 1 billion yen in terms of the amount of future monthly sales.


Response to Customers in Reaction to the Spread of COVID-19

• Expand points of contact with our customers by utilizing one-to-one emails from SPR data, web conferencing(Teams, Zoom), telephone calls, etc.

• Make use of online seminars• Provide solutions for urgent issues such as telework

• Promote “DAISENRYAKU”(Otsuka Strategy) Ⅱ initiativesSales activity support using AI(parties receiving proposal, proposal details)

Promote inside businessFurthermore, we provided approximately 11,000 stockpiled masks to visitors at event venues.

Solve problems through proposals and supportfrom the customer’s perspective


Support Customers’ Telework

Provide telework-related solutions to a total of 70,000 customers

• Remote desktop, remote access systems• Communication tool systems, communication systems• Over 5,000 companies• From March 1 to April 15

Propose solutions through a variety of products such as security, document digitization, cabinets everywhere, etc.

Reason for Otsuka’s existence = Solving customers’ problems


Internal Initiatives for Responding to COVID-19 - 1

• Promote telework and working from homeTelework rate of 61.5%, including for sales and supportAim for further improvements.

• Encourage staggered working hours• Cancel conferences and meetings and utilize

various communication tools(All of our approximately 8,000 workers are able to useTeams)

Contact and business negotiations with customers,internal contact

• Distribute masks to all employees


Oct. Nov. Dec. Jan. Feb. Mar.

AI order-receiving rate

General order-receiving rate

【Sales activities through AI proposals】

151Q 161Q 171Q 181Q 191Q 201Q

【Inside Business Center】

AI = Usage of SPR information

(*Order-receiving rate for negotiations)

20

Internal Initiatives for Responding to COVID-19 – 2“DAISENRYAKU”(Otsuka Strategy) Ⅱ

Increase in contacts and business talks at the center

[Number of accounts acquired]


(Millions of yen)

Consolidated1Q 2020(Result)

1H 2020（Plan）

FY 2020（Plan）

Net sales 224,329 452,000 864,000

Operating profit 16,147 36,000 63,700

Ordinary profit 16,484 36,520 64,600

Profit*(*Profit attributable to owners of parent)

10,882 24,530 43,530

21

Plans for FY 2020

At the present time, then earnings forecast is unchanged. As we closely monitor the situationfor the April-June period, we will promptly announce any revisions to our earnings forecast in the future.


Community

Employees

Customers

ShareholdersBusiness Partners

We live up to ourStakeholders’ confidence

22


1. This material is intended to provide information about the business performance of the 1st quarterof fiscal year 2020 and strategy of the OTSUKA CORPORATION and Group companies. It is not intended and should not be construed as an inducement to purchase or sell stocks ofOTSUKA CORPORATION.

2. Forward-looking statements in this material with respect to OTSUKA CORPORATION’s strategies,plans, beliefs, and other statements related to future trends and performance are not historicalfacts, and as such involve risks and uncertainties. Such statements are not guarantees of futureperformance. Actual results may differ considerably from projections due to unpredictable changes to the economic situation, and a number of factors. Key factors that could affect actual results aregeneral economic conditions, social trends, change of relative competitiveness in demand actionfor products and services provided by OTSUKA CORPORATION. Key factors that may affectbusiness performance are not limited to these items described here.

3. Statements in this document are based on the current beliefs, estimates and expectations ofmanagement. OTSUKA CORPORATION undertakes no obligation to update any forward-lookingstatements.

4. OTSUKA CORPORATION shall in no event be liable for any damages arising out of the use orinterpretation of this material.

Cautionary statement

23

Documents

Fiscal year ending December 2020 First three months...• Promote telework and working from home Telework rate of 61.5%, including for sales and support Aim for further improvements