april, 2016 to june, 2016 (q1 of fy ending march 31,...

Business ReportApril, 2016 to June, 2016

(Q1 of FY ending March 31, 2017)

Wacom Co., Ltd.

(TSE Sec.1 6727)

All Rights Reserved. Copyright © 2016 Wacom Co., Ltd. 2

Contents Index3-4 Q1 FY 03/17 (Apr. to Jun. 2016) Results Overview5-6 Consolidated P/L, Operating Expenses Comparison7-8 Consolidated Sales/Profit Comparison9-10 Business Segment Sales/Profit Comparison 11-18 Business Highlights19-21 Sales by Product Line22-24 Sales by Region, Sales Changes for Local Currencies25-26 Consolidated B/S, C/F27-29 FY 03/2017 Business Strategies30-46 FY 03/2017 Financial Forecast47-49 Shareholders Return Policy for FY 03/201750-53 Review of Wacom Strategic Business Plan SBP-201954-56 Our Branding57 Disclaimer


Q1 FY 03/17 (Apr. to Jun. 2016) Results OverviewOperating environment The recovery of global economy plateaued driven by growing uncertainties such as the slowdowns

in Europe and China, a sluggish Japanese recovery, and UK’s exit from the EU.

Japanese Yen’s appreciation against US Dollar and euro from the end of last year further accelerated from this April. Yen strengthened against emerging currencies such as Renminbi.

In addition to the penetration of mobile products, cloud computing and SNS, the emergence of new fields such as IoT and VR in the IT industry is causing major changes in our business environment.

Performance overview Consolidated net sales fell below the previous comparable fiscal period, due to the strong Yen and

decreased sales in the Brand Business segment during product lifecycle transitions. We posted operating and net Losses due to higher R&D expenses for new products, and depreciation of global IT infrastructure.

Sales in the Brand Business segment fell below the previous comparable fiscal period. Creative Business shipment increased in unit base but overall sales decreased due to the strong Yen, product mix change, and the transitions to new models. Consumer Business and Business Solution also struggled by foreign exchange rates and changes in the market environment.

Sales in Technology Solution Business declined mainly due to the strong yen and the reduced tablet demand for Turkish government project even though the sales in smartphone category increased.


Q1 FY 03/17 (Apr. to Jun. 2016) Results Overview

Average Forex rate Q1 FY 03/17 YOY Change

1 USD 109.07 JPY -10.1% (Strong JPY)

1 EUR 122.47 JPY -8.5% (Strong JPY)

Business Performance Q1 FY 03/17 YOY Change

Net Sales 13,261 mil -12.4％

Operating Income -1,447 mil -- ( Prev. 1Q: 29 mil )

Ordinary Income -1,481 mil -- ( 26 mil )

Net Profit aft. Tax -1,147 mil -- ( -235 mil )

Financial Indices Q1 FY 03/17 1Q FY 03/2016

EPS -6.97 JPY -1.41 JPY

BPS (Book Value per Share) 153 JPY 181 JPY

Financial Summary (JPY)

(For reference)

(Note) Net Profit is equivalent to net profit attributable to shareholders of Wacom Co., Ltd.


Consolidated P/L Q1 FY 03/16 Q1 FY 03/17 YOY Change

04/15-06/15 04/16-06/16 Amount Ratio

Net Sales 15,142 13,261 -1,881 -12.4%

Gross Profit 6,280 5,271 -1,009 -16.1%

profit margin % 41.5% 39.8%

SG&A 6,251 6,718 467 7.5%

Operating Income 29 -1,447 -1,476 --

profit margin % 0.2% -10.9%

Ordinary Income 26 -1,481 -1,507 --

Net Profit after

Tax-235 -1,147 -912 --

(Unit: Million JPY)

• Effects of forex fluctuationsThe US dollar weakened by 12.27 JPY: Sales -1,200 mil*, OP -110 mil*The euro weakened by 11.39 JPY: Sales -220 mil, OP -90 mil* The above FX impacts in the US dollar are including effects of depreciation in Asian currencies.


Key changes in SG&A

Increase of depreciation(+190 mil) and subcontractor expenses(+190 mil)* in Others and personnel expense* for global IT infrastructure development.

* SG&A including the above global IT infrastructure development decreased by 450 mil due to the stronger yen for expenses incurred at subsidiaries.

Operating Expenses ComparisonQ1 FY 03/16 Q1 FY 03/17 YOY Change

04/15-06/15 04/16-06/16 Amount Ratio

Personnel 2,363 2,412 49 2.1%

R&D 1,019 1,062 43 4.2%

Ad. & Promo. 714 592 -122 -17.0%

Others 2,154 2,652 498 23.1%

Total 6,251 6,718 467 7.5%

SG&A ratio % 41.3% 50.7%

(Unit: Million JPY)


Consolidated Sales Comparison

10,7609,263

4,241

3,828

141

170

0

5,000

10,000

15,000

Q1 FY 03/16 Q1 FY 03/17

Brand biz Tech. Solution biz Other biz

+20.2%

-13.9%

-9.7%

-12.4%15,142

13,261

(Unit: Million JPY)

Change

Ratio


Consolidated Profit Comparison

29

-1,447

26

-1,481

-235

-1,147

-1,500

-1,000

-500

0

Q1 FY 03/16 Q1 FY 03/17

Operating Income Ordinary Income Net Profit

(Unit: Million JPY)


Business Segment & Business Unit

Technology Solution Business Pen sensor systems for Smartphones and Tablets EMR, AES pen components & modules (feelTM)

Other Business Engineering Solution・ECAD dio

Consumer Business Makes daily lives more creative and enjoyable

Product Lines: Digital Stationery, etc.

Business Solution Serves society by providing innovative solutions

Product lines: Display, Signature Tablet, etc.

Creative Business Serves the passion of professional and consumer creativity

Product Lines: Pen Tablet, Mobile, Display

Bra

nd

Bu

sin

es

s

Platform &applications

Provides

technology,

apps and

platforms

Cloud Apps

& Services

WILL (digital

Ink solution)


Consolidated P/L by Business Segment

Q1 FY 03/16 Q1 FY 03/17 YOY Change

04/15-06/15 04/16-06/16 Amount Ratio

Net Sales 15,142 13,261 -1,881 -12.4%

Brand Business 10,760 9,263 -1,497 -13.9%

Tech. Solution Biz. 4,241 3,828 -413 -9.7%

Other Business 141 170 29 20.2%

Operating Income 29 -1,447 -1,476 --

Brand Business 1,651 987 -664 -40.2%

Tech. Solution Biz 216 -96 -312 --

Other Business 3 7 3 96.0%

Corp. and others -1,841 -2,345 -504 27.3%

profit margin % 0.2% -10.9%

(Unit: Million JPY)


Business Highlights:

Brand Business

Creative Business 8.00 bn -13.4%

Shipment increased more than 10% in unit base driven by the emerging market,

but overall sales fell due to the strong yen, a change in product mix, and the

impact of transitions to new models. We continued R&D for the next model.

Pen Tablet (subsection) 4.56 bn -10.0%

Shipment of Intuos Pro maintained the same level in unit base, but sales fell

due to the strong yen. We plan to release the next model in Q4 after more

than three years passed since current model launch.

Intuos maintained the same level in unit base, but the proportion of lower-end models increased.

Shipment of the emerging market model increased by more than 60% in unit base, acquiring new customers in China, India, and South America.

9.26 bn -13.9%

Emerging market model

(One by Wacom)

(Unit: JPY)


Brand Business

Creative Business

Mobile (subsection) 0.75 bn -45.3%

Creative users got more choices on tablet devices due to

changes in competitive environment driven by an increase in

digital pen-adopted devices. Demand for highly-functional

creative tablets supporting user’s workflow continued.

Demand for Cintiq Companion 2 slowed due to product life cycle

transitions and the impact of the strong yen.

We plan to launch new models in Q3, adding features such as

next generation pen technology, and advanced 3D and color

management functions in order to solidify our global market

leadership and realize growth recovery.

Business Highlights: (Unit: JPY)

companion 2


Brand Business

Creative Business

Display (subsection) 2.70 bn -3.8%

Shipment of Display products expanded more than 10% in unit base.

Sales of Cintiq 27 QHD decreased due to strong yen and the impact from large sales in the previous quarter following its launch.

Sales of Cintiq 22HD decreased, having been on the market for four years.

Shipment of Cintiq 13HD increased, particularly in Asian countries.

We continued R&D for the next model, and plan to launch the next model of all product lines in Q3 and Q4.

13HD


27 QHD touch

22HD touch

13HD touch

27 QHD

(Unit: JPY)


Brand Business

Consumer Business 0.23 bn -17.8%

Bamboo Spark, a digital stationery that transforms

handwritten notes on paper into digital ink for editing and

sharing, contributed to sales. We plan to launch the next

model in Q2 after a year passed since its launch.

Provided Wacom Cloud services to stores and utilized digital

ink through cloud services.

Sales of stylus products for iPad decreased due to

intentional adjustment of shipment before new model launch.


Wacom InkLayer Language Bamboo Spark

Bamboo Paper



Brand Business

Business Solution 1.03 bn -17.0%

Sales dropped in the Eurozone due to prolonged investment

projects in the midst of economy uncertainties.

STU series expanded in sales and shipment, owing to increased

demand for digital signature at domestic retailers and public

services in India, and for credit card transactions and over-the-

counter services.

LCD signature tablets, the DTU series, expanded widely in sales

for over-the-counter use in the finance field, with DTU-1141

adopted by Citi Bank Korea.

All Rights Reserved. Copyright © 2016 Wacom Co., Ltd.

DTU-1031DTU-1141 DTH-2242

STU series

STU-530/430



Tech. Solution Business

Pen Sensor System

for Smartphones 1.26 bn +12.2%

Mass production of Samsung’s next gen. model, Galaxy

Note7 partially started from Q1. As a result, sales increased

despite the strong yen.

Sales of existing models such as Galaxy Note5 remained

stable.

Focused on development and automated production of new

cartridge type digital pen

Active development of new customer base.

3.83 bn -9.7%

(Unit: JPY)

Smartphone models


Business Highlights:Tech. Solution Business

Pen Sensor System

for Tablets 2.27 bn -10.5%

Sales fell below the previous fiscal year due to the yen appreciation and

discontinuation of orders of educational tablets for the government of Turkey.

Sales of Active ES pen solution increased with favorable demand from

tablet PC manufacturers, including steady orders from Huawei.

Developing standardized digital pen for Windows OS tablets with Microsoft.

Pen Sensor System

for Notebook PCs 0.30 bn -48.5%

Continued shift in demand from notebook PCs to 2in1 tablets

(Unit: JPY)

Tablet ・PC models



Other Business

CAD software and others 0.17 bn +20.2%

Increased demand of ECAD dio 2016 for replacements.

0.17 bn

(Unit: JPY)

+20.2%

F&A (Corporate)

Continued to invest in business infrastructure for growth and operational efficiency. Major projects include new SCM system for e-commerce and IT infrastructure for global integrated operations.

Promoted WILL (Wacom Ink Layer Language) under our open partnership policy as a new framework to standardize digital ink and engaged in activities for partnership development.

Made preparations for the establishment of Digital Stationery Consortium, by holding Wacom Connected Ink events in Las Vegas and Shanghai in January and May 2016 for digital ink experience.


Sales by Product Line in Brand Business

5,060 4,555

1,377

753

2,804

2,696

283

233

1,236

1,026

0

2,000

4,000

6,000

8,000

10,000

Q1 FY 03/16 Q1 FY 03/17

Creative・Pen tablet Creative・Mobile Creative・DisplayConsumer Business Solution

-45.3%

-10.0%

-3.8%

-17.0%

8,004

9,241-13.9%

-17.8%

(Unit: Million JPY)

Change

Ratio

Creative

biz

9,241

Creative

biz

8,004

-13.4%


Sales by Product Line in Tech. Solution Business

1,118 1,255

2,540 2,273

583300

0

1,000

2,000

3,000

4,000

Q1 FY 03/16 Q1 FY 03/17

Pen for Smartphone Pen for Tablet Pen for Notebook PC, etc.

-48.5%

-10.5%

+12.2%

3,828

4,241-9.7%

(Unit: Million JPY)

Change

Ratio


0

5000

10000

15000

20000

25000

13/7-9 13/10-12 14/1-3 14/4-6 14/7-9 14/10-12 15/1-3 15/4-6 15/7-9 15/10-12 16/1-3 16/4-6

Creative Consumer(Stylus, etc.) Business(VM) Tech. Solution CAD, etc.

Quarterly Trend by Product Line

19,026

23,389

20,786

13,669

18,342

24,954

17,592

15,142

23,814

21,936

16,676

13,261

(Unit: Million JPY)


Sales by Region

4,241 3,828

1,6801,565

3,7392,774

2,717

2,321

2,765

2,773

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Q1 FY 03/16 Q1 FY 03/17

Tech. Solution Japan U.S. Germany Asia Oceania

(-17.5%)

(-6.6%)

+0.3%

-25.8%

-6.9%

-9.7%

-14.6%

15,142

13,261

-12.4%

※1,296

※1,369 (※+11.3%)

(Unit: Million JPY)Change

Ratio※Sales in China

of Asia Oceania

(※% growth based

on local currency)

( ) % growth based

on local currency

(Note) There are no regional segments in the Tech. Solution Biz.


(For reference) Sales Changes in Local Currency Base

Region CurrencyYOY

Change Ratio

Japan(excluding Tech. Solution biz)

JPY -6.9％

U.S. USD -17.5％

Europe EUR -6.6％

China CNY +11.3％

Korea KRW +22.5％

Australia AUD +9.2％

Singapore USD +21.9％

Hong Kong USD -34.2％

Taiwan NTD +19.8％

India INR +139.8％


0

5,000

10,000

15,000

20,000

25,000

13/7-9 13/10-12 14/1-3 14/4-6 14/7-9 14/10-12 15/1-3 15/4-6 15/7-9 15/10-12 16/1-3 16/4-6


Quarterly Trend by Region

19,026

23,389

20,786

13,669

18,342

24,954

17,592

15,142

23,814

21,936

16,676

13,261

(Unit: Million JPY)



Consolidated B/SKey Changes

Assets

・ Decrease in notes and accounts receivable

-1,575・ Decrease in cash and cash equivalents

-1,428Liabilities

・ Increase in long-term loans 3,000

・ Decrease in notes and accounts payable

-575

Net Assets

・ Decrease in shareholders’ equity -4,400(decrease with dividends paid, etc.)

End of Mar. 2016

End of Jun. 2016

Change

Current Assets 37,874 34,733 -3,141

Noncurrent Assets 13,693 13,225 -468

Total Assets 51,567 47,958 -3,609

Current Liabilities 16,479 15,838 -641

Noncurrent Liabilities 3,992 6,878 2,886

Total Liabilities 20,470 22,717 2,247

Minority Interest in

Subsidiaries0 0 0

Net Assets 31,096 25,242 -5,854

Total Liabilities and Net Assets 51,567 47,958 -3,609

Equity Ratio 60.0% 52.3% -7.7%

(Unit: Million JPY)


Consolidated C/FMajor Activities in Q1 FY 03/17

C/F from operating activities

・ Net profit before tax -1,515

・ Increase in inventories -458

・ Decrease in notes and accounts

receivable-trade 1,097

・ Depreciation 621

C/F from investing activities

・ Purchase of fixed assets -900(global IT infrastructure, etc.)

・ Proceeds from sales of property 533 (sales of property in US subsidiary, etc.)

C/F from financing activities

・ Increase in long-term loans payable 3,000

・ Cash dividends paid -2,664

・ Purchase of treasury stock -296

Q1

FY 03/16

Q1

FY 03/17

YoY

Change

04/15-06/15 04/16-06/17 Amount

C/F from operating

activities-2,130 -237 1,893

C/F from investing

activities-1,130 -368 762

C/F from financing

activities1,508 43 -1,465

Effect of change in

exchange rate 181 -866 -1,047

Increase-decrease of

cash & cash equivalent-1,570 -1,428 142

Beginning balance of

cash & cash equivalent16,687 14,365 -2,322

Ending balance of cash

and cash equivalent15,116 12,937 -2,179

(Unit: Million JPY)

FY 03/2017

Basic Strategies and

Business Focus


Initial Assumptions of Business Environment for FY 03/17Global Economy

• Modest growth trends will be supported by financial policies in each country.

• Destabilizing factors are increasing such as refugees in Europe, low oil prices and economic slowdowns in U.S. and China.

• Rapid appreciation of the Japanese Yen and the impact from the Kumamoto earthquake in April are concerns for the Japanese economic recovery.

IT industry and our business environment

• 3D market growth accelerates triggered by 3D design, VR and 3D printing.

• Creative markets in emerging countries continue to expand in both professional and consumers segments.

• 2in1 tablet market starts to grow as the smartphone market at standstill.

• Tablet market for educational and enterprise sectors expand.

• Digital stationery creates new value through integration with Apps and Cloud services.

• Digital signature expands by improving workflow and security.


Basic Strategies and Initiatives Expand Creative Business and enhance the market leadership.

Extend 3D design and color management functions with the next generation of product lines.

Accelerate the growth of Creative Business in emerging markets

Establish a new consumer segment by integrating digital stationery and Cloud

services.

Promote standardization of digital ink by WILL (Wacom Ink Layer Language).

Enhance paperless workflow and security business with digital signature.

Promote standardization of digital pen and expand Technology Solution Business.

Enhance the collaboration among global organizations and improve business efficiency by

leveraging the new global IT infrastructure.

Enhance corporate governance and processes for improving corporate value.


Assumptions for FY 03/17 Financial Forecast

(Note) Each figure of the above sensitivities shows a opposite sign in case of the weaker JPY.

(Unit: Million JPY)

Revised downward our consolidated financial forecast, based on our further market review in mid July, 2016.

Reflected the yen appreciation, changes in market environment, and business progress in Brand Business.

Reflected on changes in customer demand and market environment in Tech. Solution Biz. Actual results may materially differ from our latest financial forecast in the short term due to its business nature.

Forex rate assumptions for FY 03/17, effective from August, 2016

1 USD = 103 JPY (YOY +12.7% stronger JPY) (prev. assumption 110 JPY)1 EUR = 114 JPY (YOY +11.9% stronger JPY) (prev. assumption 125 JPY)

Forex exchange sensitivity: 12-month forecast

Unit of sensitivity Per 1 JPY in case of the stronger JPY

FY 03/17 (forecast) (for ref.) FY 03/16 (result)

Currency USD EUR USD EUR

Sales -500 -140 -400 -112

Operating Income +40 -100 +33 -71

*Assumption: Asian currencies are pegged to USD.


Summary for FY 03/17 Forecast

FY 03/17 (prev.) FY 03/17 (rev.) Prev. vs.

Rev.

04/16-03/17 04/16-03/17 Change

Sales 82,000 77,900 -5.0%

Operating Income 4,200 5.1% 2,400 3.1% -42.9%

Ordinary Income 4,140 5.0% 2,300 3.0% -44.4%

Net Profit aft. tax 3,000 3.7% 1,620 2.1% -46.0%

FY 03/16 (rslt.) FY 03/17 (rev.) YOY

04/15-03/16 04/16-03/17 Growth rate

Sales 77,568 77,900 0.4%

Operating Income 3,664 4.7% 2,400 3.1% -34.5%

Ordinary Income 3,777 4.9% 2,300 3.0% -39.1%

Net Profit aft. tax 2,310 3.0% 1,620 2.1% -29.9%

ROE 7.1% 5.5% -1.6%

(Unit: Million JPY)

(forecast comparison and YOY)


(Note) Due to risks and uncertainties involved in the forecast of customer demand and market in Technology Solution Business,

actual results may materially differ from forward-looking statements in the short term.

Forecast by Business Segment

FY 03/17 (prev.) FY 03/17 (rev.) Prev. vs. Rev.

04/16-03/17 04/16-03/17 Amount Change

Net Sales 82,000 77,900 -4,100 -5.0%

Brand biz 56,200 53,200 -3,000 -5.3%

Tech. Solution biz 25,100 23,900 -1,200 -4.8%

Other biz 700 800 100 14.3%

Operating Income 4,200 2,400 -1,800 -42.9%

Brand biz 11,400 9,660 -1,740 -15.3%

Tech. Solution biz 1,600 1,390 -210 -13.1%

Other biz 50 190 140 3.8倍

Corp. and others -8,850 -8,840 10 -0.1%


(Unit: Mil JPY)

(forecast comparison)


Major Impacts on P/L Forecast Revision -1

• Breakdown analysis of sales revision

Previous forecast on May 11, 2016 82,000 mil. JPY

(－) FX impact

Brand Biz. (yen appreciation against multiple currencies)

3,100 mil. JPY(－) FX impact

Technology Solution Biz. (yen appreciation against US dollar)

1,200 mil. JPY

(＋) Sales increase of Other Biz., etc. 200 mil. JPY

Revised forecast on August 5, 2016 77,900 mil. JPY

4,100

mil. JPY


• Breakdown analysis of sales revision

Previous forecast on May 11, 2016 4,200 mil. JPY

(－) FX impact

Brand Biz. (yen appreciation against euro and Asian currencies)

1,000 mil. JPY(－) FX impact

Technology Solution Biz. (yen appreciation against US dollar)

200 mil. JPY(－) FX impact COGS increase due to FX impact on inventory valueby time lag between purchase and sales(yen appreciation against multiple currencies) 400 mil. JPY

(－) Product mix change in sales, etc. 200 mil. JPY

Revised forecast on August 5, 2016 2,400 mil. JPY

Major Impacts on P/L Forecast Revision -1

1,800

mil. JPY


Forecast of Results by Business Segment

• Brand Business

• Sales and profit were revised downward, mainly due to yen appreciation. However, sales and

profit are expected to increase from prior fiscal year owing to new product launches in major

product lines and cost efficiency improvement in Creative Business.

• As for pen tablets, next model for professionals are scheduled to launch in Q4. Meantime,

middle and lower price model of pen tablets for emerging market are expected to

contribute to overall sales until Q3 (foreseeing temporally lower ASP).• As for mobile and display products, next models are scheduled to launch from Q3, adding

features such as next generation pen technology, advanced functions of 3D and color

management, to lift up competitive edge.

• As for Consumer Business, enhancement of line-up of digital stationery product and

expansion of sales channels are expected in place. At the same time, we will pursue to

stabilize customer demand for existing stylus products by sales and marketing effort.

• As for Business Solution, wider extension of workflow and security solutions utilizing digital

signature is a key for recovery. While Asian market is expanding, we should take account

of European market slowdown under economy uncertainties.

(All comparisons are with the same period of the previous fiscal year unless otherwise stated )


Forecast of Results by Business Segment

• Technology Solution Business

• Technology Solution Business is expected to decrease in both sales and operating income

from prior fiscal year due to the yen appreciation.

• Sales for Galaxy Note 7, a new smartphone model, are expected to remain the same level

of the previous forecast, owing to full mass production, offsetting foreign exchange impact.

• As for tablets, customer base for Active ES pen solutions is expected to expand. However,

sales are expected to decrease due to the yen appreciation and delay of shift to tablets

from notebook PCs by a certain customer.

• Contribution from standardized pen for Windows tablets to financial results in this fiscal

year is limited.

• Sales of educational tablet for Turkey government accounted in prior fiscal year are not

expected in this fiscal year.

• Corporate and others

• An increase of depreciation expense is expected from prior fiscal year due to implementation

of global IT infrastructure system.

(All comparisons are with the same period of the previous fiscal year unless otherwise stated )


Sales Forecast by Business Segment

56,200 53,200

25,10023,900

700800

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

FY 03/15 (previous) FY 03/15 (revised)


+14.3%

-5.3%

-4.8%

-5.0%82,000

77,900(Unit: Million JPY)

Change

Ratio

（forecast change）


Sales Forecast by Product line in Brand Product

25,700 23,800

5,9005,800

14,70014,600

3,3002,500

6,6006,500

0

10,000

20,000

30,000

40,000

50,000



-24.2%

-1.7%

-7.4%

-0.7%

-1.5%

53,20056,200-5.3%

Creative

biz

46,300

Creative

biz

44,200

-4.5%

(Unit: Million JPY)

Change

Ratio



Sales Forecast by Product line in Tech. Solution

13,200 13,000

9,8008,600

2,1002,300

0

5,000

10,000

15,000

20,000

25,000



+9.5%

-12.2%

-1.5%

23,90025,１00

-4.8%(Unit: Million JPY)

Change

Ratio



Sales Forecast by Region

25,100 23,900

9,080 9,310

17,410 16,010

17,17016,190

13,24012,490

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000



-5.7%

-8.0%

+2.5%

-4.8%

-5.7%

82,000-5.0%

77,900


Ratio




(Note) Due to risks and uncertainties involved in the forecast of customer demand and market in Technology Solution Business,

actual results may materially differ from forward-looking statements in the short term.

Forecast by Business Segment

FY 3/16 (rslt.) FY 3/17 (rev.) YOY Change

04/15-03/16 04/16-03/17 Amount Ratio

Net Sales 77,568 77,900 332 0.4%

Brand biz 48,931 53,200 4,269 8.7%


Other biz 663 800 137 20.7%

Operating Income 3,664 2,400 -1,264 -34.5%

Brand biz 8,036 9,660 1,624 20.2%


Other biz 36 190 154 --

Corp. and others -7,538 -8,840 -1,302 17.3%


(Unit: Mil JPY)

(YOY change)


Sales Forecast by Business Segment

48,931 53,200

27,974 23,900

663 800

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

FY 03/16 (result) FY 03/17 (forecast)


+20.7%

+8.7%

-14.6%

+0.4%

77,568 77,900

（YOY change）

(Unit: Million JPY)

Change

Ratio


Sales Forecast by Product line in Brand Product

24,148 23,800

4,453 5,800

13,22314,600

2,1492,5004,9586,500

0

10,000

20,000

30,000

40,000

50,000



+16.3%

+30.3%

-1.4%

+10.4%

+31.1%

53,200

48,931

+8.7%

Creative

biz

41,824

Creative

biz

44,200

+5.7%

(Unit: Million JPY)

Change

Ratio

（YOY change）


Sales Forecast by Product line in Tech. Solution

16,35313,000

9,532

8,600

2,089

2,300

0

5,000

10,000

15,000

20,000

25,000



+10.1%

-9.8%

-20.5%

23,900

27,974-14.8%

（YOY change）(Unit: Million JPY)

Change

Ratio


Sales Forecast by Region

27,974 23,900

7,9149,310

15,63116,010

14,845 16,190

11,204 12,490

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000



+11.5%

+2.4%

+17.6%

-14.6%

+9.1%

77,568

+0.4%77,900

（YOY change）


Ratio



Investment, depreciation and R&D

Capital expenditure

4.00 bn JPY (YOY -17.7％) (no revision)

• Key items: Mold for new products and global IT systems (mainly ERP), etc.

Depreciation

2.80 bn JPY (YOY +39.7％) (previous forecast: 3.20 bn JPY)

・ Key items: Depreciation of new global IT systems, etc.

R&D expense

4.60 bn JPY (YOY + 5.9％) (previous forecast: 4.70 bn JPY)

• Key items: New products development in Brand Business,next generation ICs and basic technology research, etc.


Shareholders Return Policy for FY 03/2017Acquisition of own shares and Cancellation of treasury stock

Acquire its own shares for the purpose of enhancing return to shareholders, improving capital efficiency, and ensuring a flexible capital policy management in response to changes in the Company’s business environment. Execute cancellation of certain treasury stocks in accordance with acquisition.

Acquisition of own shares

• Total number of shares to be acquired: Up to 5,000,000 shares

(equivalent of 3.04% of outstanding shares)

• Total acquisition cost: Up to 2.0 bn JPY

• Acquisition period: From May 12, 2016 to March 31, 2017 (the extension of acquisition

period was resolved on August 5)

Cancellation of treasury stock• Total number of shares cancelled: 2,500,000 shares (equivalent of 1.48% of outstanding

shares)

• Date of cancellation: May 25, 2016


Shareholders Return Policy for FY 03/2017

Dividend policy

• Continue steady dividend payout to shareholders while maintaining a stable financial base necessary for future business development.

• Target payout ratio maintains approximately 40% or more to attract global investment.

• Revised downward dividend forecast for FY3/17 to reflect our revised business forecast, and maintain sound financial base.

Dividend per share

• 12.00 JPY per share for FY 03/2017 (18.00 JPY for FY 03/2016) (previous forecast: 18.00 JPY )

• Payout ratio 121.3% (128.6% for FY 03/2016) (previous estimation: 98.7%)

Total return ratio for shareholders

• Total return ratio: 244.8% (FY 03/2017 forecast) (previous estimation: 165.4%)

(details) Payment of shareholders’ dividends 1.97 bn JPY (forecast)Acquisition of own shares Up to 2.00 bn JPY


Dividends per Share

0.00

2.50

5.00

7.50

10.00

12.50

15.00

17.50

20.00

FY 03/13 FY 03/14 FY 03/15 FY 03/16 FY 03/17

Specialdividend pershare

Ordinaydividend pershare

37.7%55.9%

86.3%

128.6% 121.3%

Payout ratio

11.25

18.0017.50 18.00

(Unit: JPY)

(revised)

(revised)

(revised)12.00

Wacom Strategic Business Plan

SBP-2019Evolve the business model toward mobile and

Cloud for reaching new customers as well as

expanding existing business. In addition, improve

the speed and profitability by leveraging our global

business infrastructure.

Financial Goals by FY ending March, 2019

• Consolidated sales: 120 billion JPY

• Consolidated operating profit margin: 12%

• Consolidated ROE: 20% or higher


43,625 48,931 53,200

75,300

3,100 30,277

27,974 23,900

43,700

1,200655

663

800

1,000

0

20,000

40,000

60,000

80,000

100,000

120,000

FY 03/15 FY 03/16 FY 03/17 FY 03/18 FY 03/19

Impact by FX changes

Other biz

Tech. Solution biz

Brand biz

(sales excluding negative

impact of FX changes）

Consolidated Sales

74,55777,568

82,100

120,000

104,000

The target for FY 03/19 is maintained as we expect Brand Business to exceed the original plan excluding negative impact by FX changes, hedging risks of the underperformance of Tech. Solution Biz.

CAGR

(Unit: Million JPY)

Consolidated

Sales

13%

10%

15%

(revised

forecast)

(plan) (plan)(result) (result)


6,143

3,664

2,400

10,400

14,400

3,473

2,310

1,620

7,070

9,800

0

5,000

10,000

15,000

FY 03/15 FY 03/16 FY 03/17 FY 03/18 FY 03/19

Consolidated Profits

30%

24%

(単位: 百万円)

4,000

1,6001,120

2,740

Raise profitability by significant improvement of

operational efficiency and quick decision-making

through leveraging global IT Infrastructure.

(plan) (plan)(result) (result) (revised

forecast)

(profits excluding negative

impact of FX changes）

CAGR


SBP-2019 Basic Strategy

Evolve the business toward mobile, Cloud and ecosystems.

Accelerate the growth with a new global business organization and enhanced global integration.

Accelerate creative business with mobile product line expansion, 3D penetration and emerging market investment.

Reach new consumer users with Digital Stationery and Cloud.

Expand the Technology Solution Business with AES and WILL (Wacom Ink Layer Language).

Enhance business workflow and security solutions by leveraging WILL and digital signature solutions.

Leverage global business system for efficiency, speed and profitability.


our vision


our brand

DisclaimerForward-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 new technologies. Please

note that actual results could materially differ from those expressed

or implied by the forward-looking statements in this presentation

due to these risks and uncertainties.

Investor Relations Inquiries

TEL: +81-3-5337-6502 FAX: +81-3-5337-6519

Wacom Co., Ltd.

Sumitomo Fudosan Shinjuku Grand Tower 31F,

8-17-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo

160-6131, Japan

Wacom Co., Ltd.

http://www.wacom.com

april, 2016 to june, 2016 (q1 of fy ending march 31,...

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