FY2018 1st Half Financial Results Briefing · 10/25/2018 · Cardealer 15. Cash management services for retail stores (2) Back office cash management solution for retail stores in

FY2018 1st HalfFinancial Results Briefing

FUJITSU FRONTECH LIMITEDOctober 25, 2018

1. Summary of FY2018 1st HalfConsolidated Financial Results

Copyright 2018 FUJITSU FRONTECH LIMITED

Consolidated Results of OperationsSales/operating income by business segmentSales by RegionsOutline of the Business SegmentsConsolidated Financial Positions and Cash Flows

1

Consolidated Results of Operations

Net salesOperatingIncome

OrdinaryIncome

Net income Attributable to

Owners of parent

Net incomeper share

FY2018 1st Half ４７.７０.８１.００.５２１.５７ yen

FY2017 1st Half ４７.４１.９１.９１.３５５.４０ yen

Change +０.４ -１.１ -０.９ -０.８Figures announced

In July４５.６０.９０.７０.４１６.６９ yen

Changes from the figures announced in July +２.１ -０.１ +０.３ +０.１

[Billion yen]


Change【In Japan】・Growth in new totalizator terminals and sports lottery terminals.

・Decrease in banking terminals due to demand cycle.【Outside Japan】・Growth in new small-sized BRU.

Changes from the figures announced in July・Increase in sales related to hasting business deals outside Japan.・Increase in ordinary income related to foreign exchange gains based around

weak yen through the 1st-Half. 2

Sales / Operating income by Business Segment

FY2017 1st Half FY2018 1st Half Change

Net salesOperatingincome Net sales

Operatingincome Net sales

Operatingincome

Global ProductBusiness

18.7 0.7 18.0 -0.6 -0.7 -1.3

Service IntegrationBusiness

13.4 1.5 13.9 1.2 +0.4 -0.3

Public SolutionBusiness

8.8 0.2 10.1 0.6 +1.3 +0.5

Frontline SolutionBusiness

6.3 0.3 5.6 0.2 -0.7 ±0.0

Other/Corporate（Including strategic

investments）0.0 -0.7 0.0 -0.7 ±0.0 ±0.0

Total 47.4 1.9 47.7 0.8 +0.4 -1.1

[Billion yen]

Copyright 2018 FUJITSU FRONTECH LIMITED3

Sales by Regions[Billion yen]

FY2017 1st Half FY2018 1st Half Change

Japan ３５.８３５.３ -0.５Outside Japan

(Raito of Sales outside Japan)

１１.６(24.4%)

１２.４(26.0%)

+0.９

Americas ５.４５.３ -0.１

Europe ３.５５.３ +１.８

Asia ２.７１.８ -0.９

（China) (１.６) (0.９) -0.７

Total ４７.４４７.７ +0.４


Average exchange rate during period

1USD=１１１ yen １１０ yen

4

Growth in RFID solution sales in North America. Launch cash management service for a large customer in Japan (TC/CM). Growth in LCM service sales in Japan.

Outline of the Business Segment (1)

Service Integration Business 13.9Billion yen (Year on year : +0.4 Billion yen, +3%)


Launch of small-sized ATM for retail stores. Growth in new cash handling components (small BRU) sales (for SCO etc.) . Decrease in banking terminals sales due to demand cycle.

Global Product Business 18 Billion yen (Year on year : -0.7 Billion yen, -4%)

Key Efforts in 2nd Half1) Expansion of cash management business for retail stores in North America.2) Expansion of small bank solution business in Japan.

Key Efforts in 2nd Half1) Expansion of cash management service business (TC/CM).2) Expansion of SI business into new business fields in Japan.3) Expansion of solution business for outside Japan (ex. RFID)

5

Growth in RFID business outside Japan. Full-scale launch of multi settlement terminals handling IC credit cards

for retail companies in Japan. Decline of demand for mobile terminals for logistics company after

peaking of large orders.

Outline of the Business Segment (2)


Frontline Solutions Business 5.6 Billion yen (Year on year: -0.7 Billion yen, -11%)

Growth in new totalizator terminals sales. Growth in sales of sports lottery terminals. Launch of the cashless betting machine for JRA.

Public Solutions Business 10.1 Billion yen (Year on year : +1.3 Billion yen, +15%)

Key Efforts in 2nd Half1) Expansion of target business field for multi settlement terminals handling

IC credit cards and related service business. 2) Sales expansion of new small-sized RFID tags and palm vein

authentication solution business.

Key Efforts in 2nd Half1) Expansion of the cashless betting machine. (JRA and local public racecourses) 2) Expansion of management service business.

6

Consolidated Financial Positions and Cash Flows

Total Assets

Total Liabilities

Total Equity

Capital Adequacy Ratio

FY2018 1st Half ７２.３２５.２４７.０６４.２％

FY2017 ７１.３２５.２４６.１６３.９％

Change +１.０ ±０.０ +０.９

C/F from operating activities A

C/F from investing activities B

Free C/F A+B

C/F from financing activities C

Ｃ/ＦA+B+C

Cash and cash equivalents at the end of year

FY2018 1st Half ０.５ -２.７ -２.３ -０.９ -３.１１７.２

FY2017 1st Half ４.４ -２.５１.９ -０.８１.１１９.９

Change -４.０ -０.２ -４.２ ±０.０ -４.２ -２.６

[Billion yen]

[Billion yen]

Consolidated Financial Positions

Consolidated Cash Flows


2. Summary of FY2018 Full-year targets


Consolidated Earnings ForecastForecast of Sales / Operating Income by Business SegmentsSales Forecast by Regions

8

Consolidated Earnings Forecast

[Billion yen]


Net Sales Operating Income

Ordinary Income

Net IncomeAttributable to

Owners of Parent

FY2018Forecast

１０２.９４.１３.３２.３

FY2017Results

９６.７３.９３.８２.４

Change +６.２ +０.２ -０.５ -０.１

Net Income Per Share

９５.９９ yen

１００.５０ yen

Considering trends in global economies and exchange rate fluctuation,consolidated earnings forecast will remain the same.

9

Forecast of Sales/Operating Income by Business Segments

FY2017Result

FY2018Forecast

Change

Net Sales

Operating income

Net Sales

Operating income

Net Sales

Operating income

Global Product Business 37.7 1.1 34.3 0.4 -3.4 -0.7

Service Integration Business 28.3 2.7 30.3 2.9 +2.0 +0.2

Public Solution Business 19.4 1.1 24.8 1.7 +5.4 +0.6

Frontline Solution Business 11.2 0.4 13.4 0.8 +2.2 +0.4

Other/Corporate（Including strategic

investments）0.1 -1.5 0.1 -1.7 ±0.0 -0.2

Total 96.7 3.9 102.9 4.1 +6.2 +0.2

[Billion yen]


[Billion yen]

FY2017 FY2018 Change

Japan 73.6 74.3 +0.7Outside Japan

(Ratio of Sales outside Japan)

23.2(23.9%)

28.6(27.8%)

+5.4

Americas 10.7 13.6 +2.9

Europe 7.6 9.4 +1.8

Asia 4.9 5.6 +0.7

（China）（2.9） (3.0) (+0.1)

Total 96.7 102.9 +6.2


Sales Forecast by Regions

Average Currency Exchange Rate During Period

1USD=

１１１ yen １05 yen※

※Assumption of average exchange rate

from 3rd-Quarter on

11

3. Introduction of the newest solution businesses


Frontline solutions without cashCash management services for retail storesNew solution for bank branches IoT sensor solutions

12

Frontline solutions without cash（１） Cashless Betting・Demand for cashless betting service to increase in betting sales

and improve services for fans.・From this autumn, cashless betting system utilizing palm vein

authentication is operating in JRA Tokyo Racecourse. - Buying a ticket and refunding easily without cash- Realized safely operation with high personal verification accuracy by palm vein authentication.

・Expanding into local public racecourses from now on.


<Automated betting and refunding machine><Cashless betting machine>13

Frontline solutions without cash (2) Multi settlement solution service handling IC credit card・Ensured security to correspond to the effort of credit card settlement safety by

the Ministry of Economy.①Preparation for IC on credit card settlement system②No preservation of card information in store

・Provide multi settlement solution as all-in-one settlement service from installationto maintenance.

・Credit cards, debit cards, union pay cards and electronic money are availablewith only one terminal.


Credit cards Debit cards Union Paycards

Electronic money

SC Taxi

Settlement terminalCAT

Settlement terminal

Settlement terminal

Massretailer

POS

Others(Financial,petroleum etc.）Settlement terminal

Department store

Handheldsettlement terminal

POS Settlement terminals

・Completion of release of handheld settlement terminal and taxi settlement terminals

14

Cash management services for retail stores (1) Cloud-based cash management service 「TeamCloud/CM」(in Japan)

・High interest in cash management work efficiency, caused by a deepeningshortage of workers.

・Provide solutions meeting needs of customers under the cloud environment.- Reduction of work to manage cash.

→ Effective staff allocation and contribution of work style innovation.- Visualization of cash stock

→ Efficient fund management using stored data analysis.・Launch in a major drugstore in this 2018 1st Half

Now in business deals with other various industries.


＜Schematic view of TeamCloud/CM service＞＜Expansion of introduction destination＞

Specialty storeBridal etc.

Supermarket

Fast food

Drugstore

Various industries that handle cash

Car dealer

15

Cash management services for retail stores (2) Back office cash management solution for retail stores in North America・Decrease in sales in real stores due to spread of online sale

→ Demands for operating reforms. ・Solution meeting needs of customers

-Making the process of cash management efficient → effective staff allocation and saving labor are available.

-Depositing sales proceeds without touching cash→ immediate capitalization and preventing workers from injustice.

-Safe and secure cash operation making use of palm vein authentication. ・Maintained line-up of cash management systems to meet needs of smalland medium scale store in addition to systems for big scale store,and now doing active business promotion and PoC.


＜Line-up of cash management systems＞

For small scale store For big scale store16

New Solution for bank branches Solution for mini bank・Rising demand in bank branches for innovation, such as further

efficiency of office work.

・Realizing the innovation by proposition of officework efficiency solution with semi-self counter.- No bill, no personal seal and no cash handling→ Rapid improvement of handling speed at counter.→ Shortening the office work process considerably.→ Improvement of customer satisfaction.

・Expand into city and regional banks.-Especially business deals with regional banks

are active, and now 40 business deals are in progress.

-Now plotting further expansion.

・Extending business to improve productsline-up adding full-self counter.


CustomerBank clerk

17

IoT sensor solutions (1) In Japan︓Total solution using RFID and beacon etc.・High interest in solution of saving labor and work efficiency,

influenced by the work style innovation and the shortage of workers. ・PoCs are in progress in various business fields.

- Warehouse management efficiencyin convenience stores, apparel industries,trading companies of auto parts and others.

- Temperature and humidity control in facility, warehouse,agriculture, refrigerated wagon

・Aim : commercialization of 5 businesses in FY2018 and 40 businesses by 2020.


Beacon equipped with sensor

＜Temperature control in refrigerated wagon＞＜Management of the flow of parts picking in a factory>18

IoT sensor solutions (2) Outside Japan : Creation of new business

opportunity with cooperation partner・Acquired POSITEK in North America last year.・Provide solutions using our RFID washable tags for clothing rental and laundry business(about 75% share)

・Improve the rate of RFID introduction in existingmarkets and develop new markets by enhancing functions and miniaturizing RFID tags.

・Cooperation with new partner is underconsideration.


RFID laundry tag・Used in business field of clothing and linen rental,such as in hotel and hospital.

・Pursuit and management of clothing and linen equipped with RFID tags are available.

0

1

2

3

4

5

FY2006 FY2018

Total one hundredmillion tags

(hundred million tags)

Accumulated shipping volume of laundry tag

19

<Notes Regarding Forward-Looking Statements>

This material contains certain statements about projections and forecasts for thefuture plans, strategies, and performance based on assumptions made usinginformation available to Fujitsu Frontech at that time.

In addition, this material contains various risks and uncertainties (includingeconomic trend, fierce competitions in the related industries, market demands,informed that the actual results may materially differ from the forecasts madeby the Company.

<Trademark>The proper herein including product names are the trademarks or

Registered trademarks of the respective companies.



Documents

FY2018 1st Half Financial Results Briefing · 10/25/2018 · Cardealer 15. Cash management services for retail stores (2) Back office cash management solution for retail stores in