Konica Minolta : Presentation Slides for 1Q / March 2021 Consolidated Financial Results

Konica Minolta, Inc.

1stQuarter/FY2020 ending in March 2021

Consolidated Financial Results

Three months: April 1, 2020 - June 30, 2020 - Announced on July 30, 2020 -

Toshimitsu Taiko

Senior Vice President and Executive Officer,

Konica Minolta, Inc.

Konica Minolta, Inc.

The points covered in today's session:

1. Our revenue portfolio, regional structure, business models and the transition of profit structure in FY2020 1Q
2. Status of businesses in 1Q and prospects after 2Q
3. Initiatives to improve the profit structure after 2Q

Konica Minolta, Inc.

1

FY2020 1Q Performance Overview| Summary

Rev en u e

O per ating Pr ofit

Pr ofit attr ibutable to owner s of the Com pany

					[¥billions]
FY2020	FY2019	YoY	YoY	YoY
1Q	1Q		(W/O	(W/O External and
	Forex)	special factors)
1 7 3 .2	2 4 1 .7	-2 8 %	-26%	+2%
-2 2 .6	0 .6	-	-	-
-1 7 .3	-1 .2	-	-	-

FO REX [ Yen]

USD

EUR

107.62 109.90 -2.28

118.48 123.49 -5.01

*1 Without External and Special Factors: Forex, US-China trade tariff, CRE strategy related expenses, structural reform expenses, one-off expenses such as impairment, COVID-19 impact

Revenue

Operating

Profit

• Affected by the lockdown in Europe and the US, Office and Professional Print, which account for a little under 70% of sales in Europe and the US, as well asBio-Healthcare which accounts for almost all sales in the US saw revenue greatly reduced.
• Meanwhile, measuring instruments, the new business of status monitoring solutions, and other such areas saw increased revenue even during theCOVID-19 outbreak.
• With economic activity resuming in China and restrictions being relaxed from May onward in Europe and Japan, June saw increases with respect toApril-May.
• The effects of structural reform enacted last fiscal year, additional measures implemented in the present period, and other such factors greatly reduced SG&A expenses, but the decline in gross profit due to reduced revenue had a significant impact and profit was greatly reduced.
• TheCOVID-19 impact amounted to approximately ¥30 billion.

Konica Minolta, Inc.

2

FY2020 1Q Performance Overview|Revenue & Operating Profit by Segment

						[¥billions]
				YoY
Revenue	FY2020		FY2019	YoY	YoY
1Q		1Q		(W/O Forex)	(W/O External and Special Factors)
Offic e	94.0		134.6	- 30%	-28%	+1%
Professional Print	31.8		50.6	- 37%	-34%	-1%
Healthcare	16.4		18.6	- 12%	-9%	+9%
Industrial	23.3		28.1	- 17%	-16%	+4%
Optical systems for industrial use	7.3		7.2	+2%	+6%	+27%
Materials and components	16.1		21.0	- 24%	-23%	-3%
New business	7.5		9.6	- 21%	-19%	+19%
Bio-healthcare	4.1		7.2	- 43%	-42%	+16%
Others	3.5		2.3	+47%	+51%	+29%
Corporate, etc .	0.1		0.2	- 49%	-60%	-60%
Company overall	173.2		241.7	- 28%	-26%	+2%
				YoY
Operating profit/OPM	FY2020		FY2019	YoY	YoY
1Q		1Q		(W/O Forex)	(W/O External and Special Factors)
Office	- 7.5	-	7.7	-	-	-
Professional Print	- 7.1	-	1.1	-	-	-
Healthcare	- 1.1	-	- 0.3	-	-	-
Industrial	3.2	13.9%	4.8	- 32%	-30%	+43%
New business	- 6.5	-	- 6.4	-	-	-
Corporate, etc .	- 3.6	-	- 6.3	-	-	-
Company overall	- 22.6	-	0.6	-	-	-

*1 Without External and Special Factors: Forex, US-China trade tariff, CRE strategy related expenses,	Konica Minolta, Inc.	3
structural reform expenses, one-off expenses such as impairment, COVID-19 impact

FY2020 1Q Financial Performance Points| Our Sales, Regional and Profit Structure

		•Decline in hardware sales due to the delay of the installation and reduction of sales
			activities to acquire new customers caused by suspension or stagnation of customers'
Revenue	-28%		activities according to lockdown, and lower non-hard sales correlated with a decline in
	print volumes due to cancellations of events and a decline in client companies' employees
			coming into office.
		•Further sales decline due to higher sales ration in Europe and the U.S. as the region and
			office and professional print as the businesses.
		•Deteriorated product mix due to delayed recovery in the U.S. market where the mainstay
Gross			products are high-speed color models.
-39%	•Deterioration in unit costs due to sharp decline in production to reduce inventories.
profit	•	Steep decrease of sales of high-marginnon-hard.
		•Incurrence of upfront costs such as distribution of consumables to customer sites due to
			the resumption of economic activities.
SG&A	-17%	•Reductions exceeded the original plan, including various measures, but were not
	suffocient to offset the decline in gross profit.

	FY19			FY19		Reduction
1Q	Revenue
	Regional breakdown		in FY20
	breakdown
		Japan	US		Europe	Others
Office	56%	12%	34%		36%	17%	-30%
Professional print	21%		-37%
Company overall	100%						-28%

Konica Minolta, Inc.

4

FY2020 1Q Performance Overview │ Monthly Sales Increase/Decrease

The year-on-year rate of increase/decrease in overall company revenue has improved from bottoming out in May under the influence of customer characteristics business-by-business and the proportion of overall revenue coming from the regions of China, where economic activity is recovering; of Japan, where the impact was relatively slight; and of Europe and the US, where lockdown has had a significant impact.

30%		Transition of Sales/M, Y o Y, Total		30%		Transition of Sales/M, Y o Y, Business Unit Basis
														Optical Systems for
20%							20%									Industrial Use
10%							10%
0%							0%									Healthcare
-10%							-10%
-20%							-20%									Office
							-30%
-30%														Material ・Components
-40%							-40%									Professional Print
-50%							-50%
										Bio-healthcare
						-60%
-60%
						Jan	Feb	Mar	Apr	May	Jun
Jan	Feb	Mar	Apr	May	Jun

Konica Minolta, Inc.

5

FY2020 1Q Financial Performance | Impact of COVID-19

As expected, the impact of COVID-19 in 1Q increased more than 4Q in FY2019, but it has shown signs of recovery in the order of China, Japan, Europe, and North America due to the resumption of economic activities step-by-step. As a whole, it bottomed out in May. There are no problems on the supply side, and sales restrictions are main factor of the decline in sales.

Business		Impact	Impact on	Profit impact
	sales
Office/	•	Hardware sales were affected by the delay in business negotiations and installations due to	Office	Office
Professional		the restriction of the sales activities with visits to customers.
Print		Around ¥38	Around ¥14
	Non-hard sales in office were affected by the restriction of the client company employees
	•	billion	billion
		coming in to work, while those in production print is affected by a decline in customers'	Prof. Print	Prof. Print
		Nearly ¥17	Over ¥7.5
		taking orders. Both hardware and non-hard are showing signs of recovery in June.
		billion	billion
	•IT-services and Industrial Print had relatively minor impacts.
Healthcare	•	Decline in revenue due to decline in patients' visits to hospitals and clinics and worsening	Nearly ¥3.5	More than
		management conditions at hospitals and clinics in Japan and China.	billion	¥1.5 billion
Materialas and	•	Sluggish sales of IJ components due to spread of COVID-19 in customers' export countries
Components	•	Sales of projector lenses declined due to the decreased demand of entertainment industry in
	Around ¥4	Around ¥2.5
		Optical components.
		billion	billion
	•Sales of high value-added films declined due to a decline in demand for TVs in Performance
		Material.
Optical	•	Sales of Measuring Instruments increased, despite the impact of COVID-19 due to strong	Around ¥1.5	Nearly ¥1
Systems for		performance by major customers, including those carried over from the previous fiscal year.	billion	billion
Industrial Use
New Business	•	Bio-healthcare saw a decline in genetic testing due to a decline in the number of visitors	Nearly ¥4	Nearly ¥3
		patients caused by US lockdown. Sales of drug discovery support services declined due to
		billion	billion
		postponement of clinical trials.
Company			Around ¥67.5	Around ¥30
overall			billion	billion	6

FY2020 1Q Business Segment | Office Business

Revenue ・Operating Profit

Results	Revenue	ITS
18.1	17.7	19.4	17.7
	FY19		1Q	2Q	3Q	4Q
		OP	116.4	120.9	119.6	116.6
Financial								YoY
FY20		1Q
	OP		7.7	9.4	5.4	1.3
Quarterly
Revenue	OP	78.3				-33%
ITS	15.7					-14%
	OP		-7.5				-

OP ITS

		YoY			7.7		YoY -
3M	-14%	134.6	YoY -30%
18.1
94.0			-7.5
					15.7	6%
	-33%	116.4	78.3			-8%
				FY19	FY20		FY19		FY20
					Revenue
						Operating Profit

[¥billions]

1Q Summary

Office（OP)

• Unit sales of color models, which are our principal products, have increased since bottoming out in April, and theyear-on-year decreases have also improved (April down 33%, May down 40%, June down 16%).
• Going by region, China returned toyear-on-year increase in June, and Europe and the US showed improvement on decreases in June as lockdowns were relaxed, while Japan showed an increase in April, decrease in May, and improvement in June.
• Non-hardwas affected by declining PV caused by limitations on client company employees coming in to work. The extent of impacts by region was the same as in hard.

IT Services Solutions（ITS）

• While results were impacted byCOVID-19 in Europe and the US, which account for the majority of sales, we expanded suggestions geared to increasing demand for work-at-home and other solutions relating to remote business. Recurring sales were also successful, so the impact was relatively slight.

Konica Minolta, Inc.

7

FY2020 1Q Business Segment | Professional Print Business

Revenue ・Operating Profit

Results		FY19		1Q	2Q	3Q	4Q
		PP	34.2	35.4	37.5	33.5
		Revenue
		IP	3.8	5.8	5.1	6.0
Financial			MS	12.6	11.5	12.8	11.9
	OP		1.1	1.0	2.9	-0.7
		FY20		1Q					YoY
Quarterly			PP	20.4					-40%
		Revenue
		IP	2.9				-23%
			MS	8.4				-33%
		OP		-7.1				-

		YoY							1.1	YoY -
			PP		IP		MS
									-7.1
3M				50.6
- 33%	12.6		YoY -37%
31.8
	- 23%	3.8	2%
								8.4
				34.2	2.9			-22%
	- 40%	20.4
					FY19		FY20		FY19	FY20
								Revenue		Operating Profit

[¥billions]

1Q Summary

Production Print（PP）

• Unit sales of both color and monochrome models in June increased significantly overApril-May. The year- on-year decrease was also somewhat improved. (April down 47%, May down 51%, June down 43%)
• HPP unit sales and pipeline increased steadily.
• Non-hardwas affected by reduced corporate marketing and sales promotion activities, and despite declining PV due to reduction in orders experienced by our customers, figures from May to June were on an increasing trend.

Industrial Print（IP)

• Despite reductions,KM-1 demand is returning among mid-size and large printing companies, and KM-1e sales have begun. Label and embellishment printing equipment are also showing increases.
• Innon-hard, textiles have declined, but with significant increases relating to packaging and labeling for everyday necessities, overall year-on-year figures remained flat.

Marketing Services（MS)

• Demand declined as customer marketing and sales promotion activities in Europe, the US, and Asia were

reduced. In Japan, customer visits to Kinko's shops

decreased.8

FY2020 1Q Business Segment | Healthcare Business

Revenue ・Operating Profit

Results
FY19		1Q	2Q	3Q	4Q
Financial	Revenue	HC	16.9	24.2	16.6	22.4
HIT	1.8	2.3	1.5	2.3
OP		-0.3	0.7	0.2	0.1
Quarterly	FY20		1Q					YoY
OP		-1.1				-
	Revenue	HC	15.1				-10%
	HIT	1.3				-24%

YoY -

YoY		HC		HIT	-0.3

-1.1

18.6YoY -12%

3M	- 24%	1.8	16.4
1.3
	- 10%	16.9	15.1	- 2%
			- 7%
			FY19	FY20		FY19	FY20
				Revenue		Operating Profit

[¥billions]

1Q Summary

Healthcare (HC)

• Although digital radiography (DR) volume decreased in Japan and Asia regions, growth in demand for mobileX-ray systems for COVID-19 examinations brought expanded volume in North America in particular.
• Ultrasound diagnostic equipment sales decreased under the impact of restrictions on marketing activities and cuts in investment due to reduced numbers of patients in orthopedics, which is a major area of focus. We began a partnership with Canon Medical in the obstetrics and gynecology fields in Japan.
• X-rayfilm sales in China have been on a recovering trend since April as the number of outpatient visits to hospitals returned to normal.

Medical IT（HIT)

• Although Japan is seeing expanding informity sales, PACS sales have declined under the impact of restrictions on marketing activities.
• We are highlighting highvalue-added appeal, such as remote image diagnostic support service under the COVID-19 impact, and statutory X-ray dosage management being enforced starting this fiscal year in Japan.

9

FY2020 1Q Business Segment | Industrial Business

Quarterly Financial Results

3M

Revenue ・Operating Profit

FY20						1Q				2Q	3Q		4Q
						MI		6.6			6.7		7.3	7.0
						IS		0.6			0.8		0.7	1.2
Revenue
		PM		12.6			11.9		10.8	11.3
						OC		4.8			5.3		5.2	4.4
						IJ		3.6			3.2		2.9	2.7
OP						4.8			4.9		5.6	3.8
FY20						1Q										YoY
						MI		7.1									+8%
						IS		0.2									-67%
Revenue			PM		9.8									-22%
						OC		3.8									-22%
						IJ		2.5									-31%
OP						3.2									-32%
			MI		IS		PM		OC			IJ	17%	14%
YoY
				28.1			YoY -17%
- 31%							23.3				YoY - 32%
		3.6
- 22%			4.8					2.5
												3.8
- 22%			12.6					9.8		4.8
- 67%												3.2
		0.6					0.2
+ 8%			6.6					7.1
					FY19					FY20		FY19		FY20
								Revenue						Operating Profit

[¥billions]

1Q Summary

Optical Systems for Industrial Use

：Measuring Instruments (SE), Imaging Solutions (VS)

• Demand for object color measuring equipment remains sluggish.
• Measuring InstrumentsLight-source color measuring equipment brings increased revenue in SE due to solid demand from major smartphone manufacturers as well as carry-over from the previous fiscal year.
• Automobile visual inspection equipment orders are lagging under theCOVID-19 impact, but we are recovering business talks and demonstrations for various companies.

Materials and Components：Performance Materials (PM), Optical Components (OC), IJ Components (IJ)

• Performance Materials: Although thin films for small- andmedium-sized displays for notebook computers and other such equipment are showing solid results due to telecommuting demand, slowing demand for final products has reduced sales for high value-added products for televisions and so reduced revenue.
• Optical Components: Due to the decreased demand of entertainment industry, sales of projector lenses and related products have declined and revenue has been reduced.
• IJ Components: As the impact of spreadingCOVID-19 emerges in the countries that are export destinations for customer products, sales have declined, reducing revenue.

Konica Minolta, Inc.

10

FY2020 1Q Business Segment | New Business

Revenue ・Operating Profit

Results	Revenue BHC
7.2	7.4	7.7	8.3
	FY19		1Q	2Q	3Q	4Q
Financial		Others	2.3	2.5	2.2	3.6
	OP		-6.4	-4.6	-3.8	-2.9
Quarterly	FY20		1Q					YoY
Revenue	BHC	4.1					-43%
	Others	3.5					+47%
	OP
		-6.5				-

										YoY -
	YoY		BHC			Others
					YoY -21%	-6.4	-6.5
			9.6
3M
+ 47%	2.3	7.5
					3.5
	- 43%		7.2				- 67%
					4.1		- 87%
								FY19		FY20
			FY19			FY20
					Revenue	Operating Profit

[¥billions]

1Q Summary

Bio-healthcare (BHC)

• Genetic testing was showing a decline in the number of genetic tests due to the reduction in outpatient visits to hospitals, but now is on the way to recovery.Full-fledged deployment of CARE Program services for imaging center organizations started in May, and contracts have been signed with major hospital groups.
• Drug discovery support services have seen a slowdown in clinical testing due to projects from pharmaceutical companies being put on hold and the number of clinical trial participants declining. There is an increasing backlog of clinical trials centered on the central nervous system field.

Others：Workplace Hub (WPH), Status monitoring, QOL, etc.

• The appeal of WPH during theCOVID-19 crisis was heightened as a platform for Managed IT services, including information security infrastructure, resulting in increased revenue year on year.
• Revenue has increased significantly due to increased sales of status monitoring solutions andnon-contact,real-time body surface temperature measurement systems using thermal cameras, which are imaging IoT equipment.

Konica Minolta, Inc.

11

Priority Policies for FY2020 | progress

• Sustainable improvement and strengthening of profitability(Structural reform benefits of FY2019, production cost reduction)
  ・Structural reform benefits:Accomplished as planned (¥2.2 billion in 1Q results/¥9 billion in annual targets)

・Cost reduction: Reduced variable cost as planned (1Q result: ¥0.5 billion/Annual target: ¥6 billion)

• Securing liquidity(Allocation of funds to concentrate on businesses, thorough reduction of inventory and curb investment)
  ・Despite a sharp decline in earnings, FCFs improved from the previous year's 1Q due to improved working capital and restrained CAPEX.

・Since securing funds of ¥85 billion at the beginning of the period, there has been no problem with liquidity on hand. Maintaining liquidity for about 6 months of sales (normally 2 months) including commitment lines

• Comprehensive reduction of fixed costs(Reorganizing cost structure by converting customer contact to DX, reducing advertising, travel, and logistics expenses by reviewing activities to create demand, and structural reform according to these activities; also making use of subsidies)
  ・Progress as planned (¥6.6 billion in 1Q, ¥20 billion in annual target)

・Considering the feasibility of additional measures of ¥5 billion while increasing the probability of annual targets

• Improving capital productivity(Tightening capital efficiency management of each business by KM-ROIC and return on invested capital management)
  ・Although inventory was temporarily increased at the end of June, measures to reduce inventory to less than 3 months at the end of the fiscal year were in progress.
  ・Capital investment in 1Q decreased 35% year on year due to selection and postponement of investments

・Accelerating review of business portfolio by applying investment evaluation standards and business continuity standards

• Transforming organizational structure(promoting activities of protective and proactive task forces) ・Benefit from business creation ideas for post-COVID-19 from bottom-up activities

Konica Minolta, Inc.

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Initiatives to Major Improvement in Profitability from 2Q FY2020

Points

• Improving profit structures
• • Revenue: Acceleration of momentum of recovery under theCOVID-19 impact
  • Gross profit ratio: Elimination or improvement of negative factors in 1Q

• Maximizing business upside (organic growth)

• Accelerating and delivering results in businesses targeting emerging demand inCOVID-19

• Continuing to reduce SG&A more than planned
  ⑤Reducing New Business deficit

Konica Minolta, Inc.

13

① Acceleration of Sales Recovery Momentum under COVID-19 Impact

The key for business will be restoring print volume in Office and Production Print, while in terms of region it will be recovering demand in the US.

	2Q	3Q	4Q
Economic activity in	Japan, Europe: Economic activity	Economic activity resumes	Move into full-scale economic activity
Japan, Europe, and	resumes
the US	US: Continuous restriction of
	travel in some areas of the
	outbreak
	Movement toward purposeful use	The US will also gradually	Hard: Number of units sold approaches last fiscal year
	of work at the office and work at	make progress in new ways of	levels, but it is possible that A3/A4 product
Office/Workplace Hub	remote locations will begin in	working.	composition and other such factors will change.
	major European countries and		Non-hard: As teleworking becomes widespread, the
	Japan.		decline in PV will continue.
	Despite differences between	Despite differences between	Hard: The slowdown in the economy may mean that
	regions and sectors, the	regions and sectors, the	commercial printers will need more time to recover
Professional Print	resumption of economic activity	resumption of economic	their willingness to invest.
will be accompanied by gradual	activity will be accompanied	Non-hard: Although PV will decline in commercial
	recovery in hard demand and PV.	by gradual recovery in	printing as a whole, including analog printing, digital
		hardware demand and PV.	printing PV will grow.
	Although the number of outpatient	As the number of outpatient	There will be a return to pre-COVID-19 levels.
	visits to hospitals will gradually	visits to hospitals rebounds,	Demand will increase for image diagnosis, vital sensing,
Healthcare/Bio-	rebound in Japan and Europe,	demand will head toward	and medical IT in primary care that contributes to
more time will be needed in the US, normal despite regional	curbing the spread of infection.
healthcare
where restrictions on movement	differences.	Bio-healthcare: Needs will expand for online medical
	remain in place.		interviews and COVID-19 treatment drug research and
			clinical trials.
	With the shift to OLED in	The severity of the impact will	There will be year-on-year decline in TV demand, but
	smartphones, demand will benefit	vary by display product	PCs and tablets will remain solid with teleworking
Industrial Business	measuring instruments. Although	application.	demand.
TV demand will recover, market
	inventory adjustment will mean
	that the impact is negative.

②Maximizing Business Upside (Organic Growth)

Business	Description of Initiative
All businesses	•Maximize the businesses' upside by obtaining results from growth drivers for which we completed
	implementation in FY2019.
	•Promote marketing activities that target industries and regions where demand is progressively
	recovering.
	•Improve operating ratio through these measures, and reap the benefits of cost reduction measures.
Office/WPH and	•Maximize throughput by creating contracts by remote operation, by enlarging pipelines, and by
Professional Print	shortening the business negotiation process.
	•Office: Expand sales by full lineups of the MFP new modelsand enhancing the affinity between MFP and
	WPH. Improve the product mixby resumption of the US economy. Have consumables dispatched, which
	was the upfront costs in 1Q, make a full-scalecontribution in sales.
	•IT Services: Increase year-on-year growth from solution businesses such as security services and ECM,
	including managed IT services and cyber security diagnostics.
	•PP/IP: Expand PV by highlighting the value of digital on-demand printing, which has labor-saving and
	automation as strengths, and by expanding new HPP productssales. In the packaging and labeling field,
	the KM-1eand high-speedlabel printerswill make contributions.
Healthcare and	•Expand dynamic X-ray system and medical IT. Support the demand for DR, ultrasound, and pulse
Bio-healthcare	oximeters that is growing intermittently in every region.
	•Sustain the momentum of genetic testing growth, where RNA testing is a strength, expand target
	markets through CARE Programs, and accelerate the increase in numbers of genetic tests. Have clinical
	trials for Alzheimer's drug make a contribution in drug discovery support services.
Industrial	•Sustaining the momentum in measuring instruments, have performance materials make a full-scale
Business	contribution to SANUQIprofits.

Konica Minolta, Inc.

15

③Accelerating and Delivering Results in Businesses Targeting Emerging Demand in COVID-19

Area	Theme	Progress in FY2020/Q1	Results and future plans

				✓Accelerating negotiation and conclusion of contracts
	Contribution		✓Press release announcing the launch in		with companies in the U.S.
	to the front		✓	Considering introduction in Japan
	CARE for COVID	the U.S. on June 29. Large-scale contract
	lines in	✓	Strengthening development of technologies for
		negotiations are underway.
	healthcare			antigen testing in order to improve level of diagnostic
					services
			✓Establishment of a nationwide work-style
			reform model in collaboration with local
	Working Style	Municipal DX	governments that have signed	✓Expanding businesses through horizontal deployment
	Reformation	agreements		of nationwide models
			✓Received several orders from work-style
			reform bidding
			✓Expanded sales of thermal cameras by	✓	Accelerating application development and enhancing
	Safety and		capturing demand for safe and secure
			corresponding functions
	security	Thermometry	entering facilities as contactless and
	✓	Accelerating acquisition of projects mainly in North
	Fulfillment of	screening	realtime system
		America, planning to expand business scale about 5
	mind		✓Release temperature screening application
			times previous year's level
			v1.0

Konica Minolta, Inc. 16

FY2020 Earnings Forecast

Full-Year Earnings Forecast

• Under the unsettled impact ofCOVID-19, economic activity is resuming in all regions of the world, but the accompanying recurrence of infection outbreaks and related phenomena are heightening concerns about a second wave. There is a growing sense of uncertainty about what lies ahead.
• Since these circumstances make it difficult to calculate reasonable forecasts, no earnings forecast will be provided for FY2020 at this point.
• Going forward, we plan to announce forecasts promptly when it becomes possible to calculate them.

Dividend forecast

• Konica Minolta's basic policy remains unchanged:
  "Our basic policy is to proactively return profits to shareholders while taking into consideration the overall status of consolidated earnings and strategic investment in growth fields."
• However, the dividend forecast has not been determined because it is difficult to reasonably calculate a financial performance forecast as of today and there is no clear prospect of liquidity on hand.

Konica Minolta, Inc.

17

【Redisplaying】

FY2020 Increase and Decrease Based on Normalized FY19 Profit

1. Effective operating profit for FY2019, with special factors excluded from FY2019 operating profit
2. Figures incorporating FY2019 structural reform effects and the earning power of each business form the baseline for FY2020.
3. This is taken as a starting point for estimating the downside risk ofCOVID-19, and additional measures, such as reductions of fixed costs made to mitigate risks, are incorporated.

(B)

[¥billions]

＋5.0

(A)

＋15.0

-40.0 -

(C)

＋7.4

＋2.3

-50.0

＋11.0

33.8

Over+20.0

8.2

＋2.5

＋2.4

-2.0

FY2019 operating profit

CRE related expenses

U.S.-China trade friction-tariff

COVID-19 impact amount

Structural reform expenses

Recognition of impairment loss

FY 2019 normalized operating profit

Started in FY2019 Effective measures

FY2020 business upside

COVID-19 impact amount

U.S.-China trade friction-tariff

Additional improvement measures

FY 2020 operating profit level

FY2019 External and special factors

Factors for FY 2020 increase/decrease

Konica Minolta, Inc.

18

FY2020 Financial Position |Major Items from Statements of Financial Position

Total Assets	[¥billions]		Inventory/Turnover	[¥billions]

Increased cash by borrowing ¥85.0 billion to secure liquidity on hand.

									1309.7
					1276.8		1279.2
	1203.9		1219.0

Mar	Mar	Mar	Dec	Mar
2018	2019	2020	2018	2020

Although inventory increased temporarily from the end of the previous fiscal year due to the balance between maintaining supply chains and the sudden drop in demand in 1Q, optimization is anticipated toward the end of FY2020 (March 2021).

				Inventories		Turnover (months)
180.00									171.1	7.00
					162.6
						155.7
160.00
				144.7					6.00
	139.5
140.00
120.00										5.00
								5.06
100.00										4.00
80.00						3.55	3.73		3.00
60.00	2.81		2.89					2.00
40.00
20.00										1.00
0.00										0.00
Mar		Mar	Mar		Dec	Mar
	2018		2019	2020	2018	2020

Inventory turnover, in months = Inventory balance at end of fiscal year / Average cost of sales for most recent three months

Konica Minolta, Inc.

19

FY2020 Financial Position |Major Items from Statements of Financial Position

Equity & Equity Ratio

[¥billions]

Attributable to owners of the parent company

Equity was reduced relative to the end of the previous fiscal year due to the decline in profit attributable to owners of the company and dividend.

600.00			Shareholders' equity			Equity ratio(%)	50.00
									45.00
500.00	43.6	45.6						40.00
		41.0			41.7
						38.3	35.00
400.00
									30.00
300.00				523.7			533.5	501.5	25.00
	524.5	555.7
									20.00
200.00									15.00
									10.00
100.00
									5.00
0.00									0.00
Mar	Mar	Mar	0.0	Dec	Mar
	2018	2019	2020			2018	2020

(For Company

Rating 42.0%)

Interest-Bearing Debts &

D/E Ratio

[¥billions]

Borrowing executed to ¥85.0 billion to secure liquidity. Deterioration of the net debt-to-equity (D/E) ratio from the end of the previous fiscal year did not exceed 0.07.

Interest-bearing debts

450.00Debt-to-equity ratio (times)

400.00									120.
350.00
300.00									0.98
					0.77		0.72	070.
250.00							489.8
	0.56
			0.49
200.00					403.5		382.9
						020.
150.00		293.7		273.7
100.00									-030.
50.00
0.00												-080.
		Mar		Mar		Mar		Dec		Mar
		2018	2019	2020	2018	2020

Increase from lease liabilities being moved onto the balance sheet through the application of IFRS16 (beginning of the term ¥112.0 billion).

Equity = Equity attributable to owners of the parent	Konica Minolta, Inc.	20
Equity ratio = Equity attributable to owners of the parent / Total assets

Non-financial results:

An "environmental digital platform" has been established and 16 companies are participating.

Japanese industry as a whole is seeking to increase environmental management efficiency by sharing and accumulating environmental knowledge and knowhow among participating corporations and jointly creating new value. The purpose is to greatly speed-up progress in environmental problem-solving.

Participation

Participants

Providing

Solutions

• Solving environmental issues among various

Co-creating Service	industries
②Creating new solutions through co-creation
		and selling them on this PF
① Basic menu		Env. Management Assessment (Lv.1 -5)
	Trouble-shooting	KM's Tips
		DATA
②Co-creation		Workshop		Co-creation	Needs
				Selling it on this PF
				Solutions
		➢Matching needs and solutions to make a	Matching
Matching Service	Success
deal			Story
			Participants : for sales	Level
① Contents	②Advisory
Users	: for problem solving
(⇨ Improving	(⇨Reforming		(Immediately)
work efficiency)	Workflow）		Matching
				Needs
③Software	④Products		Success
(⇨ Improving	(⇨ Solving new		story
work efficiency)	problems)		Solution proposal by	Buying and
				Konica Minolta	solutions.

Users （

.incl

Participants ）

Host（Konica Minolta）

Collaborator（Panasonic）

21

Appendix

Konica Minolta, Inc.

FY2020 3M Performance Overview| Bridge-Revenue & Operating Profit (1Q)

Revenue (1Q)		Operating Profit (1Q)

[¥billions]

*BF	+2.7

*NB &Co	+2.9

*ESF	⁻28.7

2.173

6.22-

＊BF: Business Factors

NB&Co: New Business and Corporate	Konica Minolta, Inc. 23

ESF: External and Special Factors

AppendixFinancial Result - Overview

						[¥billions]
		FY2020	FY2019
		1Q	1Q	YoY
Revenue	173.2	241.7	- 28%
Gross Profit	71.7	116.7	- 39%
Gross Profit ratio	41.4%	48.3%	-6.9pt
Operating Profit		- 22.6	0.6	-
Operating Profit ratio	-13.1%	0.2%
Profit before tax		-23.8	-1.4	-
Profit before tax ratio	-13.7%	-0.6%
Profit attributable to owners of the Company		- 17.3	- 1.2	-
Profit attributable to owners of the Company ratio		-10.0%	-0.5%
EPS [Yen]		-34.96	-2.44
CAPEX	6.3	9.7
Depreciation and Amortization Expenses	14.3	14.1
R&D expenses	16.1	18.9
FCF	-13.9	-15.0
Investment and lending	0.2	3.9
FOREX [Yen] USD	107.62	109.90	- 2.28
EUR		118.48	123.49	- 5.01

* Depreciation and amortization expenses：IFRS16 right-of- use assets amortization expensesnot included.

Konica Minolta, Inc. 24

AppendixSG&A-Other Income/ Expenses-Finance Income/Loss

SG&A:				[¥billions]
FY2020	FY2019
YoY
		1Q	1Q
Selling expenses - variable	7.1	11.3	- 4.2
R&D expenses	16.1	18.9	- 2.8
Personnel expenses	45.4	52.2	- 6.8
Others		25.0	30.3	- 5.3
SG&A total		93.7	112.8	- 19.1
* Forex impact:		-2.3bn. (Actual: -16.8bn.)

Other income:

Gain on sales of property, plant and equipment Other income

Other income total

Other expenses

Loss on sales of property, plant and equipment Impairment losses on property

Business structure improvement costs Other expenses

Other expenses total

Finance income/loss:

Interest income/Dividends received/Interest expense Foreign exchange gain/loss (net)

Others

Finance income/loss, net

-	0.0	- 0.0
3.1	0.5	+2.6
3.1	0.5	+2.6
0.2	2.5	- 2.3
-	0.0	- 0.0
2.4	0.4	+2.0
1.2	1.0	+0.2
3.8	3.9	- 0.1
- 0.9	- 0.8	- 0.1
- 0.3	- 0.9	+0.6
- 0.1	- 0.2	+0.1
- 1.2	- 1.9	+0.6

Konica Minolta, Inc.

25

AppendixOperating Profit Analysis

[¥billions]

Comparison of Y on Y

FY20/1Q vs. FY19/1Q

		Office	Professional	Healthcare	Industrial	New business	corporate, etc.	Total
		Print	Business
[Factors]
Forex impact	- 0.8	- 0.4	- 0.2	- 0.1	+0.1	- 0.0	- 1.5
Sales volume change, and other, net	- 21.8	- 10.6	- 1.0	- 2.8	- 1.8	+0.3	- 37.7
Price change	- 2.7	- 0.7	- 0.2	- 0.5	-	-	- 4.1
Cost up/down	+0.4	+0.0	+0.1	-	-	-	+0.5
SG&A change, net	+10.0	+3.1	+0.5	+1.3	+1.4	+0.6	+16.8
Other income and expense	- 0.3	+0.4	- 0.1	+0.6	+0.2	+1.9	+2.7
[Operating Profit]
Change, YoY	- 15.2	- 8.1	- 0.8	- 1.6	- 0.1	+2.7	- 23.2

Konica Minolta, Inc.

26

AppendixCAPEX and Depreciation and Amortization Expenses/ FCFs

Capital Expenditure and

Depreciation and Amortization Expenses

80.0Capital expenditures

Depreciation and amortization

Free Cash Flows

INCJ

FCF

[¥billions]

70.0
60.0			56.3	59.0	57.0
		52.5
51.8				50.8
50.0
38.9	38.7
40.0
30.0
20.0
10.0
									unannounced
0.0
FY2016		FY2017		FY2018		FY2019		FY2020
		FY2016		FY2017		FY2018					2020
											Forecast

*Depreciation and amortization:

IFRS16 royalty assets amortization expenses not included

Net cash flows from investing activities

Net cash flows from operating activities

			35.4 *
			133.7	15.7
68.7	70.6	65.4	41.5
				57.2	30.150.0
						unannounced
		-1.9
			FY2018	-19.9		FY2020
	FY2016	-33.0
	Forecast
			FY2017		FY2019

*INCJ's equity stake regarding acquisition of Ambry Genetics INCJ : Innovation Network Corporation of Japan

Konica Minolta, Inc.

27

AppendixFY2020 Earnings Forecast - Overview

				[¥billions]
		FY2020 12M	FY2019 12M
		Forcast （current)	Results	YoY
R evenue	-	996.1	-
Operating Profit	-	8.2	-
Operating Profit ratio	-	0.8%	-
Profit before tax	-	0.3	-
Profit attributable to owners of the Company	-	- 3.1	-
Profit attributable to owners of the Company ratio	-	-0.3%	-

EPS [Yen]

ROE（%）

CAPEX

Depreciation and Amortization Expenses R&D expenses

FCF

Investment and loan

-	- 6.2
-	-
-	50.8
-	57.0
-	74.0
-	- 19.9
-	7.9

FOREX [Yen] USD	-	108.74
EUR	-	120.82

ROE*: Profit attributable to owners of the company divided by equity attributable to owners of the company (average of beginning and ending balances)

Konica Minolta, Inc.

28

AppendixFOREX Impact on Revenue and Operating Profit

［FOREX：¥］

［Impact, Sensitivity：¥billions］

USD

EUR

GBP

European Currency*1

CNY

AUD

Other

Exchange contract effect

Total

FY19	FY20	YoY Impact	FX Sensitivity*2
3M	3M	Revenue	OP	Revenue	OP
109.90	107.62	- 1.4	+0.2	+3.0	- 0.2
123.49	118.48	- 1.5	- 0.7	+1.7	+0.5
141.16	133.52	- 0.3	+0.0	+0.2	+0.0
ー	ー	- 2.5	- 0.6	+2.3	+0.9
16.07	15.17	- 0.7	- 0.1	+2.9	+0.9
76.94	70.65	- 0.4	- 0.1	+0.4	+0.1
ー	ー	- 0.7	- 0.2	ー	ー
ー	ー	+0.0	- 0.6	ー	ー
ー	ー	- 5.7	- 1.5	ー	ー

*1 European currency: Currencies used in Europe including EUR/GBP

*2 FOREX Sensitivity: FOREX impact at ¥1 change (annual)

Konica Minolta, Inc.

29

AppendixQuarterly Sales Trends | Office/Professional Print - Regional

• Composition of revenue by region (in yen)

			FY2018					FY2019				FY2020
		1Q	2Q	3Q	4Q		1Q	2Q	3Q	4Q		1Q
Japan	13%	12%	12%	12%	12%	13%	13%	14%	15%
North America	33%	33%	33%	33%	34%	33%	33%	33%	33%
EU	36%	36%	36%	36%	36%	34%	37%	37%	35%
Others	18%	19%	18%	18%	17%	19%	17%	16%	18%

• Change in revenue by region (w/o FOREX)

FY2018

FY2019

FY2020

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

Japan

+4%

+1%

+2%

+3%

-8%

+4%

+1%

-3%

-19%

North America

+5%

+4%

+5%

+4%

-2%

-2%

-3%

-12%

-34%

EU

+4%

+1%

+1%

+0%

-2%

-1%

+6%

-7%

-31%

Others

+16%

+8%

+10%

+10%

-18%

+4%

+1%

-52%

-74%

• Percentage of color in sales of hardware

			FY2018					FY2019				FY2020
		1Q	2Q	3Q	4Q		1Q	2Q	3Q	4Q		1Q
Office	73%	73%	73%	74%	72%	73%	72%	75%	69%
Professional Print	81%	80%	80%	81%	78%	82%	76%	80%	75%

Konica Minolta, Inc.

30

AppendixQuarterly Unit Sales Trends | Office/Professional Print - Products

• A3 Color MFP- Units*

YoY -28%

118 118 116

100

	72
		0	0	0
1Q		2Q		3Q	4Q
				FY19		FY20

• Color Production Print - Units*

YoY -49%

◼A3 monochrome MFP- Units*	◼A3 MFP- Units*
YoY -24%								YoY -26%
100	114	100
								116
													110
										100				97
								71
		76
												74
			0	0	0					0	0	0
	1Q		2Q		3Q	4Q			1Q		2Q		3Q	4Q
					FY19		FY20								FY19		FY20
◼Monochrome Production Print - Units*	◼Production Print - Units*
YoY -41%								YoY -46%
			110

100

116 111107

100	94	100	114	105	98
		80
	59

51

0 0 0

1Q

2Q

3Q

4Q

FY19 FY20

＊Base Index: "FY2019-1Q = 100

54

0

0

0

0

0

0

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

FY19

FY20

FY19

FY20

Konica Minolta, Inc.

31

AppendixSales Results for Non-Hard | Office/Professional Print

Revenue & ratio of non-hard

YoY revenue increase in non-hard

（w/o FOREX）

Office							[¥billions]				【Total】
															+10.0%
															+5.0%	-2.3%	-2.0%-0.7%
70.0															80%							-2.9%
60.0															70%
50.0															60%
40.0	53%								53%	50%
50%	52%	51%	40%
30.0																					-31.1%
														30%
20.0															20%
10.0	62.4	60.5	62.3	60.1	42.1	10%
0.0			0%
																		1Q		2Q	3Q		4Q		1Q
		1Q		2Q		3Q			4Q			1Q
														FY19		FY19	FY19	FY19	FY20
			FY19		FY19		FY19			FY19			FY20
Production print											+10.0%
70.0															80%	+1.7%-0.6%+1.0%-0.7%
															70%
60.0															+0.0%
50.0	59%					59%	60%		60%	-10.0%
	56%	57%		50%
40.0
																	-20.0%
															40%									-38.5%
30.0
														30%
															-30.0%
20.0															20%
10.0															-40.0%
														10%
	20.3	19.9	21.5	19.8	12.2
0.0		0%	-50.0%
		1Q		2Q		3Q			4Q			1Q				1Q		2Q	3Q		4Q		1Q
															FY19	FY19	FY19	FY19	FY20
			FY19		FY19		FY19	FY19	FY20

【Regional YoY】

+16.2%

+9.2%

+7.3%	+9.7%	+4.1%	+1.4%	CN, +6.7%
+1.1%	-0.4%
+3.0%	-1.3%
-1.2%	-1.5%	-0.6%	-1.6%
-2.4%	-2.1%	-1.9%	-3.8%
-3.5%	JP, -14.6%
			-15.9%
				EP, -34.3%
				US, -37.8%
				IN, -48.1%

1Q	2Q	3Q	4Q	1Q
FY19	FY19	FY19	FY19	FY20

+27.5%	+19.0%	+18.5%
	+10.2%	CN, +13.0%
+20.2%
+1.4%	.7%	+18.5%	+4.6%
	+16- .9%
	-2.3%	-1.2%	+0.3%
-0.9%	-1.6%
-4.8%
-2.7%
-3.7%	-3.7%	-6.4%	JP, -24.0%
				EP, -36.2%

US, -47.6%

				IN, -66.1%
1Q	2Q	3Q	4Q	1Q
FY19	FY19	FY19	FY19	FY20
		Konica Minolta, Inc. 32

AppendixQuarterly Financial Results : Segments

					FY18				FY19
		【Revenue】	1Q	2Q	3Q	4Q		1Q	2Q	3Q	4Q
Office Business	143.5	147.2	145.7	151.4	134.6	138.6	139.0	134.3
Professional Print Business	53.4	55.9	55.8	62.7	50.6	52.7	55.4	51.4
Healthcare Business	18.6	21.6	20.9	29.8	18.6	26.4	18.1	24.7
Industrial Business	31.6	28.0	28.8	28.3	28.1	27.9	26.9	26.7
		Optical Systems for Industrial Use	10.1	7.9	8.2	9.0	7.2	7.4	8.0	8.2
		Material ・Components	21.5	20.1	20.6	19.3	21.0	20.5	18.9	18.5
				7.8	8.8	8.8	9.2	9.6	9.9	9.9	11.8
		Bio-healthcare	5.9	6.5	6.6	6.9	7.2	7.4	7.7	8.3
		Others	2.0	2.3	2.2	2.3	2.3	2.5	2.2	3.6
Corporate etc.	0.3	0.3	0.4	0.2	0.2	0.2	0.2	0.2
Company overall	255.2	261.9	260.5	281.5	241.7	255.7	249.5	249.1

[¥billions]

FY20
1Q
94.0
31.8
16.4
23.3
7.3
16.1
7.5
4.1
3.5
0.1
173.2

【Operating Profit】		1Q	2Q	3Q	4Q		1Q	2Q	3Q	4Q		1Q
Office Business	9.3	13.4	11.6	12.8	7.7	9.4	5.4	1.3		-7.5
Professional Print Business	1.7	3.7	3.3	5.1	1.1	1.0	2.9	-0.7		-7.1
Healthcare Business	-0.2	1.0	0.3	1.2	-0.3	0.7	0.2	0.1		-1.1
Industrial Business	6.8	4.7	5.6	3.9	4.8	4.9	5.6	3.8		3.2
New Business	-5.1	-3.5	-5.4	-5.3	-6.4	-4.6	-3.8	-2.9		-6.5
Corporate etc.	3.1	-0.2	0.4	-5.8	-6.3	-6.6	-5.2	-4.1		-3.6
Company overall	15.4	19.2	15.9	11.9	0.6	4.9	5.1	-2.4		-22.6

Konica Minolta, Inc.

33

Glossary

• MFP (Multi Functional Peripheral) Speed Segment: Office Business

Seg. 1 to 20ppm, Seg.2 21-30ppm, Seg.3 31-40ppm, Seg.4 41-69ppm, Seg.5 70~ppm (A4 vertical, minute speed)

• Color production print Machine Segments: Professional Print Business

ELPP（Entry Light Production Print, Monthly printing volume: 1-0.3 million sheets for low-priced products mainly for large companies' centralized printing rooms）

LPP（Light Production Print, Monthly printing volume: 0.1-0.3 million sheets for commercial printers）

MPP（Mid Production Print , Monthly printing volume: 30-1 million sheets for commercial printing products）

HPP（Heavy Production Print , Monthly printing volume:1 million sheets or more for commercial printing products）

• IQ-501(Intelligent Quality Optimizer): Professional Print Business

An optional unit that implements constant monitoring/control during printing to automate color management and front/back register control. This drastically cuts down on control times and improve production time.

• X-raykinetic analysis and Digital X-ray Dynamic Digital Radiography Systems: Healthcare Business

These devices and systems enable more detailed diagnoses by using continuously captured X-ray images to observe patients in motion.

• informity: Healthcare Business

Our ICT service platform for helping hospitals and clinics deliver care in a variety of ways. Offerings include our Collaboration Box Service, which allows multiple institutions to share medical data such as examination images and reports, and remote diagnostic support services that facilitate requests for image interpretation.

・RNA (ribonucleic acid)Testing: Bio-healthcare Business

Testing to identify changes in mRNA structure in the primary transcript of DNA(deoxyribonucleic acid). Analysis of transcript mRNA can provide more detailed test results on DNA mutations that used to be considered of undetermined clinical significance in conventional DNA testing.

・CARE for COVIT: Bio-healthcare Business

The health care program which is aimed to prevent the infection of COVID-19. It offers safety and security to employees and citizens by counselling with AI technology, PCR testing, and telemedicine.

・Workplace Hub (WPH): New Business

Edge IoT platform provided by Konica Minolta. In addition to multi functional peripheral, a server is integrated to create
a solution that drives efficiencies by reducing the overall costs of IT infrastructure management, providing real-time
data-driven visibility of IT usage patterns that help to improve business processes. This will link people and data, and
empower them to make smarter decisions and solve problems in the office.	34
Konica Minolta, Inc.

MEMO

MEMO

MEMO

Cautionary Statement:

The forecasts mentioned in this material are the results of estimations based on currently available information, and accordingly, contain risks and uncertainties. The actual results of business performance may sometimes differ from those forecasts due to various factors.

Remarks:

Yen amounts are rounded to the nearest 100 million.