Konica Minolta : Presentation Slides for 3Q / March 2020 Consolidated Financial Results

Evolution

Konica Minolta, Inc.

3rdQuarter/FY2019 ending in March 2020

Consolidated Financial Results

Three months: October 1, 2019 - December 31, 2019

Nine months: April 1, 2019 - December 31, 2019 - Announced on February 3, 2020 -

Seiji Hatano

Senior Executive Officer

Chief Financial Officer

Konica Minolta, Inc.

Konica Minolta, Inc.

Key points to communicate today

1. Professional Print Business is recovering
2. • Hard:Appeal to customer value succeeded, and unit sales of color units increased YoY, driven by North America
   • Non-hard:Revenue returned to positive YoY growth due to higher revenue in India and China and improved numbers in Europe and North America.
   • New products: Konica Minolta launched its first new HPP product in February, and these sales will contribute to results in Q4
3. Office Business is solid, as expected
4. • Hard: Effect of new Seg.2/3 products and unit sales of color MFPs, driven by Europe, led to gains YoY
   • Non-hard:QoQ improved for the second straight quarter with higher revenue in China, India and Europe
   • New products: Sales of new Seg.4 products began, and we expect the sales mix to improve from Q4 onward, primarily in North America
   • Profitability: The effect of manufacturing cost reduction would materialize at a faster pace from Q4, and structural reforms would contribute in FY20
5. Improvements to profitability in new businesses
6. • Income improved both YoY and QoQ due to increased revenue inbio-healthcare and stronger control over expenses
7. Progress with initiatives aimed at reinforcing profitability in FY20 is in line with plans
8. • Progress was made with initiatives to reduce costs and make structural reforms withone-off cost ¥8.6bn, and we expect its effect by ¥15.0 billion in FY20

Konica Minolta, Inc.

1

FY2019 9M Performance Overview|Summary

[¥billions]

		FY2019	FY2018	YoY	YoY	FY2019	FY2018	YoY	YoY
		9M		9M		(W/O Forex)	3Q		3Q		(W/O Forex)
Revenue	7 4 7	.0	7 7 7	.6	-4 %	-0%	2 4 9	.5	2 6 0	.5	-4 %	-0%
O per ating Pr ofit	1 0	.6	5 0	.5	-7 9 %	-68%	5	.1	1 5	.9	-6 8 %	-49%
Pr ofit attr ibutable to						*-21%						*-13%
owner s of the	2	.2	3 3	.7	-9 4 %		2	.1	1 0	.4	-8 0 %
Com pany
FO REX [ Yen]
USD	108.67	111.14	- 2.47		108.76	112.9	- 4.14
EUR		121.05	129.49	- 8.44		120.32	128.78	- 8.46

*Without External and Special Factors

Revenue

Operating

Profit

• Although the external environment remains harsh, on a real basis sales were in line with the previous year when excluding the impact of exchange rates.
• The decline in operating profit continues to improve QoQ when excluding the impact of exchange rates andone-off factors, such as CRE strategy-related profits and expenses.

Konica Minolta, Inc.

2

FY2019 9M Performance Overview|Revenue & Operating Profit by Segment

											[¥billions]
Revenue	FY2019		FY2018	YoY	YoY	FY2019		FY2018	YoY	YoY
9M		9M	(W/O Forex)	3Q		3Q	(W/O Forex)
Offic e	412.2		436.5	- 6%	-2%	139.0		145.7	- 5%	-0%
Professional Print	158.7		165.1	- 4%	+0%	55.4		55.8	- 1%	+4%
Healthcare	63.2		61.1	+3%	+5%	18.1		20.9	- 13%	-11%
Industrial	82.9		88.4	- 6%	-5%	26.9		28.8	- 7%	-5%
Optical systems for industrial use	22.5		26.2	-14%	-11%	8.0		8.2	- 3%	+1%
Materials and components	60.4		62.2	-3%	-3%	18.9		20.6	- 8%	-8%
New business	29.4		25.5	+15%	+19%	9.9		8.8	+12%	+17%
Bio-healthcare	22.4		19.0	+18%	+20%	7.7		6.6	+17%	+21%
Others	7.0		6.5	+9%	+14%	2.2		2.2	- 2%	+3%
Corporate, etc .		0.6		1.0	- 40%	-26%	0.2		0.4	- 46%	-20%
Company overall		747.0		777.6	- 4%	-0%	249.5		260.5	- 4%	-0%
Operating profit/OPM	FY2019		FY2018	YoY	YoY	FY2019		FY2018	YoY	YoY
9M		9M	(W/O Forex)	3Q		3Q	(W/O Forex)
Office	22.6	5.5%	34.3	- 34%	-23%	5.4	+3.9%	11.6	- 53%	-36%
Professional Print	5.0	3.2%	8.7	- 42%	-25%	2.9	+5.3%	3.3	- 11%	+13%
Healthcare	0.6	0.9%	1.2	- 50%	-16%	0.2	+1.1%	0.3	- 41%	-2%
Industrial	15.4	18.6%	17.0	- 10%	-10%	5.6	+21.0%	5.6	+1%	+1%
New business	- 14.8	－	- 14.0	ー	ー	- 3.8	－	- 5.4	ー	ー
Corporate, etc .		- 18.1	－	3.2	ー	ー	- 5.2	－	0.4	ー	ー
Company overall		10.6	1.4%	50.5	- 79%	-68%	5.1	+2.1%	15.9	- 68%	-49%

Konica Minolta, Inc.

3

FY2019 3M Performance Overview|Bridge-Revenue & Operating Profit (3Q)

[¥billions]

Revenue (3Q)		Operating Profit (3Q)

FY18/3Q(3M)	15.9
Office	- 2.9
Professional Print	+0.4	BF*	-3.3
Healthcare
- 0.1
Industrial Business	- 0.7
New Business	+1.4	NB&Co*
Corporate, etc.		+1.2
- 0.2
FOREX	- 3.0
U.S. - China tariffs	- 1.0	ESF*
Structural reform expenses etc.…	+0.6	-8.7
CRE strategy	- 5.3
FY19/3Q(3M)	5.1
	FY18: S&LB ¥5.4 bn -	repairs, etc. ¥0.1 bn
＊BF: Business Factors	FY19: Repairs, etc., ¥0.0 bn

NB&Co: New Business and Corporate

ESF: External and Special Factors

Konica Minolta, Inc.

4

FY2019 9M Performance Overview|Bridge-Revenue & Operating Profit (9M)

[¥billions]

Revenue (9M)		Operating Profit (9M)

FY18/9M	50.5
Office
- 6.7
Professional Print	- 1.8	BF*	-10.5
Healthcare	+0.4
Industrial Business	- 2.4	NB&Co*
New Business	- 0.9	+0
Corporate, etc.	+0.9
FOREX	- 5.7
U.S. - China tariffs	- 1.2
0.0	ESF*
Structural reform expenses etc.…			-29.4
- 0.9
CRE strategy	- 21.7
FY19/9M
10.6
FY18: S&LB ¥20.3 bn - repairs, etc. ¥1.1 bn
＊BF: Business Factors		FY19: Repairs, etc., ¥2.5 bn

NB&Co: New Business and Corporate

ESF: External and Special Factors

Konica Minolta, Inc.

5

		FY2019	Point of the 2H / 3Q Progress
						■ Improved ■ As planned ■ Not Achieved
				Points of the Second Half	3Q Progress
External		◼	Economic slowdown, continuing uncertainty	■ PMI has remained at 50 or below in Europe from
Environment			over future	1.5 years ago and in the US since August;
	◼	Additional tariffs due to US-China trade	China's economy is uncertain
					conflict	■ Additional tariffs had an impact of ¥1.1 billion
						in Q3
Office		◼	Sales of new color Seg2/3 products increase in	◼Sales picked up in Europe, our main market;
Business			H2	color Seg2/3 shipments grew 3% in Q3.
	◼	Recovery from delays in cost reductions	◼Progress in reducingmanufacturing cost, effect
				◼Introduction of new color Seg4 products (Q4)	of variable cost-cutting partly realized
				◼Expansion of MIF due to the completion of	◼Sales of new color Seg4 products begun in
					large project installations, and maintenance of	January
					non-hard levels	◼Steady progress with large projects and
						improvements with non-hard as well
Professional		◼	Stronger MPPsales with IQ-501	■ Gross profit ratio improved due to the appeal of
Print		◼Fixed cost reductions at Chinese plants and	IQ-501, including the inspection function, and
		additional cost reductions	sales growth was restored in North America
Business
	◼	Expand sales further in ASEAN and India	◼Some effects achieved by cutting fixed costs
				◼Konica Minolta's first HPP model will be	and reducing variable costs
					launched	◼Unit sales up 15% in ASEAN, and growth
				◼New digital decoration printing equipment	expected in India from Q4
					products will be launched	◼Color HPP printer (AccurioPress
						C14000/12000) will be launched in February
						◼New digital decoration printing equipment
						product (MGI JETvarnish 3D One) will be
						launched in February

Konica Minolta, Inc.

6

FY2019 Point of the 2H / 3Q Progress

				■ Improved	■ As planned ■ Not Achieved
			Points of the Second Half	3Q Progress
Industrial	・	Measuring Instruments	・	Measuring Instruments
Business		◼Growth in light source color measuring		◼Some advance orders for 2020
	instruments in China and South Korea		smartphone models were shipped
				◼Growth picked up for automotive visual		◼Several new inquiries at Eines, and
				inspection business		initiatives aimed at increasing contracts
						are ongoing
			■ Performance Materials: Accelerate shift to	■ Performance Materials: New resin products
				higher-value-addedproducts by rearranging
					brought in customer approvalin the large-
				portfolio
					scale TV sector
New	・	Bio-health care	・	Bio-healthcare
Business		■ Accelerate increase in number of testing		■ Number of tests continue to increase (number
	samples (RNA, checkup market and		of RNA tests exceeds target,
				pharmaceutical market)		■ Slight delay in CARE program for check up
				■ Improve profitability (reduce costs at inspection		markets
				laboratories, improve efficiency of global R&D)		■ Consolidation of development functions led to
				■ Expand the number of pharmaceutical		progress in cutting expenses
				development support projects (cancer clinical trials,		■ New orders in the drug discovery support
				Parkinson's, Alzheimer's)		services increased, but central nervous
			・	Workplace Hub		system market remain weak
				■ Version upgrade of firmware to improve	・Workplace Hub
				functionality, package solutions for sales		■ Progress toward developing main body
				discussions with scope and major reductions in		versions with upgraded functionality in Q4;
				installation and support man-hours		starter package and industry-specific
				■ Efforts to improve sales capacity in the		solutions will gradually be rolled out
				US to yield results, and improve number of		■ Expand pipeline customers in the US to build
				customers due to stronger engagement by the MFP		up contracts from Q4
				sales force	■ Delay on top line revenue growth in other
						new businesses

FY2019 3Q Business Segment |Office Business

Quarterly Financial Results

9M

Revenue ・Operating Profit

	FY18		1Q	2Q	3Q	4Q
	Revenue	OP	125.7	127.5	125.7	130.4
	ITS	17.9	19.7	20.0	21.0
	OP		9.3	13.4	11.6	12.8
	FY19		1Q	2Q	3Q	YoY
	Revenue	OP	116.4	120.9	119.6	-5%
	ITS	18.1	17.7	19.4	-3%
	OP		7.7	9.4	5.4	-53%

			OP		ITS
YoY	436.5		YoY -6%	38.0	8%
				412.2	33.0		5%	10%
-4%	57.6
55.2	28.0			5%
						23.0		YoY -34%	0%
						18.0	34.3
-6%	378.9					-5%
357.0
	13.0
					22.6
								-10%
						8.0
						3.0			-15%
						-2.0			-20%
			FY18		FY19	FY18	FY19
				Revenue		Operating Profit

[¥billions]

3Q Summary

Office（OP)

• Progress was made in large project installations in Europe, and the mainstay new color Seg2/3 product (bizhub C250i/C300i /C360i) drove a 10% jump up in shipments.
• Although sales of the new color Seg3 rose 9% in North America, sales of the mainstay Seg4 current model failed to grow, and sales were down 9% overall.
• Sales remained low in China, but partner sales increased significantly.
• While prioritizing supply and quality, Konica Minolta continued activities aimed at manufacturing cost reduction for new products, and realized the effect ofcost-cutting for some variable costs.
• Non-hardimproved in line with forecasts (-0.7%)

IT Services Solutions（ITS）

• Sales were down temporarily due to a narrowing down of the service menu to raise profitability in Q2, but sales began to increase again in Q3 when excluding the impact of exchange rates.

Konica Minolta, Inc.

8

FY2019 3Q Business Segment |Professional Print Business

Quarterly Financial Results

9M

Revenue ・Operating Profit

	FY18		1Q	2Q	3Q	4Q
		PP	36.5	38.3	39.2	41.6
	Revenue	IP	3.5	5.9	4.1	7.3
		MS	13.4	11.6	12.6	13.8
	OP		1.7	3.7	3.3	5.1
	FY19		1Q	2Q	3Q	YoY
		PP	34.2	35.4	37.5	-4%
	Revenue	IP	3.8	5.8	5.1	+26%
		MS	12.6	11.5	12.8	+2%
	OP		1.1	1.0	2.9	-11%

			PP		IP		MS
YoY							YoY -4%	10			20%
	165.1		158.7	9			15%
-6%							5%
							8	3%	10%
	37.6
			36.9	7			5%
+8%	13.5			14.7	6		YoY -42%0%
								5			-5%
								4	8.7		-10%
-6%	114.0		107.2	3		5.0	-15%
								2			-20%
								1			-25%
								0			-30%
			FY18			FY19		FY18	FY19
					Revenue		Operating Profit

[¥billions]

3Q Summary

Production Print（PP）

• Shipments increased in North America due to a reinforced sales system, gross profit ratio improveddue to MPP with IQ501, and growth recovered.
• Shipments overall fell in Europe, but increased unit sales for commercial printers.
• Shipments decreased due to prolonged sales negotiations and decrease in government projects in China, and a decline in capital liquidity in India, but an increase innon-hard led to higher sales, and improved service efficiency boosted profitability.

Industrial Printing（IP)

• Sales ofKM-1 grew significantly in direct sales. Label printers benefited from new products (AccurioLabel 230) and decorative printing equipment saw significant growth, remaining in the top share in the target market.
• Non-hardsales also continued to grow significantly.

Marketing Services（MS)

• Shifttohigher-value-addedservices continues
• In Europe, the print business declined, but the US and Asia drove sales growth, leading to higher revenue.

Konica Minolta, Inc.

9

FY2019 3Q Business Segment | Office & Production Print

Office

• Sales of new Seg4 products (bizhub 450i/550i/ 650i) began in January. The aim is to improve the sales mix, primarily in North America, which is a key market for Seg4, and boost sales overall.
• Non-hardcontinued to improve as expected in Q3. The impact on gross profit will be minimized by accelerating the Free-to-Fee and shift left measures.

Year-on-year growth rate in A3 color MFP shipments

A3 Color	A3 color Seg4+			Increase in
total				non-hard

+40%
+28%
	+17% +15%
	+8%	+7%	+6%
			+2%			+2%
	+0.7%			-2%	-7%	-0.7%
-0.1%		-0.4%	-1.3%	-7%	-1%	-1%
			-2.3%	-2.0%
FY18	FY18	FY18	FY18	FY19
FY19		FY19
1Q	2Q	3Q	4Q	1Q		2Q	3Q

Production Print

• There has been progress in orders of new HPP products (AccurioPress C14000/12000) since it was released in Europe and the US in October, and shipments and installation began in February. We will break into theon-top market.
• Growth fornon-hard continued in China and India, improved in Europe after resale inventory adjustments, and decreased in North America due to resale inventory adjustments. There are no changes to forecasts, and we expect growth of about +1%.

Year-on-year growth rate in Production
Color	Print color models		Increase in
MPP(Mid Production Print)
total
	non-hard

+32%
	+7.2%
		+6.1%	+6.1%
+4.3%		+12%
+7%	+4%	+7%+3%	+1.7%
			+2%+1.0%
						-0.6%
	-5%	-3%-0%	-3%	-3%
				-9%
				-12%
FY18	FY18	FY18	FY18	FY19		FY19	FY19
1Q	2Q	3Q	4Q	1Q		2Q	3Q

Konica Minolta, Inc.

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FY2019 3Q Business Segment | Healthcare Business

Quarterly Financial Results

9M

Revenue ・Operating Profit

	FY18		1Q	2Q	3Q	4Q
	Revenue	HC	17.0	19.6	19.4	27.5
	HIT	1.6	2.1	1.4	2.3
	OP		△ 0.2	1.0	0.3	1.2
	FY19		1Q	2Q	3Q	YoY
	Revenue	HC	16.9	24.2	16.6	-15%
	HIT	1.8	2.3	1.5	+6%
	OP		-0.3	0.7	0.2	-41%

			HC			HIT	YoY +3%	2
YoY
61.1	63.2				9%
					2
+8%				5.1	5.6	2			7%
								1			5%
								1	2%	1%	3%
								1
+3%				56.0	57.6				1%
			1		YoY -50%-1%
								1	1.2
											-3%
								0
								0		0.6	-5%
								0			-7%
			FY18	FY19		FY18	FY19
							Revenue		Operating Profit

[¥billions]

3Q Summary

Healthcare (HC)

• DR sales volume continues to rise in Asia and Europe. There were signs of a recovery in sales in the US, particularly to clinics, but in Japan, sales declined due tolast-minute demand in the previous quarter before the sales tax hike went into effect. Overall, revenue was down over the previous year.
• Sales of ultrasound diagnostic equipment increased over the previous year due to ongoing strong sales of new products for obstetrics in Japan and stronger sales in Europe and the US.
• The highvalue-added imaging of our digital X-ray Dynamic Digital Radiography Systems continues to earn high praise from universities and medical institutions in Japan. Aggressively pursue clinical research in the US and China.

Medical IT（HIT)

• PACS sales declined slightly over the previous quarter in Japan.
• Several new contracts, includinglarge-scale projects (subscription agreements), were acquired in North America.

Konica Minolta, Inc.

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FY2019 3Q Business Segment | Industrial Business

Quarterly Financial Results

9M

Revenue ・Operating Profit

	FY18		1Q	2Q	3Q	4Q
		MI	9.6	7.2	7.7	7.6
		IS	0.5	0.7	0.5	1.3
	Revenue	PM	12.6	11.7	12.9	10.9
		OC	5.6	5.4	4.9	4.7
		IJ	3.3	3.0	2.8	3.7
	OP		6.8	4.7	5.6	3.9
	FY19		1Q	2Q	3Q	YoY
		MI	6.6	6.7	7.3	-6%
		IS	0.6	0.8	0.7	+48%
	Revenue	PM	12.6	11.9	10.8	-16%
		OC	4.8	5.3	5.2	+5%
		IJ	3.6	3.2	2.9	+5%
	OP		4.8	4.9	5.6	+1%

			MI			IS		PM		OC		IJ		19%	19%
YoY						YoY -6%	25
															20%
+7%				88.4	82.9
			9.1	20
											YoY -10%15%
-4%				9.7
			15.9	15.3	15
-5%															10%
			37.3	35.3	10
					17.0	15.4
+26%
			1.6							5		5%
				2.0
-17%				24.6
			20.5
													0			0%
				FY18				FY19		FY18	FY19
							Revenue		Operating Profit

[¥billions]

3Q Summary

Optical Systems for Industrial Use :

：Measuring Instruments (MI), Imaging Solutions (IS)

• Measuring Instruments: Sales oflight-source color devices were affected by the US-China trade friction and major customers continued to curb investments, but when excluding the impact of exchange rates, sales were unchanged over the previous year in China and South Korea. Object color sales were sluggish due to the impact of slower economic growth.
• Eines, acquired at the end of May, accelerated the development of the automotive visual inspection business.

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

• Performance Materials: Despite steady progress with new resin products, sales of existing TAC film products have decreased over the previous year due to the impact of customers' inventory adjustments.
• Optical Components: Sales increased over the previous year, driven by sales of projector lenses.
• IJ Components: Sales are solid, despite the impact of deteriorating market conditions in the Asia region

Konica Minolta, Inc.

12

Measuring Instruments revenue

FY2019 3Q Business Segment |Measuring Instruments & Performance Materials

[¥ billions]

Measuring Instruments

•In the display market, despite sluggish smartphone demand and major customers' ongoing restrained investment, sales of light source color measuring instruments in China and South Korea were in line with the previous year when excluding the impact of exchange rates.

•The acquired Eines attracted several new inquiries, and made steady progress in accelerating the launch of the automotive visual inspection business.

Mobile technological				Broadening of the customer
	innovation,
					base and the range of
manufacturers
				applications
	increasing
	Significant					Expansion in product applications
investments in OLED					yields temporary increase in revenue
	11.0								Revenue decreases due
9.7	10.910.7					9.6		to curbs in investment
							by major customers
			7.8	7.2	7.7	7.6	6.7	7.3
6.5								6.6
5.2 5.3

１Q ２Q ３Q ４Q １Q ２Q ３Q ４Q １Q ２Q ３Q ４Q １Q ２Q ３Q

FY16

FY17

FY18

FY19

Performance Materials

• Sales levels were maintained, despite the impact from a temporary decline in demand due to inventory adjustments resulting from TV panelover-supply.
• New resin products have been approved by customers in thelarge-size TV market, and there has been steady progress with applications and expanding the customer base.

Performance Materials revenue

Share declined	Sales growing due to strategy of
due to
shifting to higher value-added
competitive
products
environment

										11.9	12.6		12.9		12.6
	11.9					11.4		11.7		10.9		11.9
10bn					10.8					11.0											10.8
line	9.5				9.7	8.9

１Q２Q３Q４Q１Q２Q３Q４Q１Q２Q３Q４Q１Q２Q３Q

FY16

FY17

FY18

FY19

Konica Minolta, Inc.

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FY2019 3Q Business Segment | New Business

Quarterly Financial Results

9M

Revenue ・Operating Profit

	FY18
		1Q	2Q	3Q	4Q
	Revenue	BHC	5.9	6.5	6.6	6.9
	Others	2.0	2.3	2.2	2.3
	OP		-5.1	-3.5	-5.4	-5.3
	FY19					YoY
		1Q	2Q	3Q
	Revenue	BHC	7.2	7.4	7.7	+17%
	Others	2.3	2.5	2.2	-2%
	OP					-
		-6.4	-4.6	-3.8

			BHC			Others
						YoY +15%			Operating Profit
YoY				29.4			FY18	FY19
25.5
	7.0	0					-10%
	6.5
									-20%
							△5
								-14.0	-14.8		-30%
							△10
				22.4						-40%
	19.0
									-50%
							△15
								-55%	-50%		-60%
							△20	YoY -
			FY18			FY19				-70%
				Revenue	△25					-80%

[¥billions]

3Q Summary

Bio-healthcare (BHC)

• In genetic testing, the number of RNA testing continues to exceed targets due to the full launch following acquisition of CPT codes.
• While the number of tests for imaging center organizations (CARE program) increased, the target was not achieved due to delays with infrastructure development.
• In the area of Support for pharmaceutical manufacturing, orders in the cancer clinical trial field are growing steadily, but central nervous system businesses continue to under perform. Progress was made in activities to acquire a major Parkinson's disease project.

Others：Workplace Hub (WPH), QOL, Status monitoring, Digital manufacturing

• The WPH sales region has increased to 23 countries and 21 cities in North America.
• Although results are far below target, Europe is leading the way in increasing customers, and in the US pipeline customers increased.
• Sales per customer were maintained, andindustry-specific solutions and starter packages continue to be expanded and implemented.

Konica Minolta, Inc.

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FY2019 9M Financial Position|Major Items from Statements of Financial Position

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

Mainly increase from inclusion of right-of-use assets (beginning of the term ¥110.9 billion), due to adoption of IFRS16, as well as from inventory assets.

1203.9

1219.0

1210.8

1304.3

1005.4

Mar	Mar	Mar	Dec	Dec
2017	2018	2019	2018	2019

* Right-of-use assets at the beginning of the term ¥110.9 billion

Inventory/turnover continued to be maintained at high levels due to inventories in preparation for new Office and PP products and for fiscal year-end sales. Optimization is expected as the fiscal year draws to a close.

200.00				Inventories		Turnover (months)	5.00
180.00								173.7	4.50
					158.4
160.00							4.00
			139.5	144.7
	136.0
140.00				3.95	3.50
120.00						3.54		3.00
100.00	2.87		2.81	2.89				2.50
80.00									2.00
60.00									1.50
40.00									1.00
20.00									0.50
0.00									0.00
Mar	Mar	Mar		Dec	Dec
	2017	2018	2019	2018	2019

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

Konica Minolta, Inc.

15

FY2019 9M Financial Position|Major Items from Statements of Financial Position

Equity & Equity Ratio	[¥billions]
Attributable to owners of the Company

Due primarily to currency translation differences and dividend payment, shareholders' equity was reduced.

Due in part to right-of-use assets being moved onto the balance sheet through the application of IFRS16, actual performance remained unchanged even though the equity ratio declined.

		Shareholders' equity		Equity ratio(%)
580.00			100.00

Interest-Bearing Debts &

D/E Ratio

[¥billions]

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

Interest-bearing debts

450.00Debt-to-equity ratio (times)

400.00

560.00

540.00

520.00

500.00

480.00

460.00

555.7

524.3 524.5

52.1	45.6
43.6

546.4

533.4

45.1 40.9

90.00

80.00

70.00

60.00

50.00

40.00

30.00

350.00			401.0
300.00
250.00	293.7	273.7	272.4
200.00			0.75 *1
150.00	185.5
	0.56	0.49	0.50

440.00						20.00
420.00						10.00
400.00							0.00
			0.0
	Mar	Mar	Mar	Dec	Dec
2017	2018	2019		2018	2019
						(For Company
Excluding the impact of IFRS16, equity ratio was 44.8%		Rating 44.6%)

(The one for company rating 48.9%)

Equity = Equity attributable to owners of the Company

Equity ratio = Equity attributable to owners of the Company / Total assets

100.00
0.35
50.00
0.00
Mar	Mar	Mar	Dec	Dec
2017	2018	2019	2018	2019

*1Excluding the impact of IFRS16, D/E Ratio was 0.54

Konica Minolta, Inc.

16

FY2019 12M Forecast | Overview

Re ve nue

Ope rating Profit

Profit attributable to owne rs of the Company

ROE

FOREX [Ye n]

USD

EUR

			[¥billions]
FY2019 12M	FY2019 12M	FY2018 12M
Forecast	Forecast	Results	YoY
(Current)	(Previous)
1045.0	1045.0	1059.1	-1%
20.0	20.0	62.4	-68%
7.5	7.5	41.7	-82%
1.4%	1.4%	7.7%	- 6.3p

105.0	105.0	110.91
118.0	118.0	128.41

Full-year

forecast

Dividend forecast

• Exchange rate: EUR and USD assumptions left unchanged at ¥118 and ¥105, respectively.
• Revenue: Prior forecasts are left unchanged, in light of Q3 progress.
• Operating profit: Prior forecasts are left unchanged, in light of Q3 progress.
• The breakdowns for the business segments have been revised in light of Q3 progress for both revenue and operating profit.
• Annual dividend: Unchanged at ¥30 per share (¥15 for both interim andperiod-end).

Konica Minolta, Inc.

17

FY2019 12M Forecast | Segments

					[¥billions]
Revenue		FY2019 12M	FY2019 12M	FY2018 12M
	Forecast (Current)	Forecast (Previous)	Results
		YoY
Office	565.0		565.0		587.9		- 4%
Professional Print	220.0		215.0		227.7		- 3%
Healthcare	90.0		90.0		90.9		- 1%
Industrial	120.0		120.0		116.7		+ 3%
Optical systems for industrial use	35.0		35.0		35.2		- 0%
Materials and components	85.0		85.0		81.5		+ 4%
New business	50.0		55.0		34.7		+ 44%
Bio-Healthcare	35.0		35.0		25.9		+ 35%
Others	15.0		20.0		8.7		+ 72%
Corporate, etc.	0.0		0.0		1.2		-
Company overall	1,045.0		1,045.0		1,059.1		- 1%
Operating Profit		FY2019 12M	FY2019 12M	FY2018 12M
	Forecast (Current)	Forecast (Previous)	Results		YoY
Office		33.0	5.8%	33.0	5.8%	47.2	8.0%	- 30%
Professional Print	8.5	3.9%	6.0	2.8%	13.8	6.1%	- 39%
Healthcare	3.0	3.3%	3.0	3.3%	2.4	2.6%	+ 25%
Industrial	22.0	18.3%	22.5	18.8%	20.9	17.9%	+ 5%
New business	-18.0		-16.0		-19.3		-
Corporate, etc.	-28.5		-28.5		-2.6		-
Company overall	20.0	1.9%	20.0	1.9%	62.4	5.9%	- 68%

Konica Minolta, Inc.

18

Appendix

Konica Minolta, Inc.

19

AppendixFinancial Result - Overview

								[¥billions]
				FY2018			FY2018
			FY2019		FY2018
			9M	9M	YoY	3Q	3Q	YoY
Revenue		747.0	777.6	- 4%	249.5	260.5	- 4%
Gross Profit		354.6	377.7	- 6%	117.7	126.1	- 7%
	Gross Profit ratio		47.5%	48.6%	-1.1pt	47.2%	48.4%	-1.3pt
	Operating Profit		10.6	50.5	- 79%	5.1	15.9	- 68%
	Operating Profit ratio	1.4%	6.5%	-5.1pt	2.1%	6.1%	-4.0pt
	Profit before tax		5.6	48.0	- 88%	4.0	14.8	- 73%
			6.2%	-5.4pt	1.6%	5.7%	-4.1pt
	Profit before tax ratio		0.7%
	Profit attributable to owners of the Company		2.2	33.7	- 94%	2.1	10.4	- 80%
	Profit attributable to owners of the Company ratio	0.3%	4.3%	-4.0pt	0.8%	4.0%	-3.2pt
	EPS [Yen]		4.39	68.23		4.18	21.05
CAPEX	34.3	33.5		10.0	13.9
Depreciation and Amortization Expenses	42.3	44.1		14.2	14.9
R&D expenses	57.1	59.4		18.4	19.6
FCF	-26.6	16.9		-8.0	5.9
Investment and lending	5.0	4.9		1.1	0.8
	FOREX [Yen] USD	108.67	111.14	- 2.47	108.76	112.90	- 4.14
	EUR		121.05	129.49	- 8.44	120.32	128.78	- 8.46

• Depreciation and amortization expenses：IFRS16 right-of- use assets amortization expensesnot included (FY2019-3Q 9M results of ¥15.1 billion and 3M of ¥5.3 billion)

Konica Minolta, Inc.

20

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

[¥billions]

		FY2019	FY2018	YoY	FY2019	FY2018	YoY
SG&A:	9M	9M	3Q	3Q
Selling expenses - variable	+34.0	+35.5	- 1.6	11.3	11.0	+0.3
R&D expenses	+57.1	+59.4	- 2.3	18.4	19.6	- 1.2
Personnel expenses	+154.2	+157.8	- 3.6	51.6	53.9	- 2.3
Others		+90.7	+90.2	+0.5	30.1	30.1	+0.0
SG&A total		+336.0	+342.9	- 6.9	111.5	114.7	- 3.2
* Forex impact:		-9.7bn. (Actual: +2.8bn.)		-3.7bn. (Actual: +0.5bn.)
Other income:
Gain on sales of property, plant and equipment	+0.1	+20.5	- 20.3	0.0	5.4	- 5.3
Other income		+2.7	+3.0	- 0.3	1.7	1.6	+0.1
Other income total		+2.9	+23.5	- 20.6	1.7	6.9	- 5.2
Other expenses
Loss on sales of property, plant and equipment	+3.4	+1.9	+1.5	0.2	0.3	- 0.1
Special extra retirement payments	+0.5	+0.3	+0.2	0.0	0.3	- 0.3
Other expenses		+6.9	+5.5	+1.4	2.6	1.9	+0.7
Other expenses total		+10.8	+7.7	+3.1	2.8	2.5	+0.3

Finance income/loss:

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

Others

Finance income/loss, net

- 2.9	- 1.6	- 1.3	-0.8	-0.7	- 0.2
- 1.7	- 0.3	- 1.4	-0.2	-0.1	- 0.1
- 0.2	- 0.2	- 0.1	-0.1	-0.1	+0.0
- 4.9	- 2.1	- 2.8	-1.1	- 0.9	- 0.2

Konica Minolta, Inc.

21

AppendixOperating Profit Analysis

												[¥billions]
		FY19/9M vs. FY18/9M
						Office	Professional	Healthcare	Industrial	New business	corporate, etc.	Total
						Print	Business
	[Factors]
		Forex impact	- 3.9	- 1.5	- 0.4	- 0.0	+0.3	- 0.1	- 5.7
		Sales volume change, and other, net	- 4.9	+1.7	+0.6	- 2.7	+2.1	+0.5	- 2.7
		Price change	- 4.0	- 1.4	- 1.3	+0.1	-	-	- 6.7
		Cost up/down	+1.6	- 0.7	+0.4	+0.5	-	-	+1.9
		SG&A change, net	+0.9	- 1.3	+0.7	- 0.9	- 2.9	+0.6	- 2.8
		Other income and expense	- 1.5	- 0.6	- 0.6	+1.3	- 1.3	- 21.3	- 23.9
	[Operating Profit]
		Change, YoY	- 11.8	- 3.7	- 0.6	- 1.7	- 1.8	- 20.4	- 39.9
		FY19/3Q vs. FY18/3Q
						Office	Professional	Healthcare	Industrial	New business	corporate, etc.	Total
						Print	Business
	[Factors]
		Forex impact	- 2.0	- 0.8	- 0.1	- 0.0	+0.1	- 0.1	- 3.0
		Sales volume change, and other, net	- 1.3	+1.1	+0.2	- 0.9	+0.9	+0.1	+0.2
		Price change	- 1.7	- 0.6	- 0.3	- 0.3	-	-	- 2.9
		Cost up/down	+0.7	- 0.1	+0.2	+0.2	-	-	+1.0
		SG&A change, net	- 0.8	+0.1	- 0.1	+0.1	+0.6	- 0.4	- 0.5
		Other income and expense	- 1.1	- 0.1	- 0.1	+1.0	- 0.1	- 5.3	- 5.6
	[Operating Profit]
		Change, YoY	- 6.2	- 0.4	- 0.1	+0.1	+1.5	- 5.6	- 10.8

Konica Minolta, Inc.

22

AppendixCAPEX and Depreciation and Amortization Expenses/ FCFs

Capital Expenditure andFree Cash Flows Depreciation and Amortization Expenses

[¥billions]

		56.3	59.0	60.0 60.0
52.6 51.3	51.8	52.5
	38.9	38.7
FY2015	FY2016	FY2017	FY2018	FY2019
Forecast

*

FY2019 FY2015 FY2016 FY2017 FY2018 Forecast

*Depreciation and amortization:	*FCF forecast for FY2019 does not include investment and lending
IFRS16 royalty assets amortization expenses not included	*INCJ's equity stake
	( INCJ : Innovation Network Corporation of Japan )
	Konica Minolta, Inc. 23

AppendixFY2019 Earnings Forecast - Overview

[¥billions]

		FY2019 12M	FY2018 12M
		Forcast （current)	Results	YoY
Revenue	1,045.0	1,059.1	- 1%
Operating Profit	20.0	62.4	- 68%
Operating Profit ratio	1.9%	5.9%	-4.0pt
Profit before tax	15.0	60.1	- 75%
Profit attributable to owners of the Company	7.5	41.7	- 82%
Profit attributable to owners of the Company ratio	0.7%	3.9%	-3.2pt
EPS [Yen]	15.16	84.33
ROE（%）		1.4%	7.7%
CAPEX	60.0	52.5
Depreciation and Amortization Expenses	60.0	59.0
R&D expenses	80.0	78.4
FCF	-10.0	15.7
Investment and loan	20.0	14.0
FOREX [Yen] USD	105.00	110.91
EUR	118.00	128.41

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

*2 Depreciation and Amortization Expenses:IFRS16 royalty assets amortization expenses not included (Forecast for FY2019: ¥20 billion)

*3 FCF: Forecast does not include investment and lending

Konica Minolta, Inc.

24

AppendixFOREX Impact on Revenue and Operating Profit

［FOREX：¥］

［Impact, Sensitivity：¥billions］

USD

EUR

GBP

European Currency*1

CNY

AUD

Other

Exchange contract

effect

Total impact from

FY2018

FY18	FY19		YoY Impact		FX Sensitivity*2
9M	9M		Revenue	OP		Revenue	OP
111.14	108.67		- 5.9	+0.1		+3.4	- 0.1
129.49	121.05	- 11.0	- 5.9	+1.8	+0.6
146.34	137.79	- 1.8	+0.1	+0.3	+0.1
ー	ー	- 15.4	- 5.8	+2.5	+1.0
16.61	15.60	- 2.4	- 0.9	+3.2	+1.3
81.71	74.92	- 2.1	- 0.6	+0.4	+0.1
ー	ー	- 1.4	- 0.2		ー	ー
ー	ー	- 0.0	+1.6		ー	ー
ー	ー	- 27.2	- 5.7		ー	ー

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

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

Konica Minolta, Inc.

25

AppendixQuarterly Sales Trends | Office/Professional Print - Regional

• Composition of revenue by region (in yen)

			FY2017					FY2018					FY19
		1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q	1Q	2Q	3Q
Japan	13%	13%	12%	12%	13%	12%	12%	12%	12%	13%	13%
North America	34%	34%	33%	31%	33%	33%	33%	33%	34%	33%	33%
EU	36%	36%	38%	40%	36%	36%	36%	36%	36%	34%	37%
Others	17%	17%	17%	17%	18%	19%	18%	18%	17%	19%	17%

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

FY2017

FY2018

FY19

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

Japan

+2%

+0%

-1%

-1%

+4%

+1%

+2%

+3%

-8%

+4%

+1%

North America

+2%

+3%

-3%

+8%

+5%

+4%

+5%

+4%

-2%

-2%

-3%

EU

-1%

+2%

+1%

+4%

+4%

+1%

+1%

+0%

-2%

-1%

+6%

Others

-10%

-8%

-5%

-2%

+16%

+8%

+10%

+10%

-18%

+4%

+1%

• Percentage of color in sales of hardware

			FY2017					FY2018					FY19
		1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q	1Q	2Q	3Q
Office	69%	72%	72%	72%	73%	73%	73%	74%	72%	73%	72%
Professional Print	78%	76%	80%	78%	81%	80%	80%	81%	78%	82%	76%
													Konica Minolta, Inc.	26

AppendixQuarterly Unit Sales Trends | Office/Professional Print - Products

• A3 Color MFP- Units*
  YoY +2%

111	107	116
100
110		109
93

0

1Q 2Q 3Q 4Q FY18 FY19

• Color Production Print - Units*
  YoY +2%

148

120

100109

• A3 monochrome MFP- Units*

YoY -6%113	113
100	102
	108
95	96

0

1Q 2Q 3Q 4Q FY18 FY19

• Monochrome Production Print - Units*

YoY -11%

134

113 112

100

117

107100

• A3 MFP- Units*
  YoY -1%

112	115
100	105

109	104
94

					0
1Q	2Q		3Q	4Q
		FY18		FY19

◼Production Print - Units*

YoY -3%		136
125
100		110
	116	107
102

100

116 111

0

0

0

1Q

2Q

3Q

4Q

FY18 FY19

＊Base Index: "FY2018-1Q = 100

1Q

2Q

3Q

4Q

FY18 FY19

1Q 2Q 3Q 4Q FY18 FY19

Konica Minolta, Inc.

27

		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】	【Regional	YoY】

70.0

60.0

50.0

1. 52%50%52% 49%53%50%52%

20.0

10.066.1 63.9 65.7 64.6 62.4 60.5 62.3

0.0

1Q 2Q 3Q 4Q 1Q 2Q 3Q FY18 FY18 FY18 FY18 FY19 FY19 FY19

0Production print

80%	+18.2%
		+16.2%	IN, +3.0%
	+14.4%
60%		+13.5%
	+10.6%	+9.3%	+9.7%	+9.2%

40%						+5.3%			CN, +7.3%
+0.7%			+1.4%	+3.1%
					US, -1.2%
-0.1%	-0.4%		-0.7%
	+1.4%	+1.5%		-1.3%	+1.1%
20%	-1.3%	-2.0%	-0.0%		-0.0%
			-0.5%-1.1%			-0.6%	JP, -2.4%
		-2.3%	-2.9%-2.7%	-2.5%	-2.2%	-1.5%-1.9%
0%					-3.5%	-2.8%	-2.1%		EP, -3.5%
			-7.7%

1Q

2Q

3Q

4Q

1Q

2Q

3Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

FY18 FY18 FY18 FY18 FY19 FY19 FY19

FY18

FY18

FY18

FY18

FY19

FY19

FY19

80%

60.0

50.0				59% 56%57%
40.0	59%	54%	57%
		50%
30.0

20.0

10.0

21.4 20.6 22.4 20.8 20.3 19.9 21.5

0.0

1Q 2Q 3Q 4Q 1Q 2Q 3Q FY18 FY18 FY18 FY18 FY19 FY19 FY19

70%	+7.2%
60%				+6.1%+6.1%
50%
+4.3%
40%
30%										+1.7%			+1.0%
20%													-0.6%
10%
0%
	1Q	2Q	3Q	4Q	1Q	2Q	3Q

FY18 FY18 FY18 FY18 FY19 FY19 FY19

			+35.0%
+31.3%+30.1%
+21.0%					+21.3%
			+16.7%		CN,
					+27.5%
+23.1%+22.4%+23.2%
+19.0% +18.5%
+20.3%		+4.7%+5.9%
+4.3%	+5.0%				IN, +20.2%
+3.8%+4.0%		+0.4%	-1.9%	-1.2%		EP, +1.4%
	+3.0%
+3.2% +3.4% +2.3%	-2.3%		JP, -0.9%
			-1.0%	-2.7%	-1.6%
			-3.7%	US, -3.7%
1Q	2Q	3Q	4Q	1Q	2Q	3Q
FY18	FY18	FY18	FY18	FY19	FY19	FY19

Konica Minolta, Inc.

28

AppendixQuarterly Financial Results : Segments

[¥billions]

					FY17				FY18				FY19
	【Revenue】	1Q	2Q	3Q	4Q		1Q	2Q	3Q	4Q		1Q	2Q	3Q
Office Business	133.0	146.5	148.2	156.2	143.5	147.2	145.7	151.4	134.6	138.6	139.0
Professional Print Business	49.0	52.2	53.9	59.2	53.4	55.9	55.8	62.7	50.6	52.7	55.4
Healthcare Business	19.5	23.3	24.0	29.6	18.6	21.6	20.9	29.8	18.6	26.4	18.1
Industrial Business	28.7	31.3	30.1	28.1	31.6	28.0	28.8	28.3	28.1	27.9	26.9
	Optical Systems for Industrial Use	11.7	11.5	11.1	8.8	10.1	7.9	8.2	9.0	7.2	7.4	8.0
	Material ・Components	17.0	19.8	19.0	19.4	21.5	20.1	20.6	19.3	21.0	20.5	18.9
New business	1.9	2.3	5.7	7.4	7.8	8.8	8.8	9.2	9.6	9.9	9.9
	Bio-healthcare	-	-	3.6	5.4	5.9	6.5	6.6	6.9	7.2	7.4	7.7
	Others	1.9	2.3	2.1	2.0	2.0	2.3	2.2	2.3	2.3	2.5	2.2
Corporate etc.	0.1	0.2	0.3	0.4	0.3	0.3	0.4	0.2	0.2	0.2	0.2
Company overall	232.4	255.8	262.2	281.0	255.2	261.9	260.5	281.5	241.7	255.7	249.5
	【Operating Profit】		1Q	2Q	3Q	4Q		1Q	2Q	3Q	4Q		1Q	2Q	3Q
Office Business	5.3	14.8	9.8	15.0	9.3	13.4	11.6	12.8	7.7	9.4	5.4
Professional Print Business	1.6	0.9	2.6	4.2	1.7	3.7	3.3	5.1	1.1	1.0	2.9
Healthcare Business	-0.5	3.4	1.0	1.7	-0.2	1.0	0.3	1.2	-0.3	0.7	0.2
Industrial Business	6.1	5.9	5.6	5.9	6.8	4.7	5.6	3.9	4.8	4.9	5.6
New Business	-2.7	-3.2	-4.4	-5.6	-5.1	-3.5	-5.4	-5.3	-6.4	-4.6	-3.8
Corporate etc.	-1.1	-10.0	-5.9	3.6	3.1	-0.2	0.4	-5.8	-6.3	-6.6	-5.2
Company overall	8.7	11.8	8.6	24.8	15.4	19.2	15.9	11.9	0.6	4.9	5.1

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Business Segments for FY 2019

Core businesses

Growth businesses

New businesses

Businesses that strengthen profitability by cost structure reform and that support profit during the Medium-Term Plan

Businesses that aim for higher profit around the core by using resources that we made upfront investments in under the previous Medium-Term Plan

Businesses that aim to achieve high profits by establishing new business models for the IoT era

Business segment

*Certain BUs, such as Healthcare and Measuring Instruments, may be incubating growth businesses internally, as is the case with the main businesses.

Business Unit	Core businesses			Growth businesses	New businesses
Office	Office					WPH
ITS
Professional	Production Print (PP)			Industrial Printing (IP)	Textiles
Print				Marketing services
Healthcare	Healthcare Business	Ultrasound			Bio-healthcare
			Medical IT
Optical Systems for	Measuring Instruments	Visual Inspection		QOL
Industrial Use				Imaging Solutions	Status MonitoringDigital Manufacturing
Materials and	Performance Materials	New Films
Components	IJ Components Optical Components	Materials	OLED

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Glossary

• CRE Strategy (Corporate Real Estate Strategy): Corporate

A corporate strategy for a corporation to utilize its assets and real estate more efficiently in ways that benefit its business.

• S&LB (Sale and Leaseback): Corporate

A method for using assets more efficiently as part of a corporate strategy, in which a corporation sells one of its assets and then continues to use the asset by leasing it back.

• 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.

・PACS: Picture Archiving and Communication System: Healthcare Business

An image storage and communication system for medical image processing. A general term for systems for managing a large volume of images, generated from such as CT, MRI, X-ray images from DR and CR, and so on.

・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.

• 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-timedata-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.

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