Positioning of Imaging Solutions - Fujifilm

1

Business Presentation for Imaging Solutions Businesses

Mar. 22, 2018

FUJIFILM Holdings Corporation

FORWARD-LOOKING STATEMENTSForward-looking statements, such as those relating to earnings forecasts and other projections contained in this material, are management’s current assumptions and beliefs based on currently available information. Such forward-looking statements are subject to a number of risks, uncertainties, and other factors. Accordingly, actual results may differ materially from those projected due to various factors.

2

Positioning of Imaging Solutions

3

Imaging Solutions Business Overview

4

History of Imaging Solutions

5

Total World Demand Trend of Color Film

6

Responding to Changes in the Business Environment

Producing New Value

7

391.6374.9

346.0373.6

360.3 352.9 341.8

380.0

-3.3%-2.2%

-0.2%

1.0%

5.6%

9.1%

10.8%

14%

-12.9

3.6

36.8 54.032.020.3

-0.8-8.4

8

Changes in the Imaging Solutions Business

Large improvements in profitability across the Imaging Solutions business as a whole

(Billions of yen)

Revenue Operation income

Operation income margin

(forecast)FY2015/3 FY2016/3 FY2017/3 FY2018/3FY2014/3FY2013/3FY2012/3FY2011/3

9

Imaging Solutions Medium-Term Management Plan “VISION2016”

10

Instant Camera

Printing Digital Camera Lens

Expand the Instant Photo System Business Globally

11

Instant Camera Printing Digital

Camera Lens

Expand the Instant Photo System Business Globally

12

Expand the Printing Business


Camera Lens

13

Instant Cmaera Printing Digital

Camera Lens

Fujifilm shipment basis in Japan, North America and Europe


Fujifilm shipment basis in Japan, North America and Europe

億円

140

120

100

80

60

40

20

0

14

Digital Cameras : Focusing on High-end models

Reading future market needs to focus on high-end models, achieving a recovery in sales revenue and

profitability

Reduced market for low-priced cameras

→ Focus on high-end models

Spread of smartphones


Camera Lens

Sales trend of digital cameras(Billions of yen)

(forecast)FY2015/3 FY2016/3 FY2017/3 FY2018/3FY2014/3FY2013/3FY2012/3FY2011/3FY2010/3

億円

15

Optical Devices : Expanding the Business in High-value-added Growth Areas

Reduction in the market for low-priced camera modules for

smart phones→ Expand business in high-value-added growth areas

Improving profitability by focusing on lenses for various industrial applications where high-quality optical technology is required such as broadcasting, cinematography and security


Camera Lens

80

70

60

50

40

30

20

0

10

(forecast)FY2015/3 FY2016/3 FY2017/3 FY2018/3FY2014/3FY2013/3FY2012/3FY2011/3FY2010/3

(Billions of yen)Sales trend of optical devices

16

Medium-Term Management Plan “VISION2019”

At Last

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Business Presentation for Photo Imaging Business

Mar.22, 2018

18

Chapter

1

Contents

Photo Imaging Business Overview

Expand the Instant Photo System Business


Chapter

2

Chapter

3

19

20Photo Imaging Business Overview Expand the Instant Photo System Business Expand the Printing Business

Chapter

1 Photo Imaging Business Overview

21

Product revenue ratios


2,157

2,4062,499

2,356

0

500

1,000

1,500

2,000

2,500

2013実績 2014実績 2015実績 2016実績 2017（予） 2018中期計画 2018（予）

22

Aiming to maintain 5% annual growth in sales and strong operating profit ratio

Revenue trend

Instant Photo System

Printing Business/Business Products

Photographing Materials

Mid-term plan brought forward by one year

（Billions of yen）


250

200

150

100

50

215.7

240.6 249.9235.6

(forecast)FY2015/3 FY2016/3 FY2017/3 FY2018/3FY2014/3

(forecast)FY2019/3FY2019/3

Med-term plan

Expanded business opportunities

77.5% of people in Japan now own a smartphone,with 2.6 billion smartphone owners worldwide

Ownership rates for smartphones and tablets in Japan

smartphones

tablets

23


FY2015/3 FY2016/3 FY2017/3 FY2018/3FY2014/3FY2013/3FY2012/3FY2011/3

(Japan) June 2017 Hakuhodo DY Survey(Global) e-marketer projections

0

10

20

30

40

50

60

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018


Research by Fujifilm: estimated based on “Photo life” survey data

Number of shots taken in Japan

SmartphoneCompact digital camera

Digital/mirrorless SLRFilm camera

24

（year)

Spread of smartphones has led to an increasing number of photographs takenreaching 1 trillion shots worldwide


（ 1 billion shots）

Shift in the value and positioning of photographic images

Facebook/Instagram user numbers：http://www.uniad.co.jp/260204Facebook is a registered trademark of Facebook, Inc.Instagram is a registered trademark of Instagram 25


26Expand the Instant Photo System

BusinessPhoto Imaging Business Overview Expand the Printing Business

Chapter

2Expand the Instant Photo System Business

27


Instant photo system “instax”

The official name of the product is “instax,”being used around the world. In Japan it is known by its nickname “Cheki.”

28

About instant photo system “instax”


29

Global sales are increasing steadily


30

目標

Development of products that meet targets


31

Photographs have become a more familiar, integral part of our daily lives

Shift in the value and positioning of photographs


32

The spread of smart phones and SNS and perceptions of “instax”


Commercialization of productsdesigned to take advantage of the spread of smartphones

and wider use of social media33

The spread of smart phones and SNS and product development of “instax”


34

New products launched in fiscal year 2017

Designed for millennials with artistic sensitivity and desire to express themselvesResponding to the popularity of the square format on SNS and other platforms

New format “square format”


35


New format “square format”

Image from a smartphone can also be printed on square format “instax” film Highly artistic square format

supports smartphone user’s self-expression


36


New “instax SQUARE” format


37


New “instax” proposal for smartphone users

Developed game-like smartphone applicationsScheduled for global launch


38

1.Development of products that meet targets

Collaborative product development

Raising the profile of “instax” and widening the customer base through collaborations with popular characters in Japan and overseas


39


A diverse range of design films

Development of highly artistic film targetingusers with high sensitivity to fashion and art


40


Wide variety of film lineup

Colorful designs and collaborations with popular charactersa diverse range of films are launched for sale


41

2.Global development


instaxearly adopting

regions

instaxgrowth regions

42

low

high

instaxemerging regions


“instax” market situation by region

“instax” ownership rates


low

43




high



regions



Penetration of various product lineupValue spread by actual users’ experience

Increase base of “instax” fans

Awareness of the instaxbrand and basic concepts

Expansion of purchase channel




low

high

44



regions



45




low

high

instaxearly adopting regions





regions



46

2.Global development In-store promotions

U. K. Japan

“instax” in early-adopting regions

OceaniaCanada


47


GermanyU.S.A.

“instax” in growth regions


48

China Mexico

“instax” in emerging regions

ThailandMalaysia



49

2.Global development Utilizing the Internet and SNS

Based on real examples from usersthe value provided by instax is spreading globally


50

3.Concept for future development

Fujifilm continues to develop products that generate new value


51



52


Expanding the range of use and enjoyment


53

“instax mini” “instax SQUARE”

“instax WIDE”


Use of diverse print formats

Expanding the range of self-expression


54


Provide products that give users a more “real” texture, promoting the further expansion of the service


55Expand the Printing BusinessPhoto Imaging Business Overview Expand the Instant Photo System Business

Expand the Printing BusinessChapter

3

56

Product revenue ratios


Printing Business Overview

57The names of each company listed are trademarks or registered trademarks.

The industry’s only total solution provider



58

9.8%16.5%

31.0%

45.0%

59.1%

69.2% 70.7%77.5%

0.0%7.4%

11.6%16.2%

20.9%27.5%

38.8% 41.0%

0%

20%

40%

60%

80%

100%

2010 2011 2012 2013 2014 2015 2016 20170

20

40

60

2010 2011 2012 2013 2014 2015 2016 2017 2018

Ownership rates of smartphones and tablets in Japan Number of images taken in Japan

Consumers are taking an increasing number of photographs due to the spread of smartphones

This creates larger printing business opportunities

Fujifilm research: Estimated from “Photo life” survey data

smartphones

compact digitalcameras

digital/mirrorless SLR

film cameras

smartphonestablets

（ 1 billion shots）

(Japan) June 2017 Hakuhodo DY Survey(Global) e-marketer projections



81% of users want to print images, and the number of images they want to print is growing.In addition to conventional usages, users now use their prints in various new ways including

gifts, displays, and albums.

402 447

569

641

133 144 171

254

0

100

200

300

400

500

600

700

2014 2015 2016 2017


59

Average number of photographs saved on smartphoneAverage number of photographs users want to print


（year）

（photos）

Fujifilm research

Timing/objectives/application of image printing

81.0% of users have photographs they

wouldlike to print

The average number of photographs users would like to

print is 254

Research by Japan Photo Imaging AssociationｘMMD Research Institute

1.7%

2.2%

12.9%

18.7%

26.1%

26.5%

36.4%

37.1%

67.1%

0.0% 25.0% 50.0% 75.0%

Other

To submit to photo contests

To make New Year’s cards

To keep a real non-digital photograph(for records / storage)

To create an album

To decorate the room

To give as a present

To organize and sort photographs

To keep memories in a tangible form

s

6,285 6,485 6,675 6,827

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

FY2017 FY2018 FY2019 FY2020

Wall Décor

カード/カレンダー

フォトブック

Mil USD



The market for value-added prints such as Photo book and WALL DECOR as larger numbers of people make more use of new print

applications 60

Total worldwide market for value-added prints

（Source）InfoTrends + Fujifilm projections

（fiscal year）

WALL DECOR

（Million USD）

Card / calendarPhotobook



61

Harnessing the increased use of print services and spread of smartphones as a business opportunity toexpand value added print services

Based on the concept of “more photographs in your life to enrich your life,” Fujifilm proposes value-added print products and services to cope with the

expanded demand for using prints in an increasing number of ways

Expand the Printing Business1. Development of value-added print services

62


63

Make albums easily through automatic photo selectionThis innovative service has been available since 2013.

It allows users to lay out an album in as little as five minutes


Many smartphone photographs capturing various persons can be brought together in a single cute layout: This print service is particularly popular among

girls and women in their teens and 20s64


65

The WALL DECOR print service isideal for those who want to use photographs as part of their home’s stylish

interior design


66

These photo books have been well received, with users providing comments such as“it looks stylish like a magazine” and “I can express myself artistically”

A new design is to be released in June 2018.

Expand the Printing Business1. Development of value-added print services

67

Added value print services are growing steadily, capturing new demand.Fujifilm will continue to offer attractive added value print products and

services, driving further growth of the market.


402 447

569 641

133 144 171

254

0

150

300

450

600

750

2014 2015 2016 2017

2.Expand smartphone based print infrastructure

68


（photos）

Timing/objectives/application of image printing

In addition to the increase in the number ofphotographs taken on smartphones

smartphones are increasingly being used as a portal for online shopping

0

25

50

75

2006 2008 2010 2012 2014 2016

20代30代40代50代60代

Research from the Hakuhodo Institute of Live and Living, the Biennial Survey of the Japanese people

（％）Average number of photographs saved on smartphone

Average number of photographs users want to print

81.0% of users have photographs they would

like to print

The average number of photographs users would like to print is 254

Fujifilm research

20s30s40s50s60s



In addition to existing print infrastructure (such as stores and PCs), Fujifilm is focusing on the expansion of infrastructure and development

of solutions for smartphones69


70

The same products and services can be ordered from a store, a PC or a smartphone

Fujifilm plans to expand the range of EC functionality that leverages digital marketing

Available for smartphone since 2016Users can order a diverse range of value-added print products and services from their smartphone


Fujifilm Online Print Services


71

Ongoing development of unique, appealing applicationsExpand infrastructure that allows simple ordering of a diverse range of print

products and services

Expand the Printing Business2.Expand smartphone based print infrastructure

72

Fujifilm is looking to engage in further tie-ups with other companiesPreparing print infrastructure that allows prints to be ordered at

anytime and anywhereThe names of each company listed are trademarks or registered trademarks.

Expand the Printing Business3.Expand promotions and customer touch points

73

“Intangible value proposal” Promotion for communicating customer feedback and photo usage ideas

Powerful communication on the strength and value of images

One of Japan's largest participatory photo exhibitions, bringing together those who enjoy looking at photos with those who took them

From 2017, the exhibition will feature 50,000 people's photos


74

From FY2017 onwards, Fujifilm will be organizing participatory photo exhibitions that people from overseas can also join

The expansion to include overseas participation will take place through venues such as “Photokina,” the industry's largest exhibition

"Photo Is"A photo exhibition of 50,000 people


From Fujifilm's directly-operated store

Wonder Photo Shop opened in Harajuku, Tokyo in February, 2014, as a forum for communication with customers in the "smartphone generation".

3.Expand promotions and customer touch points

75

Developing new products and services from communication with customersCreating demand for new print services through our directly-operated store

It's more fun to display your photos!


76

Wonder Photo Shop, stores operated by Fujifilm,now operate in 25*countries around the world, introducing people

around the world to new ways of enjoying photographs*As of February 2018: the total includes concept shots


77

Collaborations with major retailersRevamping the image of photo shops around the world

The names of each company listed are trademarks or registered trademarks.


78

As the Industry's Only Total Solution Provider,Fujifilm is proposing new ways of enjoying photographs and developing infrastructure that will allow users to print photographs anytime,

anywhere, while also expanding the printing business.

Business Presentation for Digital Camera Business

Mar. 22, 2018

Optical Device & Electronic Imaging ProductsSales Ratios

By fusing our world-leading optical device technology with digital image processing technology that

achieves the highest quality,

Fujifilm develops, produces and sells imaging equipment that provides an emotional impact,

reliability and convenience, responding speedily, acting innovatively, and continually evolving,

polishing the Fujinon and Fujifilm brands, to continue providing customers with superior products and

services.






services.

Received Emmy Award from The Academy of Television Arts & Sciences

World leader in magnification; 4K lens for broadcast applications with × 107 zoom

World-Leading Optical Device Technology






services.

Image Processing Technology of the Highest Quality






services.

Number of New Products Developed by Companies(number of products in the exchangeable lens camera market over the

past four years and share%)

Fujifilm, 10, 18%

Sony, 9, 17%

Canon, 19, 35%

Nikon, 10, 19%

Olympus, 6, 11%

Fujifilm, 21, 24%

Sony, 20 , 22%

Canon, 16, 18%

Nikon, 20, 22%

Olympus, 12, 13%

Interchangeable lensesInterchangeable lens Camera

Digital Camera Market Trends

Overall Digital Camera Demand (CIPA Shipments)

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

交換式コンパクト

(Million Units)

Interchangeable lens camera

Compact digital camera

iPhone 4 (June, 2010)

5 million pixels, LED flash

デジタルカメラ総需トレンドCIPA工業会出荷

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

交換式コンパクト

Trend of Overall Digital Camera Demand (CIPA Shipments)

Interchangeable lens camera

Compact digital camera

(Million Units)

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2012 2013 2014 2015 2016 2017 2018 1-2月

ミラーレス一眼レフミラーレス比率

交換式カメラ・ミラーレス比率CIPA工業会出荷

800

700

600

500

400

300

200

100

January, February

10

Mirrorlesscamera

SLR cameras

Mirrorless camera ratio

Interchangeable lens Camera / Mirrorless Camera Ratios (CIPA Shipments)(Billions of yen)

ミラーレス・当社シェアCIPA工業会出荷

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

0

500

1,000

1,500

2,000

2,500

2012 2013 2014 2015 2016 2017 2018 1-2月

ミラーレス総需当社シェア

250

200

150

100

50

Mirrorless Camera / Fujifilm Market Share (CIPA Shipments)

(Billions of yen)

Overall Mirrorlesscamera demand

Fujifilm market share

January, February

10

Manufacturers (Camera/Imaging Division)FY 2017 1Q-3Q Sales Revenue (YoY)

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Fujifilm Canon Nikon Sony Olympus

Why sales of Fujifilm's MirrorlessCameras are increasing

Evolution of digital devices＆

Differentiation by analog / responsive performance

Moving Away from Compact Digital Cameras, Selecting and Focusing on High-end Models

Game Change Breaking away from 100 years of 35mm film and

70 years of SLR cameras

Mirror Less

Less is More

Less is More

Compact, lightweight cameras applicable in various scenes without overwhelming the subject

High image quality unaffected by shock from the mirror

Precise focus control directly adjusted by the image sensor

High performance, compact lightweight lenses through short flange back and back focus

Electronic viewfinder allowing prior image check before shooting, and displaying the subject brightly even in dark environments

Quiet shutter without mirror shock, maintaining the relationship with the subject

Reduced image failure rate due to various image recognition technologies to reduce failure such as face detection autofocus and automatic scene detection mode

User’s Needs by Shooting Scene / Subject


デバイスの進化

Evolution of Devices

Evolution of Speed and Maneuverability

2012

X-E1

Startup time Sec 1.00

EVF display lag Sec 0.05

AF (focusing speed) Sec 0.10

AF (moving subject) focusing rate

% 100

AF method Single

AF number of points points 49

Burst shot speed fps 5.6

Burst shot number pcs 19

Black out (at 3fps) ms No Live View

Movie performance fps HD24p

2015

X-E2S

0.92

0.005

0.06

167

AF-Zone

49

7.0

32

260ms

HD60p

2017

X-E3

0.40

0.005

0.05

233

New Tracking

325

8.0

100

130ms

4K30p

Examples of Functionality EvolutionEVF Black Out

Example of Functionality EvolutionAF Speed

0.05 seconds0.05 seconds

Differentiation by analog / responsive performance

写真の原点を呼び起こすカメラ写真の原点を呼び起こすカメラ

Interchangeable lenses lineup (X Series)

interchangeable lenses

1.7×

Interchangeable lenseslineup (GF Series)

interchangeable lenses

Evaluation from the Market

Digital Camera Business Sales Performance

0

200

400

600

800

1,000

1,200

1,400

2009 2010 2011 2012 2013 2014 2015 2016 2017

XシリーズコンパクトLaunch of X100

Entry into mirrorless camera market with X-Pro1

X-T1 became a hit mirrorless camera

Number of interchangeable lenses

exceeded 10

Launch of double flagship models, X-

Pro2, X-T2Launch of GFX

140

120

100

80

60

40

20

(Billions of yen)

X series Compact digital camera

Shipment of Fujifilm Interchangeable Lenses

0

50

100

150

200

250

300

350

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

2012年 2013年 2014年 2015年 2016年 2017年

出荷数量出荷金額Shipment quantity Shipment amount

億円本数

2012 2013 2014 2015 2016 2017

Future Growth Strategies

Invest and strengthen all areas : development, production, brand marketing, and services

Development: Development of attractive lens products by Fujifilm's proprietary device technology (sensors, processors) and 4K/8K lens technology

Production: Strengthen interchangeable lens capacities (e.g. expansion of the floor area of the Yamato Plant) and improve productivity (e.g. increased use of automated production)

Marketing: Promoting the use of direct marketing (e.g: within the new Fujifilm Imaging Plaza in Marunouchi)

Services: FPS (Fujifilm Professional Service) etc.

Preparing for the 2020 Tokyo Olympics

Keep Innovating with Passion for Photography.

Positioning of Imaging Solutions - Fujifilm

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