Questions and Answers at the Investor Conference (November 18, 2016)

Q1: What are the reasons for the differences between the forecasts and results for the first half operating income by business segment?

A1: An improvement in the product mix resulting from higher U.S. sales of “coin sorter” was the main reason that Overseas Market operating income was higher than the forecast. The segment’s operating income also benefited from a decline in expenses caused by the stronger yen. In the Financial Market, sales of “banknote and coin recycler” for tellers were higher than the forecast and we were able to hold R&D expenses below the forecast. In the Retail and Transportation Market, there was an improvement in the profitability of “coin and banknote recyclers” for cashiers. In the Amusement Market, sales were higher than the forecast but price-based competition brought down operating income.

Q2: What are the reasons for the growth in overseas demand for GLORY products used in the retail industry?

A2: In France, the use of our “coin and banknote recyclers” for cashiers is increasing due to a number of user needs. For example, bakeries want to avoid hygiene problems associated with touching merchandise after handling money. There is also a need to reduce the mental burden on cashiers and to manage cash more rigorously. In addition, to improve efficiency, a major supermarket in Europe is dividing checkout lines into three categories: normal, semi-self-service, and self-service, and all three use “coin and banknote recyclers”. While there are competing products, GLORY leads the industry with the development of innovative products, such as a machine that unifies a “coin recycler” and a “banknote recycler”, and a product that handles cash with no need for store salespeople to touch any cash.

Q3: Do you expect second half Financial Market sales to be less than first half sales?

A3: In the first half, we sold “banknote and coin recycler” for tellers, “open teller systems” and other major products sooner than we had expected. Therefore, we expect that second half Financial Market sales will be less than first half sales.