Consolidated Results for the Half Year Ended September 30, 2009

Q&A summary

Click on the appropriate question to view the answer.


Information-related equipment


  • Q1

    How do you see your prospects for achieving your second half targets?

  • A

    While achieving our second half targets is important, our main priority this year is to reach breakeven in ordinary income for the full year. To meet this goal, we have to ensure that various scenarios in the third quarter move in a favorable direction. Another key point is how quickly sales to enterprise recover.

  • Q2

    What are the latest situations in sales and manufacturing?

  • A

    We saw a recovery in some areas in the first quarter, but overall the market environment remained tough. In the second quarter, some signs of recovery can be seen in our figures. We hope this will become even more apparent in the second half. Manufacturing is proceeding on schedule as we look towards the year-end selling season.

  • Q3

    How much risk do you see for achieving your forecast for the second half?

  • A

    In the first half we had the benefit of foreign exchange so we are talking a cautious stance.

  • Q4

    You upwardly revised your forecast for the first half, but left the full year forecast unchanged. You were previously optimistic about the second half, but does this mean that you are revising downwards your second half forecast?

  • A

    Chinese and other Asian markets seem to be recovering, but we are taking a cautious stance on the balance between the first and second halves.

  • Q5

    What are the prospects for R&D spend in the second half?

  • A

    In the second half, we will implement strict selection criteria based on the business results in the first half. We haven't revised our second half business forecast, and have not changed our R&D spend forecast either.
    R&D will be an essential element in the growth of our business going forward. We will implement R&D projects that we determine to be necessary, while carefully considering the profit potential of projects.

  • Q6

    What are the prospects for capital expenditure in the second half?

  • A

    While making the necessary expenditures, our main aim this fiscal year is to meet our business targets. In the first half, we reined in capital expenditures by implementing strict selection criteria and delaying projects wherever possible. However, we have not yet decided whether we will continue this stance in the second half.
    Whatever stance we take, we will be sure to check our cash situation carefully and reduce expenditure wherever we can by implementing rigorous selection criteria.

  • Q7

    When will you make a decision about the year-end dividend, and on what policy will you base that decision?

  • A

    Although we can't give any definite timing on this right now, we would like to come to a decision as early as possible while doing what we can to improve our business results. Our full-year prospects should become more visible by the end of the third quarter, which is our end-of-year selling season. When that happens we will review the situation based on our policy of distributing stable dividends and on the trends relating to our business results.

  • Q8

    How are your efforts to reduce fixed costs? What is the situation going forward?

  • A

    We are already seeing the effects of our fixed cost cuts in both the information-related equipment and electronic devices segments.
    This fiscal year we have a companywide policy of reducing fixed costs, and this policy was built into our plan. By the end of the first half we had made significant headway. We will continue with these efforts, and over the full year hope to surpass our original fixed cost reduction plan. (We see reductions proceeding faster than our initial plan.)

  • Q9

    What were the relative impacts of factors such as foreign exchange and fixed cost cuts on the business results by quarter?

  • A

    The impact of foreign exchange was negative when compared to the previous period, but positive compared to our forecast.
    In comparison to the first quarter, we saw a slow recovery in demand as we entered the second quarter for business-orientated products, which generally offer greater profitability. We increased the number of employees by the end of the second quarter compared to the previous period as we sought to boost production. However, this was a seasonal trend we had already factored into our plan, and did not have any significant impact.

Information-related equipment

  • Q10

    Why did segment operating income exceed plan in the first half?

  • A

    Operating income was basically on plan in the first quarter, and exceeded the forecast in the second quarter.
    One major reason for this was that the yen was weaker than anticipated. We took a tough view of the foreign exchange market when we made our plan, with 90 yen to the US$ and 115 yen to the euro. However, the actual figures were 95 yen to the US$ and 133 yen to the euro. We are therefore still cautious when we consider the actual situation in our business.
    Another important factor was our progress in cutting fixed costs. This was mainly achieved through an accumulation of cost cuts throughout our business.

  • Q11

    Was it hardware or consumables that were more significant in improving printer business profitability in the first half? Howe do you see profitability in the second half?

  • A

    Compared to the previous fiscal year, the improvement in hardware profitability had the biggest impact. In the previous fiscal year, costs increased due to factors such as higher components costs caused by rising oil prices, and costs associated with starting up production of new products. These will not be factors in the current year, so we are starting to see the benefits of cost cutting and fixed cost reductions.
    We will continue to make improvements to our profit structure, and do not anticipate any significant decline in profitability in the second half.

  • Q12

    What is the situation by region for business-oriented printers?

  • A

    POS (point-of-sale)-related products have been affected by the economic downturn in every region, and we anticipate this situation continuing for the time being. SIDM (serial impact dot matrix) printers have been boosted by sales related to the Chinese taxation system, and we think this will continue. LFPs (large-format printers) have been affected as businesses have curtailed capital expenditure, but are gradually recovering, in part boosted by sales generated as a result of public spending in China.