Consolidated Results for the First Quarter Ended June 30, 2015
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Epson is now able to generate steady cash. How do you plan to use that cash? Also, what is Epson's policy on shareholder returns?
We are increasing the amount we are investing this fiscal year, but we believe that capital expenditures, mergers and acquisitions, and other growth investments will continue to be necessary if we are to sustain growth in the medium to long term.
For our shareholder return policy, we have been looking to raise the level of dividends, and in the 2014 fiscal year we attained our long-standing goal of achieving a consolidated dividend payout ratio of 30%. As we continue to invest in future growth and build a robust financial structure, we will also study repurchasing Epson shares as one option for increasing shareholder returns and will explore further raising the dividend payout ratio in the next few years.
Why did Epson increase production volume of ink cartridge inkjet printers in the first quarter compared to the original plan?
Last year, logistics were impacted by a lack of port capacity in the Philippines, so this year we decided to start production earlier to ensure that we are able to deliver products in time for the year-end shopping season.
Another reason for the increase was that we wanted to level production volume over time to better enable us to efficiently produce office inkjet printers and other models with complex mechanisms, since these models, which are growing as a percentage of total printer units, take more people, time, skill, and space to produce.
How are your efforts in the office inkjet printer market going?
This fiscal year we will increase the percentage of products equipped with Epson's latest PrecisionCore inkjet printheads, which deliver better-than-ever image quality at high speed. This strategy aims to lead to increased future ink sales.
In the first quarter, we fell slightly short of the unit sales target, mainly for low-priced printers, because we kept prices at a level that would ensure profitability over the life of our products even as competitors in the U.S. and Europe implemented pricing campaigns on some models. On the other hand, sales of PrecisionCore printers, the cornerstones of our strategy, were firm.
In the business for printers with managed print services, we expanded and enhanced our lineup by introducing a new A4 model. Given the positive response from our customers, we feel that we are headed in the right direction and hope to steadily increase sales.
How are sales of high-capacity ink tank printers?
In Latin America, first-quarter sales of high-capacity ink tank printers were impacted by currency devaluations, with impacts seen more in some countries than in others. In Asia, however, sales were strong. Overall, sales have exceeded the original plan, where we forecast continued growth from last year.