Consolidated Results for theThird Quarter Ended December 31, 2015
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Price changes and cost changes were major factors in the difference in business profit from the year ago period (slide 11 of the explanatory presentation). Can you explain the reasons for this?
The biggest factor in price changes was the price rises we implemented in Latin America in reaction to the currency devaluations in the region. In cost changes, we were boosted by the results of cost reductions in each business. The biggest factor, however, was the positive impact of lower year-on-year production of ink cartridge printers in the third quarter. You should note, however, that the production volumes vary from quarter to quarter versus the previous year, and that this will not always work as a positive factor.
What is your thinking about next fiscal year's financial results?
Although we are continuing to take a cautious view on the market environment, we are also planning to factor in positives such as expanding sales of high-capacity ink tank printers and an improved install base due to expanded sales of office inkjet printers.
Over the next year we will continue to pursue our growth strategy, for example by launching professional printing products in new segments and by adding to our lineup of projectors.
We believe it will be necessary to continue some strategic investments over a certain period, and will accordingly strike a balance between long- and short term profit as we move forward.
What's your thinking about shareholders' returns?
We'd first like to mention that from FY2014 we achieved the dividend payout ratio of 30% that had been our target from before.
Going forward, our aim is to generate stable and high returns on an ongoing basis. Our first priority with these returns will be on strategic growth investments and also creating a firm financial structure. In the medium term, we would like to improve shareholder returns, and would like to consider share buybacks and an increased shareholder payout ratio as part of a comprehensive discussion of our financial structure and the liquidity of our shares.
What has been the impact of other companies launching high-capacity ink tank printers?
We believe high-capacity ink tank printers firmly meet the needs of customers who want to print in large volumes at low cost. We also think that the durability of Epson's Micro Piezo printheads is ideal for this type of product.
Other companies have recently introduced similar products in certain regions. But since October 2010, Epson has launched sales in more than 150 countries and has gained a significant amount of market awareness and brand strength, in addition to building up a strong sales and support network. Going forward, we plan to further boost our lineup, and continue to steadily expand our sales volumes. We believe that the entry of other companies into this market has the potential to grow market awareness and contribute to the expansion of the market for these products, and we intend to use this to further accelerate the shift from laser to inkjet.