Q&A of Financial Results for First Quarter of the Year Ending March 31, 2012
The following includes questions and answers at the conference for the financial results for First Quarter of the Year Ending March 31, 2012.
Q. What has been the impact of the appreciating yen and what measures do you have planned to cope with it?
A. Although the Japanese yen rose 10 yen against the U.S. dollar compared with the previous quarter in this 1Q period, this adverse condition was overcome to give an increase in sales and a significant increase in income. In response to the strong yen, we have already increased the ratio of overseas production, expanding production in Thailand and China, and other measures to cope with the rise against the dollar, such as increasing procurement in the dollars, are already being implemented.
Precision Equipment Business
Q. What is the outlook for the market of IC/LCD steppers and scanners?
A. The IC steppers and scanners market in 2011 lately saw a downturn with a focus on memory manufacturers and foundries. However, demand for cutting edge ArF immersion scanners remains high, and in comparison to the previous period, there is a significant shift towards the NSR-S620D ArF immersion scanner. The market of LCD steppers and scanners continues to perform strongly primarily on the back of demand for panels for smartphones. We expect orders for LCD steppers and scanners for the production of mid-sized and smaller high-definition panels to remain strong however predict that orders for equipment for the production of panels for large-screen LCD televisions to drop for the foreseeable future.
Q. What can you tell us about the NSR-S620D ArF immersion scanner?
A. The NSR-S620D ArF immersion scanner has been adopted by memory manufacturers in their mass production lines. And we steadily continue to make improvements to stability and production capacity. It will be difficult to achieve an increase in orders amidst the current market downturn however if the market improves from the next period, we expect to expand our market share.
Q. How are Precision Equipment business earnings?
A. Sales and income for the 1Q were up in comparison to the same period in the previous fiscal year. This increase is a result of a number of factors including a shift in our product mix of ArF immersion scanners towards our latest NSR-S620D, reduced costs due to shortening the lead time for production process and a significant increase in sales of LCD steppers and scanners for the production of mid-sized and smaller high-definition panels due to the explosion in demand for smartphones. We have left our profit forecasts for the fiscal year unchanged in consideration of the adoption of the NSR-S620D by memory manufacturers in mass production lines, which has cancelled out concerns for future investment into IC production facilities, and the fact that it will be possible to achieve our initial forecasts for LCD steppers and scanners.
Imaging Products Business
Q. What can you tell us about the digital camera market?
A. Although the digital SLR camera market in Japan showed negative growth during the 1Q in the comparison to the same period of the previous year, other regions continue to grow, albeit at a slower rate. Despite the severe conditions, we increased unit sales in both digital SLR and compact digital cameras compared to the same period of the previous year and increased the presence, obtaining top market share in Europe for the month of June in compact digital camera sales.
Q. How are Imaging Products business earnings?
A. A concerted effort to rectify supply chain problems following the March 11 earthquake and tsunami have enabled us to return to a stable production base faster than initially expected and respond effectively to demand. In addition, efforts to improve product appeal and marketing have been successful resulting in Nikon posting positive figures. And sales and income of the 1Q period were up on figures on a year-over-year basis. With respect to the second half of the year ending March 2012, amidst the unclear outlook caused by the adverse circumstances of global economy, we expect to see increased market competition as our competitors recover their production capacity therefore although we have made a slight upward adjustment our previously announced sales figures we have maintained operating income forecasts for the period. We have also made an upward adjustment for sales and operating income for the year ending March 2012 of 9% and 34% respectively.