Consolidated Results for the First Quarter Ended June 30, 2013

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FAQ Summary of the Question-and-Answer Session at Seiko Epson's Announcement of Consolidated Results for the First Quarter (ended June 30, 2013).



Q&A summary

Click on the appropriate question to view the answer.

Overall


Q

What were the main factors affecting the results improvement other than foreign exchange?


Q

The information-related equipment segment showed the biggest improvement compared to our internal plan.
In addition to foreign exchange, the biggest impact was in inkjet printers and was caused by the growth in sales of high-capacity ink tank models, the increase in consumables sales, the improvement of the model mix and increased demand for large-format printers for commerce.
Each business also felt the effect of reductions to fixed and other costs, and the delay in executing these costs into the second quarter.


Q

What will be your strategy from the second quarter onwards?


A

Although we will take into account market environment changes in devices and precision products segment, we will not change our basic strategy for printing systems and visual communications.
As previously, we will maintain our inkjet printer pricing strategy, while also seeking to increase unit sales of high-capacity ink tank models and accelerating the expansion of inkjet printers in the office.


Q

You have reiterated your foreign exchange assumptions of 90 yen to the US dollar and 120 yen to the euro. What will be the impact on your full-year results if current exchange rates continue?


A

Present currency sensitivity over the year for each one yen depreciation is 100 million yen for the US dollar and 1.1 billion yen for the euro.
Of course it's impossible to predict how the currency markets will move. However, even if present rates were to continue it does not necessarily mean that results will improve automatically. This is because of the effects of the weakened yen on the competitive environment and the impact increased expenses would have on results.


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Information-related equipment

Q

Why did inkjet printer ASPs rise?


A

This was the result of the model mix changes that we have been trying to implement since last year, in addition to the effects of yen depreciation.
We have managed to maintain prices by introducing competitive, compact models for the home, and by increasing the proportion of function-rich products for the office. We were also successful in improving the ratio of high-capacity ink tank models for emerging economies.


Q

Why are your high-capacity ink tank printers selling so well?


A

These products have exceeded the expectations of office customers in emerging markets because they dramatically reduce the cost of printing compared to conventional models. We have also boosted our lineup and rapidly increased the number of countries where we sell these models. The results of our strategy became apparent in our first quarter results, and we expect the benefits to continue in the second half.


Q

Why are office inkjet printers selling so well in the US?


Q

With so many small businesses in the US, the environment for office inkjets is better prepared for office inkjets compared to other regions. As a result of our ongoing efforts to expand sales of office inkjets, Epson's products have gradually become accepted by the channel.


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