Consolidated Results for the Third Quarter Ended December 31, 2012

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FAQ Summary of the Question-and-Answer Session at Seiko Epson's Announcement of Consolidated Results for the Third Quarter (ended December 31, 2012).



Q&A summary

Click on the appropriate question to view the answer.


Overall

Q

What is Epson's currency sensitivity for the fourth quarter?


Q

Epson doesn't disclose its currency sensitivity by quarter. At this point, though, we haven't adjusted our outlook for full-year operating income sensitivity, which is a positive impact of USD200 million and EUR1.2 billion for every 1 yen depreciation.
We understand there will be a significant impact if you recalculate the fourth quarter results based on present foreign exchange rates. However, Epson believes the overall impact of foreign exchange will be limited because of the change in expected expenses caused by ongoing fluctuations in the market and competitive environment.


Q

What was the inventory situation in the third quarter, and what are the prospects going forward?


Q

Our sales and manufacturing teams are working closely together to normalize the situation by March 2013. Although the impact of the weakened yen meant we were unable to meet our end of December 2012 targets for inventory reduction, we have made definite inroads in reducing inventory since the peak in October.
We are currently controlling manufacturing levels to reflect the sales situation and believe that we can reach our planned inventory levels by the end of March.


Q

What is the focus of your capital expenditure in FY2012?


Q

The bulk of our capital expenditure is focused on inkjet printers, and is investment aimed at securing the future growth of the business.


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Information-related equipment

Q

How did you manage to improve profitability in the information-related equipment segment in the third quarter?


Q

This was mainly achieved by improving profitability in inkjet printer hardware. Profitability improvements were achieved by changing the model mix, maintaining prices, and cutting costs through measures such as introducing more compact models to the market.
We were also able to increase consumables sales volumes.


Q

What is your strategy for inkjet printers going forward?


Q

We are looking to improve the model mix by focusing on inkjet printers for the office and on high-capacity ink tank printers for customers in emerging economies. We will also accelerate our efforts to introduce compact printers to the market with the aim of improving the competitiveness and profitability of our products.


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