Consolidated Results for the Full Year Ended March 31, 2013

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FAQ Summary of the Question-and-Answer Session at Seiko Epson's Announcement of Consolidated Results for the Full Year (ended March 31, 2013).



Q&A summary

Click on the appropriate question to view the answer.


Overall

Q

What was the main focus of Epson's capital expenditure in FY2012?


Q

Epson's capital expenditure totaled 43.1 billion yen in FY2012. This included investment in a new print head for use on inkjet printers for office and other applications. Another reason for the increase in capital expenditure compared to the previous year was above-average investment in molds for a new range of products launched in the information-related equipment business.


Q

Why will depreciation and amortization expenses increase in FY2013 compared to the previous year while capital expenditure remains flat?


Q

We will incur increased depreciation and amortization expenses in FY2013 as a result of the capital expenditure that we made at the end of FY2012.


Q

What will be the characteristics of the inkjet printers you will launch in FY2013 with the new print head?


Q

The printers containing the new print head will be office models boasting high printing speeds, excellent reliability and compatibility with a wide range of paper types, including regular paper. These new products will offer our customers all-round competitiveness, including both high performance and cost effectiveness.


Q

What assumptions have you changed for the FY2013 operating income outlook compared to the financial targets announced in March 2013 when you released your Updated SE15 Second-Half Mid-Range Business Plan?


Q

We adjusted our exchange rate assumptions. Please note that the outlook is not just a simple calculation involving currency sensitivity and its impact on income. We also took into account factors such as changes in the competitive environment and the increase in expenses associated with an improvement in business results in the case that the yen remains weak.


Q

As ever, the bulk of Epson's operating income is heavily weighted towards the second half of the fiscal year. Can you explain the background to this?


Q

We are presently implementing a number of measures to normalize the balance between the first and second halves of the fiscal year. Despite these efforts, we always incur significant expenses in the first half associated with the startup of new products, while in the third quarter we earn the bulk of our income because of the year-end selling season. We expect this situation to continue in FY2013.


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Information-related equipment

Q

What are the prospects for the inkjet printer market going forward?


Q

Our strategy is based on the assumption that the market for consumer printers will continue to contract. To maintain our presence in this market we will boost competitiveness by launching new compact models and also increasing compatibility with smartphones and tablet PCs.
We will also continue to develop and strengthen new domains that promise increased print volumes such as office printing and the printing market in emerging economies. Our intention is to drive Epson's future growth by taking various industry-leading initiatives in these expanding markets.


Q

What measures will you take to boost inkjet printer hardware profitability in FY2013?


Q

We aim to improve the variable cost ratio in FY2013. We forecast rising costs for inkjet printer hardware as we improve the functionality and expand our lineup of printers for the office market, and also experience the effects of yen depreciation in our manufacturing plants in Southeast Asia. Against this we will continue to rationalize production, drive down costs, and continue our efforts to maintain selling prices and improve the model mix.


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