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| Q1: | Please give an overview of the results for the year ended March 2009. |
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| A1: | Since we entered the year ended March 2009 amid the early stages of a global economic slowdown, we had implemented emergency management measures from its onset. However, in fall 2008 the slowdown in the economy precipitated by the financial crisis in the United States spread quickly throughout the world, and markets cooled considerably beyond our expectations. This had a significant impact on the Nikon Group’s business. The Precision Equipment Company faced a marked contraction of markets in the semiconductor field, as capital expenditures were sharply curtailed following the worldwide falloff in demand for semiconductor devices. The market for the LCD equipment field, despite brisk investment during the first half, stagnated from summer 2008 as demand for the large panels used in flat-screen televisions abruptly slowed. The Precision Equipment Company managed to boost sales to a certain extent with cutting-edge ArF immersion scanners and large-scale LCD steppers and scanners, but the impact from the slowdown in related markets led to year-on-year declines in both revenue and earnings. |
| Q2: | What are the measures and goals of the Medium Term Management Plan to begin in the year ending March 2010? |
| A2: | Nikon’s policies for the three-year Medium Term Management Plan are, in the year ending March 2010, to reform the structure of business and profit, and lower the break-even point; in the year ending March 2011, to commence business operation for the coming economic recovery, and achieve a turnaround in profitability; and in the year ending March 2012, to return to a sustainable growth track. The measures in this plan assume that semiconductor producers and other manufacturers will continue to control capital expenditures, and that demand for final products will remain sluggish for some time. We also expect that even after the world economy recovers there will be a shift in the demand structure, and we will enter an era in which corporate growth is uneven. First of all, to strengthen earnings capabilities to secure profits even in the severe environment, we will reorganize the business locations of the Precision Equipment Company at a global level to be more appropriate to the changes in the market. Specifically, we will reorganize and consolidate our four production subsidiaries in Japan into two companies, while unifying and streamlining as much as possible the marketing and servicing operations of our two overseas subsidiaries in the United States and Europe. Furthermore, in Japan and Asia we are pursuing a more efficient business by scaling back operations in line with the business scale. Through these measures, we will make reductions in production and service personnel in Japan, as well as sales and service personnel overseas, which we anticipate will cut fixed costs by approximately ¥8,000 million. |
| Q3: | What are your forecasts and priority measures for the year ending March 2010? |
| A3: | We anticipate that semiconductor manufacturers will sharply scale back capital expenditures during the fiscal year ending March 2010, and while there are signs of rising operation rates among panel manufacturers, we expect that the decline in capital expenditure will continue. In digital cameras, we foresee a difficult market environment, with the yen expected to remain strong, and decline in product prices arising from more intense competition with the launch of new products by all manufacturers. Despite the difficult business environment, to provide for continued growth the Nikon Group will faithfully implement the fundamental policies in the Medium Term Management Plan described previously, reforming its business and earnings structure, lowering the break-even point, and pursuing product development for sustainable growth. |
| Q4: | What aspects of CSR will you focus on in this harsh business climate? |
| A4: | The Nikon Group currently faces an extremely difficult business environment. However, it is precisely at such times that we must act with sincerity in our dealings with all stakeholders. We must never betray the trust placed in Nikon merely for the sake of short-term profits. We recognize that corporate social responsibility (CSR) is essential no matter what the state of the business environment, and we need to strengthen our corporate governance, ensure strict compliance, develop human resources and provide environmental management, as well as reaffirm our commitment to creating value that exceeds expectations.
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| Q5: | What is Nikon’s policy for shareholder return, and the dividend result for the year ended March 2009 and plan for the year ending March 2010? |
| A5: | Nikon's basic policy regarding the distribution of earnings is to expand investment in business and technology development to ensure future growth, take steps to enhance competitiveness, and pay a steady dividend that reflects the perspective of shareholders, while making continual adjustments to better reflect operating performance. Consequently, we have set a target for a total return ratio of 25% or more, providing returns to shareholders through dividend increases, acquisition of treasury stock, and other means.
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<This article, based on a previous interview, was produced on August 31, 2009.>