Q&A of Conference for the Medium Term Management Plan in 2014
The following includes questions and answers at the Conference for the Medium Term Management Plan on June 17, 2014.
Precision Equipment Business
Q. What can you tell us about your management numerical targets?
A. In the Semiconductor Lithography Business we aim to reduce our fixed costs of 8 billion yen and variable costs of 9 billion yen to lower the breakeven point, and acquire a 30% share of the market in the ArF immersion scanners. The FPD Lithography Business will retain its current position while implementing further cost cuts. Our management numerical targets reflect the effects of these efforts.
Imaging Products Business
Q. What can you tell us about future marketing strategies?
A. The total number of D-SLRs, interchangeable lenses and compact digital cameras sold over the last 10 years amounts to around 200 million, which means that we have information on an approximately equal number of customers. We will analyze this information to launch new products and to offer Nikon users ideas for new products and encourage to replace older ones in a timely manner.
Q. What can you tell us about markets you will be focusing efforts on in the future?
A. Among emerging markets, we will expand sales particularly in Tier 3 and 4 cities in China, as well as India, Africa and other Asian regions. Each region requires a different marketing approach, so we plan to implement methods customized to local needs.
Medical Business
Q. What can you tell us about new businesses that will be unique to Nikon?
A. Examples include the business in bio-microarrays and the business in compact POCT (*) devices we are working on in collaboration with LSI Medience Corporation, which utilizing Nikon's core competence. We also have other projects in progress, which we plan to make announcements on as soon as they get ready.
- (*)Support of minimally invasive pathology diagnostic procedures conducted as point-of-care testing that takes place at clinics, the patient's home, or in examination rooms or bedside at hospitals.
Q. What can you tell us about the volume of sales in the medical business in the future?
A. Our target for combined sales in the medical business and new businesses will be 40 billion yen for the year ending March 2016, and 130 billion yen for the year ending March 2017. We would like to achieve sales of 200 billion yen in a mid-to-long term target, but we first focus on optimal business operation with reasonable investment. The reason for the rapid sales growth in the plan is brought by M&As. We will forge ahead as we embrace Nikon's technology and "trustworthiness" based on our corporate philosophy of "Trustworthiness & Creativity."
Overall
Q. What can you tell us about the reorganization of your corporate structure?
A. We have a dramatic change internally. It is described by a word of "Transform". We implement the changes with the intention of paving the way to a new world through internal reforms.
Q. What can you tell us about funding for M&As?
A. We believe we should be fine with current cash balance and future cash flow for M&As, but we will also consider debt financing e.g. from banks.