This is Tokunari, CFO. I do appreciate your precious time despite your busy schedule to attend our financial briefing. Today, I am pleased to report the first quarter results, our forecast for the full year, and our sustainability strategy. These are the three points I would like to explain. First, highlights of the first quarter results, April through June. Revenue was JPY 132.2 billion compared with the first quarter last year, when we were severely impacted in revenue loss by COVID-19. First quarter revenue was up JPY 67.5 billion, or up 104%. Revenue became almost 2x. Operating profit was JPY 19.9 billion. The four segments, including Imaging Products Business and the Precision Equipment Business, became positive in operating numbers. Operating profit in Q1 includes one-time factors, including about JPY 2.3 billion from the sales of the idle land and sales profit of about JPY 2 billion from the retirement benefits release due to the revised pension systems of our U.S. subsidiaries. Profit attributable to owners of the parent was positive, JPY 15.8 billion. Slide four shows the major numbers for the first quarter on the consolidated basis. Revenue and operating profit before income taxes, profit attributable to owners of the parent, and free cash flow respectively shows a dramatic improvement from the first quarter of the previous fiscal year. For your further reference, the far right shows the Q1 numbers two years ago, prior to COVID-19. The latest Q1 revenue did not recover up to the numbers prior to COVID-19. May I remind you that operating profit attributable to owners of the parent, et cetera, surpassed the pre-COVID-19 numbers. The structural reform up until the last fiscal year, as well as the efforts to make the balance sheet lean, resulted in a lower profit loss break-even point, though the revenue is still on its way to recovery. We believe we are firmly improving our profit-making capability and structure. As shown in the bottom, compared to the official numbers announced, vis-à-vis the full-year operating profit forecast of JPY 20 billion, it was JPY 19.9 billion for the actual Q1 number, and vis-à-vis the full-year net profit attributable to owners of the parent forecast of JPY 16 billion, it was JPY 15.8 billion. We were able to achieve almost a full-year forecast just in three months from April through June. With this situation in place, we have revised our forecast, and I will explain them later. Slide five shows the actual numbers by segment in the 1st quarter. Please look at the operating profit in the center column from top to down. Imaging Products Business, JPY 9.2 billion. Precision Equipment Business, JPY 10.6 billion. We achieved operating profit in all the segments except for Industrial Metrology and others. The loss of Industrial Metrology and others was caused by one-time factor of our subsidiaries, which are included in others. As shown in the far right, both revenue and operating profit were above the previous year in almost all the segments. Now, allow me to move on to explain each business segment starting from slide six. The 1st segment is Imaging Products Business. Revenue in the first quarter was JPY 50 billion, almost doubled from JPY 25.1 billion in the first quarter last year, and operating profit landed at positive JPY 9.2 billion. Thanks to the recovering demand in cameras, not only the mirrorless Z6 II and Z7 II launched last year, but also high-priced interchangeable lenses enjoyed strong sales. Shifting into models for professionals and then hobbyists, our strategic segment has been steadily advancing, and higher ASP trend is still continuing. On top of it, we were benefited by the cheaper yen as well as by the lower sales promotion cost, which is going to be deductible from sales. All in all, revenue grew almost 2x. Operating profit improved significantly year-on-year due to the subdued and the deferred sales expenses in some items till Q2 and beyond. Slide seven shows Precision Equipment Business. Revenue was JPY 51.8 billion, up about 2.6x year-on-year. Operating profit was JPY 10.6 billion. FPD lithography systems. No system sales were booked in Q1 previous fiscal year due to the impact of COVID-19. We were not able to travel to China, we completed installations of 13 units in April through June period, resulting in the increased revenue and profit. Semiconductor lithography business, we did not have new sales because the completion of some system installations were pushed out into Q2 and beyond. Thanks to the revenue and contributions from the service business, et cetera, operating profit increased. Please look at slide eight. Healthcare Business, revenue was JPY 15.8 billion. Operating profit was JPY 400 million. Revenue and profit grew year-on-year. Biological microscope sales grew mainly in the Americas. Retinal diagnostic imaging systems recovered in the major U.S. and European markets. We enjoyed growth both in revenue and profit. Slide nine. This shows our Components Business, whose disclosure starting from the current fiscal year. Revenue was JPY 7.7 billion. Operating profit was JPY 2.1 billion. Both revenue and profit grew year-on-year. EUV-related Components Business contributed to the revenue expansion. Sales were strong in optical parts for semiconductor-related equipments and encoders for industrial equipments. Slide 10 shows the last segment, Industrial Metrology and others. Revenue was JPY 6.7 billion, up year-on-year. In the Industrial Metrology Business, revenue expanded thanks to the recovered CapEx in our customer companies, in electronic components, semiconductors, and automotive-related businesses. On the other hand, operating profit became -JPY 1 billion. The major reason for this goes to those domestic production subsidiaries which belong to others. Those subsidiaries posted a disposal and write-downs of inventory and assets. Next, I will explain our forecast for the year ending March 31, 2022. Slide 12 shows the highlights for the forecast. For the full year, revenue forecast is JPY 520 billion, revised up JPY 10 billion from the May forecast. As for breakdowns, Imaging Products are now revised up by JPY 5 billion, reflecting better than expected Q1 performance. Precision Equipment forecast is now revised up by JPY 5 billion, reflecting better than expected sales for service business. Full year operating profit is expected to become JPY 27 billion, revised up by JPY 7 billion. As for details, Imaging Products are now revised up by JPY 7 billion. This upward revision is coming from increased sales as well as on higher sales price of products due to the improved product mix. Precision Equipment Business is now revised up JPY 2 billion, coming from the expected service business opportunities related to the high capacity utilization of the installed lithography systems. The corporate P&L, non-attributable to any reportable segments, is now revised down by JPY 2 billion due to the revised profit and loss allocation between segments. All in all, we will have an upward revision as much as JPY 7 billion. Profit attributable to owners of the parent is now revised up by JPY 6 billion from the previous forecast. For the full year basis, our forecast here is JPY 22 billion. As for the annual dividend, it is JPY 30, unchanged from the previous forecast. Please look at slide 13. This table shows the major forecast numbers for the full year. I have already explained the highlights, so allow me to skip this. Next, I will explain our forecast for the full year by segment. This page is a summary page, so allow me to go to each segment. Slide 15. First segment is Imaging Products Business. Revenue is now JPY 170 billion, up JPY 5 billion from the May forecast. Digital camera market continued its excellent recovery, particularly in our focal market, mid- and high-end cameras and lenses is expected to remain strong. In order to monetize those market opportunities, in July, Nikon launched a new mirrorless camera, Z fc, and we are pleased to say it is highly appreciated. In the second half this fiscal year, we plan to launch our mirrorless camera flagship model, Z9, and lenses for professionals and hobbyists. With strong demand coming from our customers, some of our products are running out in supply, so we intend to make further efforts to secure procurement of components, including semiconductors. With all these elements considered, we have revised up our revenue for the full year to JPY 170 billion, particularly taking into account the strong demand for professionals and hobbyists, as well as risk factors such as parts supply. Operating profit for Imaging Products Business full year forecast is now revised up to JPY 12 billion, up JPY 7 billion from the previous forecast. We are having a lower break-even point after having conducted impairment, disposal, and value depreciation and other structural reform conducted in the previous fiscal year. With the increasing ASP brought by the product mix, profitability of Imaging Products Business is improving, so we can expect to grow in profit. Some expenses originally expected to incur in the first half will be deferred to the second half of the fiscal year. With this, we do expect to book as much as JPY 10 billion out of the JPY 12 billion in the first half for the full year operating profit. Slide 16 shows Precision Equipment Business. Revenue is JPY 210 billion, up JPY 5 billion from the May forecast. In FPD, customers and CapEx is trending to recover in small and mid-size panels. CapEx for the large panels is moving firmly. Now the delayed installations caused by COVID-19 are moving rather smoothly. We expect to install 45 units in the current fiscal year as forecasted back in May, as shown in the left bottom. Most of the operating profit is expected to be booked in the first half because we have many large size panels business in the first half. As for the expected units for semiconductor lithography systems, the forecast we made back in May is unchanged, as shown in the left bottom. For both FPD and semiconductors, besides the lithography business, we are having a good business for services, particularly in the current fiscal year, backed up by the recent strong markets for digitalization and DX. The FPD and semiconductor lithography systems actually are growing quite good. We see a high level of utilization of the units we had installed at the customer sites. With this, there is going to be an increased demand for maintenance, replenishing of consumables and other services. With this in the background, we have revised up our full year revenue for Precision Equipment Business to JPY 5 billion. Operating profit is now revised to be JPY 19 billion, up JPY 2 billion from the previous forecast by reflecting the strong sales opportunities. As much as JPY 18 billion out of JPY 19 billion is expected to be booked in the first half of the fiscal year because we have a concentration of delivery of Gen 10.5 size panels in the first half. Please look at slide 17. For Healthcare Business, there are no changes from the previous forecast for both revenue and operating profit. Biological microscopes and retinal diagnostic imaging systems, both markets are now recovering. Commercial production in the contract for cell development and manufacturing is advancing. Several projects are now underway as planned in the so-called CDMOs. With these points in place, we expect the Healthcare Business to make a record in revenue. We forecast to generate the profit of JPY 1 billion in the current fiscal year. It is going to be the very first surplus on the full year basis since this business got started. Next slide shows the newly created Components Business. For Components Business as well, there are no changes from the May forecast, revenue being JPY 35 billion and operating profit being JPY 8 billion. On top of the highly profitable EUV-related Components Business, we are having a rather firm business in optical components for semiconductor-related equipment manufacturers, as well as encoders for Industrial Metrology. We do believe we can achieve JPY 8 billion fully. We forecast for the full year operating profit. The last slide for the financial numbers. This slide 19 shows Industrial Metrology and others. Others include production subsidiaries. We have not changed the full year revenue and operating profit since the last forecast we made. Industrial Metrology Business has its customers in electronic components, semiconductor, and automotive-related companies, and their CapEx is continuing to recover. We do expect to see further growth in revenue from our image metrology system, X-ray inspection systems, and non-contact 3D metrology, et cetera. For the entire segment, Industrial Metrology and others put together, we will aim at JPY 3 billion for the full year in operating profit. Next, I will explain our sustainability strategy. Our sustainability consists of two aspects. Firstly, to reduce global and environmental impact coming from our company's economic activities. Secondly, to make our aggressive contributions to the sustainable society through our core business activities. As for the first aspect, we have a long-term goal to achieve carbon neutral by 2050. Under this goal, we have specific initiatives to reduce our global warming gas emission from our plants and offices by more than 70% in FY 2030 while making a shift to renewable energy as much as 30% in our total power consumption. We have already started these specific actions. At the same time, Nikon does believe it is important for us to be engaged in activities to aim at sustainable societies through our core business activities. Nikon has three sets of ideas here. Innovate the process of manufacturing, contribute to a more comfortable society with imaging and sensing technologies, and contribute to people's health and quality of life. We have positioned them as our long-term growth domains. Here now we commit ourselves to delivering a set of values which are best fit with and unique to Nikon. To be more specific, in the Digital Manufacturing domain, where Nikon will aim at Monodzukuri innovations. In order for Nikon to contribute to the space industry with our unique optical processes, we acquired a U.S. company, Morf3D Inc., who specializes in contract processing of satellite parts. We like to leverage our optical processing machine to reduce resistance so that we can improve fuel efficiency and reduce CO2 in turbines, wind power generation, airplanes, et cetera. We actually signed a joint development agreement with Sharp Corporation to implement biomimetics technology such as shark skin, to implement outer units of air conditioners and other home appliances to imitate living organisms. To contribute to a more comfortable society with our imaging and sensing technology with 6G coming up, Nikon is now engaged in a joint validation research with SoftBank Corp. in the fields of optical telecommunications. We are also engaged in efforts which are already underway now for remote assurance system to be used in many sport competition events in collaboration with our U.K. subsidiary, MRMC. Furthermore, in the Healthcare Business domain, to contribute to better health, our subsidiary, Nikon CeLL innovation Co., Ltd., is now collaborating with a major Swiss biotechnology company, Lonza. They are developing and manufacturing new drugs for the regenerative medicine, the so-called CDMO operations. As you could see here, Nikon has its aspiration to solve social and environmental issues by leveraging our unique technologies. By contributing to realizing sustainable society, Nikon would like also to enjoy its own sustainable growth. This concludes my explanation. Here now I would like to summarize the first quarter. Though we were impacted by the COVID-19 in Q1 last year, but since then, our business performance has improved significantly. We were able to almost achieve our full year forecast officially announced just during the first quarter, namely JPY 20 billion in operating income and JPY 16 billion in profit attributable to owners of the parent. Looking at the segment by segment, thanks to the structural reform we conducted in the last fiscal year, as well as the market recovery, Imaging Products Business made a firm profit and our core business, Precision Equipment Business, also enjoyed a firm growth and our newly established Components Business made progress as we had planned. All in all, we were able to have a rather smooth start for our profit-making goals for all the segments. With these rather favorable situations in place, for the first quarter, we made upward revisions for operating profit being JPY 27 billion, profit attributable to owners of the parent being JPY 22 billion, respectively. Something unique to the current fiscal year, we do expect that for the entire company basis, we will have a concentration of profit booked in the first half because our focal segments, Imaging and Precision, tend to have profits being generated in the first half of the fiscal year. Lastly, Nikon has a strong aspiration to get away from the loss we made in the last fiscal year, and Nikon would like to move on to sustainable growth to come. We are here to actually meet with expectations coming from the shareholders, investors, and may I wish for your continued support and understanding here. Thank you indeed for your kind attention.
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