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- 00:50:13.3 Thank you for the presentation.
I would like to ask about the expected increase in expenses and the share buyback.
On slide 7, you show the impact of increases in SG&A and R&D spending. When you disclosed your full-year forecasts you indicated that R&D spend would be a drag of ¥8.3 billion and SG&A would be a drag of ¥8.5 billion versus OP. Relative to your full-year plan, should we assume that R&D spend for the full year will increase by around ¥8 billion? For SG&A, in spite of your full-year plan for a negative impact of ¥8.5 billion, you were able to offset about half of the Q1 negative impact as a result of restructuring. Will you be able to similarly offset about half of the expected full-year negative impact from SG&A or have you already fully factored in the benefits from restructuring, meaning that we should expect the full ¥8.5 billion drag on a full-year basis? Can you talk about what we should expect on expenses, relative to your initial full-year plan for increases? This is my first question.
- 00:51:11.0 (Oue) You should expect that fixed cost increases for the full year will be in line with our initial expectations. We are committed to acting on our investment plans, in line with the VG 2.0 medium-term management plan.
On restructuring, the impact of restructuring had not materialized yet in Q1 FY2016 but did have an impact 2H. Therefore, the offsetting impact of restructuring will drop out from Q3 onward. You should assume that any mitigating impact has already been factored in.
- 00:51:57.6 Thank you.
My second question is on the share buyback. Looking back at previous share buybacks, you have historically announced relatively short-dated buybacks at the end of 1H. However, this time, the buyback program will run for 12 months and you indicated that you would be buying from time to time over the course of the year, subject to various considerations. Is there a possibility that you might not fully execute on the amount you have set out? In the past, you had generally bought back the maximum amount. How should we think about the differences between previous buybacks and this time?
- 00:52:29.0 This time around we have stipulated a one-year period for the buyback. You could argue that a share buyback represents an investment in ourselves. From that standpoint, although I cannot disclose our assumptions about market levels, we will be taking into account a number of different factors including timing as we execute flexibly on the buybacks. However, speaking hypothetically, if the market were to respond strongly to our performance and drive up our share price significantly, from the standpoint of rewarding shareholders, we believe that continuing to buy back shares at elevated prices could be viewed as negative for shareholder value. As such, we will be monitoring the situation as we go along. We will do our best to execute fully, but there is a possibility that we might not do the full amount before the end of the 12-month period. This time around, we do not propose to execute fully regardless of the circumstances.
- 00:53:26.3 Thank you.
- 00:53:29.9 We are coming up on the allotted time. Two people have their hands up for questions so we will take questions from the person in the middle section first and then the person in the front left section.