【テロップ】
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【ノート】
Next is the segment breakdown of Q1 FY2019 operating profit.
IAB profits were sharply lower on sales declines. However, despite the fall in sales, the GP margin improved 1.8%-pts Y/Y, the result of solid sales of solutions packages leveraging the innovative-Automation concept, as well as internal efforts, such as selling price measures and reductions to variable costs. We believe that our ability to generate profits is improving.
EMC profits fell substantially on a decline in external sales and the impact of inventory adjustments in the highly profitable IAB business (internal sales). Structurally, the ratio of fixed manufacturing costs at EMC is high, so a decline at the topline tends to depress operating income. This is why we were reorganizing the production footprint and implementing structural reforms at EMC last year. We hope to reap the benefits of these initiatives in the near future.