2020_1q_omron_e
30/38 Questioner(1)

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【ノート】
Thank you. My first question is about how to think about the forecasts. At the last results briefing, with regard to the buffer you had incorporated into the forecasts, I believe you stated that your forecasts represented a floor that must be achieved. However, if you simplistically back out the 9-month forecast and look at the implied OPM for IAB excluding the buffer, OMRON will need to achieve an OPM of over 17%. From the outside, given this math, it now appears that OMRON will now need to rely on the buffer to achieve its forecasts. Is that the right way to think about it? Also, you have indicated that you will provide an update at the Q2 results briefing, following a review of conditions. At that point should we expect that any updated plan will not include buffers and instead will directly reflect the earnings outlook of the businesses? (Nitto) First, with regard to the buffer, our view is that the change in the operating environment we are seeing now actually exceeds the scope of the buffer. Conditions are very tough. So, for OMRON, the question is how we can achieve what we have framed as levels that must be achieved, particularly for sales. This reflects our perception of the severity of the situation. That said, at the profit level, we would hope to achieve our profit forecasts even if we need to fully tap into the buffer. This is our current view. Obviously, we will review our forecasts in Q2. In terms of our update to investors, it is likely that the update will include a discussion of the buffer and what we propose to do. (Questioner 1) Thank you. My second question is about IAB. Domestic sales growth was particularly weak, falling 14% Y/Y. I believe this is the largest decline reported since the currency reverted to a weaker yen in 2012. Given that the domestic business accounts for a large portion of IAB sales, what I would like to know first of all is whether there was a significant change in conditions when you look at the June quarter by month? In the December 2018 quarter, you had indicated that the declines became progressively larger into December on a monthly basis. For the March quarter, you have said that the trend by month was flat from the end of December. My question is about the trend from April onward. If possible, could you talk about the domestic and overseas trends separately? (Nitto) What I can say is that conditions became increasingly challenging over the course of Q1. In particular, the declines were pronounced for the domestic business, and conditions were very tough. We saw many customers suddenly decide to shift planned investments into 2H, particularly in automotive and digital. This trend became increasingly clear by month. At this stage, frankly speaking, we do not have visibility into how this plays out. (Questioner 1) Understood. Thank you. Next, the person in the middle.