Nikon | Investor Relations | Q&A of Financial Results for the Year Ended March 31, 2009

The following includes questions and answers at the conference for the financial results for the Year Ended March 31, 2009.

Precision Equipment Business

Q:What is the outlook for the market of IC steppers and scanners?: A:
The capital expenditure of IC steppers and scanners remains more or less stagnant. Orders are expected to make a recovery starting in the latter half of the year ending March 2010, but the forecast is extremely bleak as the size of the 2009 year market seems to drop to 30% of that for 2008 year.
Q:Can you provide us with information on immersion scanner development for "Double Patterning"?: A:
The NSR-S620 announced in November 2008 is a competitive unit providing both overlay accuracy for use of the "Double Patterning " technique and high throughput to fulfill customer requirements. The NSR-S620 not only features "Double Patterning" technique, but also supports single pattern exposure, providing superior COO (Cost of Ownership). We will begin collecting feedback from customers this summer, and intend to start shipping the product sometime within year.
Q:How are precision equipment business earnings?: A:
Due to market downsizing during the year ending March 2010, we expect a great drop in our sales units. For this reason, we are forecasting that sales will fail to break even, resulting in operation loss. We plan to implement structural reforms that will reduce fixed costs, such as reorganizing business locations both domestically and overseas, in the hope that sales will recover from the year ending March 2011 due to the influential contribution of the cutting-edge NSR-S620.

Q:What is the market of the digital cameras?: A:
Currently, inventory levels seem to differ between companies. Nikon completed its inventory adjustment at the end of March 2009 and began shipping favorably as scheduled in April. While the markets in Europe, North America and Japan have been maturing, newly-emerging regions such as Latin America, India and Russia are expected to bring increased demand. As such, we will continue to step up our efforts in these regions.
Q:How are imaging products business earnings?: A:
As a recovery in consumer spending and the improvement of an appreciating yen cannot be fully expected in the year ending March 2010, we believe that competition will continue to be fierce. While we plan to make improvements, such as reducing fixed costs, we expect a decline in both sales and profits compared with the previous fiscal year given under the circumstances. Even so, sales have exceeded expectation since April, but there are still several uncertain factors for the remaining business year, including the situation of the coming Christmas shopping season.

Q:Tell us about Nikon's structural reforms.: A:
We plan to reduce fixed costs by 25 billion yen in the year ending March 2010 and 15 billion yen next fiscal year by cutting labor costs, R&D expenditure and advertising expenses. Aside from this, we are expecting extraordinary expenses totaling 5 billion yen this fiscal year for the cost of reorganizing our domestic and overseas business locations. We are currently determining the details and plan to make an announcement when they are finalized.