Epson announces First Quarter Financial Results as at June 30 2022

Summary

Q1 results (YoY)

• ¥297.8B in revenue (+¥15.7B), ¥22.6B in business profit (-¥1.5B),
• ¥26.6 in profit for the period (+¥9.1B)
• Results were negatively affected by supply constraints, which caused unit sales to decrease, and by skyrocketing materials and logistics costs, but they were positively affected by dynamic product pricing based on supply and demand. Profit for the period was also positively affected by the weakened yen.
• The internal plan on which the previous outlook (April 28) was based did not factor in the negative impact of the Shanghai lockdown (interruption of shipments outbound from our Shanghai warehouse), yet revenue was in line with the plan and business profit exceeded it by about ¥5B owing to dynamic pricing and cost control.

FY2022 full-year outlook (vs. previous 4/28 outlook)

• ¥1,360.0B in revenue (+¥40.0B) and ¥100.0B in business profit (unchanged),
• ¥74.0B in profit for the year (+¥7.0B)
• We factored in a lowered outlook for unit sales due to supply constraints and the negative effects of further increases in materials and logistics costs, but will implement dynamic pricing and cost control.
• We changed the foreign exchange rate assumptions for a weaker yen, affecting the revenue outlook by about +¥60B. We assume minor impact on business revenue, while profit for the year will receive positive effects.

Commercial & Industrial Printing

• Sales growth in the growth areas of the commercial and industrial IJP finished products business was limited due to supply constraints. Sales of photo ink in existing areas decreased compared to the same period last year, when there was special demand from North American customers. Results were affected by soaring materials and logistics costs and continued spending on growth.
• Revenue in the printhead sales business decreased due to shipment constraints

Printing Solutions

• With supply constrained due to semiconductor shortages and the Shanghai lockdown, we increased revenue by dynamically adjusting prices based on supply and demand, but profit declined due to soaring material and logistics costs, etc.

Office & Home Printing

• IJP unit sales decreased, but revenue increased due to dynamic pricing.
• Sales of ink bottles and ink for office shared IJPs increased.

Visual Communications

• Demand was strong, but unit sales decreased due to supply constraints.
• Revenue increased due to forex effects.
• Continued cost control measures.

Manufacturing-Related & Wearables

• Strong revenue and profit growth in microdevices, other.
  • Manufacturing solutions: Revenue was flat YoY amid robot supply constraints.
  • Wearable products: Both watch and movement revenue increased.
  • Microdevices, other: Strong demand continued.