- TOKYO, Japan, March 15, 2012 -
Seiko Epson Corporation ("Epson," TSE: 6724) today unveiled its new three-year SE15 Mid-Range Business Plan (FY2012-14). The new plan follows SE15 Mid-Range Business Plan (FY2009-11) as the second-half of Epson's strategic plan.
Epson has been proceeding in line with SE15 (FY2009-11). This three-year business plan is the first half of a plan designed to achieve the goals Epson set forth in March 2009, in the SE15 Long-Range Corporate Vision, a strategic vision of how the company wants to be in the 2015 fiscal year.
In the past three years the global economy climbed back from the economic crisis triggered by the Lehman collapse before falling back under the weight of events such as the European sovereign debt crisis. In 2011, moreover, the business environment was thrust into further upheaval by the skyrocketing yen and a series of natural disasters, including the devastating earthquake and tsunami in Japan and flooding in Thailand.
Epson's financial performance was significantly impacted by these environmental changes, yet the company still managed to gain traction for growth. This traction is being provided by steady progress in accomplishing the core strategies set forth in SE15 (FY2009-11), which were to expand business domains and product lines and to reduce total costs to dramatically improve the company's cost structure.
The new mid-range business plan, SE15 (FY2012-14), is designed to enable Epson to achieve the goals stated in the SE15 Long-Range Corporate Vision, regardless of environmental conditions. Given the results achieved during the past three years under SE15 (FY2009-11), Epson will stay the course and accelerate the execution of strategies.
Epson is seeing the strategies pursued under SE15 (FY2009-11) yield results. Under SE15 (FY2012-14), therefore, the company will accelerate and expand the execution of these strategies. The key to these strategies is Micro Piezo inkjet print head technology. Epson will thus further extend the advantages of this technology (including broad ink and media compatibility and outstanding durability, speed, and accuracy) and deploy it in a broad range of printing segments and revolutionize processes.
Epson will accelerate and expand the strategies pursued under SE15 (FY2009-11), as these strategies have steadily been yielding results. The keys to the strategies are micro-displays, typified by Epson's high-temperature polysilicon TFT liquid crystal panels, and optical technologies. By refining these technologies Epson will increase its competitiveness, and further expand its market share.
Under SE15 (FY2009-11) Epson, faced with a difficult operating environment, including a strong yen and declining demand, realigned and rightsized its devices and precision products operations by revamping the cost structure and streamlining operations. Under SE15 (FY2012-14) Epson will leverage the unique strengths of its long-fostered QMEMS and semiconductor technologies to create strong products that offer attractive customer value, thereby shoring up the foundation of the business while expanding the customer base.
Difficult business conditions are expected to continue due to ongoing concerns about the direction of the global economy, the strong yen, and other factors. Nevertheless, in fiscal 2014 Epson aims to restore net sales to the one-trillion mark and reach ¥70 billion in operating income and 7% ROS by executing the plans in SE15 (FY2012-14) and increasing sales revenue, primarily in the information-related equipment business. Moreover, as shown by the SE15 plan, the company seeks to record 10% ROS and 10% or greater ROE on a continuous basis, assuming net sales growth, in fiscal 2015.
(Unit: billion yen, except where otherwise stated)
|Assumed exchange rate (yen)
Epson will allocate the bulk of capital expenditure to projects in the information-related equipment segment, particularly printing and projection, both of which promise opportunities for expansion and new growth. This will total 140 billion yen over three years.
Epson seeks to generate a cumulative total of ¥80 billion in free cash flows over three years, mainly via efficient investment and a stronger financial structure based on operating income growth.
Epson's policy for shareholder dividends is to reward investors with stable dividends, so for the medium to long-term, the company will look to consistently achieve a consolidated dividend payout ratio of 30%.
|Capital expenditure||¥140 billion|
|Free cash flows||¥80 billion|
|Shareholder dividends||Objective is to consistently achieve a consolidated
dividend payout ratio of 30% over the medium to long-term
Epson is a global imaging and innovation leader that is dedicated to exceeding the vision of customers worldwide through its compact, energy-saving, high-precision technologies, with a product line-up ranging from printers and 3LCD projectors for enterprise and the home, to sensors and other microdevices.
Led by the Japan-based Seiko Epson Corporation, the Epson Group comprises more than 78,000 employees in 99 companies around the world, and is proud of its ongoing contributions to the global environment and the communities in which it operates.