2/33 ■Summary


These are the 3 key highlights for today's presentation. The first is the H1 FY2020 results. While the H1 operating environment was challenging throughout, we were able to beat the sales and operating profit forecasts announced as of Q1. We had expected Q2 to be the bottom for sales but Q2 sales exceeded our expectations. In addition, the GP margin improved Y/Y and we were able to reduce fixed costs in line with our plan. As a result, if we exclude the forex impact, profits improved Y/Y. By segment, both IAB and HCB were able to substantially exceed our assumptions, with IAB supported by Digital-related demand from China and South Korea, and HCB supported by COVID-related demand. Next is our FY2020 full-year forecasts. Based on our H1 results, we are revising up our full-year forecasts for sales and operating profit. We have raised our operating profit forecast from the previous ¥30 bn to ¥40 bn. While our view of the overall operating environment is cautious, the outlook for individual regions and industries is mixed. That said, we do expect capex conditions will continue to be tough. Elements of uncertainty remain given the resurgence of COVID-19 infections in Europe and increasingly fraught trade tensions between the US and China. However, conditions are improving in some regions and industries. This is the backdrop to our new forecasts. We will concentrate on capturing demand to drive sales growth. We will undertake additional growth investments we consider necessary for sales growth going forward, but will be rigorously selective in evaluating investments. We remain committed to executing on our plan to reduce fixed costs by ¥20 billion. Finally, I will discuss the progress we are making on our Zero Events initiative, HCB's growth strategy which looks toward a post-COVID-19 world.