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Seiko Epson Annual Report 2006
36
Management’s Discussion and Analysis of Financial Condition
and Results of Operations
Analysis of Operating Results
Net Sales
Consolidated net sales increased ¥69,818 million, or 4.7%, to ¥1,549,568 million. This growth
was mainly attributable to an increase of ¥44,356 million, or 9.2%, in sales in the electronic
devices segment, and an increase of ¥30,414 million, or 3.2%, in sales in the information-related
equipment segment.
Sales for each business segment were as follows:
In the information-related equipment segment, sales were up ¥30,414 million, or 3.2%, to ¥976,443
million. Results by product category were as follows:
LCD projectors, though impacted by falling prices, saw steady growth in sales volume among
business-use customers. Laser printers, including related supplies (the same applies to various printers
mentioned below), mirrored this result, with sales volume up despite steadily declining prices. Sales
of inkjet printers, meanwhile, rose on the back of a lower yen versus other major currencies and
growth in multifunction printer volumes. This growth came in spite of declines in prices and single-
function printer volumes.
In the electronic devices segment, sales increased ¥44,356 million, or 9.2%, to ¥526,967 million.
Results by product category were as follows:
Prices for color STN-LCDs and MD-TFD LCDs for mobile phones fell in the face of intensifying
competition. In addition to falling prices, sales volumes were also lower for high-temperature polysilicon
(HTPS) TFT-LCD panels for LCD projectors in line with lower demand. Sales of system LSIs and LCD
driver ICs, meanwhile, were affected by both lower sales volumes and falling prices accompanying
increased competition. Elsewhere, sales benefited from the full-year contribution of SANYO EPSON
IMAGING DEVICES CORPORATION, where operations began in October 2004. This had the effect
of lifting sales volumes for both amorphous silicon TFT LCDs and low-temperature polysilicon TFT
LCDs. Similarly, while prices for quartz crystal devices were lower overall, sales volumes nonetheless
rose in step with Epson’s business integration with Toyo Communication Equipment Co., Ltd.
In the precision products segment, sales increased ¥4,635 million, or 5.7%, to ¥85,778 million.
Increased demand for IC handlers accompanying a firm semiconductor market, as well as higher
sales volumes for plastic corrective lenses, were the main factors behind this increase.
In the other segment, sales decreased ¥1,533 million, or 4.4%, to ¥32,977 million.
Net Sales by Business Segments
Millions of yen, except percentages
Year ended March 31
2004 2005 2006
Information-related equipment ¥ 920,380 62.5% ¥ 946,029 61.3% ¥ 976,443 60.2%
Electronic devices 441,153 30.0 482,611 31.2 526,967 32.5
Precision products 81,102 5.5 81,143 5.3 85,778 5.3
Other 29,457 2.0 34,510 2.2 32,977 2.0
Total 1,472,092 100.0% 1,544,293 100.0% 1,622,165 100.0%
(Eliminations and corporate) (58,849) (64,543) (72,597)
Total net sales ¥1,413,243 ¥1,479,750 ¥1,549,568