Results and forecast of expense : SG&A expenses in Q1 were almost the same as the same period in FY2019 while the sales increased by 6 billion. Is it the results of cost control efforts, or simply due to limitation effect by from COVID-19? Can we expect this expense level to continue?

Personnel expenses increased. However, selling activity expenses including business trips, advertising, and exhibitions did not in Q1. We expect the SG&A expenses to increase along with the sales increase in the following quarters. However, we believe the expense ratio to sales will be lower than the level in pre-COVID-19, at somewhere in the middle of pre-COVID-19 and this Q1.

Strength of demand: I hear from other companies that they are receiving many orders including imaginary demand. How about your company?

In our case, the brisk sales are supported by real demand thanks to strong market conditions. The portion of imaginary demand would be quite limited, if any.

Full year forecast : Given the strong Q1 performance, why you leave full year plan unchanged? Should we assume that the outlook is deteriorating due to growing uncertainties?

Although there are some uncertain factors, we may revise it, if necessary when we announce our 1H financial results at the end of October.

Concerns: Could you explain the impacts of the semiconductor shortages and the rising logistics costs in Q1?

We could manage well to minimize the negative impact through taking various measures in Q1. However, we think it will be inevitable to incur some impacts in Q2 onward.

Analysis of changes in OP YoY breakdown: Do you expect any changes in positive/negative factors for the full year?

We assume there will be certain negative impacts from rising material and logistics costs. However, OP YoY breakdown remains unchanged this time as we do not change the full year plan.

Risk factors: Among various risk factors such as semiconductor shortages and rising material costs, do you recognize anything particular to Topcon?

We don’t recognize any special factors only for Topcon.

Changes in seasonality of sales and profits: I understand that quarterly sales and profits fluctuate every year. Does this strong figure in Q1 indicate any change in the seasonality?

Q1 results were definitely strong. However, we don’t think that the seasonality has changed.

Strength of demand : The statistical data and/or market sentiment for construction and agriculture market are not included in the presentation material this time. Has the demand outlook changed from the last presentation in May?

We reckon the market trend has not changed at all and expect favorable conditions to continue.

Sales trend : Sales growth appears to be small compared to Positioning/Smart Infrastructure. How do you see it?

The sales increased more than 10% even compared to two years ago, and we think the business is growing steadily.

Business in China : Are there any concerns in 2H?

We expect uptrend will continue, basically. However, there are some uncertainties.

Acquisition of VISIA: Could you explain the impact of VISIA acquisition on the bottom line?

We do not disclose the specific figures related to this acquisition. Although the company is profitable, the impact on overall earnings would be minimal due to the amortization.