Q: The operating income forecast in FY2016 is ¥30 billion, which means a decrease from FY2015 (¥34.1 billion in operating income), when structural reform was conducted. Please let us know the details of such forecast.
A: As positive factors, we expect a total gain of ¥28.5 billion, consisting of (i) ¥7 billion through the material cost reduction and an increase in selling price, etc., (ii) ¥20.7 billion through overhead cost reduction, which includes the ¥7.5 billion reduction in expenses related to human resources, including outsourcing expenses, and (iii) ¥0.8 billion through the increase of other income. As negative factors, we expect a total loss of ¥32.6 billion, consisting of ¥15.1 billion in negative foreign exchange impact affected by yen appreciation, and ¥17.5 billion in restructuring and structural reforms. By aggregating the gain and loss factors, we forecast that the operating income will decrease ¥4.1 billion year-on-year. The breakdown of ¥17.5 billion in restructuring and structural reforms is (i) the negative factor of the ¥11.5 billion total loss in “other income and expenses” described in the preceding QA and (ii) ¥6 billion in restructuring expenses in FY2016.