Financial Results for the First Quarter ended June 30, 2020 [IFRS](Consolidated)

July 31, 2020

Name of the listed company: SEIKO EPSON CORPORATION

Stock Listing: TOKYO

Code: 6724

URL: global.epson.com

Representative: Yasunori Ogawa, President

Inquiries: Tatsuaki Seki, Director, General Administrative Manager of the Management Control Tel: +81-266-52-3131

Scheduled date to file Quarterly Securities Report: August 4, 2020

Scheduled starting date of payment for the dividends:

Reference materials regarding financial results for the period: Yes

Briefing on quarterly financial results: Yes (for analysts)

(Amounts are rounded down to the nearest million yen)

1. Results of Three months ended June 30, 2020From April 1, 2020 to June 30, 2020

(1) Consolidated Operating Results

(%: Change from same period previous year)

Profit from

Profit

Profit for

Profit for the period

Revenue

Business profit

operating

attributable to owners of

before tax

the period

activities

the parent company

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Three months ended

193,217

22.6

4,366

3.2

2,054

40.1

1,154

59.7

(243)

(246)

June 30, 2020

Three months ended

249,627

4.2

4,511

69.2

3,429

74.6

2,865

80.0

248

97.8

249

97.8

June 30, 2019

Note: Total comprehensive income for the period: Three months ended June 30, 2020 ¥4,126

million (%)

Three months ended June 30, 2019 (¥6,950) million (%)

Business profit is calculated by subtracting Cost of sales and Selling, general and administrative expenses from Revenue.

Basic earnings

Diluted earnings

per share

per share

Yen

Yen

Three months ended June 30, 2020

(0.71)

(0.71)

Three months ended June 30, 2019

0.71

0.71

(2) Consolidated Financial Position

Total assets

Total equity

Equity attributable to owners

Equity attributable to owners

of the parent company

of the parent company ratio

Millions of yen

Millions of yen

Millions of yen

%

As of June 30, 2020

1,013,699

498,949

497,189

49.0

As of March 31, 2020

1,040,910

506,037

503,746

48.4

2. Cash Dividends

Cash dividends per share

1st Quarter

2nd Quarter

3rd Quarter

Year End

Year Total

Yen

Yen

Yen

Yen

Yen

Year ended March 31, 2020

31.00

31.00

62.00

Year ending March 31, 2021

Year ending March 31, 2021

31.00

31.00

62.00

Forecast

Note: Changes from the latest announced forecasts: None

3. Forecast for the Fiscal Year ending March 31, 2021 (From April 1, 2020 to March 31, 2021)

(%: Change from same period previous year)

Profit from

Profit

Profit for

Profit for the year

Basic earnings

Revenue

Business profit

operating

attributable to owners

activities

before tax

the period

of the parent company

per share

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Yen

For the year ending

930,000

10.9

20,000

51.1

16,000

59.5

14,000

64.7

1,000

87.2

1,000

87.1

2.89

March 31, 2021

Note: Changes from the latest announced forecasts: Yes

Notes

  1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting from changes in the scope of consolidation): None
  2. Changes in accounting policies, or changes in accounting estimates
  1. Changes in accounting policies required by IFRS: None
  2. Changes in accounting policies other than the changes above: None
  3. Changes in accounting estimates: None
  1. Number of shares outstanding
  1. Issued shares (including treasury shares):
  2. Treasury shares:
  3. Average number of shares:

(share)

As of June 30, 2020

399,634,778

As of March 31, 2020

399,634,778

As of June 30, 2020

53,679,051

As of March 31, 2020

53,703,521

Three months ended

345,944,841

Three months ended

350,871,422

June 30, 2020

June 30, 2019

This report is not reviewed by certified public accountants nor auditors.

Explanation of appropriate use of forecast and other special items

(Cautionary statement concerning forward-looking statements)

This report includes forward-looking statements that are based on management's view from the information available at the time of the announcement. These statements are subject to various risks and uncertainties. Actual results may be materially different from those discussed in the forward-looking statements. The factors that may affect Epson include, but are not limited to, general economic conditions, the ability of Epson to continue to timely introduce new products and services in markets, consumption trends, competition, technology trends, and exchange rate fluctuations.

Assumptions for the forecasts and warnings for users of the forecasts are available on page 4 "Qualitative Information Regarding the Consolidated Financial Outlook".

(How to access supplementary explanations and details of briefing on financial results)

The Company is scheduled to hold a briefing for analysts on financial results on Friday, July 31, 2020 and to post materials used at the briefing on the Company's website on that day.

U.S. dollar amounts are presented for the convenience of the readers. This translation should not be construed to imply that the yen amounts actually represent, or have been or could be converted into, equivalent amounts in U.S. dollars. The exchange rate of ¥107.705 = U.S.$1 at the end of the reporting period has been used for the purpose of presentation.

Operating Performance Highlights and Financial Condition

Overview of the Fiscal 2020 First Quarter (April 1 to June 30, 2020)

The global economy rapidly slowed during the first quarter of the year under review due to the worldwide coronavirus pandemic, which forced countries to go into lockdown, restrict travel, and otherwise limit economic activity. The economy is expected to begin to head toward a recovery from the current dire situation as countries gradually reopen their economies. However, the outlook remains clouded by extreme uncertainty because of the many risks that need to be anticipated, such as the coronavirus infection trend, government actions, and the impact on financial and capital markets. By region, emerging economies continue to face a difficult economic environment due to ongoing restrictions on economic activity in parts of India, Southeast Asia, and Latin America. In China, economic activity resumed at an early stage and there have been strong signs of recovery. However, the Chinese economy, which had continued to grow at a high rate, has fallen into a recession, and this is having a substantial negative impact on the world economy. In the advanced economies, restrictions are being gradually eased in Japan, the Americas, and Europe, and the once sharp decline has neared the bottom. However, we must keep a close eye on future trends.

The average exchange rates of the yen against the U.S. dollar and of the yen against the euro during the first quarter of the fiscal year were ¥107.54 and ¥118.39, respectively. This represents a 2% appreciation in the value of the yen against the dollar and a 4% appreciation in the value of the yen against the euro, year on year. The yen also rose against the currencies of some emerging countries, in places such as China and Latin America.

Given this environment, revenue was negative in every business segment. Epson recorded ¥193.2 billion in revenue for the period, a decline of 22.6% year on year. Revenue was positively affected mainly by increased demand for inkjet printers in advanced countries, where more people began to work from home as the coronavirus spread. However, revenue was hit hard by decreased demand in emerging markets where economic activity was restricted. Business profit was ¥4.3 billion, down 3.2% year on year. While the decrease in revenue had a significant negative impact on business profit, Epson limited the decline by immediately cutting costs across the Epson Group in reaction to the spread of the coronavirus. Profit from operating activities was ¥2.0 billion, down 40.1% year on year. Profit before tax was ¥1.1 billion, down 59.7% year on year. The loss for the period attributable to owners of the parent company was ¥0.2 billion, compared to a ¥0.2 billion profit in the same period last year.

A breakdown of the financial results in each reporting segment is provided below.

Printing Solutions Segment

Printer business revenue decreased. Office and home inkjet printer revenue decreased. Sales of high-capacity ink tank printers increased in North America, Western Europe, and China due to a rise in demand from the growing number of people who began working or learning from home during the pandemic. In India, Southeast Asia, and South America, on the other hand, sales plummeted mainly due to restrictions on economic activity and because manufacturing operations were temporarily reduced or shut down as the virus

1

spread, resulting in insufficient product supply. In addition to these negative effects, total office and home inkjet printer revenue also decreased as a result of negative foreign exchange effects. Consumables revenue increased because sales of ink cartridges for SOHO / Home printers increased due to a rise in printing demand from the growing number of people working or learning from home during the pandemic. Serial impact dot matrix printer revenue decreased due to negative foreign exchange effects and a decline in sales associated with market contraction.

Revenue in the professional printing business decreased. Commercial and industrial inkjet printer sales were dealt a heavy blow by the restrictions on economic activity, and a combination of decreased sales and negative foreign exchange effects resulted in lower revenue. POS system product revenue decreased. This was both a counterreaction to the extra demand generated last year by tax reforms in Italy and a result of demand that was weakened by the restrictions on economic activity due to the pandemic.

Other revenue decreased compared to the same period last year, when PC demand rose as users sought to upgrade their operating systems.

Segment profit in the printing solutions segment increased despite the decrease in revenue and negative foreign exchange effects, because sales of consumables increased and because spending was rigorously reviewed and sharply curtailed.

As a result of the foregoing factors, revenue in the printing solutions segment was ¥138.0 billion, down 15.4% year on year. Segment profit was ¥17.5 billion, up 28.4% year on year.

Visual Communications Segment

Visual communications revenue decreased due to a variety of factors, including the restrictions placed on economic activity around the world to slow the spread of the coronavirus; the postponement or cancellation of events; school closures; the continued shrinkage of the projector market due to the incursion of flat panel displays that began last year; and negative foreign exchange effects.

Epson is being rigorously selective about spending projects and has sharply cut costs in the visual communications segment. Nevertheless, segment profit decreased on lower revenue and negative foreign exchange effects.

As a result of the foregoing factors, revenue in the visual communications segment was ¥23.5 billion, down 52.1% year on year. Segment loss was ¥2.7 billion, compared to a segment profit of ¥4.3 billion in the same period last year.

Wearable & Industrial Products Segment

Revenue in the wearable products business decreased on a decline in watch unit shipments. This decline was primarily due to the global pandemic, which caused dealers and distributors around the world to voluntarily close and limited economic activity, a sharp decrease in demand from visitors to Japan, and flagging economic conditions, which caused consumer demand to cool. Sales of watch movements also plunged due to a slack overall watch market.

Robotics solutions revenue increased despite a weakened appetite for capital expenditure in the European automotive industry. The increase was fueled largely by a contract win in China that boosted sales.

2

In the microdevices business, crystal device revenue decreased chiefly due to the pandemic, which caused demand for devices used in smartphone and automotive applications to decrease and which caused manufacturing operations to temporarily stop, leading to a supply shortage of some parts. Semiconductor revenue also decreased due to a deceleration of the automotive industry. Revenue in the microdevices business as a whole decreased due to a decline in semiconductor sales for automotive applications and negative foreign exchange effects.

Segment profit in the wearable and industrial products segment was muted by the effects of lower revenue in the wearable products business yet still increased owing to spending controls and spending cuts.

As a result of the foregoing factors, revenue in the wearable and industrial products segment was ¥31.8 billion, down 16.5% year on year. Segment profit was ¥0.6 billion compared to a ¥1.0 billion segment loss in the same period last year.

Other

Other revenue amounted to ¥0.1 billion, down 21.2% year on year. Segment loss was ¥0.2 billion, equaling the ¥0.2 billion segment loss of the same period last year.

Adjustments

Adjustments to the total profit of reporting segments amounted to negative ¥10.9 billion. (Adjustments in the same period last year were negative ¥12.3 billion.) The main components of the adjustment were basic technology research and development expenses that do not correspond to the reporting segments and expenses associated with things such as new businesses and corporate functions.

Liquidity and Financial Position

Assets, Liabilities, and Equity

Total assets at the end of the first quarter were ¥1,013.6 billion, a decrease of ¥27.2 billion from the previous fiscal year end. In addition to a ¥15.6 billion decrease in cash and cash equivalents resulting largely from the payment of dividends, trade and other receivables decreased by ¥28.6 billion. On the other hand, inventories increased by ¥21.8 billion.

Total liabilities were ¥514.7 billion, down ¥20.1 billion compared to the end of the last fiscal year. This decrease was mainly due to a ¥7.4 billion decrease in trade and other payables and a ¥12.9 billion decrease in other current liabilities.

The equity attributable to owners of the parent company totaled ¥497.1 billion, a ¥6.5 billion decrease compared to the previous fiscal year end. Although retained earnings increased due to a ¥5.3 billion remeasurement of the defined benefit plan, the decrease was mainly due to the recording of a ¥0.2 billion loss for the period attributable to owners of the parent company and to ¥10.7 billion in dividend payments.

Cash Flows

Net cash from operating activities during the quarter totaled ¥11.8 billion. The total for the year-ago period was ¥13.9 billion. Epson recorded a ¥0.2 billion loss for the period. Net cash was negatively affected by a ¥21.3 billion increase in inventories and the recording of ¥17.1 billion in other. However, net cash was

3

positively affected by the recording of ¥17.6 billion in depreciation and amortization and a ¥25.7 billion decrease in notes and accounts receivable-trade.

Net cash used in investing activities totaled ¥17.3 billion (compared to ¥17.6 billion in the same period last year), mainly because Epson used ¥16.0 billion in the acquisition of property, plant, equipment and purchase of intangible assets.

Net cash used in financing activities totaled ¥10.1 billion (compared to ¥9.3 billion in the same period last year), chiefly due to ¥10.7 billion in dividends paid.

As a result of the foregoing, the balance of cash and cash equivalents at the end of the first quarter totaled ¥180.6 billion compared to ¥158.9 billion in the same period last year.

Qualitative Information Regarding the Consolidated Financial Outlook

The global economy is in a precarious state due to the pandemic, but it should head toward a recovery as economic activity gradually resumes.

Epson did not earlier provide a full-year consolidated financial outlook for the fiscal year ending March 31, 2021, as it was not possible to reasonably calculate the impact of the coronavirus pandemic on our business activities. However, we recently put together an outlook based on forecasts and information that are currently available.

First-half revenue is expected to decrease compared to the same period last year. In the printer business, we expect home use to fuel continued growth in sales of home and office inkjet printers and consumables in developed markets in places such as North America and Western Europe. However, the pandemic is likely to cause product supply delays and weaken demand and sales. Second half revenue will be slightly below the same period in the previous year. Although we expect to benefit from the launch of strategic products, we expect to feel the lingering effects of the pandemic in certain regions.

We are forecasting a year-on-year decrease in every profit category from business profit on down. Given the current challenging business environment, we will slash expenses and spend on priorities throughout the year. Nevertheless, the reduced revenue resulting from the effects of the pandemic will impact profit.

The figures in the outlook are based on assumed exchange rates from the second quarter of 105.00 yen to the U.S. dollar and 118.00 yen to the euro.

Consolidated Full-Year Financial Outlook

FY2019

Previous Outlook (A)

Current Outlook (B)

Revenue

¥1,043.6 billion

-

¥930.0 billion

Business profit

¥40.8 billion

-

¥20.0 billion

Profit from operating activities

¥39.4 billion

-

¥16.0 billion

Profit before tax

¥39.7 billion

-

¥14.0 billion

Profit for the period

¥7.8 billion

-

¥1.0 billion

Profit for the year attributable to

¥7.7 billion

-

¥1.0 billion

owners of the parent company

Exchange rates

1 USD = ¥108.74

-

1 USD = ¥106.00

1 EUR = ¥120.85

-

1 EUR = ¥118.00

4

Quarterly Condensed Consolidated Statement of Financial Position

Millions of yen

Thousands of

U.S. dollars

March 31,

June 30,

June 30,

2020

2020

2020

Assets

Current assets

Cash and cash equivalents

196,262

180,601

1,676,811

Trade and other receivables

157,782

129,172

1,199,312

Inventories

233,434

255,294

2,370,307

Income tax receivables

5,217

4,257

39,524

Other financial assets

3,159

2,090

19,404

Other current assets

13,989

16,157

150,011

Total current assets

609,846

587,574

5,455,401

Non-current assets

Property, plant and equipment

360,517

351,994

3,268,130

Intangible assets

29,052

27,820

258,298

Investment property

1,043

1,112

10,324

Investments accounted for using the equity

1,512

1,500

13,926

method

Net defined benefit assets

33

30

278

Other financial assets

16,959

17,833

165,572

Other non-current assets

1,871

2,761

25,634

Deferred tax assets

20,072

23,073

214,224

Total non-current assets

431,064

426,125

3,956,408

Total assets

1,040,910

1,013,699

9,411,810

5

Millions of yen

Thousands of

U.S. dollars

March 31,

June 30,

June 30,

2020

2020

2020

Liabilities and equity

Liabilities

Current liabilities

Trade and other payables

125,069

117,637

1,092,214

Income tax payables

3,286

4,389

40,750

Bonds issued, borrowings and lease liabilities

22,320

25,748

239,060

Other financial liabilities

363

1,419

13,174

Provisions

11,406

11,496

106,735

Other current liabilities

109,827

96,870

899,401

Total current liabilities

272,274

257,561

2,391,356

Non-current liabilities

Bonds issued, borrowings and lease liabilities

187,362

186,183

1,728,638

Other financial liabilities

1,877

2,123

19,711

Net defined benefit liabilities

52,964

49,106

455,930

Provisions

7,585

7,150

66,385

Other non-current liabilities

11,814

11,448

106,290

Deferred tax liabilities

993

1,175

10,909

Total non-current liabilities

262,598

257,187

2,387,883

Total liabilities

534,873

514,749

4,779,248

Equity

Share capital

53,204

53,204

493,978

Capital surplus

84,434

84,423

783,835

Treasury shares

(40,953)

(40,912)

(379,852)

Other components of equity

37,451

36,444

338,368

Retained earnings

369,609

364,029

3,379,870

Equity attributable to owners of the parent

503,746

497,189

4,616,210

company

Non-controlling interests

2,290

1,760

16,340

Total equity

506,037

498,949

4,632,551

Total liabilities and equity

1,040,910

1,013,699

9,411,810

6

Quarterly Condensed Consolidated Statement of Comprehensive Income

Three months ended June 30, 2019 and 2020:

Thousands of

Millions of yen

U.S. dollars

Three months ended

Three months ended

June 30,

June 30,

2019

2020

2020

Revenue

249,627

193,217

1,793,946

Cost of sales

(164,894)

(126,596)

(1,175,395)

Gross profit

84,733

66,620

618,541

Selling, general and administrative expenses

(80,221)

(62,253)

(577,995)

Other operating income

728

898

8,337

Other operating expense

(1,811)

(3,211)

(29,812)

Profit from operating activities

3,429

2,054

19,070

Finance income

714

496

4,605

Finance costs

(1,284)

(1,432)

(13,295)

Share of profit of investments accounted for using the

5

36

334

equity method

Profit before tax

2,865

1,154

10,714

Income taxes

(2,616)

(1,398)

(12,979)

Profit (loss) for the period

248

(243)

(2,256)

Profit (loss) for the period attributable to:

Owners of the parent company

249

(246)

(2,284)

Non-controlling interests

(0)

2

18

Profit (loss) for the period

248

(243)

(2,256)

7

Other comprehensive income

Items that will not be reclassified subsequently to profit or loss, net of tax

Remeasurement of net defined benefit liabilities (assets) Net gain (loss) on revaluation of financial assets measured at FVTOCI (Note)

Subtotal

Items that may be reclassified subsequently to profit or loss, net of tax

Exchange differences on translation of foreign operations

Net changes in fair value of cash flow hedges

Share of other comprehensive income of investments accounted for using the equity method

Subtotal

Total other comprehensive income, net of tax

Total comprehensive income for the period

Total comprehensive income for the period attributable to:

Owners of the parent company Non-controlling interests

Total comprehensive income for the period

(Note) FVTOCI: Fair Value Through Other Comprehensive Income

Earnings per share for the period:

Basic earnings (loss) per share for the period

Diluted earnings (loss) per share for the period

Thousands of

Millions of yen

U.S. dollars

Three months ended

Three months ended

June 30,

June 30,

2019

2020

2020

1,603

5,390

50,044

(285)

443

4,113

1,317

5,833

54,157

(8,810)

201

1,866

316

(1,661)

(15,421)

(22)

(2)

(18)

(8,517)

(1,463)

(13,583)

(7,199)

4,370

40,573

(6,950)

4,126

38,308

(6,846)

4,137

38,410

(104)

(10)

(92)

(6,950)

4,126

38,308

Yen

U.S. dollars

Three months ended

Three months ended

June 30,

June 30,

2019

2020

2020

0.71

(0.71)

(0.01)

0.71

(0.71)

(0.01)

8

Quarterly Condensed Consolidated Statement of Changes in Equity

Three months ended June 30, 2019 and 2020:

Millions of yen

Equity attributable to owners of the parent company

Other components of equity

Total equity

Non-controlling

Net gain (loss) on

Exchange

Total equity

Retained

attributable to

Share capital

Capital surplus

Treasury shares

Remeasurement of

revaluation of

Net changes in fair

Total other

interests

differences on

earnings

owners of the

net defined benefit

financial assets

value of cash flow

components of

translation of

parent company

liabilities (assets)

measured at

hedges

equity

foreign operations

FVTOCI (Note)

As of April 1, 2019

53,204

84,427

(30,788)

-

2,234

48,069

136

50,440

382,897

540,181

2,565

542,747

Cumulative effects of change in

-

-

-

-

-

-

-

-

(847)

(847)

-

(847)

accounting policy

As of April 1, 2019 (restated)

53,204

84,427

(30,788)

-

2,234

48,069

136

50,440

382,049

539,333

2,565

541,899

Profit (loss) for the period

-

-

-

-

-

-

-

-

249

249

(0)

248

Other comprehensive income

-

-

-

1,603

(285)

(8,729)

316

(7,095)

-

(7,095)

(104)

(7,199)

Total comprehensive income for the period

-

-

-

1,603

(285)

(8,729)

316

(7,095)

249

(6,846)

(104)

(6,950)

Acquisition of treasury shares

-

-

(5,879)

-

-

-

-

-

-

(5,879)

-

(5,879)

Dividends

-

-

-

-

-

-

-

-

(10,919)

(10,919)

(188)

(11,108)

Share-based payment transactions

-

2

4

-

-

-

-

-

-

7

-

7

Transfer from other components of equity to

-

-

-

(1,603)

-

-

-

(1,603)

1,603

-

-

-

retained earnings

Total transactions with the owners

-

2

(5,874)

(1,603)

-

-

-

(1,603)

(9,315)

(16,791)

(188)

(16,980)

As of June 30, 2019

53,204

84,430

(36,663)

-

1,949

39,340

452

41,742

372,983

515,696

2,272

517,969

(Note) FVTOCI: Fair Value Through Other Comprehensive Income

9

Millions of yen

Equity attributable to owners of the parent company

Other components of equity

Net gain (loss) on

Share capital

Capital surplus

Treasury shares

Remeasurement of

revaluation of

net defined benefit

financial assets

liabilities (assets)

measured at

FVTOCI (Note)

Exchange differences on translation of foreign operations

Net changes in fair

Total other

value of cash flow

components of

hedges

equity

Total equity

Non-controlling

Retained

attributable to

Total equity

interests

earnings

owners of the

parent company

As of April 1, 2020

53,204

84,434

(40,953)

-

1,729

35,144

577

37,451

369,609

503,746

2,290

506,037

Profit (loss) for the period

-

-

-

-

-

-

-

-

(246)

(246)

2

(243)

Other comprehensive income

-

-

-

5,390

443

211

(1,661)

4,383

-

4,383

(12)

4,370

Total comprehensive income for the period

-

-

-

5,390

443

211

(1,661)

4,383

(246)

4,137

(10)

4,126

Acquisition of treasury shares

-

-

(0)

-

-

-

-

-

-

(0)

-

(0)

Dividends

-

-

-

-

-

-

-

-

(10,723)

(10,723)

(519)

(11,243)

Share-based payment transactions

-

(11)

40

-

-

-

-

-

-

29

-

29

Transfer from other components of equity to

-

-

-

(5,390)

-

-

-

(5,390)

5,390

-

-

-

retained earnings

Total transactions with the owners

-

(11)

40

(5,390)

-

-

-

(5,390)

(5,333)

(10,694)

(519)

(11,214)

As of June 30, 2020

53,204

84,423

(40,912)

-

2,172

35,355

(1,083)

36,444

364,029

497,189

1,760

498,949

(Note) FVTOCI: Fair Value Through Other Comprehensive Income

Thousands of U.S. dollars

Equity attributable to owners of the parent company

Other components of equity

Net gain (loss) on

Share capital

Capital surplus

Treasury shares

Remeasurement of

revaluation of

net defined benefit

financial assets

liabilities (assets)

measured at

FVTOCI (Note)

Exchange differences on translation of foreign operations

Net changes in fair

Total other

value of cash flow

components of

hedges

equity

Total equity

Non-controlling

Retained

attributable to

Total equity

interests

earnings

owners of the

parent company

As of April 1, 2020

493,978

783,937

(380,233)

-

16,053

326,298

5,357

347,718

3,431,679

4,677,090

21,261

4,698,361

Profit (loss) for the period

-

-

-

-

-

-

-

-

(2,284)

(2,284)

18

(2,256)

Other comprehensive income

-

-

-

50,044

4,113

1,959

(15,421)

40,694

-

40,694

(111)

40,573

Total comprehensive income for the period

-

-

-

50,044

4,113

1,959

(15,421)

40,694

(2,284)

38,410

(92)

38,308

Acquisition of treasury shares

-

-

(0)

-

-

-

-

-

-

(0)

-

(0)

Dividends

-

-

-

-

-

-

-

-

(99,558)

(99,558)

(4,818)

(104,386)

Share-based payment transactions

-

(102)

371

-

-

-

-

-

-

269

-

269

Transfer from other components of equity to

-

-

-

(50,044)

-

-

-

(50,044)

50,044

-

-

-

retained earnings

Total transactions with the owners

-

(102)

371

(50,044)

-

-

-

(50,044)

(49,514)

(99,289)

(4,818)

(104,117)

As of June 30, 2020

493,978

783,835

(379,852)

-

20,166

328,257

(10,055)

338,368

3,379,870

4,616,210

16,340

4,632,551

10

Quarterly Condensed Consolidated Statement of Cash Flows

Three months ended June 30, 2019 and 2020:

Millions of yen

Thousands of

U.S. dollars

Three months ended

Three months ended

June 30,

June 30,

2019

2020

2020

Cash flows from operating activities

Profit (loss) for the period

248

(243)

(2,256)

Depreciation and amortisation

16,410

17,678

164,133

Impairment loss (reversal of impairment loss)

198

328

3,045

Finance (income) costs

569

936

8,690

Share of (profit) loss of investments accounted for using the equity

(5)

(36)

(334)

method

Loss (gain) on sale and disposal of property, plant and equipment,

226

115

1,067

intangible assets and investment property

Income taxes

2,616

1,398

12,979

Decrease (increase) in trade receivables

12,072

25,770

239,264

Decrease (increase) in inventories

(11,295)

(21,385)

(198,551)

Increase (decrease) in trade payables

7,983

4,898

45,476

Increase (decrease) in net defined benefit liabilities

874

1,166

10,825

Other

(12,715)

(17,126)

(159,008)

Subtotal

17,185

13,500

125,342

Interest and dividends income received

757

474

4,400

Interest expenses paid

(292)

(251)

(2,330)

Income taxes paid

(3,709)

(1,837)

(17,055)

Net cash from (used in) operating activities

13,940

11,885

110,347

Cash flows from investing activities

Purchase of property, plant and equipment

(16,589)

(14,906)

(138,396)

Proceeds from sale of property, plant and equipment

410

164

1,522

Purchase of intangible assets

(1,246)

(1,193)

(11,076)

Proceeds from sale of intangible assets

0

15

139

Other

(207)

(1,428)

(13,258)

Net cash from (used in) investing activities

(17,633)

(17,348)

(161,069)

Cash flows from financing activities

Net increase (decrease) in current borrowings

(6,380)

3,302

30,657

Proceeds from non-current borrowings

29,948

-

-

Redemption of bonds issued

(10,000)

-

-

Payment of lease liabilities

(1,829)

(2,196)

(20,389)

Dividends paid

(10,919)

(10,723)

(99,558)

Dividends paid to non-controlling interests

(188)

(519)

(4,818)

Purchase of treasury shares

(5,879)

(0)

(0)

Decrease (increase) in deposits for purchase of treasury shares

(4,141)

-

-

Net cash from (used in) financing activities

(9,389)

(10,137)

(94,118)

Effect of exchange rate changes on cash and cash equivalents

(3,246)

(43)

(399)

Net increase (decrease) in cash and cash equivalents

(16,329)

(15,644)

(145,248)

Cash and cash equivalents at beginning of period

175,238

196,245

1,822,060

Cash and cash equivalents at end of period

158,909

180,601

1,676,811

11

Notes to Consolidated Financial Statements

1. Note for Going Concern Assumption

Not applicable.

2. Contingencies

Material litigation

In general, litigation has uncertainties and it is difficult to make a reliable estimate of financial effect of the possibility of an outflow of resources embodying economic benefits.

Provisions are not recognised when either an outflow of resources embodying economic benefits is not probable or an estimate of financial effect is not practicable.

Epson had the following material action.

The civil action on copyright fee of ink-jet printers

In June 2010, Epson Europe B.V. ("EEB"), a consolidated subsidiary of the Company, brought a civil suit against La SCRL Reprobel ("Reprobel"), a Belgium-based group that collects copyright royalties, seeking restitution for copyright royalties for multifunction printers. After that, Reprobel also brought a civil suit against EEB. As a result, these two lawsuits were adjoined. EEB's claims were rejected at the first trial, but EEB, dissatisfied with the decision, intends to appeal.

3. Subsequent Events

Issuance of straight bonds by the Company

In accordance with a comprehensive resolution on the issuance of unsecured straight bonds at the board of directors meeting held on June 3, 2020, the Company issued the bonds on July 16, 2020 as follows.

The 20th Series unsecured

The 21st Series unsecured

The 22nd Series unsecured

Name of bonds

straight bonds issued (with

straight bonds issued (with

straight bonds issued (with

issued

inter-bond pari passu clause)

inter-bond pari passu clause)

inter-bond pari passu clause)

(Green bond)

(Green bond)

(Green bond)

Amount of

¥10 billion

¥40 billion

¥20 billion

bonds issued

$92,846 thousand

$371,384 thousand

$185,692 thousand

Issue price

¥100 per value of ¥100

Interest rate

0.020%

0.230%

0.450%

Collateral

Non

Non

Non

Maturity date

July 14, 2023

July 16, 2025

July 16, 2030

The following projects that are eligible to Green Bond Framework:

(1)

Cost of new building construction at the Hirooka Office (Building 9)

(2)

Cost of new building construction at the Hirooka Office (Innovation Center Building B)

(3)

Cost of expansion of factory of a manufacturing subsidiary in the Philippines

(4)

Cost of R&D activities and production equipment for high-speed linehead inkjet

Purpose of

multifunction printers for offices

funding

(5) Cost of R&D activities and production equipment for commercial and industrial printers

(6)

Cost of R&D activities and production equipment for inkjet printers and for applying

inkjet printheads

(7)

Cost of R&D activities and production equipment for applying PaperLab and Dry Fiber

Technology

(8)

Cost of purchasing electricity generated from renewable energy sources

12

4. Additional Information

Impacts of the coronavirus pandemic on accounting estimates

There are no significant changes from the previous consolidated fiscal year in accounting estimates and assumptions about the impacts of the coronavirus pandemic applied for assessing the recoverability of deferred tax assets and impairment tests of non-financial assets, and so on.

13

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Seiko Epson Corporation published this content on 31 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 July 2020 06:05:15 UTC