Business and Operating Risks from the Spread of COVID-19

「In addition, sales of medical cameras and monitors in the Medical segment performed well as the business recovered from the COVID-19 pandemic, and sales for the Industrial Systems segment as a whole significantly exceeded those of the same period of the previous year.」

「There have been no material changes to the assumptions regarding the impact of COVID-19 described in the previous consolidated fiscal year's securities report under Additional Information (Impact of COVID-19 on accounting estimates).」

「In the industrial systems business, sales in the security business to government agencies increased, but sales were approximately level with the same period of the previous year because of the postponement of delivery schedules for projects in the plant market due to the COVID-19 pandemic.」

「Overseas, sales in Asia and North America were below the level of the same period of the previous year because delays in capital investment plans associated with the renewed spread of variant infections became pronounced, while sales in Europe exceeded the level of the same period of the previous year.」

「In Asia, sales of medical cameras and monitors in China continued to grow from the previous fiscal year, mainly through OEM sales. However, sales revenue was slightly below the same period of the previous year because broadcast camera system sales in Southeast Asia remained sluggish, partly due to the resurgence of COVID-19 infections.」

「Meanwhile, the global economy remained subject to downside risks from the impact of COVID-19. The U.S. economy was steadily recovering despite severe conditions, while China was showing a gradual recovery trend; however, infections were resurging in India, and economic activity in Europe was being constrained by the resurgence of COVID-19 driven by new variants.」

「In the previous fiscal year's securities report, under Additional Information (Impact of COVID-19 on accounting estimates), the Company had assumed that although the impact of COVID-19 would continue for several months, economic activity would recover by the fiscal year-end. In light of the current renewed spread of COVID-19 in Japan and overseas, the assumption has been changed to assume that the impact will extend into the following consolidated fiscal year (the fiscal year ending March 2022).」

「During the second quarter of the fiscal year, overseas sales declined slightly in Europe, while sales in Asia increased, supported by firm OEM sales of medical cameras in the Chinese market. However, sales declined sharply in North America, particularly because the slowdown in economic activity caused by COVID-19 had a significant impact. As in the first quarter, customer capital investment did not proceed as planned in either the core broadcast or medical markets, and restrictions on sales activities themselves continued.」

「Net sales were ¥2,913 million, down 15.4% year on year (net sales in the same period of the previous year: ¥3,445 million). In the Industrial Systems segment, sales from the inspection equipment business exceeded those of the same period of the previous year. However, in the Medical segment, sales of medical cameras and monitors remained sluggish because investment in COVID-19 countermeasures was prioritised. In the Security segment, sales of surveillance camera systems also failed to grow as much as in the same period of the previous year, resulting in lower sales.」

「The spread of COVID-19, which originated in China in December 2019, has increased uncertainty surrounding economic conditions, and economic activity has slowed significantly. If the spread of the disease continues for an extended period, projects that had been planned may be postponed or reduced in scale, and new capital investment may be frozen.」