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Thank you. Good morning or good afternoon ladies and gentlemen and welcome to Canon’s conference call. Please refer to today’s slide and note that our financial comparisons made during my presentation will be on a year-on-year basis unless otherwise stated.
Please refer to slide two. This is today’s agenda.
Please turn to slide three. In the second quarters, we noticed spread in the global economic slowdown. In Europe, we saw economic stagnations. In the United States, we saw only gradual recoveries. And in emerging markets, factors driving the economic expansion seems to have weakened. As for exchange rate, although the trend of Yen appreciation remain, the levels of appreciation was significant against the Euro.
Despite business environment, which become increasingly more challenging since our earnings announcement in April, we steadily expanded our market shares for such core products as cameras and copiers posting our first increase in net sales in three quarters. At the same time, we maintained profitability by promptly responding to changes in the external environment through such measures as expense reductions. This allowed us to post our fourth consecutive increase in operating profit.
Please refer to this slide to summarize our second quarter result. We achieved an increase in net sales of 7.5% in yen terms, and an increase of 12.7% on a local currency basis. As for gross profit, while we fell short of the ratios we posted in the same period last year, we saw an improvement of 1.8 point on a sequential basis. Operating profit increased 18.1% thanks to a 2 point improvement in our expense to sales ratios made possible by effort to streamline expenses. As for the decrease in net income, this mainly reflect lower effective tax rate last year due to the earthquakes and other factors.