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Message from the Management
01
Brother Annual Report 2007
3-Year Business Strategy-CS B2008
First Year Review
Representative Director
& President
Toshikazu Koike
Fiscal 2007 Results of Operations
Brother is currently taking actions aimed at achieving the goals of "Global Vision 21," w hich defines the
kind of company we w ant to become after 10 years from April 2003. To reach these goals, we
established strategies for three periods of three years each. In the first phase, w hich ended in
March 2006, w e conducted a plan called "CS B2005" w ith the primary goal of sustaining strong earnings
while investing in technologies for the future. Regarding earnings, w e took steps to maximize
earnings from established businesses like communications and printing equipment. The objective was
to achieve a significant improvement in our financial soundness by making our operations consistently
profitable. Regarding future technologies, w e reinforced the development of basic technologies,
primarily involving printing, and invested in technologies that w ere needed to start new businesses.
"CS B2008," w hich started in April 2006, is the second phase. Driving grow th is the central goal.
Therefore, w e are positioning this three-year period as a time for making the large investments
required to sustain growth. The main objective is building a pow erful base of operations. One w ay is
by expanding our Printing & Solutions business to give this business an even greater competitive
edge. Other goals include making investments needed to drive growth during the third phase and
developing new businesses. To accomplish these goals, we are making large capital expenditures
and substantial investments in R&D programs.
During the first year of "CS B2008," which ended in M arch 2007, we achieved higher sales of
communications and printing equipment and machine tools in all geographic regions. Sales also
benefited from a weaker yen relative to the U.S. dollar and euro. The result was sales of ¥562,273
million. Earnings increased mainly because of higher sales of communications and printing
equipment and favorable exchange rates. Operating income rose to ¥51,255 million and ordinary
income increased to ¥45,479 million. Net income w as ¥28,875 million as ordinary income
increased and income taxes declined as a percentage of ordinary income because of asset
impairment charge recorded in the prior fiscal year.
Business Segment Performance
In the Printing & Solutions business, there were strong sales of laser and inkjet products, including
cartridges and other supplies, in all regions. Sales of electronic stationery products w ere strong
in the Americas and Europe. The result w as segment sales of ¥397,630 million. Operating income
was ¥37,427 million, as the contribution from higher sales of communications and printing
equipment offset grow th in selling, general and administrative expenses, w hich includes research
and development expenses.
In the Personal & Home business, a strong performance in the Americas resulted in segment sales
of ¥34,224 million. Due to the higher sale and an improvement in profitability caused partly by the
weaker yen, operating income was ¥2,465 million.
In the M achinery & Solution business, sales of industrial sew ing machines in Asia and Turkey
declined. But there were strong sales of machine tools, mainly in Asia. The result w as segment
sales of ¥63,024 million. Operating income w as ¥8,474 million because of higher sales of machine
tools and the benefit of a weaker yen.
In the Others segment, sales totaled ¥67,395 million because of the acquisition of a business in the
netw ork karaoke and content category. Operating income was ¥2,889 million because of low er
netw ork karaoke and content business earnings.
Net Sales
Fiscal years ended March 31
(¥ billion)
600
500
400
300
200
100
02006 20072005
579.2 562.3
438.5
Net Income
Fiscal years ended March 31
(¥ billion)
30
25
20
15
10
5
02006 20072005
20.4
24.6
28.9
Composition of Net Sales
by Business Segment
Fiscal year ended March 31, 2007
*FY2006 includes 3-month transition
period of some subsidiaries.
Printing & Solutions
Personal & Home
Machinery & Solution
Others
70.7%
6.1%
11.2%
12.0%