Canon 2004 Annual Report Download - page 5

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R&D expenditures grew by ¥16.2 billion and SG& A
expenses increased by just 1.3% year on year. As the rate of
increase in these expenses was slower than that of net sales,
operating profit rose ¥89.4 billion, or 19.7%, to ¥543.8 billion
(US$5,229 million). While the appreciation of the yen and
more intense price competition were negative factors, we
overcame the effects of these through increases in unit
volume and other efforts, including production reform and
the timely launch of competitive new products. As a result,
income before income taxes and minority interests advanced
23.2%, to ¥552.1 billion (US$5,309 million), aided by a ¥14.6
billion improvement in other income. The effective tax rate
declined 1.2 percentage points, to 35.1%. Consequently, net
income was ¥343.3 billion (US$3,301 million), exceeding the
¥300 billion mark for the first time in the Company’s history.
Basic net income per share was ¥387.80 (US$3.73),
up ¥73.99 from the previous year. Reflecting its strong
financial position, Canon increased the annual dividend
by ¥15, to ¥65 (US$0.63).
Aiming to be No. 1 in All Our Main Businesses
To realize the management objectives set for Phase II of our
Excellent Global Corporation Plan, we aim to capture the
No. 1 position in each of our main business fields worldwide.
We have already claimed the top position in the markets for
copying machines, laser beam printers, digital cameras, and
mask aligners for large LCD panels. In inkjet printers, the
PIXMA brand (PIXUS brand in Japan) was successful globally
and returned Canon to the No. 1 position in the Japanese
market for the first time in eight years. We plan to further
strengthen our lineups of photo-quality color printers and
MFDs. In semiconductor production equipment, our early
launch of new, industry-leading products will strengthen
our competitive position in this field.
We are upgrading our R&D capabilities to make our main
businesses No. 1 in their respective categories and to create
new businesses. We will endeavor to strengthen our
concurrent product development structure, and shorten the
time required to create and bring new products to the market,
while reducing costs. The use of our 3D-CAD infrastructure
will allow us to strengthen our capability for simulation,
inspection, and measuring technologies significantly and
enable us to introduce “prototype-less” development that
eliminates the need for building physical prototypes.
Preparing for Future, Sustainable Growth
To cultivate future growth businesses, in October 2004,
we established a joint venture with Toshiba Corporation to
develop and manufacture surface-conduction electron-emitter
display (SED) panels with an eye on gaining a strong foothold
in this promising area. The joint venture is now preparing to
begin full-scale operations. Moreover, we will work to bolster
our infrastructure for the future through the establishment of
new facilities, such as a new state-of-the-art technology
research center, and a production engineering technology
center, whose activities will include plastic injection molds
technology development.
Canon has made concern for the environment one of
its top management priorities. One way we do this is to
develop products that are environment-friendly throughout
their life cycles, from development, production, sales, use,
to collection and recycling. Moreover, we readily disclose
our environmental information and actively participate in
environmental preservation activities.
We will continue to work to improve profitability through
implementing a wide range of policies. These will include
pursuing further improvements in our innovative production
systems, developing and introducing a cutting-edge
automated assembly system, and shortening lead times for
production as well as optimizing inventories through
improvements in our supply chain management systems.
We will also promote the manufacturing of key components
in-house and reform our procurement processes.
Through these activities, we will strive for further growth
and aim to increase Canon’s corporate value.
Fujio Mitarai
President and CEO
Canon Inc.