Kenwood 2003 Annual Report Download - page 16

14 KENWOOD Corporation Annual Report 2003
Financial Review
In the fiscal year ended March 2003, the Japanese economy
displayed signs of a moderate recovery at the beginning, led by
strong demand overseas. However, the recovery pace
remained slow due to the prolonged deflation, and the sluggish
stock market also depressed the domestic economy. Although
consumer spending in the United States had been growing
rapidly, it began to lose steam, and the uncertainty over the
future outlook for the economy worsened amid mounting
tension over Iraq in the latter half of the fiscal year. In Europe,
the economy was far from a full-scale recovery track, as anxiety
over economic prospects rose affected by the Iraq war and
SARS. Under these circumstances, Kenwood announced the
Kenwood Revitalization Action Plan on July 11, 2002 under its
new management team, which was elected at a regular general
meeting of shareholders held in June 2002, in a bid to eliminate
negative net worth. Under this plan, the Company proceeded
with drastic restructuring measures and enhanced its financial
disposition. As a result, it could emerge from the adversity of
posting losses for the third straight year, and consolidated net
income hit a record high, achieving a "V-shaped" recovery.
Consolidated performance
Sales
In the fiscal year ended March 2003, sales of car electronics
products rose in Japan and Europe, which, however, was
decimated by the effects of the slow domestic economy, as
well as the phasing out of cellular phone production and the
home electronics operations in Asia. As a result, consolidated
net sales declined 25.5%, year on year, to 225.6 billion yen
from 302.6 billion yen in the previous fiscal year.
According to sales breakdown by region, domestic sales
were 74.7 billion yen (down 41.4% from the preceding fiscal
year), while overseas sales amounted to 150.9 billion yen (down
13.9%). Of the total, sales in Japan accounted for 33.1%
(42.1% in the previous fiscal year) and the remaining 66.9%
(57.9%) came from overseas.
By business, the audio-related businesses were affected by
the weak demand for home electronics products in the
domestic market and termination of the home electronics
operations in Asia. Meanwhile, sales of car electronics products
were brisk in Japan and Europe. As a result, sales totaled 164.6
billion yen (down 24.7% from the previous fiscal year). In the
communications-related businesses, sales of radio equipment
Net sales by business segment Operating income
Audio equipment Communications equipment
(Billions of yen)
0 10050 200 250150 300
2003
2002
2001
2000
1999
(Billions of yen)
01591263
2003
2002
2001
2000
1999