Kenwood 2003 Annual Report Download - page 17

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KENWOOD Corporation Annual Report 2003
fared well, but the withdrawal from the production of cell phone
terminals in the domestic market weighed on overall sales. As a
result, sales dropped to 61 billion yen (a decline of 27.5%).
Expenses and earnings
The cost to sales ratio improved from the previous year's
76.5% to 72% on a consolidated basis, due chiefly to a
dramatic rise in performance at the three core businesses: the
home electronics business moved effectively into the black;
earnings at the car electronics business sharply advanced; and
the wireless radio business performed well. The effects derived
from the improvements in business, and cost structures also
contributed to improving the ratio. Selling, general and
administrative expenses fell 21.7% to 50.9 billion yen. Against
the backdrop, group operating income approximately doubled
from the previous year's level to 12.3 billion yen.
Although the Company booked an evaluation loss from
investment securities and disposal of fixed assets in associated
with the consolidation of overseas production firms, it posted a
record net income of 4.2 billion yen, achieving a "V-shaped"
recovery in net balance, a turnaround from the third
consecutive year of large loss.
Performance by Business Segment
Audio Equipment
Sales of audio equipment in the fiscal year ended March 2003
dropped 24.7% from the previous fiscal year to 164.6 billion
yen, hurt by declining sales of home electronics products in
Japan and withdrawal from the business of such products in
Asia. However, the Company posted an operating income of
7.1 billion yen, an improvement of 9.1 billion yen in operating
balance, thanks to the effects of restructuring efforts by both
the home electronics and car electronics businesses, as well as
robust sales of car electronics products in Japan and Europe.
Home Electronics
In the fiscal year under review, sales of home electronics
products dropped to 41.9 billion yen or about half of their
previous level, and operating income dropped to negative 4.5
billion yen, affected largely by weakened sales in the domestic
market and the withdrawal from business in Asia. However,
effects of restructuring emerged in the latter half of the fiscal
year, and the business moved back into the black, excluding
temporary losses caused by the restructuring of operations
overseas.
Audio equipment sales Sales of Home Electronics Sales of Car Electronics
(Billions of yen)
0
2003
2002
2001
2000
1999
50 100 (Billions of yen)
0
2003
2002
2001
2000
1999
50 100
73.0%