Kenwood 2005 Annual Report Download - page 6

Kenwood, which was established in 1946 in Nagano prefecture as a
company specializing in radio assembly and repair, produced an
advanced high-frequency coil by taking advantage of its location
surrounded by mountains, where radio waves were weak. The high-
frequency technology that was built at that time became the base for
the Company to develop FM tuners and amateur radios. Since then,
it has expanded its business domains steadily to include home-use
and car-mounted audio systems as well as commercial radio
equipments. Its business areas have also expanded into North
America, Europe, Asia, particularly China, East Europe, particularly
Russia, Latin America and the Middle East.
During the period when the Company was called TRIO Electronics,
Inc. (1960 - 1986), it developed as a full-scale audio manufacturer
with the launch of FM tuners that were evaluated as the world’s best,
followed by transistorizing audio products for the first time in the
industry. The Company leveraged its advanced technologies that it
had developed in home-use audio products to enter into the car
audio product and portable audio product markets in 1980 and
1982, respectively, establishing the foundation of its present concept
of sound entertainment.
In 1986, the Company was renamed as Kenwood Corporation,
and it proactively entered into new business fields such as car
navigation system and mobile phone businesses in line with the
development of digital, networking and IT technologies, while
expanding not only the audio product business but also the radio
equipment business as “Kenwood - sound and communications.”
After Japan’s bubble economy collapsed, its earnings slowed down
for a while. This was because of a severe business environment and
deteriorating profitability in the matured home electronics business,
in addition to new businesses which unexpectedly turned out to be
unsuccessful. As a result of implementing a bold program to
restructure its corporate structure after July 2002, however, it was
able to post a record-high consolidated net income in fiscal 2002,
achieving a “V”-shape recovery in net income.
In May 2003, the Company formulated the first mid-term business
plan “Excellent Kenwood Plan,” and focused on enhancing its
competitiveness and promoting a growth strategy. As a result,
record net incomes were seen for two consecutive years.
Simultaneously, the Company strived to implement the “New
Financial Strategy,” achieving a “resumption of dividend payment”
that was one of the objectives of the first mid-term business plan, as
well as setting a course for “implementing zero net-debt business
management” and “achieving a 20% return on equity (ROE).” In
addition, the Company completed the redemption of preferred
stocks in August 2005 to sweep away the past negative legacies,
thus accomplishing the radical reform of the financial base and
capital structure.
At present, the Company is implementing a growth strategy in the
businesses of car electronics, communications equipment and home
electronics under the new corporate vision – “Reaching out to
discover, inspire and enhance the enjoyment of life” by leveraging its
assets such as technical prowess, products planning capability, global
networks and the brand in order to accomplish the goals of the
second mid-term business plan “Value Creation Plan” that was
formulated in May 2005. As the sole manufacturer simultaneously
operating in the car electronics, communications equipment and
home electronics businesses, we will continue our utmost effort to
establish the business of “Mobile & Home Multimedia Systems” by
further combining audio and wireless radio technologies as our core
competence, and become the dominant company in the world.
“Reaching out to discover, inspire and enhance the enjoyment of life”
Aiming to become a Global Excellent Company with our core competencies
in audio and wireless radio communication technologies
Home Electronics Business
Car Electronics Business
Communications
Equipment Business
Car Electronics Consumer (Audio) Business
Car Multimedia (Consumer) Business
Car Electronics OEM Business
Corporate Profile
06 Outline of Kenwood