Konica Minolta 2006 Annual Report Download - page 33

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Capital Expenditure, Depreciation and Amortization
Capital expenditure increased ¥11.1 billion year-on-year
to ¥67.6 billion
Business Technologies-related capital expenditure was
¥28.8 billion and included the construction of an equip-
ment assembly plant in Wuxi, China, construction of
a new polymerized toner plant and purchases of dies for
new products. Optics-related capital expenditures were
¥21.8 billion and included the expansion of the manufac-
turing line for the Group’s third TAC film plant. Medical
and Graphic Imaging-related expenditure was ¥6.7 bil-
lion and included the acquisition of American Litho Inc.,
a major U.S. plate manufacturer, as part of efforts for an
early expansion in the plate business. In Photo Imaging,
capital expenditure declined 59.6% year-on-year to ¥3.0
billion reflecting the decision to exit the business.
Cash Flows
Net cash provided by operating activities in the fiscal year
was ¥78.9 billion. While the loss before income taxes and
minority interests was ¥35.9 billion, cash was provided by
recorded losses of ¥96.6 billion related to the decision to
exit the Photo Imaging business, depreciation expenses,
impairment losses and amortization of consolidation
goodwill that did not involve the use of cash.
Net cash used in investing activities was ¥43.1 billion,
largely as the result of purchases of property, plant and
equipment. Property, plant and equipment expenditures
included investment in dies mainly for new products,
and production capacity expansion for the assembly of
business technology equipment, polymerized toner,
aspherical plastic object lenses for optical disks and
LCD-use TAC film.
Net cash used in financing activities was ¥16.9 billion,
mainly reflecting efforts to further reduce interest-bearing
debt, centering on the redemption of corporate bonds.
Future Financial Strategies
In making a new start, the Group has created a new
medium-term management plan called FORWARD08 that
covers the three fiscal years beginning from April 2006
and is aimed at winning the global competition and
achieving sustainable growth. FORWARD08 sets the future
direction for the Group’s businesses, clarifies priority
issues, and through its unfailing execution, the Group aims
to provide for the expanding value of new businesses
and a maximization of the Group’s corporate value.
The financial strategies in order to achieve this place
first priority on increasing sales as a means of creating
cash, and includes the reduction of interest-bearing debt
which was ¥236.6 billion at the end of the fiscal year
under review to less than ¥200 billion. On the other
hand, short-term debt has been shifted to long-term debt
as a countermeasure for rising interest rates, and in order
to provide for proactive investment in growth areas,
while the Group also plans to increase its shareholders’
equity ratio which has temporarily declined as a result of
losses recorded because of the decision to exit the Photo
Imaging business.
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Total Assets (left scale)
Shareholders’ Equity (left scale)
Return on Equity (right scale)
Total Assets,
Shareholders’ Equity and
Return on Equity (ROE)
(Billions of Yen, %)
0
250
500
750
1,000
–20
–10
0
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20
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20
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80
Capital Expenditure
(Billions of Yen)