Konica Minolta 2009 Annual Report Download

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Strong Growth
Innovation 2009
Konica Minolta Holdings, Inc.
Annual Report
for

Table of contents

  • Page 1
    Innovation for Strong Growth Konica Minolta Holdings, Inc. Annual Report 2009

  • Page 2
    ... Advantages Konica Minolta has built its superior competitiveness around three prime advantages. The first is management capability in effectively utilizing management resources based on the selection and concentration policy. The second is its ability to forecast trends in cutting-edge technologies...

  • Page 3
    ...Minolta formed a business alliance with Océ N.V. (Océ), which has unique and innovative technologies in the production printing field. We also acquired leading dealers in the North American region like Danka Office Imaging Company (DOIC), which offers an extensive region-wide MFP sales and support...

  • Page 4
    ...-driving technologies to improve the image quality and usability and to accelerate processing of equipment and systems in the information, medical, industrial, and sensing fields. Our imaging technologies in MFPs have enabled us to slash power consumption in fixing processes. Optical pickup lenses...

  • Page 5
    ... ectrod trod rode e Glass plate Pol Po olar arizing plate e VA-TAC films s used in n large-size LCD televisio ons Marketing Power Genre-Top Strategy W e pursue a genre-top strategy, in which we carefully and rationally determine areas of growth through a process of selection and concentration...

  • Page 6
    ... has annual sales of nearly ¥950 billion, conducts business operations in approximately 40 nations worldwide and has about 37,000 employees. Based on an underlying management principle of "New Value Creation" and driven by the corporate message of "the essentials of imaging" , the Konica Minolta...

  • Page 7
    ... Company â- Achieving Strong, Sustainable Growth â- Becoming Essential to Society New Leader President and CEO Masatoshi Matsuzaki 18 Medical and Graphic Imaging X-ray image processing systems, X-ray film, contrast media for diagnostic purposes, digital color proofing systems 8 Interview...

  • Page 8
    ... our new management structure, I shared a new vision with all Group employees of making Konica Minolta sufficiently robust to achieve strong, ongoing growth while becoming essential for world society. We formulated MANAGEMENT POLICY , covering April 2009 through March 2011, as the first...

  • Page 9
    ... Minolta. I dedicate myself entirely to grasping the essence of the issues facing us, strategically and boldly addressing them to decisively increase Konica Minolta's value. Stay with us as we tackle the challenges of change in the year ahead. June 23, 2009 Masatoshi Matsuzaki President and CEO...

  • Page 10
    ..., particularly in color MFP and production printing fields in our Business Technologies business. The strong performers in the Optics business were VA-TAC films for large-size LCD televisions, optical pickup lenses for Blu-ray format, and glass hard disk substrates. Optics business generated record...

  • Page 11
    ... will build on our genre-top strategy to reinforce existing businesses and establish an unassailable market position. In office MFPs, we will bolster our product capabilities by introducing more color models and will strengthen marketing and costcompetitiveness. We should thus maintain our top group...

  • Page 12
    ... and color management from our own printing operations to provide easy-to-use, unique solutions to our customers. In optical devices, we will integrate core optics, image processing, and sensing technologies, expand their applications, and enter markets other than information appliances. Thirdly...

  • Page 13
    ... majority are non-executive directors, including the Board's chair. Independence is a key attribute in candidate directors, and we require that none of these people have significant business ties with our organization. We have a holding company structure, and by formulating a setup that can respond...

  • Page 14
    .... Execute Structural Reforms Achieve Strong Growth Reform the Corporate Culture Strong 2011 2012 2014 2016 Develop new businesses Environment and energy, health and security, and safety printing, optical devices Expand existing businesses Emphasis on production printing 2009 2010 Achieve...

  • Page 15
    ... Review unprofitable businesses and shift resources to key businesses In printer business, focus on MFP-based A4 color models In lens unit business, concentrate on standard modules In graphic art film business, cease film production and sales Growth Innovation Revitalize business processes...

  • Page 16
    ... positions in digital color printing Expand into new areas other than information appliances Integrate core optics, image processing, sensing, and other technologies and broaden applications other than information appliance areas Develop new businesses Environment and energy Health, security, and...

  • Page 17
    ...) 700 658.7 623.7 606.7 701.0 140 Sales Composition (FY March 2009) Medical and Graphic Imaging 13.3% Operating Income by Segment Business Technologies Business Technologies 600 564.8 120 623.7 500 Business Technologies 65.8% 52.6 100 90.1 80.0 Optics 18.3% 400 Sensing 0.9% Others 1.7% 80...

  • Page 18
    ... proprietary High Chroma Toner. We augmented our lineup of the high-speed monochrome models with three models resulting from our alliance with Océ. These systems can output 160 to 250 double-sided pages per minute. In the laser printer segment, we focused on raising sales for general offices, where...

  • Page 19
    ...e s. An important challenge in n pursuing growth over consistently solid id gro g r wth ov ver the medium term will be e to keep increasing appliance-related the digital appliance-re rela late t d business while expanding into o other new areas. Lens unit for camera-equipped mobile phones Glass hard...

  • Page 20
    ... solid track record in radiographic image processing technologies to develop high-definition digital X-ray image reading equipment as the core of computed radiography systems we supply to hospitals and clinics. During the fiscal year, we focused on expanding sales of the compact REGIUS Model 110 and...

  • Page 21
    ... color, and 3D measurement systems. In Europe and the United States, at the same time, we reviewed our sales structures and bolstered profitability. We strove to expand sales in each mainstay fields, launching the Spectroradiometer CS-2000, the Spectrophotometer CM-700d/600d, and the KONICA MINOLTA...

  • Page 22
    ... executives and makes important management decisions, candidates should ideally have track records in corporate management. General Meeting of Shareholders Konica Minolta Holdings, Inc. (Holding Company) Business Companies and Common Function Companies Board of Directors President and CEO...

  • Page 23
    ...Such efforts will equip Konica Minolta to maintain a highly transparent corporate governance structure and thereby enhance corporate value and shareholder value. * All of the Group's business companies, common function companies, and their subsidiaries have adopted the corporate auditor system. 21

  • Page 24
    ... 80% 0 March 2006 March 2016 2050 Intellectual Property W e have accumulated a number of outstanding core technologies over the years in the materials, optical, nano-fabrication, and imaging fields. We employ these capabilities to supply innovative imaging products and services. We combine our...

  • Page 25
    Financial Section Consolidated Financial Review Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Changes in Net Assets Consolidated Statements of Cash Flows Notes to the Consolidated Financial Statements Independent Auditors' Report 24 28 30 31 32 33 45 23

  • Page 26
    ... to the Japanese Corporate Tax Law, we changed the useful lives of machinery and equipment, 0 2007 2008 2009 Business Technologies Optics Medical and Graphic Imaging Sensing Holdings, Others 2007 2008 2009 SG&A Expenses SG&A Expenses Ratio (%) which increased cost of sales by ¥6.6 billion. For...

  • Page 27
    ... and Graphic Imaging business's sales of investments in affiliated companies and transfer of business, and a significantly lower loss on impairment of fixed assets. On the negative side, patent-related income declined, the write-down of investment securities increased owing to the stock market...

  • Page 28
    ....1 2007 2008 2009 2007 2008 2009 This stemmed from the sales decline and increased depreciation expenses owing to Japanese tax law reforms. These factors outweighed more intense efforts to restructure and optimize our domestic plants and reduce fixed costs. Medical and Graphic Imaging Debt...

  • Page 29
    ... and other subsidiaries by ¥21.2 billion, against which we generated ¥7.8 billion in proceeds from the Medical and Graphic Imaging business's sales of investments in consolidated subsidiary and transfer of business. Free cash flow was thus ¥17.4 billion, down ¥28.8 billion. Net cash provided by...

  • Page 30
    ... (5,608) 557,110 $ 2009 872,982 1,749,313 138,430 488,649 1,314,873 257,823 168,289 198,137 (48,346) 5,140,171 Property, Plant and Equipment (Note 13): Buildings and structures Machinery and equipment Tools and furniture Land Lease assets Construction in progress Rental business-use assets Total...

  • Page 31
    ...-1,200,000,000 shares in 2009 and 2008 Issued-531,664,337 shares in 2009 and 2008 Capital surplus Retained earnings Less: Treasury stock, at cost; Common stock, 1,370,709 shares in 2009 and 1,055,317 shares in 2008 Unrealized gains on securities, net of taxes Unrealized losses on hedging derivatives...

  • Page 32
    ...Gain on sales of investments in affiliated companies, net (Note 17) Loss on impairment of fixed assets (Note 13) Gain on discontinued operations (Note 14) Equity in net income (losses) of unconsolidated subsidiaries and affiliates Patent-related income (Note 15) Gain on transfer of business (Note 17...

  • Page 33
    ...Changes in Net Assets Konica Minolta Holdings, Inc. and Consolidated Subsidiaries For the fiscal years ended March 31, 2009 and 2008 Millions of yen Shares of issued common stock Unrealized Unrealized losses on Foreign gains on hedging currency Share securities, derivatives, translation subscription...

  • Page 34
    ..., plant and equipment Loss (gain) on sale and write-down of investment securities Loss (gain) on sale and write-down of investments in affiliated companies Patent-related income Reversal of reserve for discontinued operations Legal-related expenses Environmental expenses Additional retirement...

  • Page 35
    ... exchange rates. Pursuant to an amendment to the Japanese Corporate Tax Law (Ordinance No. 32 of the Ministry of Finance Japan (April 30, 2008)), effective from the year ended March 31, 2009, the Company and its domestic consolidated subsidiaries changed the useful lives of machinery and equipment...

  • Page 36
    ...", originally issued by the Business Accounting Deliberation Council on June 17, 1993 and the Japanese Institute of Certified Public Accountants on January 18, 1994, respectively, and both revised by the ASBJ on March 30, 2007. Consequently, lease assets are recognized as a normal sales transaction...

  • Page 37
    ... the year ended March 31, 2009, the Company and its consolidated subsidiaries recognize service expense as cost of sales, following a change in accounting policy. As a result of this change, gross profit decreased ¥28,126 million ($286,328 thousand) when compared to the previous method. (p) Loss on...

  • Page 38
    ... ¥18,479 ¥23,399 ¥ 4,919 (2) Other Securities Sold during the Year Ended March 31, 2008 Sale value Millions of yen Total profit Total loss Class of stock Issue price of shares (Yen) Initial conversion prices (Yen/per share) Total issue price (Millions of yen) Ratio of granted rights (%) Period...

  • Page 39
    ... Thousands of U.S. dollars March 31 2009 Deferred tax assets: Net operating tax loss carried forward ¥ 31,953 ¥ 27,061 $ 325,288 Accrued retirement benefits 29,824 26,973 303,614 Elimination of unrealized intercompany profits 9,064 20,131 92,273 Reserve for discontinued operations 6,025 9,565 61...

  • Page 40
    ... manufacturing facilities in the Optics business, worsening of the market environment in the Medical and Graphic business, etc., and the decline in real estate value, poor performance and profitability of rental and idle assets. 38 18. Business Structure Improvement Expenses The business structure...

  • Page 41
    ... of yen March 31 2009 2008 Thousands of U.S. dollars March 31 2009 Purchase cost: Buildings and structures Machinery and equipment Tools and furniture Rental business-use assets Intangible fixed assets Less: Accumulated depreciation Loss on impairment of leased assets Net book value ¥ 7,459...

  • Page 42
    ... have defined benefit retirement plans that include corporate defined benefit pensions plans, tax-qualified pension plans and lump-sum payment plans and the Companies have also defined contibutory pension plans. The Companies may pay additional retirement benefits to employees at their discretion...

  • Page 43
    ... 2. Derivative instruments for which hedge accounting is applied are excluded from the above table. (2) Interest Rate-Related Derivatives 2009 Contract value (notional principal amount) Fair market value Millions of yen March 31 2008 Unrealized gain (loss) Contract value (notional principal amount...

  • Page 44
    ... Business segment information of the Companies for the years ended March 31, 2009 and 2008 is presented as follows: Business segment Related business segment products Business Technologies: Optics: Medical and Graphic Imaging: Sensing: Other: MFPs, printers and others Optical devices, electronics...

  • Page 45
    ... Japan (April 30, 2008)), effective from the year ended March 31, 2009, the Company and its domestic consolidated subsidiaries changed the useful lives of machinery and equipment. As a result of this change, the Business Technologies figures, the Optics figures, the Medical and Graphic Imaging...

  • Page 46
    ... Canada Europe ...Germany, France and U.K. Asia and Other ...Australia, China and Singapore 2. "Overseas sales" is the Company and consolidated subsidiary sales in countries or regions outside of Japan. 27. Net Income per Share Calculations of net income per share for the years ended March 31, 2009...

  • Page 47
    ... financial position of Konica Minolta Holdings, Inc. and subsidiaries as of March 31, 2009 and 2008, and the consolidated results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in Japan. The U.S. dollar amounts...

  • Page 48
    ...(HK) Ltd. Konica Minolta Business Solutions (M) Sdn. Bhd. Konica Minolta Business Solutions (S) Pte. Ltd. Hungary Italy Lithuania Netherlands Norway Poland Portugal Portugal Romania Russia Serbia Slovakia Slovenia Spain Sweden U.K. U.K. U.K. Ukraine Australia Australia China China China China China...

  • Page 49
    ... Minolta Medical & Graphic Imaging Europe GmbH Konica Minolta Medical & Graphic Imaging Europe B.V. Konica Minolta Medical Systems Russia Konica Minolta Medical & Graphic (SHANGHAI) Co., Ltd. Japan Japan Japan Japan Japan Japan U.S.A. U.S.A. Germany Netherlands Russia China Japan Japan U.S.A. Japan...

  • Page 50
    ... Shoei Yamana In charge of Corporate Strategy, Investor Relations, and Administrative Innovation Chairman of Risk Management Committee Hideki Okamura Executive Director, Konica Minolta Business Technologies, Inc. President, Konica Minolta Business Solutions Europe GmbH Tel: (81) 3-6250-2011 Fax...

  • Page 51
    ... that they hold shares of Konica Minolta as set forth below, the Company is unable to confirm the exact number of shares held at period end. For this reason only the top 10 shareholders as per the shareholders' register have been listed. Companies submitting significant shareholder reports Reporting...

  • Page 52
    Konica Minolta Holdings, Inc. 1-6-1 Marunouchi, Chiyoda-ku, Tokyo 100-0005, Japan Tel (81) 3-6250-2100 Fax (81) 3-3218-1368 http://konicaminolta.com Printed with ink made from aroma-free soy bean oil. Printed in Japan