Konica Minolta 2009 Annual Report Download - page 19

17
Overview
W e posted solid gains in all segments of the Optics business in
the first half of the fiscal year, but performances deteriorated
from the second half owing to the global recession.
During the first half, we did well in display materials, an area
of particular focus, by increasing market share with new VA-TAC
films for large-size LCD televisions. Greater production capacity
also contributed to annual unit sales gains. On the downside, the
operating climate deteriorated from the third quarter because
LCD manufacturers slashed production. We responded to this
situation by provisionally freezing production capacity increases,
decreasing inventories, and lowering our breakeven point.
Sales of mainline optical pickup lenses were solid in the first
half of the fiscal year. This reflected the full-fledged diffusion of
Blu-ray format optical pickup lenses. The successful development
of this product ahead of our rivals has given us a dominating
market position. Demand for Blu-ray players plunged from the
third quarter, however, so unit sales of optical pickup lenses for
Blu-ray format were around the same as a year earlier. Further,
CD and DVD player optical pickup lens unit sales also dropped
significantly. Similarly, inventory adjustments by PC manufac-
turers from the fourth quarter resulted in hard disk substrate
unit sales volume remaining flat from the previous year.
Sales of microcamera modules for camera-equipped mobile
phones and digital camera lens units were generally sluggish.
This was because manufacturers cut production in the
third quarter.
Optics sales therefore declined 4.9% year on year, to
¥173.4 billion, and operating income fell 59.9%, to ¥12.5 billion,
reflecting lower unit sales and higher depreciation expenses
owing to Japanese tax law reforms.
Outlook
W hile we believe that demand for TAC films bottomed out in
the April–June term of FY March 2010, further inventory adjust-
ments are likely. It will take some time for demand to recover
completely for optical pickup lenses and glass hard disk
substrates. Our priorities for the year ahead will be to secure
sufficient earnings while the operating climate remains adverse.
We plan to do this by optimizing production sites, materials
purchasing, and inventory management, while focusing on
becoming more competitive in mainstay TAC
films and optical pickup lenses to maintain our
genre-top market positions.
An important challenge in pursuing
consistently solid growth over the
medium term will be to keep increasing
the digital appliance-related business
while expanding into other new areas.
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Net Sales
(Billions of Yen) (Billions of Yen)
16.0 17.6
21.0
31.3
12.5
17.4
15.9 15.1
17.1
7.2
Operating Income and
Operating Income Ratio
200720062005 2008 2009
91.7
110.4
139.0
182.3 173.4
200720062005 2008 2009
Operating income
Operating income ratio (%)
Glass hard disk
substrates
Lens unit for
camera-equipped
mobile phones
Optical pickup lenses
for Blu-ray format
TAC film, a key material
for LCD panels
T
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film, a ke
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materi
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for LCD panels
Optics