Konica Minolta 2010 Annual Report Download

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TIME FOR ACTION
ANNUAL REPORT 2010

Table of contents

  • Page 1
    TIME FOR ACTION ANNUAL REPORT 2010

  • Page 2
    ...about 36,000 employees, delivering an array of products and services to customers across the globe. Based on an underlying management principle of "New Value Creation" and driven by the corporate message of "the essentials of imaging," the Konica Minolta Group aims through its business activities to...

  • Page 3
    ... BUSINESS TECHNOLOGIES OPTICS 20 REVIEW OF OPERATIONS 21 REVIEW OF OPERATIONS 22 CORPORATE GOVERNANCE 24 CSR MEDICAL AND GRAPHIC IMAGING SENSING CSR REPORT 25 INTELLECTUAL PROPERTY 26 BOARD OF DIRECTORS AND EXECUTIVE OFFICERS 27 FINANCIAL SECTION 52 THE KONICA MINOLTA GROUP 54 INVESTOR...

  • Page 4
    02 KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 CONSOLIDATED FINANCIAL HIGHLIGHTS Konica Minolta Holdings, Inc. and Consolidated Subsidiaries For the fiscal years ended March 31 2006 2007 2008 2009 Millions of yen 2010 Thousands of U.S. dollars 2010 Results of Operations Net sales ......

  • Page 5
    KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 03 NET SALES (Billions of yen) 1,068.3 1,071.5 947.8 804.4 OPERATING INCOME AND OPERATING INCOME RATIO (Billions of yen, %) 119.6 104.0 83.4 7.8 11.2 NET INCOME (LOSS) (Billions of yen) 72.5 1,027.6 68.8 10.1 15.1 56.2 5.9 43.9 5.5 (54.3) 16...

  • Page 6
    04 KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 AT A GLANCE NET SALES COMPOSITION BY SEGMENT 1.9% 0.9% 13.0% 17.0% FY March 2010 67.2% n Business Technologies n Optics n Medical and Graphic Imaging n Sensing n Others NET SALES (Billions of yen) 1,068.3 1,027.6 1,071.5 947.8 804.4 ...

  • Page 7
    ...14.3 12.5 10.5 7.2 15.1 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 MEDICAL AND GRAPHIC IMAGING MAIN PRODUCTS Digital x-ray image reader Mammography unit Diagnostic imaging workstation Digital color-proofing systems On-demand printing systems NET SALES (Billions of yen) OPERATING...

  • Page 8
    06 KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 TO OUR SHAREHOLDERS VISION SHIFTING TO AN AGGRESSIVE STRATEGY TO DRIVE TOWARDS FUTURE GROWTH

  • Page 9
    KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 07 The operating environment in FY March 2010, the fiscal year ended March 31, 2010, got off to a turbulent start. The global economy showed few signs of returning to the levels of strength seen prior to the financial crisis that struck in the fall ...

  • Page 10
    08 KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 INTERVIEW WITH THE PRESIDENT TIME FOR ACTION MANAGEMENT POLICY The Konica Minolta Group, has formulated and enacted MANAGEMENT POLICY in its quest to become a robust company capable of achieving strong, sustainable growth, and ...

  • Page 11
    KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 09 EXPAND SCOPE OF EXISTING BUSINESSES Create new value in production printing and optical devices PRODUCTION PRINTING Expand Scope in Medium and Heavy Production Printing and in Commercial Printing n FOSTER NEW BUSINESSES Create new businesses ...

  • Page 12
    ... areas such as color models in office multi-functional peripherals (MFPs) and production printing in the Business Technologies business, as well as in display materials and optical pickup lens-related fields in the Optics Business. At the same time, we are leveraging our advantages in these fields...

  • Page 13
    KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 11 QUESTION HOW DID KONICA MINOLTA PERFORM IN THE FISCAL YEAR ENDED MARCH 2010, AS THE INITIAL YEAR OF MANAGEMENT POLICY ? ANSWER WE EXCEEDED OUR PLAN WITH RESPECT TO STRUCTURAL REFORM, AND SAW A RECOVERY IN GROUP OPERATING RESULTS BEGIN TO ...

  • Page 14
    12 KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 QUESTION WHAT INITIATIVES ARE PLANNED IN FY MARCH 2011 FOR THE SECOND YEAR OF MANAGEMENT POLICY ? ANSWER THE YEAR IS A TURNING POINT FOR PUTTING KONICA MINOLTA ON TRACK FOR GROWTH, AS WE SHIFT TO A MORE AGGRESSIVE STRATEGY. The operating ...

  • Page 15
    KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 13 QUESTION CAN YOU ELABORATE ON PROMOTING SALES GROWTH AND EXPANDING THE SCOPE OF EXISTING BUSINESSES? ANSWER WE WILL STRENGTHEN OUR ABILITY TO OFFER PRODUCTS AND SERVICES THAT CUSTOMERS FEEL THEY TRULY NEED. In office MFPs, maintaining growth ...

  • Page 16
    ...to expand the sale of Konica Minolta products and services in Asia, particularly in China and India, centered on our Business Technologies and Healthcare operations. Turning to production, in China we have established production sites for products such as MFPs, printers and optical pickup lenses. We...

  • Page 17
    KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 15 QUESTION WHAT DO YOU THINK IS NEEDED TO PUSH AHEAD FURTHER WITH EXECUTING THE STRUCTURAL REFORMS CALLED FOR IN MANAGEMENT POLICY ? ANSWER WE ARE CONSTANTLY AWARE OF THE NEED TO ENHANCE OPERATIONAL QUALITY. One task we face is finding ways...

  • Page 18
    ... to undergo growth particularly in color printing, where Konica Minolta has advantages 0 2007 2008 2009 2010 n 2011 2012 (CY) nn Color nn Monochrome Percent color Color Production Printing System "bizhub PRESS C8000" KONICA MINOLTA POLYMERIZED TONER -ACHIEVING HIGH RESOLUTION AND SUPERIOR...

  • Page 19
    ... lens Reflector Glass Mold Technology LED cover White light Blue LED EXTEND BUSINESS SCOPE IN THE INKJET SECTOR The scope of use for inkjet printers extends far beyond printing to include potential applications in manufacturing and an extremely diverse range of other applied fields. Konica...

  • Page 20
    18 KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 REVIEW OF OPERATIONS BUSINESS TECHNOLOGIES OVERVIEW OF RESULTS FOR FY MARCH 2010 Sales for FY March 2010 showed a trend toward recovery, with steady quarterly increases, and some regions and product segments even delivering results exceeding the...

  • Page 21
    KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 19 OPTICS OVERVIEW OF RESULTS FOR FY MARCH 2010 The global economy began moving toward a recovery, with increased production in the digital appliance industry and others. In this environment, the Optics business saw increased unit sales of glass ...

  • Page 22
    ... management of Konica Minolta Business Technologies, Inc. STATUS BY SEGMENT HEALTHCARE In the key digital X-ray diagnostic imaging field, we began sales of our new REGIUS MODEL 210, and, along with digital radiography system and diagnostic imaging workstations, worked to expand sales to hospitals...

  • Page 23
    KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 21 SENSING OVERVIEW OF RESULTS FOR FY MARCH 2010 During the year, we launched several new products, including the CM-5 spectrophotometer, the CR-5 colorimeter and the KONICA MINOLTA RANGE 5 non-contact 3-D digitizer, and worked to expand sales ...

  • Page 24
    ... Audit Committee Audit Committee Office Board of Directors/ Basic Management Policy Konica Minolta Holdings, Inc. Executive Officers (business execution function) Group Management Executive Meeting (reporting/directives mechanism) Reporting Directives President and CEO Management Council...

  • Page 25
    KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 23 In principle, the Board of Directors meets once a month. Outside directors receive advance briefings on agenda items in order to ensure they understand the items and thereby facilitate more lively discussion at meetings of the board. In ...

  • Page 26
    ... Silver Class CSR Rating by Premier Global SRI Ratings Firm Sustainable Asset Management Switzerland-based SAM (Sustainable Asset Management) Group Holding AG, one of the world's premier research and ratings companies in the field of socially responsible investment (SRI), has selected Konica Minolta...

  • Page 27
    ... the number of Konica Minolta Group patents since the fiscal year ended March 2006. PATENTS IN KEY BUSINESS FIELDS (JAPAN) BUSINESS TECHNOLOGIES (Number) 4,511 4,048 547 PATENTS IN KEY BUSINESS FIELDS (U.S.) BUSINESS TECHNOLOGIES (Number) 687 2,798 2,769 2,765 530 399 462 619 2,844 OPTICS (Number...

  • Page 28
    ... of the Companies Act of Japan, and are independent corporate officers as stipulated by Article 436-2 of Securities Listing Regulations and Related Rules promulgated by the Tokyo Stock Exchange Group, Inc. In charge of Technology Strategy Executive Director, Konica Minolta Business Technologies, Inc...

  • Page 29
    KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 27 FINANCIAL SECTION CONTENTS 28 FINANCIAL REVIEW 32 CONSOLIDATED BALANCE SHEETS 34 CONSOLIDATED STATEMENTS OF INCOME 35 CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS 36 CONSOLIDATED STATEMENTS OF CASH FLOWS 37 NOTES ...

  • Page 30
    ...GROUP OVERVIEW The Konica Minolta Group (the Group) consists of the Company, Konica Minolta Holdings, Inc., 96 consolidated subsidiaries, 18 non-consolidated subsidiaries, and 7 affiliated companies. The Group's core business operations are Business Technologies, Optics, Medical and Graphic Imaging...

  • Page 31
    ...glass hard disk substrates were brisk, benefitting from a recovery in market prices for LCD televisions and PCs. Business performance was notably impacted, however, by lower sales volumes in image input/output components and optical pickup lenses for Blu-ray Discs. In the Medical and Graphic Imaging...

  • Page 32
    30 KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 ASSETS Current assets at March 31, 2010 amounted to ¥489.2 billion, down ¥15.6 billion from the previous fiscal year-end. Cash on hand and in banks was virtually unchanged at ¥85.5 billion. Short-term investment securities rose ¥31.0 billion ...

  • Page 33
    ... a means of returning profit to shareholders. Net Sales Operating Income Net Income FREE CASH FLOWS (Billions of yen) 72.9 400 21 8 430 29 12 830 50 20 20 Free Cash Flow CURRENCY EXCHANGE RATE ASSUMPTIONS (Yen) Exchange rate USD 46.1 35.7 90.00 120.00 EUR 17.3 10.3 2006 2007 2008 2009 2010

  • Page 34
    ...Lease assets ...Construction in progress ...Rental business-use assets ...Total ...Accumulated depreciation...Net property, plant and equipment ...Intangible Fixed Assets: Goodwill (Note 14) ...Other intangible fixed assets ...Total intangible fixed assets ...Investments and Other Assets: Investment...

  • Page 35
    KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 33 Millions of yen Thousands of U.S. dollars (Note 3) March 31 March 31 2010 Liabilities and Net Assets Current Liabilities: Short-term debt (Notes 5 and 7) ...Current portion of long-term debt (Note 7) ...Notes and accounts payable-trade (Note ...

  • Page 36
    34 KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 CONSOLIDATED STATEMENTS OF INCOME Konica Minolta Holdings, Inc. and Consolidated Subsidiaries For the fiscal years ended March 31, 2010 and 2009 Millions of yen Thousands of U.S. dollars (Note 3) 2010 March 31 2009 March 31 2010 Net Sales ...

  • Page 37
    KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 35 CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS Konica Minolta Holdings, Inc. and Consolidated Subsidiaries For the fiscal years ended March 31, 2010 and 2009 Millions of yen Shares of issued common stock Common stock Capital surplus ...

  • Page 38
    36 KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 CONSOLIDATED STATEMENTS OF CASH FLOWS Konica Minolta Holdings, Inc. and Consolidated Subsidiaries For the fiscal years ended March 31, 2010 and 2009 Millions of yen Thousands of U.S. dollars (Note 3) 2010 March 31 2009 March 31 2010 Cash ...

  • Page 39
    KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 37 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Konica Minolta Holdings, Inc. and Consolidated Subsidiaries For the fiscal years ended March 31, 2010 and 2009 1. BASIS OF PRESENTING FINANCIAL STATEMENTS The accompanying consolidated financial ...

  • Page 40
    ... long-term loans payable, the Companies use interestrate swap to fix interest expenses. Investment securities consist mainly of stocks, and the market values of listed stocks are determined on a quarterly basis. The Companies control credit risk of customers relating to notes and accounts receivable...

  • Page 41
    KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 39 Fair Values of Financial Instruments The book value on consolidated balance sheets, fair value, and difference as of March 31, 2010...fixed interest rates is based on the present value of future cash flows discounted using the current borrowing rate...

  • Page 42
    40 KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 6. INVESTMENT SECURITIES As of March 31, 2010 (1) Other Securities with Quoted Market Values Millions of yen Market value at the consolidated balance sheet date Original purchase value Unrealized gains (losses) As of March 31, 2009 (1) Other ...

  • Page 43
    KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 41 The zero coupon convertible unsecured bonds due in 2016 (on the previous page) are bonds with share subscription rights issued on December 7, 2006. Details of the share subscription rights are as follows: 2016 bonds 8. INCOME TAXES The income ...

  • Page 44
    ...$13,048 Manufacturing Buildings and facilities of structures, Land, microlenses for Others mobile phones Manufacturing Machinery and facilities and equipment, sales offices Goodwill, Others other than above Rental assets Idle assets Rental business-use assets Buildings and structures, Land, Others...

  • Page 45
    KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 43 (2) Fixed assets have been written down to the recoverable amount and the correlating impairment losses have been recognized due to worsening market conditions for plates in the Medical and Graphic business, restructuring of microlens ...

  • Page 46
    44 KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 Loss on impairment and reversals of loss on impairment of leased assets for the years ended March 31, 2010 and 2009 are as follows: Millions of yen March 31 2010 2009 Thousands of U.S. dollars March 31 2010 Net retirement benefit costs for the ...

  • Page 47
    KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 45 The principal policies on foreign currency exchange instruments and other derivative instruments of the Company and its major subsidiaries are approved by the Management Committee of the Company. Additionally, a Committee which consists of ...

  • Page 48
    46 KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 Derivative transactions to which hedge accounting is applied (1) Currency-Related Derivatives Method of hedge accounting: Forecasted transactions such as forward exchange contracts Millions of yen March 31 2010 Contract value (notional principal ...

  • Page 49
    KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 47 24. STOCK OPTION PLANS The following tables summarize details of stock option plans as of March 31, 2010. Position and number of grantees Class and number of stock Date of issue Condition of settlement of rights Period grantees provide service in...

  • Page 50
    ... Business segment information of the Companies for the years ended March 31, 2010 and 2009 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 51
    KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 49 Millions of yen Business Technologies Medical and Graphic Imaging Eliminations and Corporate 2009: Optics Sensing Other Total Consolidated Net sales External Intersegment Total Operating expenses Operating income Assets Depreciation ...

  • Page 52
    50 KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 Millions of yen 2009: Japan North America Europe Asia and Other Total Eliminations and Corporate Consolidated Net sales External Intersegment Total Operating expenses Operating income (loss) Assets ¥437,312 280,586 717,898 662,001 ¥ 55,897 ¥...

  • Page 53
    ... Konica Minolta Holdings, Inc.: We have audited the accompanying consolidated balance sheets of Konica Minolta Holdings, Inc. and consolidated subsidiaries as of March 31, 2010 and 2009, and the related consolidated statements of income, changes in net assets and cash flows for the years then ended...

  • Page 54
    ... Business Solutions Norway AS Hungary Italy Lithuania Netherlands Norway Poland Portugal Portugal Romania Russia Serbia Slovakia Slovenia Spain Sweden U.K. U.K. Ukraine Australia China China China China China (Hong Kong) India Malaysia Singapore Production Companies Konica Minolta Electronics...

  • Page 55
    ... Europe B.V. Konica Minolta Medical Systems Russia LLC Konica Minolta Medical & Graphic (SHANGHAI) Co., Ltd. Konica Minolta Healthcare India, Private Ltd. Japan Japan Japan Japan U.S.A. U.S.A. Germany Netherlands Russia China India Konica Minolta Sogo Service Co., Ltd. Konica Minolta Technology...

  • Page 56
    ... Investments Japan Limited (Joint holding) March 9, 2009 April 15, 2009 23,168 16,972 4.4 3.2 Reporting obligation accrual date March 31, 2010 February 15, 2010 Number of shares held (Thousand shares) Percentage of shares held (%) 44,797 27,224 8.4 5.1 Stock Price Chart (Tokyo Stock Exchange...

  • Page 57
    ... INC. ANNUAL REPORT 2010 55 CORPORATE DATA As of March 31, 2010 Company name Stock code URL Date established Establishment as joint-stock company Paid-in Capital Number of Employees Address Investor Relations Contact Konica Minolta Holdings, Inc. 4902 (First sections, Tokyo Stock Exchange, Osaka...

  • Page 58
    1-6-1 Marunouchi, Chiyoda-ku, Tokyo 100-0005, Japan Tel: (81) 3-6250-2100 Fax: (81) 3-3218-1368 http://konicaminolta.com