Konica Minolta 2010 Annual Report Download - page 9

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 of 2008, while weak consumer spending
and a reluctance to invest continued.
We correctly recognized that these radical changes
in our environment could not be addressed with the
usual measures for a temporary economic slowdown.
We saw these changes as the turning point of a massive
and global transformation taking place. Seizing the
moment as an opportunity to enhance our own value, we
set out to achieve more vigorous growth with the start of
MANAGEMENT POLICY <09-10>, a new two-year man-
agement plan spanning FY March 2010 to FY March 2011.
During the fiscal year under review, we concentrated
on transitioning to a corporate structure capable of
steadily generating free cash flow even in an adverse
operating climate with little prospects for sales growth. As
a result, free cash flow was ¥72.9 billion, a substantial
improvement over the previous fiscal year.
In terms of earnings, although consolidated net sales
declined 15.1% year on year to ¥804.4 billion, and oper-
ating income was down 21.8% to ¥43.9 billion, signs of
recovery were nonetheless present in Group operating
results. Performance in core businesses rebounded, led
by Business Technologies from the second half of
FY March 2010. This business in particular posted three
consecutive quarters of earnings growth.
The economic climate anticipated for FY March 2011
is far from optimistic. Determined to break a run of lower
sales and earnings that has continued for two consecutive
terms, we have positioned FY March 2011 as a pivotal
year for putting Konica Minolta on track for growth. Along
the way, there are three aims we must achieve—promoting
sales growth and expanding the scope of our existing
businesses, full-scale advancement into Asian markets,
and accelerating the development of new businesses.
With these issues in mind, our task is to guide Konica
Minolta in the direction of not only short-term growth, but
to shift towards a more aggressive strategy that will
enable sustainable growth for the next five to ten years.
I am confident that Konica Minolta can be a robust
company capable of achieving strong, sustainable
growth, and one vital to society. My management of the
Company reflects this conviction.
Being a robust company means having a solid corpo-
rate structure founded on a sound financial position, as
well as a structure that can reliably produce profits irre-
spective of a challenging operating environment. We must
respond to the changing operating environment and
accurately seize growth opportunities, translating these
into strong, sustainable growth. At the same time, of
course, we must create the conditions that make such
growth possible by staying abreast of society’s ever-
changing needs, discerning where we ought to bolster our
position, and providing customers exactly what they need.
Being vital to society naturally means offering new
value through products and services that individual con-
sumers and the public at large find useful. It also means
ensuring that our corporate activities make a favorable
impression and gain approval and support among various
stakeholders including shareholders, as well as custom-
ers, suppliers and those who have little direct contact
with our operations.
People are the common denominator that will drive
this entire vision forward. In my message to Group
employees, I urge them to be ambitious and to put the
fear of failure aside to rise to the challenge of meeting our
targets. I want them to aim for a positive corporate mind-
set where we learn from our failures and apply those
lessons for future success. The first task is to be ambi-
tious. Accomplish this, and rising to overcome obstacles
will become second nature. In the process, individual
employees effectively achieve their own future goals,
which will in turn enhance the corporate value of the
Konica Minolta Group.
To our shareholders and other investors, I ask for your
continued understanding and support of Konica Minolta
as we take our operations forward.
June 2010
Masatoshi Matsuzaki
President and CEO
KONICA MINOLTA HOLDINGS, INC. ANNUAL REPORT 2010 07