Konica Minolta 2012 Annual Report Download - page 16

Operating Environment
The Great East Japan Earthquake that occurred in March 2011, damaging fl oods in
Thailand from July 2011, and other unprecedented disasters directly and indirectly
affected the procurement and production operations of the Konica Minolta Group (the
Group) by disrupting supply chains in the related industries.
Regarding macroeconomic circumstances in Japan and overseas, increasing
economic uncertainty in Europe as a result of the sovereign debt crisis and its potential
impact on the global economy were cause for concern. However, the U.S. economy was
relatively solid and the economies of emerging countries including China maintained high
growth rates overall. Economic conditions remained challenging in Japan, especially for
export-oriented manufacturers, because of the rapid appreciation of the yen, the impact
of the earthquake in Japan and the fl ooding in Thailand.
Operating Results
Net Sales
In the fi scal year ended March 31, 2012, net sales decreased ¥10.0 billion, or
1.3%, year on year to ¥767.8 billion. Amid the Great East Japan Earthquake, fl ooding
in Thailand, the recession in Europe and other factors, the Group implemented
initiatives such as introducing new products, acquiring large customers, and
strengthening sales in emerging countries. However, currency translation reduced net
sales by ¥29.7 billion.
Operating Income
Gross profi t increased ¥0.7 billion, or 0.2%, year on year to ¥355.3 billion. Although
net sales decreased and procurement costs rose while orders stagnated as a result of
the Great East Japan Earthquake and the fl ooding in Thailand, sales of main products
increased and the entire Group worked to reduce costs and raise productivity. As a result
of these and other factors, the gross profi t margin improved 0.7 points year on year to
46.3 percent.
Selling, general and administrative (SG&A) expenses increased ¥0.4 billion year on
year as assiduous efforts to reduce SG&A expenses offset increased expenses due to
aggressive mergers and acquisitions.
As a result of the above, operating income increased ¥0.3 billion, or 0.8%, year on
year to ¥40.3 billion. Excluding a decrease of ¥7.4 billion due to currency translation,
operating income would have increased 19.3% year on year.
Income before Income Taxes and Minority Interests
Income before income taxes and minority interests increased ¥4.7 billion, or 16.7%,
year on year to ¥32.8 billion. Gain on reversal of foreign currency translation adjustment
of ¥3.7 billion partially offset foreign exchange loss, net of ¥2.5 billion, write-down of
investment securities of ¥2.7 billion, and business structure improvement expenses of
¥1.1 billion.
Net Income
Net income decreased ¥5.4 billion, or 21.1%, year on year to ¥20.4 billion. Among
other factors, revision of the corporate tax rate in Japan increased income taxes and
reduced net income by ¥3.3 billion.
Operating Results by Segment
Business Technologies Business
In the offi ce fi eld, overall sales volume of the A3 multi function peripherals (MFPs) of
the bizhub series for the fi scal year ended March 31, 2012 increased year on year,
refl ecting stronger unit sales of color MFPs in all regions – Japan, the United States,
Europe, and other regions including Asia – and level sales volume of monochrome MFPs.
The Company enhanced its global sales system based on the concept of Optimized Print
Services (OPS), a growth strategy that aims at providing optimal printing environments to
customers. Sales to major global accounts increased steadily as a result. For example,
the Company successfully concluded multi-year global contracts with BMW AG, a major
Net sales
1,000
804.4 777.9 767.8
800
400
600
200
FY2009 FY2010 FY2011
0
(Billions of yen)
Operating income
50 43.9 40.0 40.3
40
20
30
10
FY2009 FY2010 FY2011
0
(Billions of yen)
Net income
30
16.9
25.8
20.4
25
15
20
10
5
FY2009 FY2010 FY2011
0
(Billions of yen)
Management’s Discussion and Analysis
15