Mazda 2007 Annual Report Download - page 57
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Cash Flows from Financing Activities
Financing activities provided net cash of ¥9.3 billion. This amount principally reflected repayments
of long-term debt of ¥62.1 billion, although the Company raised ¥95 billion during the year,
including the issuance of ¥40.0 billion in corporate bonds.
During the year, free cash flow, the sum of cash flows from operating and investing activities,
totaled ¥21.0 billion.
FISCAL 2007 OUTLOOK
Fiscal 2007 marks the start of the Mazda Advancement Plan, the new medium-term management
plan for the Mazda Group. During the year, we will work to accelerate business structural
reforms centering on Monotsukuri Innovation. Substantially boosting R&D investment and
capital expenditures in the upcoming term will create a spike in fixed costs, but we expect
Mazda Group operating performance to overcome these expenses and rise to the levels
outlined below.
●Global retail sales 1.35 million units (up 3.7% from fiscal 2006)
●Net sales ¥3,320 billion (up 2.2% from fiscal 2006)
●Operating income ¥160 billion (up 0.9% from fiscal 2006)
●Net income ¥85 billion (up 15.3% from fiscal 2006)
BUSINESS RISKS
Significant risks that could affect the Company’s business results and financial position include
those listed below. This, however, does not represent a comprehensive list of all the risks faced
by the Mazda Group at the current time.
1. Economic Conditions Impacting the Mazda Group
The Mazda Group sells products in Japan and around the world, including in North America,
Europe and Asia. An economic downturn or declining demand in these markets could adversely
affect Mazda’s business results and financial position.
2. Exchange Rates
The Mazda Group exports products from Japan to the rest of the world and consequently its
business results and financial position are exposed to the effects of fluctuations in exchange
rates. An appreciation of the yen, particularly against the U.S. dollar and euro, could lower the
Mazda Group’s profitability and ability to compete on price.
Mazda uses forward-exchange contracts and other instruments in some of its transactions
to minimize the impact of short-term exchange rate risk. However, a weakening of the yen
could result in a loss of contingent gains.
3. Alliances and Mergers
The Mazda Group is involved in joint activities with other companies under technology alliances,
joint ventures and in other forms with respect to the development, production and sales of
products. These joint activities are designed to optimize resources, facilitate their prioritization
and generate synergies. However, a disagreement over management, financial or other matters
between the parties involved could mean that the joint activities fail to deliver the results
expected. This could adversely affect the Mazda Group’s business results and financial position.