Nikon 2007 Annual Report Download - page 5

NIKON ANNUAL REPORT 2007 03
RETURN ON EQUITY %R&D COSTS MILLIONS OF YEN
NET INCOME PER SHARE (LOSS) ¥
BUSINESS ENVIRONMENT AND
PERFORMANCE
We aggressively made further progress in
the key objectives identified in the medium-
term management plan for the Nikon
Group that we announced in March 2006.
In practical terms, we made significant
progress on three fronts: (1) strengthening
core business competitiveness by gaining
market share with state-of-the-art
equipment and by developing high-value-
added products; (2) bolstering cost
competitiveness through the development
of policies to strengthen manufacturing
competitiveness; and (3) creating and
fostering new businesses, notably within
the Glass Division.
We also devoted efforts to CSR-oriented
management through upgrading our
internal control systems and other
initiatives. At the same time, we focused on
improving our financial structure.
In performance terms, the result of our
efforts was a second straight year of record-
high sales and profits. Consolidated net
sales rose 12.6% compared with the
previous year, reaching ¥822,813 million.
Operating income rose 53.2% to ¥102,007
million and net income soared 89.4% to
¥54,825 million. Moreover, our focus on
boosting manufacturing competitiveness
yielded a gain in the cost of sales ratio of
4.0 percentage points—in just one year.
Turning to business segment performance,
we recorded significant growth in both
sales and profits across the board. The
precision equipment business posted sales
of ¥292,562 million, a year-on-year
increase of 20.3%. Segment operating
income soared 87.0% year-on-year to
¥49,321 million. This was due to various
factors, including cost-reduction gains from
adoption of standardized modules and
promotion of simplified design as well as
increased sales of LCD scanners for large
LCD glass substrates. In the imaging
products business, strong sales of digital
single-lens reflex (SLR) cameras and
interchangeable lenses helped segment
sales rise 8.0% in year-on-year terms to
¥449,790 million. Operating income in this
business surged 32.9% to ¥45,678 million.
In the instruments business, sales climbed
11.5% to ¥61,171 million, while operating
income was 25.4% higher at ¥5,123
million. Finally, sales in the other segment
rose 14.9% to ¥57,244 million, generating
a 9.0% year-on-year gain in operating
income to ¥2,102 million. For further
details of business performance, please
refer to the other sections of this report
under Review of Operations and
Management’s Discussion and Analysis of
Operations.
BUSINESS PROSPECTS AND
DEVELOPMENT
We have cause to feel satisfied with these
results for the year ended March 2007.
However, the business environment is
characterized by extremely rapid change,
and so we cannot afford to rest on our
laurels. If anything, we need to be even
more alert to the dangers of constant
change than we have been in the past.
With this in mind, our goal is to focus on
business expansion.
Below, we outline the major issues and
trends in each Nikon Group business.
Precision equipment
Our efforts to re-engineer this business
have now realized clear potential for
profitable growth. Nikon’s operations span
the two sectors of IC and LCD steppers and
scanners . In IC steppers and scanners, our
ArF immersion scanners now represent the
mainstream of cutting-edge technology.
We enjoy a dominant position due to our
technical leadership in immersion
lithography.
In the year ending March 2008, we will
launch the first of the SF150 high-speed
i-line IC steppers for exposure of non-critical
layers. This represents a new concept in IC
steppers. Going forward, we plan to
expand this business across all domains by
developing steppers and scanners for non-
07
06
05
04
03
07
06
05
04
03
07
06
05
04
03
146.36
78.16
65.19
6.52
(22.03)
18.5
13.2
13.1
1.4
(4.8)
47,218
37,139
33,561
30,165
27,506
Years ended March 31 Years ended March 31Years ended March 31