Oki 2001 Annual Report Download - page 5

Oki Electric Industry Co., Ltd. Annual Report 2001 3
value benefits all stakeholders, including shareholders,
customers and employees.
We are upgrading and strengthening our business systems
by investing in research and development and by intro-
ducing state-of-the-art manufacturing facilities in prepar-
ation for future business expansion. Our basic policy also
emphasizes stable cash dividends in line with profits.
Dividends for fiscal 2001 were ¥5.0 per share.
Progress of Phoenix 21
Oki remains committed to promoting and implementing its
management reorganization plan, Phoenix 21, launched in
September 1998 and scheduled for completion in fiscal
2002. The plan’s measures were steadily and smoothly
implemented in its first two years. Fiscal 2000 consoli-
dated financial statements show that profitability had been
restored, allowing the resumption of dividends for fiscal
2001. Sharp changes in the business environment and a
revised accounting system have caused our predictions and
budget to fall short of the original Phoenix 21 goals for
fiscal 2002. The plan has begun to bear fruit, however, and
we are confident we will achieve our goals in the near
future.
On March 29, 2001, in response to the significant
changes in our business environment, we presented “Phoe-
nix 21 Sky-High,” a growth plan that draws on the results
of Phoenix 21 and will guide us until fiscal 2006. This
medium-range business plan will be amended as necessary
to reflect changes in the business and management environ-
ment. Using “the flight of the phoenix” as its key adage,
the plan sets out the growth strategies necessary to trans-
form Oki from a stable and profitable company into an
outstanding growth company. In fiscal 2002, we will lay
the groundwork that will lead to an increase in corporate
value in fiscal 2003.
Phoenix 21 Sky-High, the Next Medium-Term Plan
Improved profitability and growth and, consequently,
increased corporate value are the management goals of this
plan. We have adopted return on equity (ROE) as our prin-
cipal indicator of profitability, and sales growth as a
measure of growth.
Fiscal 2002 is the preparatory year that will serve as the
basis of the Phoenix 21 Sky-High plan, in which we are
aiming for average annual sales growth higher than 6.0%,
which, in fiscal 2006, should culminate in ¥1.0 trillion in
consolidated net sales, ROE exceeding 12.0%, and net
income of ¥30.0 billion.
The plan’s measures include reorganizing our businesses
to achieve our vision in four segments. This will enable us
to concentrate on businesses that represent our strengths,
and to move away from product-oriented IT solutions
toward e-business solutions, thereby making service a
source of competitive strength. To reinforce our manage-
ment base, we are pursuing a networked in-house company
system and carrying out measures that will support growth
strategies, such as realigning in-house companies, promot-
ing venture companies, strengthening procurement and
reorganizing our production structure. Furthermore, we are
improving corporate governance to enhance management
transparency, appointing external directors (elected at the
general meeting of shareholders in June 2001) and estab-
lishing management advisory and compensation boards. We
are also striving to lessen the environmental impact of our
activities by offering environment-friendly products and
implementing environmental accounting.
In closing, we express our gratitude to shareholders for
their continued support.
June 2001
Katsumasa Shinozuka
President and Chief Executive Officer