Olympus 2014 Annual Report Download - page 4

Rebuilding of
Business Portfolio /
Optimizing Allocation of
Management Resources
Restoration of
Financial Health
Review and
Reduction of Costs
Back to Basics Profitable GrowthOne Olympus
Restructuring of
Corporate Governance
Olympus is promoting a medium-term vision for the  ve years from the  scal year ended March 2013. Acting in
accordance with the vision’s slogan of “Back to Basics,” the Company aims to return to the basic values it had at
founding and make a fresh start in order to regain the credibility of its stakeholders, build itself anew, and create
new corporate value.
Basic Strategies Based on Corporate Management Policies
Corporate Management Policies under the New Management
Performance Indices and Targets (Consolidated)
1. Clarifi cation of our core
businesses
2. Identifi cation and liquidation
of non-core businesses
3. Establishment of mechanisms
to drive optimal allocation of
management resources
Contribute to total
wellness of people as a company
centered on Medical Business
Improve pro tability of the entire
Group through drastic review
of cost structures
Improve equity ratio
as soon as possible and
realize stable management
Recover trust
and improve
corporate value
1. Cost reduction
2. Signifi cant curtailment
of indirect expenses
1. Steady fl ow of profi ts from
businesses
2. Maximization of cash fl ow
3. Streamlining of assets
1. Restructuring of the
governance system
2. Reinforcement of internal
controls
3. Strengthening of the
compliance system
Results of implementing these basic strategies will
be monitored based on four performance indices:
“return on invested capital (ROIC),” “operating
margin,” “free cash fl ow,” and “equity ratio.”
The operating margin and the equity ratio
both reached the levels targeted for fi scal 2017,
meaning these goals were achieved three years
early. We are making steady progress toward
accomplishing the fi scal 2017 targets for ROIC
and free cash fl ow.
* Return on Invested Capital (ROIC): At Olympus, ROIC is calculated using the following assumptions:
Return (Operating income after taxes) / IC (Shareholders’ equity + Interest-bearing debt)
Performance indices FY ended
March 2013
(Results)
FY ended
March 2014
(Results)
FY ending
March 2017
(Targets)
Return on invested capital (ROIC)(*)2.7% 5.9% 10% or more
Operating margin 4.7% 10.3% 10% or more
Free cash flow
(Cash flow from operating activities +
cash flow from investing activities)
¥58.7 billion ¥52.1 billion ¥70.0 billion or
more
Equity ratio 15.5% 32.1% 30% or more
FY ended March 2014 FY ending March 2015(*)FY ending March 2017
Results Forecasts Targets
Net sales ¥713.3 billion ¥760 billion ¥920 billion
Operating income
(Operating margin)
¥73.4 billion
(10%)
¥88 billion
(12%)
¥143 billion
(16%)
Ordinary income
(Ordinary income ratio)
¥50.9 billion
(7%)
¥70 billion
(9%)
¥125 billion
(14%)
Net income
(Net income ratio)
¥13.6 billion
(2%)
¥45 billion
(6%)
¥85 billion
(9%)
1 2 3 4
* Targets for fi scal 2015 are based on forecasts released on May 9, 2014.
Financial Plans (Consolidated)
Our Strategy
Medium-Term Vision (Corporate Strategic Plan)
Our Progress under Review
Advances in the Two Years Since the Institution of the New Management Team
In April 2012, Olympus instituted a new management team. Since then, the Company has continued the rapid advance
of the strategies described in the medium-term vision.
The following is a list of the major accomplishments seen in different areas of the Company over the past two years.
Corporate (Management / Others Business)
Apr. 2012 A special general meeting of shareholders is convened,
and anew management team is instituted.
Jun. The medium-term vision (corporate strategic plan) geared
toward creating a new Olympus is announced by the new
management team.
Aug. The transference of the Information & Communication
Business is announced.
Sep. A business and capital alliance with Sony Corporation
is announced.
May 2013 Restructuring measures for the Imaging Business are
announced.
Jun. The Security on Alert designation placed on the Com-
pany’s stock by the Tokyo Stock Exchange is removed.
Jun. A stock option system (linked to performance and stock
price) for corporate offi cer compensation is introduced.
Jul. Capital to the extent of ¥112.6 billion is procured by
issuing new shares through public offering in overseas
markets and disposing of treasury stock.
Feb. 2014 The withdrawal from the biologics business is announced.
Scientifi c Solutions Business
Jun. 2012 A plant in the Philippines is closed as part of efforts to ratio-
nalize production sites and improve operational effi ciency.
Jul. 2013 The strategic FLUOVIEW FVMPE-RS laser scanning
microscope is introduced in the life science fi eld.
Jul. The strategic OmniScan SX series of miniature, light
weight ultrasonic phased array fl aw detectors is launched
in the industrial fi eld.
Apr. 2014 The Life Science & Industrial Business is renamed the
Scientifi c Solutions Business. A shift away from strate-
gies based on product lineups is undertaken to pursue
those oriented toward customer groups in order to
improve business and capital effi ciency and thereby
increase profi tability.
Imaging Business
Mar. 2012 OM-D E-M5, a middle-class strategic mirrorless camera
inthe OM-D series, is launched.
May 2013 Restructuring measures for the Imaging Business are
announced.
The reorganization of manufacturing sites is completed,
effectively consolidating fi ve sites into two sites (Shenzhen
and Vietnam completed during fi scal 2014).
Oct. OM-D E-M1, our fl agship model for OM-D series mirror-
less cameras that offers resolution levels comparable to
full-size single-lens refl ex cameras, is launched.
Feb. 2014 OM-D E-M10, an OM-D series camera that features a
more accessible price, is launched.
Medical Business
Feb. 2012 The THUNDERBEAT integrated energy device with both
advanced bipolar and ultrasonic energy is launched in
the European and U.S. markets.
Apr. The EVIS EXERA III endoscopy system is launched in the
European and U.S. markets.
Nov. The EVIS LUCERA ELITE endoscopy system is launched
in the Japanese market.
Dec. Investment of approximately ¥20 billion in manufacturing
sites in Japan (Aizu, Shirakawa, and Aomori) is decided.
Apr. 2013 A joint venture company between Olympus and
Sony Corporation is established, with Sony to develop
surgical endoscope products with 3D and 4K imaging
capabilities.
Apr. A surgical endoscopy system with 3D imaging capabilities
is launched in the European, U.S., and Japanese mar-
kets; the world’s fi rst 3D videoscope for surgery equipped
with a bending tip islaunched simultaneously.
Nov. Our largest training and service center is established in
Guangzhou, adding to existing Chinese training centers
situated in Shanghai and Beijing.
0
3,000
2,000
1,000
4,000
April 2012 January 2013 January 2014 July 2014
Stock Price over Past Two Years
(¥)
5
OLYMPUS Annual Report 2014
4OLYMPUS Annual Report 2014