Olympus 2015 Annual Report Download - page 22

Composition (Fiscal year ended March 31, 2015)
Industry’s top share of 40% in biological microscope market
World-leading share of 40% in industrial endoscope market
Comprehensive solutions capabilities utilizing diverse product
lineups
State-of-the-art optical technologies continually refined since
Company’s founding
Increased focus on advanced science research by governments
of various countries and higher related budgets in these countries
following economic upturns
Rising demand for non-destructive testing equipment due to
aging of infrastructure in developed countries and installation
of infrastructure in emerging countries
Expanding demand for industrial microscopes due to growth of electronic
component industry in conjunction with spread of smartphone usage
High susceptibility to changes in economic conditions of
specific regions and countries
Redundant functions and inefficiencies resulting from
business diversification
Diminished synergies in certain smaller businesses due
toportfolio expansion
Trend toward limiting capital expenditures by private-sector
companies
Delayed execution of government budgets and budget cuts
in various countries
Economic deceleration and decreasing demand in emerging
countries
S
O
W
T
Share of Net Sales
(Consolidated net sales)
13.6%
Japan
16.1%
North America
28.3%
Europe
23.7%
Asia /
Oceania
25.5%
Others
6.4%
Share of Net Sales
by Region
Life Science
42.9%
Share of Net Sales
by Product
Industrial
57.1%
2013/3 2014/3 2016/3
(Forecast)
2017/3
(Target)
38.9
46.6
44.8
53.7
44.5
110.0
103.9
98.5
85.5
59.4
62.0
48.0
0
50
100
150
2015/3
0
4
8
12
16
0
3
6
9
12
4
5
7 7
3.5
4.9
6.8
8.0
2013/3 2014/3 2015/3 2016/3
(Forecast)
2017/3
(Target)
Net Sales
(¥ Billion)
Operating Income / Operating Margin
(¥ Billion) (%)
Operating income Operating margin (right) Life science Industrial
Overview of Fiscal 2015
An economic recovery trend pervaded domestic and overseas
markets, stimulating brisk corporate capital expenditures and
thereby resulting in favorable sales of products for the elec-
tronic component and automotive industries.
In the life science field, performance was impacted by a
temporary slowdown in the execution of budgets by research
institutions in Japan. At the same time, however, sales of
FLUOVIEW FVMPE-RS, a laser scanning microscope for
use in cutting-edge life science research, made contributions
to overall performance in this field. In the industrial field,
meanwhile, sales were strong for IPLEX RX and IPLEX RT,
industrial videoscopes that offer the highest levels of resolution
in their series, as well as for the OmniScan series of products
used in non-destructive testing of social infrastructure. Oper-
ating income in the Scientific Solutions Business increased
39% year on year following higher net sales and the benefits
of cost reduction efforts, such as the integration of sales offices.
Growth Strategies
In the Scientific Solutions Business, we have been shifting from
our previous strategies based on product lineups to pursue
those oriented toward customer groups, and are strategically
investing in growth fields to expand our market share and boost
sales. In addition, the business restructuring measures com-
menced in fiscal 2015 are generating steady improvements
in profitability realized by streamlining operations to cut costs.
By further advancing such reforms, we aim to strengthen the
earnings capacity of this business to an even greater degree
while building the systems needed for future growth.
1. Work Closely with Customers to Expand Market Share
and Maximize Earnings
• Shift from product lineup-based strategies to customer
group-oriented strategies
We are moving away from our previous product lineup-based
strategies to pursue those more customer group oriented. As
part of this process, we have narrowed the scope of customer
groups to be targeted to seven fields in which we can anticipate
high earnings and rapid growth, and reorganized operations
in unprofitable fields accordingly (selection and concentration
of management resources). Going forward, we will pursue
growth that emphasizes profitability through sales activities
focused on these seven target customer fields.
2. Strengthen Earnings Foundation
• Improve business efciency and constitution through
organizational integration
We are in the process of integrating business organizations
that were previously separated based on product line, and are
thereby consolidating management functions and sales orga-
nizations on a global scale. In fiscal 2015, sales bases in North
America were integrated, and contributions to higher profitabil-
i ty are already noticeable. These initiatives will be expanded
to Europe and Asia going forward with the aim of realizing
further improvements in business efficiency and constitution.
• Conduct upfront investment in growth markets
Upfront investments will be conducted in growth markets to
build the foundations for medium- to long-term business growth.
For example, research on topics such as iPS cells is anticipated
to create a massive market in the regenerative medicine field.
Accordingly, the Company will advance R&D ventures on new
products targeting this field with the aim of creating new
markets with products that facilitate advanced research.
Review of Business Segments
Millions of yen
2012/3 2013/3 2014/3 2015/3
Operating Results
Net Sales 92,432 85,513 98,510 103,880
Operating Expenses 86,993 81,986 93,575 97,043
Operating Income 5,439 3,527 4,935 6,837
Operating Margin (%) 5.9% 4.1% 5.0% 6.6%
Sales by Product
Life Science 42,650 38,910 44,778 44,518
Domestic 10,560 10,315 11,855 8,400
Overseas 32,090 28,595 32,923 36,118
Industrial 49,782 46,603 53,732 59,362
Domestic 8,394 7,526 7,968 8,320
Overseas 41,388 39,077 45,764 51,042
Segment Data
R&D Expenditures (¥ billion) 8.7 8.2 9.3 9.4
Capital Expenditures (¥ billion) 4.3 3.4 4.5 3.9
Number of Employees* (people) 5,150 4,575 4,284 4,430
* Including average number of temporary employees
Scientific Solutions Business
Seven Target Customer Fields Growth Opportunities
Advanced life science research • Stable demand for pathological diagnosis in hos-
pitals and for services for educational institutions
• Accelerated research in regenerative medicine,
oncology, brain neurology, and other advanced
lifescience fields
Pathology and clinical research
Wet lab
Education
Infrastructure maintenance
• Aging social infrastructure in developed countries
(increased demand for repairing and inspecting
roads, etc.)
• Infrastructure investment in emerging countries
(increased repair and inspection demand)
Manufacturing
• Higher demand for methods of testing equipment
at resource- and environment-related facilities as
well as factories without causing unnecessary
destruction or halting operation
Environment and resources
Strengths
Oppor-
tunities
Weaknesses
Threats
41
OLYMPUS Annual Report 2015
40 OLYMPUS Annual Report 2015
Performance and Strategies by Business