Sharp 2009 Annual Report Download - page 9

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
In fiscal 2008 net sales declined by 16.7% compared to
the previous year to ¥2,847.2 billion and we reported an
operating loss of ¥55.4 billion. This is attributable to
tougher price competition for digital products caused by
the global recession, sharp yen appreciation, and deterio-
rating income associated with adjustment of retailers’
inventories of LCD TVs and LCD panels. We incurred a net
loss of ¥125.8 billion, reflecting a ¥49.8 billion loss on
valuation of investment securities, ¥58.4 billion in restruc-
turing charges associated with LCD plant reorganization
and other measures, and a ¥12.0 billion loss on violation
of the antitrust law.
Given these circumstances, we paid an annual divi-
dend of ¥21 per share, which regrettably is seven yen
lower than the previous fiscal year.
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Amid this harsh business climate, Sharp faces changes in
the external environment; specifically, rapidly declining
demand caused by the economy’s sharp slowdown, wors-
ening trade conditions primarily associated with the
strength of the yen, lower prices in digital products, move-
ment towards formation of economic blocs, and sudden
changes in Europe’s solar market. We also face internal
challenges—older LCD plants losing their competitive-
ness, falling prices and slower growth in the LCD TV and
mobile phone sectors, and worsening financial position,
including cash flow, in conjunction with these develop-
ments. Given the rapidly changing business environment,
such challenges cannot be overcome by sticking with
conventional business models. We are therefore revamp-
ing our management via two major initiatives: a recovery
plan, aimed at streamlining our corporate structure, and
implementation of a new business model to promote
localization of front-end processes in our device business.
Current Challenges and Corresponding Initiatives
Changes in the External
Environment
n฀฀
Declining demand due to rapid eco-
nomic slowdown
n฀฀
Worsening trade conditions caused
primarily by the strength of the yen
n฀฀
Falling prices for digital products
n฀฀
Emergence of economic blocs
n฀฀
Rapid changes in Europe’s solar market
Implementation of New Business Model
Recovery Plan
Internal Challenges
n฀฀
Older LCD plants becoming less
competitive
n฀฀
Falling prices and slower growth for
LCD TVs and mobile phones
n฀฀
Deterioration of financial position
Rapidly
Changing
Business
Environment
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