Suzuki 2009 Annual Report Download - page 24

SUZUKI MOTOR CORPORATION 23
Financial Review
1. Operating results
For the management environment of the Suzuki Group during this fiscal year, the world economy, mostly in the US and
Europe, increasingly slowed down on account of the US subprime loan issue and the soaring of the crude oil and raw material
prices in the first half, and in the second half, the economy rapidly deteriorated in various parts of the world by the worsening of
the financial crisis, being in the extremely severe situation. The management environment in Japan was also drastically
changed as a result of the large reduction in manufacturing by the decreased exports, the rapid yen appreciation and the stock
price fall, and we are faced with the unprecedented critical situation.
Under these circumstances, consolidated sales were ¥3,004,888 million (85.8% y-o-y) for this fiscal year, below
consolidated sales of the previous year, on account of the overseas sales reduction and yen appreciation. As for consolidated
profits, operating income, ordinary income and net income declined to ¥76,926 million (51.5% y-o-y), ¥79,675 million (50.8% y-
o-y) and ¥27,429 million (34.2% y-o-y), respectively, because the reduced costs, reduced depreciation/amortization and
operating expenses, etc were unable to cover the reduced profits on account of the reduced sales, increased raw material
costs, exchange influences and increased research and development expenses.
In addition, non-consolidated sales declined to ¥1,685,777 million (83.0% y-o-y) for this fiscal year. As for non-consolidated
profits, operating income, ordinary income and net income declined to ¥11,422 million (16.9% y-o-y), ¥4,133 million (6.7% y-o-
y) and ¥3,287 million (8.0% y-o-y), respectively, because the reduced costs, reduced depreciation/amortization and operating
expenses, etc were unable to cover the reduced profits on account of the reduced sales, exchange influences and increased
research and development expenses.
(1) The operating results by business segmentation
(a) Motorcycle operations
In the rapid slowdown of the world economy, sales of the motorcycle business were ¥454,349 million (76.8% y-o-y)
on account of the large sales decline in North America and Europe as well as the exchange influences by rising yen.
Operating income declined to minus ¥6,416 million because the reduced costs, reduced depreciation/amortization and
operating expenses, etc. were unable to cover the reduced profits by reduced sales and exchange influences.
(b) Automobile operations
While the overall domestic demand is declining, the Suzuki Group tried to expand sales by completely changing the
models of “Wagon R” and “Alto Lapin” for mini vehicles and launching compact car the “Splash” by Magyar Suzuki
Corporation Ltd. in Hungary. Domestic sales, however, were slightly below sales of the previous fiscal year. On the other
hand, overseas sales were below those of the previous fiscal year on account of the large sales decline in North
America, Europe and Asia as well as the exchange influences by rising yen despite the sales expansion efforts such as
the new launching of the “Splash” in Europe and the “A-star” in India. As a result, sales of the automobile business were
¥2,524,012 million (89.1% y-o-y), and operating income declined to ¥69,049 million (60.6% y-o-y) because the reduced
costs, reduced depreciation/amortization and operating expenses, etc. were unable to cover the reduced profits by
reduced sales, increased raw material prices and exchange influences.
(c) Marine and Power products, etc
Sales and operating income of marine and power products, etc were ¥66,720 million (87.1% y-o-y) and ¥9,234
million (71.6% y-o-y), respectively, on account of reduced sales of outboard motors in North America and Europe.
(d) Financial Services
The financial services business is newly classified from this fiscal year to indicate the business details of the Suzuki
Group more clearly. Sales and operating income for this fiscal year were ¥78,693 million and ¥3,993 million,
respectively.
(2) The operating results of geographical segmentation
(a) Japan
Sales were ¥1,823,866 million (83.1% y-o-y) on account of export sales reduction for North America and Europe.
Operating income declined to ¥28,782 million (33.9% y-o-y) because the reduced costs, reduced depreciation/
amortization and operating expenses, etc. were unable to cover the reduced profits by reduced sales, increased raw
material costs and exchange influences.
(b) Europe
Sales declined to ¥618,636 million (79.6% y-o-y) on account of reduced sales in the economic recession and the
exchange influences by rising yen. Operating income declined to ¥3,110 million (23.2% y-o-y) on account of reduced
sales and the change in the sales composition of automobiles.
(c) North America
Sales declined to ¥225,601 million (55.6% y-o-y) on account of reduced sales in the economic recession and credit
crunch started by the financial crisis. Operating income declined to minus ¥24,143 million.