Canon 2004 Annual Report Download - page 4

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2
TO OUR SHAREHOLDERS
The global economy was strong in the first half of 2004,
driven by ongoing growth in the United States and China.
While Asian countries generally reported economic expansion,
European nations, for the most part, experienced only
moderate growth. The world economy experienced a
temporary slowdown in the second half, however, indicated
by signs of decelerating growth. The average value of the yen
for the year was ¥108.12 to the U.S. dollar and ¥134.57 to
the euro, representing a year-on-year increase of 7% against
the U.S. dollar, and a decrease of 3% against the euro.
Canon adeptly navigated these conditions to post record
earnings and marked its fifth consecutive year of higher sales
and profits. Net sales grew 8.4% from the previous year, to
¥3,467.9 billion (US$33,345 million), while net income
climbed 24.5%, to ¥343.3 billion (US$3,301 million). We
also met our consolidated financial targets for Phase II of our
Excellent Global Corporation Plan, covering fiscal 2001 through
2005, ahead of schedule, achieving a shareholders’ equity
ratio of 61.6% and an debt to total assets ratio of 1.1%.
In addition, we were recognized by the investment
community for firmly rooting the objective of further
increasing corporate value in all aspects of our business
operations, as called for in Phase II. In fiscal 2005, we will
work to see Phase II to a successful conclusion while laying
a firm foundation for the implementation of Phase III,
Toward Healthy Growth, which will get under way in 2006.
Overview of Fiscal 2004
Revenue growth in fiscal 2004 was underpinned by
continued sharp growth in sales of digital cameras and
color network digital multifunction devices (MFDs) as well as
significantly higher demand for semiconductor production
equipment. By product segment, sales of business machines
advanced 4.1%, to ¥2,388.0 billion (US$22,961 million),
sales of cameras climbed 16.8%, to ¥763.1 billion
(US$7,337 million), and sales of optical and other products
jumped 26.9%, to ¥316.8 billion (US$3,046 million).
During the year, despite ongoing production-reform
efforts and the timely launch of competitive, new products,
the gross profit ratio declined 0.9% from the previous
year, to 49.4%, hurt by the yen’s appreciation against the
U.S. dollar and heightened price competition.