Casio 2005 Annual Report Download - page 5

management฀targets.฀At฀the฀same฀time,฀the฀
Company฀has฀been฀focusing฀on฀realizing฀
greater฀management฀efciency,฀including฀
raising฀operating฀income฀margin฀and฀
improving฀capital฀efciency.
฀ As฀a฀result,฀consolidated฀net฀sales฀grew฀
6.8%฀year-on-year฀to฀¥559.0฀billion฀in฀scal฀
2005,฀primarily฀driven฀by฀growth฀in฀strategic฀
businesses.
฀ With฀efforts฀to฀substantially฀increase฀
added฀value฀by฀enhancing฀product฀strength฀
in฀strategic฀businesses฀and฀to฀strengthen฀
earning฀potential฀by฀promoting฀greater฀
management฀efciency,฀consolidated฀
operating฀income฀jumped฀42.0%฀
year-on-year฀to฀¥39.0฀billion.฀Net฀income฀
rose฀51.9%฀year-on-year฀to฀¥21.5฀billion.฀
The฀Company฀achieved฀record-high฀sales฀
and฀income.
฀ Casio฀increased฀the฀dividend฀by฀¥2฀per฀
share฀from฀the฀¥15฀per฀share฀paid฀one฀year฀
earlier฀to฀¥17฀per฀share฀for฀the฀year฀under฀
review,฀taking฀factors฀such฀as฀business฀
performance฀into฀consideration.฀This฀
resulted฀in฀an฀increase฀in฀the฀dividend฀for฀
two฀years฀in฀a฀row.
Issues to Be Addressed and
Corporate Strategy
The฀Casio฀Group฀considers฀increasing฀its฀
earning฀capacity฀and฀strengthening฀its฀
nancial฀structure฀to฀be฀pressing฀issues,฀
and฀the฀entire฀Company฀has฀been฀united฀in฀
promoting฀the฀strategies฀described฀below฀
since฀scal฀2004.
(1)฀Improving฀Earning฀Capacity
Casio฀has฀positioned฀businesses฀that฀have฀
maintained฀top฀market฀share฀and฀are฀
expected฀to฀obtain฀stable฀cash฀ow฀without฀
requiring฀signicant฀additional฀investment฀
as฀Stable฀Businesses.฀These฀businesses฀
include฀Timepieces,฀Consumer฀(excluding฀
digital฀cameras),฀and฀System฀Equipment.฀
The฀Company฀has฀positioned฀businesses฀
that฀are฀expected฀to฀experience฀signicant฀
global฀market฀growth฀in฀the฀future,฀while฀
also฀experiencing฀intensifying฀competition฀
as฀a฀large฀number฀of฀companies฀enter฀the฀
market,฀as฀Expansive฀Businesses.฀These฀
include฀the฀digital฀camera฀and฀cellular฀
phone฀businesses,฀as฀well฀as฀Electronic฀
Components฀(TFT฀LCDs).฀With฀these฀two฀
types฀of฀businesses฀at฀the฀core,฀Casio฀is฀
pursuing฀management฀that฀secures฀stable฀
growth฀and฀protability฀by฀developing฀
strategies฀that฀suit฀the฀characteristics฀of฀
each฀type฀of฀business.฀In฀scal฀2005,฀Stable฀
Businesses฀accounted฀for฀47%฀of฀net฀sales฀
and฀Expansive฀Businesses฀accounted฀for฀
53%฀of฀net฀sales.฀The฀operating฀income฀
margin฀was฀10.6%฀in฀Stable฀Businesses฀
and฀5.7%฀in฀Expansive฀Businesses.฀As฀a฀
result,฀the฀operating฀income฀margin฀for฀the฀
Company฀overall,฀allowing฀for฀eliminations฀
or฀unallocated฀amounts,฀was฀7.0%,฀which฀
is฀a฀substantial฀improvement฀from฀the฀
4.1%฀of฀scal฀2003.฀Going฀forward,฀the฀
Company฀aims฀to฀secure฀stable฀prots฀in฀
Stable฀Businesses฀while฀increasing฀operating฀
income฀in฀Expansive฀Businesses.฀Casio฀is฀
focused฀on฀achieving฀a฀10%฀operating฀
income฀margin฀overall.
(2)฀Strengthening฀Financial฀Position
Casio฀is฀moving฀ahead฀strongly฀with฀
improvements฀in฀its฀shareholders’฀equity฀
ratio฀and฀debt/equity฀(D/E)฀ratio฀with฀
the฀aim฀of฀strengthening฀the฀nancial฀
foundations฀for฀future฀growth.
฀ In฀the฀term฀under฀review,฀Casio฀realized฀
major฀improvements:฀the฀shareholders’฀
equity฀ratio฀improved฀from฀28.7%฀in฀scal฀
2003฀to฀32.7%,฀and฀the฀D/E฀ratio฀went฀
from฀1.34฀in฀scal฀2003฀to฀0.95.฀In฀the฀
future,฀the฀Company฀will฀continue฀to฀pursue฀
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Stable฀Businesses฀and฀Expansive฀Businesses
Stable฀Businesses
•
฀ Electronic฀calculators
• ฀ Electronic฀dictionaries
• ฀ Label฀printers
• ฀ Visual-related฀products
• ฀ Electronic฀musical฀instruments
• ฀ Timepieces
• ฀ System฀equipment
• ฀ Mobile฀system฀equipment
• ฀ Others
Expansive฀Businesses
• ฀ Digital฀cameras
• ฀ Cellular฀phones
• ฀ Electronic฀components
Operating฀Income฀Margin
04 05
5.3% 7.0%
Target
฀10.0%
Net฀sales
(Billions฀of฀yen)
Operating฀income฀margin
(%)
Net฀sales฀of฀Stable฀Businesses
Net฀sales฀of฀Expansive฀Businesses
Operating฀income฀margin฀of฀Stable฀Businesses
Operating฀income฀margin฀of฀Expansive฀Businesses
Operatin
g
฀income฀mar
g
in
Text฀in฀blue฀=฀strategic฀businesses
2CASIO฀COMPUTER฀CO.,฀LTD.
3
ANNUAL฀REPORT฀2005