Harman Kardon 2015 Annual Report Download - page 2

With our entry onto the Fortune 500 list, HARMAN now has
delivered nine consecutive quarters of top and bottom line growth.
This performance could not have been achieved without the
dedication and teamwork of our employees and partners. It is a
testament to their integrity, ingenuity and work ethic that we
produced such impressive results. I am exceptionally proud of our
leadership and organization for the flexibility they demonstrated as
we took bold steps to transform HARMAN and improve our
competitive position in an increasingly connected – and complex –
world.
Over the last couple of years, HARMAN has been emphasizing the
growing importance of software and services in a world driven by
the Internet of Things (IoT). To meet the demand for seamless
connectivity across the car, home and enterprise, in January 2015,
HARMAN announced the acquisition of Mountain View-based
Symphony Teleca, a software engineering and integration services
company, and Israel-based Redbend, a leading provider of Over-The-
Air (OTA) software and firmware upgrading services for automotive
and consumer devices. These acquisitions brought to HARMAN
more than 8,000 talented individuals, many of them software
engineers and designers, and gave us immediate scale to deliver
solutions at the convergence of cloud, mobility and analytics. Now,
we are positioned to design, deliver, integrate and manage
connected technologies for all markets.
Turning to our business performance, HARMAN had a banner year
in each of our four divisions with customer wins and new product
introductions that underscore the expanding role of connectivity
and software within the markets we serve.
INFOTAINMENT
In many ways, this was a breakout year for the connected car with
HARMAN expanding our leadership in this growing market. In 2015,
HARMAN’s net sales in our Infotainment division reached $3.125
billion, up 10% over fiscal year 2014. EBITDA was up 33%*.
HARMAN’s Infotainment backlog of awarded business reached $17
billion. We capitalized on higher automotive production and
increasing demand for a connected car experience by increasing
take rates, delivering platform expansions and winning competitive
replacement awards and follow-on business with strategic accounts.
In fiscal year 2015, the HARMAN Infotainment team won additional
next-generation business with long-time customers BMW and
Daimler. In Japan, HARMAN won a competitive replacement award
from Subaru for their car lines globally. In addition, Suzuki launched
its new Lapin vehicle with an all-new infotainment system from
HARMAN. This is the first time a non-Asian supplier has delivered
an infotainment solution designed specifically for the Japanese
market, and it is an excellent example of how our scalable platform
delivers speed-to-market and flexible design to global OEMs.
HARMAN also continued its strides in China with follow-on
business from Chinese automaker Guangzhou Automobile, a joint-
venture partner of Fiat Chrysler Automobiles.
To maintain our leadership in infotainment, HARMAN continued to
invest in innovations that reflect OEM and driver demands for a
broader embedded and integrated connected car experience. In
fiscal year 2015, HARMAN introduced a 5 + 1 multi-layer security
solution, the first Learning Navigation & National Data Standard
(NDS)-based navigation system with OTA updating capabilities, and
a Smart Essentials entry-level platform leveraging smartphone
connectivity. HARMAN’s recent acquisitions give HARMAN further
scope to expand into automotive cloud services, including more
sophisticated OTA capabilities with Redbend which we believe will
become the de facto standard for OTA software services for mobile
devices and automotive applications.
While HARMAN technologies and solutions are forming the
building blocks for autonomous driving, the connected car itself
presents very exciting opportunities for a safer, more secure and
more immersive driving experience, and we have only just begun to
tap into the potential of this growing market.
LIFESTYLE
In fiscal year 2015, HARMAN introduced exciting home and
multimedia and car audio solutions that raised the standard in
sound quality, design and performance. Reflecting a growing demand
for HARMAN’s robust and diverse audio brands, HARMAN’s
Chairman's Letter
To Our Shareholders –
Fiscal year 2015 was a year of incredible change and growth for HARMAN,
culminating in outstanding financial results that reflect our relentless commitment
to innovation, execution and cost leadership:
ŸRevenue reached a record high of $6.16 billion, up 15% over the prior year.
ŸOperating income was up 29%* to $554* million compared to $430* million in
FY2014.
ŸEarnings Per Share (EPS) was up 29%* to $5.71*.
ŸAutomotive backlog of awarded business hit a record high $23 billion.
HARMAN's vision is to make life more
connected, entertaining, personalized and
productive. Our mission is to design and deliver
smart products, systems, software and services
that connect people wherever they are.