JVC 1999 Annual Report Download - page 18

16 JVC 1999
Analysis of Income
For the fiscal year ended March 31, 1999, JVC’s consoli-
dated net sales totaled ¥946,617 million (US$7,823.3 mil-
lion), an increase of 3.3% from the previous fiscal year. By
category, Entertainment posted robust growth, while
Consumer Electronics and Components & Devices con-
tributed substantially to sales growth. Sales of Professional
Electronics, however, were lower compared with the previ-
ous fiscal year.
By geographic region, sales in Japan declined 2.6% to
¥380,066 million (US$3,141.0 million) on account of weak
consumption and a fall in public and private capital invest-
ment. Overseas sales rose 7.7% to ¥566,551 million
(US$4,682.2 million). Sales grew steadily in North America
and Europe. Sales in emerging markets in Asia, Russia and
Brazil, however, dropped sharply owing to lackluster eco-
nomic conditions started by currency crises in the fall of
1997. Sales advanced 11.3% in the Americas and 13.5%
in Europe, while decreasing 6.7% in Asia. The overseas
sales ratio increased 2.5 percentage points to 59.9%.
With an increasing overseas sales ratio, fluctuations in
the exchange rate had a greater impact on net sales. The
yen depreciated to ¥146 per US$1 in the first half of the
term under review, and appreciated from the fall to winter
to ¥108 at the beginning of 1999. Prices have been
reduced to raise competitiveness during periods of depre-
ciation, and price competition persisted throughout peri-
ods of appreciation. Recognizing the urgency of this situa-
tion, the Company is building a strong corporate founda-
tion to minimize the effect of exchange rate fluctuations.
To lower its exposure to intense price competition
throughout the world for conventional audiovisual prod-
ucts, JVC aimed to boost its lineup of high-value-added
products in Consumer Electronics and increase the contri-
bution of Professional Electronics, Components & Devices
and Entertainment businesses to net sales. However, the
sales ratio of non-Consumer Electronics businesses
decreased 0.8 percentage point to 35.3% on account of a
drop in domestic private capital investment and a decline
in sales of Professional Electronics due to the lackluster
karaoke industry. The sales ratio of high-value-added con-
sumer electronics, however, climbed 4.0 percentage points
to 20%. The sales performance of each business was as
follows.
Sales of Consumer Electronics expanded 4.6% to
¥612,340 million (US$5,060.7 million), representing 64.7%
of net sales, an increase of 0.8 percentage point. Although
sales of conventional products were adversely affected by
sluggish domestic consumer spending and price competi-
tion, demand for such high-value-added products as DVC,
S-VHS ET and car audio systems was strong.
Sales of Professional Electronics fell 9.4% to ¥107,642
million (US$889.6 million), or a decline of 1.6 percentage
points to 11.4% of net sales. Overseas, demand was
Financial Review
NET SALES BY CATEGORY
Consumer Professional Components
Entertainment Other Total
Electronics Electronics & Devices
1999 612,340 107,642 73,693 148,934 4,005 946,617
64.7% 11.4% 7.8% 15.7% 0.4% 100%
1998 585,245 118,783 70,843 136,702 4,730 916,306
63.9% 13.0% 7.7% 14.9% 0.5% 100%
Change 4.6% (9.4)% 4.0% 8.9% (15.3)% 3.3%
Major
Products
VCRs, camcorders,
videotapes,
televisions,
stereo systems,
car audio systems,
CD radio cassette
tape players and
telephones
Professional-use
and educational-use
systems,
information systems,
karaoke systems
and projectors
Components for use
in computer
displays,
video heads,
motors and
build-up multilayer
printed wiring boards
Audio and visual
software including
CDs, DVDs and
videotapes
Interior furniture
(Millions of yen)