JVC 2002 Annual Report Download - page 23

ANNUAL REPORT 2 0 0 2 2 1
strong sales of DVD players and color televisions,
and favorable exchange rates. Amid weak market
growth in Europe, JVC achieved a substantial increase
in sales of DVD players and double-digit growth in
sales of digital video camcorders (DVCs), color tele-
visions and car audio systems. This propelled sales
in Europe to ¥191.6 billion (US$1,441 million), a
26.7% increase over the previous year. Conditions
were also challenging in Asia, particularly in the
Middle and Near East, due to the effects of the terrorist
attacks. Even still, sales in the region increased
22.1% to ¥82.1 billion (US$617 million), boosted
by rising sales of DVD players and DVCs.
COST OF SALES AND SG&A
Cost of sales increased 6.7% year on year, or ¥43.2
billion, to ¥684.5 billion (US$5,146 million), while
the cost of sales ratio deteriorated slightly from
68.6% to 71.7%.
Selling, general and administrative (SG&A)
expenses declined 2.0%, or ¥5.6 billion, to ¥281.8
billion (US$2,119 million). As a percentage of net
sales, SG&A expenses fell to 29.5% from 30.8% in
the previous year.
OPERATING INCOM E (LOSS)
The company recorded an operating loss of ¥12.1
billion (US$91 million), a ¥17.8 billion deterioration
from the operating income in the previous fiscal year.
Efforts to improve the company’s cost structure,
-1 5
-1 0
-5
0
5
1 0
1 5
9 8 0 29 9 0 0 0 1
OPERATING INCOME (LOSS)
(Billions of yen)
0
200
400
600
800
1 ,0 0 0
9 8 0 29 9 0 0 0 1
NET SALES
(Billions of yen)
Overseas
Domestic
including reducing fixed costs and material costs,
failed to show through as the benefits were more
than offset by the effects of the weak Japanese and
U.S. markets, the inability to meet sales targets due
to the slump in IT-related demand and falling prices.
SEGM ENT INFORM ATION
CONSUMER ELECTRONICS
Sales of Consumer electronics rose 7.1%, or ¥42.7
billion, to ¥641.3 billion (US$4,822 million), helped
by favorable exchange rates, although operating income
declined ¥6.6 billion to a loss of ¥3.5 billion (US$26
million). The segment continued to battle with the
twin problems of anemic consumer spending and fall-
ing prices in Japan, although JVC did rack up healthy
sales of a new model that combines a VHS video deck
and a DVD player. Overseas, the European and Asian
markets held up well, thanks to rising sales of DVD
players, car audio systems, color televisions and DVCs,
while demand in the U.S. was hit by the slowing
economy and the terrorist attacks.
PROFESSIONAL ELECTRONICS
During fiscal 2002, sales of Professional electronics
products fell 6.6%, or ¥5.6 billion, to ¥78.3 billion
(US$589 million), while the operating loss increased
¥0.1 billion to ¥5.0 billion (US$38 million). In
Japan, strong demand for security systems continued
to buoy sales of security camera systems, while the
shift to digital broadcasting boosted demand for