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5
Message from the President
Shifting Focus from Operational Reforms to Business
Structural Reforms
In fiscal 2007, ended March 31, 2007, consolidated net sales
declined 8.0%, to ¥742.7 billion, from the previous fiscal year. The
Company recorded an operating loss of ¥5.7 billion, versus an oper-
ating loss of ¥6.9 billion a year earlier, and a net loss of ¥7.9 billion,
versus a net loss of ¥30.6 billion a year earlier.
The Perfect Experience
One of the main reasons for the slow recovery in our earnings
was the weak performance of our display business in Japan and the
Americas. Sales of our HD-ILA rear projection TVs in the Americas
were weak, negatively impacted by the sharp decline in selling prices
for digital rear projection TVs and plasma and other flat-panel TVs.
Likewise, sales of our LCD TVs in Japan were below expectations,
hurt by an inability to attract sufficient consumer interest, despite
offering picture quality that ranks among the industry’s best. Our
performance was also hurt by the sales decline following the paring
down of DVD recorder models, sagging audio systems sales, and a
drop in selling prices for recordable media. As a result, the Company
recorded an operating loss for a second successive year and a net
loss for a third consecutive year.
We pressed forward with management reforms, centering on a
series of operational reforms for several years through fiscal 2007,
but as our sagging earnings show, we could not strengthen our
business fundamentally. In light of this, we devised a reconstruction
plan as a management reform blueprint that takes further the busi-
ness structural reforms we announced in May 2007. Soon after, in
July, we released our Action Plan 2007 to ensure the achievement
of the reconstruction plan. We will rebuild and restore the confi-
dence of the market under Action Plan 2007 with the following
goals: return to positive operating income in fiscal 2008, build a
strong management foundation in fiscal 2009, and switch to a
growth strategy in fiscal 2010.
Measures to Accomplish Rebuilding under Action Plan 2007
Action Plan 2007 is based on our recognition that to win amid
mounting competition in the digital era we must focus on bolstering
business and management structural reforms.
Business Reforms
We will carry out a fundamental review of the business structure
of the entire Group and reorganize so that it can grow and be
Completing Our Reconstruction Plan: Restoring Strength and Appeal to
the JVC Brand
In June 2007, I, Kunihiko Sato, assumed the responsibilities of president and representative director of Victor
Company of Japan, Limited (JVC). The year 2007 marks the 80th year since JVC’s founding, but our perform-
ance has been unfavorable over the past several years. As I have worked for JVC for nearly 40 years, I feel
agrave responsibility to see our reconstruction plan through to completion.