JVC 2010 Annual Report Download - page 4

JVC KENWOOD Holdings, Inc.
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First, we would like to apologize for the inconvenience and concern
caused to all of you by the adjustments made to previous earnings
results. The JVC Kenwood Group as a whole will do its utmost to
prevent a recurrence and to regain the trust of society at large,
while creating added value and increasing our corporate value. We
would like to ask for your continued understanding and support.
The JVC Kenwood Group was launched on October 1, 2008,
through the management integration of Victor Company of
Japan, Limited (JVC) and Kenwood Corporation (Kenwood). In line
with the corporate vision of the JVC Kenwood Group, “Realize
unconventional (Katayaburi wo katachi ni),” the two long-established
companies chose to integrate their management with the aim of
building a corporate group that will survive intensifying international
competition caused by the progress of digital technology, and
achieve global leadership as a unique specialty manufacturer of
unconventional AV products and services. At the time management
integration was being implemented, the worldwide economic crisis
was growing more severe. To overcome the resulting difficulties
and achieve the original purpose of management integration as
soon as possible, we strengthened the business areas where we
can demonstrate our strengths, and promoted various structural
reforms based on a four-pronged reform approach focusing on
management, finance, costs, and businesses.
Specifically, to establish the medium to long-term earnings
structure of the JVC Kenwood Group and achieve new growth, we
strengthened business and product competitiveness and improved
sales and profits in the following two businesses: the Car Electronics
business, where the most positive effects of integration are
expected, and the Land Mobile Radio business, in which high levels
of profitability can be achieved. Following profit structural reforms
launched at the same time as management integration, the JVC
Kenwood Group implemented the Business Structural Reform Action
Plan, which focused on improving the performance of unprofitable
businesses in the fiscal year ended March 2010. Consequently,
we significantly reduced fixed costs in the display, camcorder, and
business solution segments by the end of March 2010.
As a result, we forecast that the operating balance will turn
positive for the fiscal year ending March 2011. In the first quarter
of the fiscal year, the Car Electronics business made advances
and the performance of other businesses improved more than
expected, chiefly due to the effects of structural reforms. This led
to operating profit for the first quarter hitting a record high for
the second consecutive quarter since management integration,
and ordinary income moving into the black for the first time since
management integration.
It has taken two years since management integration to put
the business on a proper track. Now, we will shift our attention
away from conventional structural reforms intended to keep the
group afloat to growth. The first step will be to implement an
action plan for reconstructing the corporate base into one that is
appropriate for current revenues. With the new corporate base,
we will carry out the Mid-term business plan through to the
fiscal year ending March 2013, re-create and expand corporate
value, create new added value in line with the corporate vision of
realizing unconventional, and evolve into a corporate group that
inspires customers in ways they never previously experienced.
Creating new added value and expanding corporate
value under the Mid-term business plan
Under the JVC Kenwood Groupʼs first Mid-term business plan
announced in May 2010, we aim to focus further on core
strengths, reposition ourselves, and achieve renewed growth
We will recover the trust of society,
create new added value,
and expand corporate value
Management Message