Kenwood 2006 Annual Report Download - page 4

Haruo Kawahara, President and CEO
“V”-shape recovery and resumption of dividend
accomplished as efforts for sweeping
restructuring and concentrating on core
businesses take hold
Kenwood Corporation has expanded its businesses based on its core
competences of “sound” and “wireless radio communications” ever
since its foundation. The strong performance in the car electronics
and wireless radio equipment businesses enabled the Company to
keep reporting operating profit even after the collapse of Japan’s
bubble economy. However, mature Home Electronics business and
new businesses weighed on the Company, and prompted the
Company to implement structural reforms at the end of March
2002.
There have been many Japanese corporations whose performance
became sluggish as their industry matured, but I believe that such
industries are intrinsically quite attractive. Mature fields, which are
not expected to grow, have large and stable markets that have been
already established and that have accumulated resources such as
technologies, facilities, sales networks, and brand presence.
To eliminate the past negative legacies as soon as possible and
restructure the Company by leveraging the benefits of a mature
industry, we formulated our “Revitalization Action Plan” in July
2002 to achieve drastic restructuring of finances, business, costs and
the management of the Company. As a result, we were able to
eliminate the negative net worth in December 2002 and completed
various restructuring measures within nine months. In fiscal 2002
(ended March 31 2003), the Company booked the highest
consolidated net income in its history, achieving a “V”-shape
recovery, and realizing resumption of dividend in June 2005.
The first mid-term business plan “Excellent Kenwood Plan”
enhancement of competitiveness and promotion
of growth strategy enabled us to sweep away
the past negative legacies and complete the
reforms on the financial base and capital
structure
As earlier mentioned, the Company had completed various
restructuring measures by the end of March 2003, and shifted its
management priorities aiming for a new leap forward as the reborn
Kenwood. In May 2003, aiming to become one of the world’s truly
excellent companies, the Company drafted its first mid-term
business plan, the “Excellent Kenwood Plan” that focuses on the
business domain of “Mobile & Home Multimedia System,” which is
To Our Stakeholders
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