Nikon 2014 Annual Report Download - page 50

Management’s Discussion and Analysis
Nikon Corporation and Consolidated Subsidiaries
For the year ended March 31, 2014
FINANCIAL INFORMATION
Business Environment
During the consolidated fi scal year ended March 31, 2014,
Japan showed signs of a slight recovery aided by a series of
government policies, but the global economy struggled, with
the United States generally improving but not in individual con-
sumption, Europe in economic stagnation, and the developing
economies facing adversity. In this environment, we revamped
operations to profi t thanks to changes in the business climate
and set up a Management Measures Committee to make busi-
ness intrinsically stronger. Stressing “minimum cost operations”
to the entire Group, we worked to slash supply and logistics
costs and to streamline development and manufacturing.
The market environments of our core businesses varied. In
the Precision Equipment Business, fi elds related to semicon-
ductors were weak, while fi elds related to fl at panel displays
(FPD) progressed steadily. In the Imaging Products Business,
the market shrank for both interchangeable lens-type digital
cameras and compact digital cameras. In the Instruments
Business, the market remained steady for bioscience instru-
ments and, in the latter half of the fi scal year, signs of recovery
were evident in capital investment for industrial instruments.
Financial Performance
In addition to overall cost-cutting measures and streamlining
to build a profi t structure responsive to market changes, we
invested in distinctive new products to strengthen our existing
businesses. In new business areas, we placed priority on
analytics and diagnosis in health and medical-related areas
by actively engaging in capital and business partnerships for
research and development (R&D) and for activities aimed at
creating viable future businesses.
As a result, on a consolidated basis, net sales for the fi scal
year under review declined ¥29,938 million, or 3.0%, to
¥980,556 million, while operating income climbed ¥11,940
million, or 23.4%, to ¥62,942 million. With ¥15,006 million in
extraordinary income from the Ministry of Land, Infrastructure,
Transport and Tourism to compensate for expropriating land and
relocating buildings at the Yokohama Plant, net income reached
¥46,825 million, an increase of ¥4,366 million, or 10.3%,
from the previous year.
Performance by Business Segment
Precision Equipment Business
Lackluster capital investment for semiconductor manufacturers
led to adverse market conditions, whereas FPD-related concerns
progressed steadily due to stronger demand related to smart-
phones and tablet computers.
While striving to boost sales in the semiconductor lithography
business, particularly of NSR-S621D and NSR-S622D ArF
immersion scanners, we started taking orders for the NSR-
S630D, which features enhanced overlay accuracy in super-
positioning and higher productivity. Sales grew steadily in the
Net Sales
(Years ended March 31)
Millions of yen
2011 2012 2013
1,500,000
1,000,000
500,000
02010 2014
Operating Income (Loss)
(Years ended March 31)
Millions of yen
90,000
60,000
30,000
0
–30,000 2011 2012 20132010 2014
Net Income (Loss)
(Years ended March 31)
Millions of yen
2011 2012 2013
60,000
40,000
20,000
0
–20,000 2010 2014
Income (Loss) Analysis
Years ended March 31, 2013 and 2014
% of Net Sales
2013 2014
Net sales 100.0% 100.0%
Cost of sales (65.7) (64.3)
Gross profi t 34.3 35.7
SG&A expenses (29.3) (29.3)
Operating income 5.0 6.4
Other income (expenses)—net 1.1 1.2
Income before income taxes and
minority interests 6.1 7.6
Income taxes (1.9) (2.8)
Net income before minority interests 4.2 4.8
Net income 4.2 4.8
* Expenses, losses, and subtractive amounts are in parentheses.
48 NIKON REPORT 2014