Nikon 2015 Annual Report Download - page 44

42 NIKON REPORT 2015
Financial and Corporate Data
Management’s Discussion and Analysis
Nikon Corporation and Consolidated Subsidiaries
For the year ended March 31, 2015
Business Environment
During the consolidated scal year ended March 31, 2015, the
Japanese economy was impacted by the reaction of last-minute
demand associated with a consumption tax rate hike, but it stayed
on a recovering trend. Outside of Japan, the U.S. economy contin-
ued to grow, underpinned by robust individual consumption,
Europe remained in an economic downturn, and growth in develop-
ing economies showed signs of slowing.
Under these circumstances, the Group initiated a structural
reform to rebuild its business portfolio and to achieve a transforma-
tion into a business model capable of realizing sustained growth
based on the three-year Medium-Term Management Plan
announced in June 2014. The Group shifted from an in-house
company structure, which was a decentralized operation, to a divi-
sional organization under the direct control of the president, to
create a system that allows the exible allocation of management
resources. In addition, the Group established the Medical Business
Development Division to promote faster business development of
the Medical Business that will serve as a new business pillar.
With regard to the market environments of the Group’s core
businesses, for the Precision Equipment Business, capital invest-
ments were rm in the semiconductor-related eld. At the same
time, in the eld related to at panel displays (FPDs), although
there was a recovery in capital investments for large displays, busi-
ness performance was weak as a result of settling down in capital
investments for small and medium-sized displays. In the Imaging
Products Business, the market for digital cameras–interchangeable
lens type was weak mainly in Europe and China, and the compact
digital camera market continued to shrink. In the Instruments
Business, although the microscope-related eld was sluggish due
to a reduction in the public budget of Japan and delays in execu-
tion, the eld was robust in the Americas and China. In the indus-
trial metrology-related eld, capital investments related to
electronic components and automobiles recovered.
Financial Performance
To achieve a transformation into a business model capable of real-
izing sustained growth, the Group worked to strengthen its busi-
ness basis by introducing innovative new products and striving to
reduce costs further in its existing core businesses. In addition, the
Group promoted the development of corporate venture capital proj-
ects to utilize external resources, through means such as M&A and
business alliances, and to explore new elds. For example, to make
full-scaled entry into the Medical Business, the Group reached an
agreement with Optos Plc, which is a leading company in the United
Kingdom’s retina diagnostic imaging equipment market, for the
friendly acquisition of Optos and the commencement of procedures
to convert it into a wholly owned subsidiary. (The process to make
Optos a wholly owned subsidiary was completed in May 2015.)
As a result, on a consolidated basis, net sales for the scal year
under review decreased ¥122,774 million year on year, or 12.5%, to
¥857,782 million, and operating income decreased ¥19,530 million
from the previous year, or 31.0%, to ¥43,412 million. In addition, as
a result of recording an impairment loss in the Semiconductor
Lithography Business, net income decreased ¥28,461 million year
on year, or 60.8%, to ¥18,364 million.
Net Sales
(Years ended March 31)
Millions of yen
2012 2013 2014
1,200,000
800,000
400,000
0
2011 2015
Operating Income
(Years ended March 31)
Millions of yen
90,000
60,000
30,000
0
2012 2013 20142011 2015
Net Income
(Years ended March 31)
Millions of yen
60,000
40,000
20,000
0
2012 2013 20142011 2015
Income (Loss) Analysis
Years ended March 31, 2014 and 2015
% of Net Sales
2014 2015
Net sales 100.0% 100.0%
Cost of sales (64.3) (62.1)
Gross prot 35.7 37.9
SG&A expenses (29.3) (32.9)
Operating income 6.4 5.1
Other income (expenses)—net 1.2 (1.0)
Income before income taxes and minority interests 7.6 4.1
Income taxes (2.8) (2.0)
Net income before minority interests 4.8 2.1
Net income 4.8 2.1
* Expenses, losses, and subtractive amounts are in parentheses.