Nikon 2016 Annual Report Download - page 48

46 NIKON REPORT 2016
Management’s Discussion and Analysis
Nikon Corporation and Consolidated Subsidiaries
For the year ended March 31, 2016
Overview of the Fiscal Year Ended March 31, 2016
During the consolidated scal year ended March 31, 2016, the
Japanese economy showed a tendency toward a gradual recovery
primarily in capital investment, amid weak personal consumption.
Although the United States and Europe trended toward gradual
improvements underpinned by personal consumption, the global
economy saw a deceleration in growth, strongly inuenced by
slowdowns in China and other emerging economies.
Under these circumstances, the Group set a new goal to restruc-
ture into a corporate entity with a portfolio of six businesses—
Semiconductor Lithography, FPD Lithography, Imaging Products,
Microscope Solutions, Industrial Metrology, and Medical—under
the Medium-Term Management Plan announced in May 2015 to
achieve sustainable medium- to long-term growth.
In the Instruments Business, which is positioned as a growth
business, although the market in the microscope-related eld was
sluggish overall, the Group’s business expanded its market share
and trended rmly. Moreover, the Group collaborated with industry
giant Lonza of Switzerland and established wholly owned Nikon
CeLL innovation Co., Ltd., to enter the contract manufacturing
business for products such as the cells used in regenerative medi-
cine therapeutics. In the industrial metrology-related eld, capital
investments in semiconductors and electronic components as well
as in the automobile-related eld remained rm and the Group’s
business was strong as well. The Group also invested in a U.S.
venture company to strengthen product competitiveness in its
non-destructive testing equipment business, where future growth is
expected. In the Medical Business, the Group acquired Optos
Plc—a leading company in the retina diagnostic imaging equipment
market—as a wholly owned subsidiary to mark its full-scale entry
into the medical business eld.
In the Group’s core businesses, for the Precision Equipment
Business, although capital investments in the semiconductor-related
eld were favorable across the market, the business environment
surrounding the Group was continuously severe. On the other
hand, in the FPD-related eld, the market was rm overall, as capital
investments for small and medium-sized panels saw a drastic
recovery, boosting the Group’s business. In the Imaging Products
Business, the Group struggled due to the shrinking market. Under
these circumstances, the Group engaged in structural reforms,
such as restructuring sales bases to optimize its business manage-
ment systems, while striving for further improvements in business
efciency through cost reductions and other efforts.
As a result, on a consolidated basis, net sales for the scal year
under review decreased ¥34,866 million (4.1%) year on year to
¥822,916 million, and operating income decreased ¥6,711 million
(15.5%) from the previous scal year to ¥36,701 million. In addition,
although impairment loss was recorded in the Semiconductor
Lithography Business, net income attributable to owners of the
parent increased ¥3,828 million (20.8%) to ¥22,192 million.
Income (Loss) Analysis
Years ended March 31, 2015 and 2016
% of Net Sales
2015 2016
Net sales 100.0% 100.0%
Cost of sales (62.1) (61.4)
Gross prot 37.9 38.6
SG&A expenses (32.9) (34.1)
Operating income 5.1 4.5
Other income (expenses)—net (1.0) (0.4)
Income before income taxes 4.1 4.1
Income taxes (2.0) 1.4
Net income 2.1 2.7
Net income attributable to owners of the parent 2.1 2.7
* Expenses, losses, and subtractive amounts are in parentheses.
Net Sales
(Years ended March 31)
Millions of yen
2013 2014 2015
1,200,000
800,000
400,000
0
2012 2016
Operating Income
(Years ended March 31)
Millions of yen
90,000
60,000
30,000
0
2013 2014 20152012 2016
Net Income Attributable to Owners of the Parent
(Years ended March 31)
Millions of yen
60,000
40,000
20,000
0
2013 2014 20152012 2016
46 NIKON REPORT 2016