Olympus 2011 Annual Report Download - page 33

OLYMPUS 2011 31
in its lineup of digital SLR cameras as a flagship model for profes-
sional and semiprofessional photographers.
In the recorder field, sales of the new V series IC recorders were
strong, while sales of the PJ-10 compact radio server also grew.
However, the negative impact of foreign exchange rate fluctuations
and intensifying competition in the compact digital camera market
resulted in a decrease in sales volume and unit sales prices; thus,
overall sales in the Imaging Systems Business declined.
Furthermore, the Company recorded an operating loss in this
business despite efforts to reduce initial costs.
Sales in the Information & Communication Business climbed
10.6% year on year to ¥209,520 million (US$2,619 million), and
operating income rose 7.8% to ¥5,242 million (US$66 million). Sales
in this segment increased due to the Company’s efforts to expand
sales channels through the complete acquisition of other compa-
nies; strong demand for such products as fixed optical lines, data
cards and digital photo frames; and increased sales of smart-
phones.
The rise in operating income in this segment was attributable to
an expansion in sales of mobile handsets.
Sales in the Others business declined 7.3% year on year to
¥50,038 million (US$625 million), and operating loss improved from
¥5,734 million in the previous fiscal year to ¥4,258 million (US$53
million). During the fiscal year under review, the Company rein-
forced the Group’s overall capabilities by pooling management
resources for new business creation while establishing a new sub-
sidiary dedicated to cultivating new businesses and transforming
the current business structure into something more effective in
order to accelerate product development. The decrease in sales
reflected the sale of subsidiaries in November 2009.
Operating loss in this segment shrank due to the improved profit
from new businesses.
Financial Position
As of March 31, 2011, total assets declined ¥88,634 million from a
year earlier to ¥1,063,593 million (US$13,295 million). Total current
assets rose ¥784 million year on year due to the increase in cash
and time deposits, while investments and other assets declined
¥87,549 million due mainly to the sale of investment securities.
Total liabilities decreased ¥38,579 million year on year to
¥896,757 million.
Total net assets fell ¥50,055 million (US$626 million) to ¥166,836
million (US$2,085 million). This was mainly attributable to ¥34,020
million decrease in foreign currency translation adjustments caus-
ing ¥40,560 million decline in total accumulated other comprehen-
sive income.
Reflecting these factors, the equity ratio dropped from 18.2% at
the previous fiscal year-end to 15.4%.
Cash Flows
Cash provided by operating activities stood at ¥32,917 million
(US$411 million). Major cash inflows included income before provi-
sion for income taxes and minority interests of ¥22,759 million
(US$284 million), depreciation and amortization of ¥34,413 million
(US$430 million) and a decrease in accounts receivable of ¥9,969
million (US$125 million), while major cash outflows were a decrease
in accounts payable of ¥5,731 million (US$72 million) and income
taxes paid of ¥30,659 million (US$383 million).
Net cash provided by investing activities totaled ¥16,555 million
(US$207 million). The principal cash inflow consisted of sales of
investment securities of ¥70,861 million (US$886 million), while
major cash outflows comprised purchases of property, plant and
equipment of ¥20,243 million (US$253 million), purchases of intan-
gible assets amounting to ¥9,381 million (US$117 million) and pay-
ments for acquisition of new consolidated subsidiaries of ¥12,328
million (US$154 million).
Net cash used in financing activities was ¥37,359 million
(US$467 million), a turnaround from net cash provided by financing
activities of ¥17,355 million in the previous fiscal year. Major cash
outflows were a decrease in short-term borrowings of ¥13,980 mil-
lion (US$175 million), repayments of long-term debt of ¥18,908 mil-
lion (US$236 million), a redemption of bonds of ¥20,040 million
(US$251 million) and payments for purchase of treasury stock of
¥10,006 million (US$125 million). The largest cash inflow was pro-
ceeds from long-term debt of ¥34,501 million (US$431 million).
As a result, cash and cash equivalent as of March 31, 2011, grew
¥7,372 million (US$92 million) from a year earlier to ¥210,385 million
(US$2,630 million).
Fiscal 2012 Outlook
In the fiscal year ending March 31, 2012, the Japanese economy is
expected to gain upward momentum. However, the effects of the
Great East Japan Earthquake will continue to weaken corporate
activities by limiting the electricity supply and driving up crude oil
prices. At the same time, the global economy is also anticipated to
continue on an upward trend even though the credit crunch and fis-
cal restraint in North America and Europe may decelerate the speed
of recovery.
Against this backdrop, the Olympus Group will aim to maximize
corporate value, one of its aims under 2010 CSP. In fiscal 2012, the
second year of this plan, the Group is continuing to reinforce its
global management infrastructure to attain new growth in the next
three years.
In the Medical Systems Business, as the world’s only all-round
endoscope manufacturer, Olympus will enhance the quality of its
marketing in order to offer better products and services both in
Japan and overseas. Simultaneously, the Company will increase its
focus on the growth areas of surgical and endotherapy devices,
while accelerating business development in emerging markets. In
the Life Science and Industrial Systems Business, the Company will
strengthen its earnings foundation by improving the sales structure
and product development process in the life science field. In the
Imaging System Business, Olympus will leverage its proprietary
technologies for smaller and lightweight optical items to enhance
its lineup of high-value-added products. In addition, the Company
will strive to improve earnings in this segment by implementing
sales promotion activities tailored to individual local communities
and each generation of customers. With regard to new businesses,
the Company will concentrate Group resources on business launch-
es and securing earnings foundations.
At present, Olympus is unable to reliably make the calculations
necessary to forecast its fiscal 2012 results due to the impact of
the Great East Japan Earthquake. When the picture becomes clear-
er, the Company will immediately announce its projections.