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capabilities, and through personnel optimization, we aim to reduce the total SG&A ratio, including of core
business domains (Medical, Life Science & Industrial, and Imaging) and corporate expenses, by 6.6
percentage points over the five-year period to fiscal 2017. This represents a reduction of approximately
¥38.0 billion on a fiscal 2012 sales basis. The fruits of these efforts will contribute to investment in next-
generation products and businesses. By preparing for future growth, we are working to further improve
corporate value.
>>> Groupwide Personnel Optimization
Through the restructuring of subsidiaries and production sites worldwide, in addition to selection and
concentration in each business field, and to enhance the efficiency of the workforce at corporate
departments, we plan to reduce the number of employees worldwide by 2,700, or approximately 7%, by the
end of fiscal 2014. At the same time, we will reassign personnel to organizations that require additional staff,
focusing on growth fields.
>>> Cost Reductions from Restructuring Production Sites and Strengthening Procurement
To reduce costs, we will also engage in structural reforms of procurement and by restructuring production
sites. Specifically, we will first of all, centrally control Groupwide procurement to reduce procurement costs.
Furthermore, we will boost cost competitiveness by eliminating approximately 40% of our thirty production
sites worldwide by fiscal 2015 and increasing plant efficiency and operating rate. We plan to finalize the
details together with the authorities in host countries. To cite one example, we have already decided to begin
procedures to deactivate a microscope plant in the Philippines in fiscal 2013.
Through such initiatives, we seek an improvement of two percentage points in the cost of sales ratio in
the core business domains by fiscal 2015 and an improvement of three points by fiscal 2017.
As the plans in the medium-term vision demonstrate, we will improve the financial position without
fail in the medium to long term. By vigorously implementing business structure reforms, we will
secure stable profits and steadily increase shareholders’ equity. We will also maximize cash flows and reduce
interest-bearing debt by efficiently investing in each business taking an overall management perspective.
Q8
Please discuss the current financial
situation and medium- to long-term
improvement measures.
Current Financial Indicators and Targets
FY2012
FY2017 (Plan)
Operating margin 4% 10% or more
(Medical) 20% 22%
(Life Science & Industrial) 6% 12%
(Imaging) -8% 5%
SG&A ratio to net sales
(Medical, Life Science & Industrial, Imaging, Corporate)
53% 47%
Free cash flows -¥4.8 billion ¥70.0 billion or more
Equity ratio 4.6% 30% or more
Balance of interest-bearing debt ¥642.4 billion ¥300.0 billion
A
OLYMPUS 󱚈 Annual Report 2012 29