Olympus 2014 Annual Report Download - page 21

(Millions of yen)
2012/3 2013/3 2014/3
Operating Results
Net Sales 128,561 107,638 96,111
Operating Expenses 139,321 130,711 105,293
Operating loss (10,760) (23,073) (9,182)
Sales by Product
Digital Cameras 115,237 95,101 83,602
Domestic 27,333 27,234 25,932
Overseas 87,904 67,867 57,670
Others 13,324 12,537 12,509
Domestic 4,018 4,126 3,944
Overseas 9,306 8,411 8,565
Segment Data
R&D Expenditures (¥ Billion) 9.6 10.2 8.7
Capital Expenditures (¥ Billion) 5.2 3.1 3.5
Number of Employees(*)11,644 8,180 7,883
* Including average number of temporary employees
Unique technologies accumulated by concentrating on mirrorless cameras
Ability to design and manufacture high-performance lenses that are small
and light weight
Top share in mirrorless camera market in Japan
High-level imaging technologies and connections with Group
customers from Medical Business and Scientifi c Solutions
Business that are applicable to BtoB operations
Expansion of mirrorless camera market
Widening range of applications for cameras and increased
demand for imaging-related technologies outside of private
sector
Lacking sales system for high-priced SLR cameras (sales
system shift under way)
Insuffi cient lineup of high-priced interchangeable lens prod-
ucts (lineup expansion scheduled)
Intensifying competition in mirrorless camera market
Increased usage of smartphones and tablets PCs
S
O
W
T
Review of Business Segments
Message from the Group President
We will work to break even on the operating income level in the camera business by expanding
mirrorless camera operations and minimizing risks.
In the Imaging Business, we will pursue business development based on the policies of expanding mirrorless camera
operations and minimizing risks. Accordingly, we will accelerate the shift from compact cameras, for which the market is
continually shrinking, to high-margin mirrorless cameras while also taking measures to cut costs. In this way, we will work
to break even on the operating income level. At the same time, we aim to quickly grow business-to-business (BtoB)
operations in light of the risks present in the mirrorless camera market.
IMAGING
BUSINESS
Haruo Ogawa
President,
Imaging Group
Composition (Fiscal year ended March 31, 2014)
13.5%
Digital cameras
87.0%
Others
13.0%
Japan
31.1%
North America
15.4%
Europe
28.4%
Asia /
Oceania
22.6%
Others
2.5%
0
40
80
120
160
115.2
13.3
95.1 83.6
12.5
79.5
17.5
97.0
128.6
107.6
96.1
12.5
100.0
2012/3 2013/3 2015/3
(Forecast)
2017/3
(Target)
2014/3
0
–30
–10
–20
0
10
20
9.0
(23.1)
(9.2)
(3.5)
(10.8)
2012/3 2013/3 2017/3
(Target)
2015/3
(Forecast)
2014/3
Net Sales
(¥ Billion)
Operating Income (Loss)
(¥ Billion)
Digital cameras Others
Overview of Fiscal 2014
In digital SLR cameras, we introduced into the OM-D series of
strategic mirrorless cameras OM-D E-M1, our new fl agship
model, and OM-D E-M10, which features a more accessi-
ble price. In addition, we continued to shift our operations
away from compact cameras and toward mirrorless cameras.
As a result, mirrorless camera sales rose 13% year on year, to
¥42.8 billion, surpassing compact camera sales, which totaled
¥40.8 billion, for the fi rst time. We took preemptive steps to
address the rapidly shrinking compact camera market by
reducing sales volumes of these cameras, a measure that
resulted in overall net sales declining 11% in the Imaging Busi-
ness. Regardless, operating loss decreased ¥13.9 billion.
Compact camera inventories have continued to be a
detriment to income. However, in fi scal 2014, we succeeded
in reducing these inventories by approximately 90% on a unit
basis and roughly 60% on a monetary basis. Meanwhile, we
are expanding our lineup of mirrorless cameras and lenses and
increasing the ratio of sales accounted for by high-value-added
OM-D series cameras. Looking at digital camera inventories on
the whole, inventory levels are relatively unchanged from March
31, 2013, on a monetary basis. However, the content of these
inventories has changed; they now consist more of mirrorless
cameras, which boast long product life cycles.
2013/3 2014/3
Approx. 90%
Approx. 10%
Compact camera inventories
decreased 90% year on year
Approx. 50%
Approx. 50%
Inventory Ratios for Mirrorless Cameras and Compact
Cameras (Unit basis)
Compact cameras Mirrorless cameras
Business Environment
The compact camera market is rapidly contracting due to
the spread of smartphones and tablet PCs, and this market
is expected to shrink about 30% in fi scal 2015. Similarly,
growth is projected to be fl at in the digital SLR camera
market, meaning that our focus market—mirrorless
cameras—is likely to be the only market showing positive
growth in fi scal 2015. The strategic OM-D series primarily
consists of mid-to-high-end models (those priced more
than US$600), which are anticipated to see the largest
growth in demand. For this reason, we forecast that ship-
ment volumes of OM-D series cameras will increase
approximately 20% year on year in fi scal 2015.
Share of
Net Sales
(Consolidated net sales)
Share of
Net Sales
by Product
Share of
Net Sales
by Region
Strengths
Opportunities
Weaknesses
Threats
39
OLYMPUS Annual Report 2014
38 OLYMPUS Annual Report 2014