Pioneer 2012 Annual Report Download - page 24

Financial Review
Year ended March 31, 2012,
compared with year ended March 31, 2011
Financial Position
Total assets as of March 31, 2012 were ¥322,012
million, an increase of ¥12,300 million from March
31, 2011, mainly reflecting increases in trade
receivables and inventories, which more than offset
decreases in property, plant and equipment and
investment securities. Property, plant and equipment
decreased ¥5,304 million, to ¥62,100 million, mainly
reflecting restrained capital expenditures and sales
of idle assets. Investment securities decreased
¥2,515 million, to ¥9,618 million, due to a decline
in the market value of equity holdings. On the other
hand, trade receivables increased ¥12,026 million,
to ¥77,273 million, mainly reflecting a year-on-year
increase in fourth-quarter net sales. Inventories
grew ¥7,255 million, to ¥66,871 million, reflecting
an increase in the production of car electronics
products in line with our sales expansion plans.
Total liabilities as of March 31, 2012 were
¥232,975 million, an increase of ¥11,717 million
from March 31, 2011. This included a ¥13,268
million increase in trade payables from increased
purchasing amounts as production was shifted
to alternate facilities in response to the flooding
in Thailand that devastated the country in fiscal
2012, which was more than offset a ¥4,977 million
decrease in accrued expenses.
Total equity as of March 31, 2012 was ¥89,037
million, marking a ¥583 million increase from
March 31, 2011. This was mainly a reflection of the
recording of ¥3,670 million in net income, despite
a ¥2,270 million decrease in unrealized gain on
available-for-sale securities from a decline in the
market value of equity holdings, and a ¥1,447 million
decrease in foreign currency translation adjustments
due to the Japanese yen’s appreciation.
Results of Operations
• Net sales
In fiscal 2012, the year ended March 31, 2012,
consolidated net sales declined 4.5% year on year,
to ¥436,753 million. Despite solid sales of car
navigation systems in Japan, a decline in sales of
optical disc drive-related products and a decline
in sales of car audio products from the impact of
the Great East Japan Earthquake and the flooding
in Thailand, combined with the Japanese yen’s
appreciation, resulted in an overall decline.
Car Electronics sales grew 6.6% year on year,
to ¥270,785 million, on strength in car navigation
Management’s Discussion and Analysis of Financial Position, Results of Operations, and Cash Flows
systems in Japan, while sales were negatively
affected by the Great East Japan Earthquake,
the flooding in Thailand, and the Japanese yen’s
appreciation. The growth in sales of car navigation
systems included increases in consumer-market
sales from strength in the Japanese market,
supported partly by the roll-out of new products,
and increases in OEM sales on solid sales to
automobile manufacturers and for dealer options
in Japan. In car audio products, on the other
hand, consumer-market sales rose in Europe but
recorded an overall decline, mainly from lower sales
in North America and in Central and South America,
reflecting insufficient product supply from decreased
production as a result of the flooding in Thailand,
combined with the Japanese yen’s appreciation.
OEM sales declined as well, in part from a large
decline in orders following the Great East Japan
Earthquake and the flooding in Thailand. In total,
OEM sales accounted for 43% of Car Electronics
sales, the same percentage as in the previous fiscal
year. By geographic region, sales in Japan grew
26.7%, to ¥136,438 million, while overseas sales
declined 8.2%, to ¥134,347 million.
Home Electronics sales declined 21.9% year
on year, to ¥123,057 million. Despite solid sales of
AV systems and AV receivers primarily in Europe,
a large decline in sales of optical disc drive-
related products due to the absence of the special
demand associated with the shift to digital terrestrial
broadcasting in Japan in July 2011 and a decline in
these products for PCs led to a large overall decline.
By geographic region, sales in Japan declined
30.2%, to ¥58,142 million, and overseas sales were
down 12.7%, to ¥64,915 million.
In the Others segment, sales declined 6.4%
year on year, to ¥42,911 million, on lower sales of
electronic devices and parts, speaker units for cellular
phones, and organic light-emitting diode displays,
despite increased sales of factory automation
systems and map software, and an increase in
royalty revenue from patents related to optical disc
technologies. By geographic region, sales in Japan
declined 5.6%, to ¥27,387 million, and overseas
sales were down 7.7%, to ¥15,524 million.
• Operating income (loss)
Cost of sales decreased to ¥343,244 million from
¥356,449 million a year earlier. Cost of sales
accounted for 78.6% of net sales, worsening by
0.7 percentage point from 77.9% in fiscal 2011.
The worsened cost of sales ratio was mainly due
to an increase in costs associated with alternate
22 Pioneer Corporation Annual Report 2012