Wacom 2016 Annual Report Download - page 2

I am pleased to present Wacom’s Annual Report for the
fiscal year ended March 31 2016.
Based on our vision of “A world alive with creativity”, we
strive to lead the field of digital expression, ranging from
movie production, industry design and image editing, to
animation and manga. We also aspire to serve the broader
realm of human creativity such as education, paperless
workflow and security as well as digital stationery.
Business results in the fiscal year ended
March 2016
During the fiscal year ended March 2016, the global
economy maintained a stable recovery until the third quarter.
Uncertainties spread rapidly during the fourth quarter, as a
result of the slowing Chinese economy, the situation with Eu-
ropean refugees, and the rapid fluctuation in exchange rates.
In the IT market, the industry continued to shift toward
mobile and cloud platforms, driving changes in the market
landscape.
Under this environment, our Brand Business segment main-
tained a steady growth by leveraging a newly established
global business organization. However, our Technology Solu-
tion Business segment was negatively impacted by the slow-
down in the smartphone market, and as a result our revenue
growth remained at a modest rate and our operating income
declined compared to the previous fiscal year.
In Brand Business, the Creative Business category
maintained strong growth, driven by an increasing demand
for 3D design and high-level multimedia content, and
user expansion in emerging markets such as China. The
Consumer Business category grew following the introduction
of Bamboo Spark, Wacom’s first digital stationery with
integrated service on Wacom Cloud, which contributed to
growth. The Business Solution category recorded negative
growth year on year due to prolonged investment projects
in the European financial field. In Technology Solution Busi-
ness, although there was steady growth of our customer
base for Active ES pen technology in tablets, our business
was impacted by a reduction in demand for smartphone and
notebook PCs. During the year we signed an agreement with
Microsoft to develop the next generation pen technology for
the Windows market. At the corporate level, we have contin-
ued to invest in global business infrastructure development
such as global SCM and ERP systems.
As a result of these activities, for the fiscal year we recorded
net sales of ¥77,568 million (up 4.0% year on year), operating
income of ¥3,664 million (down 40.3%), and net Income
attributable to owners of parent of ¥2,310 million (down
33.5%).
Business outlook and new initiatives
For the fiscal year ending March 2017, while we expect the
global economy to maintain moderate growth due to fiscal
policies and stimulus measures from major countries, we
also foresee an increase in uncertainty in the business
environment. As such, business risk management will be one
of our key focuses for the year. In the IT market, we expect
the mobile product market to continue growing as the main
business platform, along with continued integration of cloud
services and applications. We also expect to see further
expansion of 3D design and content as well as 3D printing
across various industry segments.
We will respond to these rapid changes in the IT industry as
well as take on new initiatives for future growth.
In Brand Business, we will enhance our market leadership
with new generation professional product lines and continue
investing in emerging markets in China, the Asia Pacific
and South America In Consumer Business, we will expand
our digital stationery product line to establish our brand lead-
ership in the segment, while in Business Solution, our main
focus will be in digital signature for workflow and security.
In Technology Solution Business, we will promote our Active
To Our Shareholders
Our Vision
ES technology as the new industry standard by developing a
broader user base and establishing a cost competitive, auto-
mated pen module production. For industry initiatives, we will
build on our Digital Stationery Consortium to promote WILL
(Wacom Ink Layer Language) as a cross-platform digital ink
standard and to develop a new global industry partnership.
We plan to complete business infrastructure development by
the end of the fiscal year ending March 2017, and start lever-
aging for global efficiency and speed.
Taking into account our new initiatives for growth and our
investment in business infrastructure, we project net sales of
¥82,000 million (up 5.7% year on year), operating income of
¥4,200 million (up 14.6%), and net income of ¥3,000 million
(up 29.9%). The assumed foreign exchange rates are ¥110
per USD and ¥125 per euro.
Wacom Strategic Business Plan — SBP-2019
On April 30, 2015, we announced the Wacom Strategic Busi-
ness Plan “SBP-2019” with target net sales of ¥120.00 billion,
and target operating profit margin and ROE of at least 12%
and 20% respectively by March 31, 2019. Currently, Brand
Business is proceeding ahead of our original plan while
Technology Solution Business is impacted by the slowdown
in the smartphone market. To attain our SBP-1219 goals,
we will continue to improve our performance by further
expanding Brand Business, revitalizing Technology Solution
Business, and raise efficiency by leveraging our new global
infrastructure.
Dividend policy
Our dividend policy is to ensure appropriate returns to inves-
tors while maintaining a solid financial foundation for growth.
For the fiscal year ended March 31, 2016, we paid a dividend
of ¥18.0 per share (payout ratio: 128.6%). In the medium
term, we plan to maintain a payout ratio of at least 40%.
Intuitive user interface for human creativity
In a world connected by digital technology, intuitive user
interface solutions have become a driver for human creativ-
ity. We will strive to further increase our corporate value by
helping people and societies across the globe unleash their
creativity.
Your support and understanding remain an essential factor in
our success. On behalf of Wacom teams worldwide, please
allow me to express my sincere appreciation for your contin-
ued support.
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Masahiko Yamada
President & CEO