2003.4.25. FY03 Business Results 1 F Y 0 2 F Y 0 3 P r o f i t a b l e a t c o n s o l i d a t e d P r o f i t a b l e a t b o t h o p e r a t i n g i n c o m e l e v e l c o n s o l i d a t e d o p e r a t i n g i n 2 H a n d n e t i n c o m e l e v e l F o r e c a s t N e t s a l e s ¥ 9 6 7 . 6 b i l . . N e t s a l e s ¥ 9 8 2 . 5 b i l . O p e r a t i n g i n c o m e O p e r a t i n g i n c o m e ¥ 2 2 . 3 b i l . . ¥ 2 0 . 0 b i l . N e t i n c o m e ¥ 6 . 3 b i l . N e t i n c o m e ¥ 6 . 0 b i l . FY03 results Profitable at both consolidated operating and net income level （ Profitable at both consolidated operating and net income level （ since since FY98 after five years of operating loss ） FY98 after five years of operating loss ） Good performance with consumer electronics business, driving force of Good performance with consumer electronics business, driving force of the company the company
2003.4.25. Focusing on Priority Business Areas in FY03 2 Priorities for FY03 FY03 results and tasks Priorities for FY03 FY03 results and tasks 1. Global organization necessary to realize the 1. Second display factory in Mexico in operation, 1. Global organization necessary to realize the 1. Second display factory in Mexico in operation, optimization of development/production and increasing production capacity optimization of development/production and increasing production capacity sales locations 2. Completed with the implementation of early retirement sales locations 2. Completed with the implementation of early retirement Consumer Consumer 2. Reduction of fixed costs through employment program 2. Reduction of fixed costs through employment program structural reform 3. Domestic sales achieving 107% YoY (market increase structural reform 3. Domestic sales achieving 107% YoY (market increase 3. Measures to strengthen domestic sales by 101%) Electronics 3. Measures to strengthen domestic sales by 101%) Electronics organization 4. In progress, consolidating manufacturing functions at organization 4. In progress, consolidating manufacturing functions at 4. Centralization of manufacturing at Yokosuka Yokosuka: from decentralization to centralization of 4. Centralization of manufacturing at Yokosuka Yokosuka: from decentralization to centralization of factory to improve productivity and quality manufacturing process factory to improve productivity and quality manufacturing process 1. Accelerating the shift to overseas production 1. Accelerating the shift to overseas production 1. Overseas production ratio of 37% by the end of FY03 1. Overseas production ratio of 37% by the end of FY03 (Goal: overseas production ratio of 40%) Professional (Goal: overseas production ratio of 40%) Professional 2. Focus on presentation and security businesses 2. Focus on presentation and security businesses 2. Focus on priority businesses through structure 2. Focus on priority businesses through structure Reinforcement of sales & marketing on prospective Reinforcement of sales & marketing on prospective reform reform system business activities Electronics system business activities Electronics 3. Decreasing the number of products from 1700 3. Decreasing the number of products from 1700 3. Number of products reduced to 1400 by the end of FY03 3. Number of products reduced to 1400 by the end of FY03 to 1100 which is half of the number in FY01 to 1100 which is half of the number in FY01 1. Expansion of Optical Pickup and Motor business 1. Motor business achieved 104% YoY, Optical Pickup 1. Expansion of Optical Pickup and Motor business 1. Motor business achieved 104% YoY, Optical Pickup 2. Global organization necessary to realize the business in difficulty 2. Global organization necessary to realize the business in difficulty optimization of development/production and 2. Centralization of deflection yoke manufacturing in over- Components optimization of development/production and 2. Centralization of deflection yoke manufacturing in over- Components sales locations seas sales locations seas 3. Reduction of fixed costs through employment 3. Completed with the implementation of early retirement 3. Reduction of fixed costs through employment 3. Completed with the implementation of early retirement & Devices & Devices structure reform program structure reform program 4. Withdrawal from Magnetic Head business, 4. Withdrawal from Magnetic Head and Crystal Oscillator 4. Withdrawal from Magnetic Head business, 4. Withdrawal from Magnetic Head and Crystal Oscillator reduction of Crystal Oscillator Device business Devices businesses, and closure of Koriyama factory reduction of Crystal Oscillator Device business Devices businesses, and closure of Koriyama factory 1. Operation in suspension at Sacramento factory, 1. Operation in suspension at Sacramento factory, integration of two US factories into one integration of two US factories into one 1. Integration of two US disc factories into one 2. Completed with the implementation of early retirement Software 1. Integration of two US disc factories into one 2. Completed with the implementation of early retirement Software 2. Employment structure reform in Media business program 2. Employment structure reform in Media business program 3. Withdrawal from Film business (production and dis- 3. Withdrawal from Film business (production and dis- 3. Drastic reform of Film/Game business 3. Drastic reform of Film/Game business & Media & Media tribution) and disposal by sale of Game business tribution) and disposal by sale of Game business 4. Improvement of earning power in Music business 4. Improvement of earning power in Music business 4. Implementation of early retirement program at Victor 4. Implementation of early retirement program at Victor Entertainment and reorganization of VE related companies Entertainment and reorganization of VE related companies
2003.4.25. Lowering Breakeven Point 3 Aim to lower FY03 breakeven point to ¥500bil. → Achieved Completion of Restructuring - Completed with closure of Koriyama factory - Completed with closure of Koriyama factory Reorganization of Reorganization of - Withdrawal from Magnetic Head and Crystal Oscillator Devices - Withdrawal from Magnetic Head and Crystal Oscillator Devices - Completed with disposal by sale of Game - Completed with disposal by sale of Game businesses businesses business business business business - Withdrawal from Film business and reduction of Game business - Withdrawal from Film business and reduction of Game business - Completed with operation in suspension at - Completed with operation in suspension at /business base /business base - Integration of disc production bases in US - Integration of disc production bases in US Sacramento factory Sacramento factory Improve global competitiveness by implementing Improve global competitiveness by implementing Employment Employment Completed with number of domestic Completed with number of domestic domestic employment structure reform domestic employment structure reform structure reform workforce reduced to 8000 structure reform workforce reduced to 8000 （ Number of workforce reduced to 8200 by the end of FY03 ） （ Number of workforce reduced to 8200 by the end of FY03 ） Re-basing the business Reduction of inventory turnover less than 30 days Reduction of inventory turnover less than 30 days Reduction of Reduction of Reduced to 42 days by the end of Reduced to 42 days by the end of by adopting SCM program by adopting SCM program FY03 （ target 38 days ） FY03 （ target 38 days ） inventory inventory （ Consolidated inventory to 38 days by March 03 ） （ Consolidated inventory to 38 days by March 03 ） Reduction of Reduction of Procurement costs reduced to Procurement costs reduced to procurement Reduction of procurement costs to ¥39.3bil. procurement Reduction of procurement costs to ¥39.3bil. ¥44.6bil. ¥44.6bil. costs costs Completed by making Yokosuka fac- Implementing goal of completing development Completed by making Yokosuka fac- Implementing goal of completing development Realignment of Realignment of and manufacturing in 6-months tory as manufacturing center and and manufacturing in 6-months tory as manufacturing center and manufacturing manufacturing transfer manufacturing facilities to Clearly shifting focus of domestic plants to consoli- transfer manufacturing facilities to Clearly shifting focus of domestic plants to consoli- facilities facilities Yokosuka dating manufacturing functions at Yokosuka factory Yokosuka dating manufacturing functions at Yokosuka factory Commitment to continued restructuring
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