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To our Shareholders and Investors
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We wish to begin this report to you as always with our sincere appreciation for your interests and continuing support for our efforts in our business. On March 31, 2009, our 62th fiscal year (April 1, 2008 through March 31, 2009) ended, and I wish to report to you about our activities and financial results during this period.
During the consolidated fiscal year under review, the real economy in Japan began to rapidly feel the effects of the appreciation of the yen and falling share prices, in turn a reflection of the financial crisis that emerged from the United States. Faced with a subsequent drop in exports and production, as well as sluggish capital investment, the employment and income situations have become more severe. Meanwhile, the global economy appears to have entered a global recession, given the sudden economic slowdown in emerging countries that had previously enjoyed solid growth, following the downturn in the United States and Europe. |
In the electronics industry, demand for television sets and digital cameras began to contract, reflecting weak consumption. The cellular phone market also declined, as a result of a lengthening of the replacement cycle for new handsets. Demand in the car electronics market remained sluggish, because of production adjustments in the automotive sector. In the semiconductor market, market conditions deteriorated rapidly, given the apparent inclination of customers to reduce their inventories, in addition to sluggish demand for a range of electronics equipment.
In this operating environment, the Group took steps to bolster sales of analog semiconductors, its range of inspection devices, and production equipment, while also adopting initiatives to reduce expenses. However, with the downturn in the market far worse than anticipated, the management environment remained severe.
As a result, net sales achieved by the Marubun Group for the consolidated fiscal year under review fell 18.5% from the previous year, to 199,943 million yen. Consolidated operating income slipped 69.6% year on year, to 1,108 million yen, reflecting lower sales.Ordinary income fell 98.3% year-on-year, to 49 million yen, given an exchange loss of 520 million yen.The consolidated net loss stood at 1,399 million yen (compared with a consolidated net income of 889 million yen for the previous fiscal year), as a result of the recording of extraordinary losses of 1,468 million yen, including restructuring charges of 870 million yen, and a loss on valuation of investment securities of 576 million yen.
Operating results by business segment are as follows.
(Electronic Devices business)
In our Electronic Device business, demand for semiconductors for cellular phone modules increased. In contrast, demand for semiconductors for game consoles fell, while that for semiconductors and electronic components for products, such as industrial equipment, in-vehicle equipment, and office automation equipment, also declined, reflecting the economic slowdown. As a result, net sales for the business fell 21.7% from the previous fiscal year, to 160,791 million yen. Operating income for the business declined 51.0% year-on-year, to 2,544 million yen.
(Electronic Systems business)
In our Electronic Systems business, sales for space and defense electronics, including space satellite components, remained strong. Sales also rose for scientific equipment, given strong sales of thin film equipment for LED production. In contrast, sales for medical equipment and measurement inspection equipment declined. As a result, net sales for the business fell 2.1% from the previous fiscal year, to 39,151 million yen, and operating income rose 16.9%, to 2,065 million yen, given an improvement in the gross profit margin.
The electronics industry faces extremely severe market conditions, given the rapid deterioration in the global economy since last autumn. Although many countries have responded with significant policy initiatives, the global economy is likely to remain uncertain for the foreseeable future, and competition in the industry is expected to become increasingly severe.
In this environment, the Marubun Group will aim to bolster sales of its mainstay analog semiconductors, wireless and in-vehicle businesses, and to expand sales and develop new products in growth markets such as the environment, medical and the information security. The Group will also seek to bolster sales and earnings, while improving customer satisfaction by strengthening its sales structure through organizational restructuring, improving its abilities to propose solutions, and maintaining and improving its quality control structure.
In addition, the Group will take steps to transform its corporate structure into one that can generate profits even in a severe management environment, by appropriately deploying human resources and cutting costs.
The Marubun Group remains committed to developing an internal control system that enables sound and highly transparent management.
We ask for your continued support, and we will welcome your suggestions.
May 2009
Marubun Corporation
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To our Shareholders and Investors
