FY2009 Financial Results
| Date : | April 28, 2010 |
|---|---|
| Presenter : | CFO Takayuki Ogawa |
Summary of the Presentation
| 1. | Consolidated Earnings for the FY 2009 | ||
| Net Sales | ¥94.862 billion (¥17.804 billion year-on-year decrease) | ||
| Operating Income | ¥1.405 billion (¥8.349 billion year-on-year increase) | ||
| Ordinary Income | ¥545 million (¥9.871 billion year-on-year increase) | ||
| Net Income | ¥133 million (¥10.125 billion year-on-year increase) | ||
| Net sales declined 84% year-on-year due to lower volumes and a strong yen—results of the global economic recession. However, the TOPCON Group recorded positive operating income, thanks to ¥8.6 billion in fixed-cost and other cost-reduction initiatives conducted through the year. Both ordinary income and net income were in the black, allowing the Group to avoid a second-consecutive year of net losses. | |||
| With the exception of China, the Positioning Business did not achieve net sales targets in Japan, the United States and Europe due to the economic downturn in those regions. As a result of reducing fixed costs and a shift in product mixi, operating income outperformed plan, ending in positive territory for the year. | |||
| With the exception of Asia, the Eye Care Business did not achieve plan targets in net sales or operating income in the United States and Europe due to the economic conditions in those regions. However, operating income experienced year-on-year growth owing to product mix changes. | |||
| The Finetech Business did not achieve net sales targets due to a significant decline in our projector business. The segment recorded an operating loss narrower than the planned figure due to the impact of the introduction of new products and a revised business portfolio. | |||
| 2. | Consolidated Earnings Forecast for the FY 2010 | |||
| Net Sales | ¥104.0 billion (¥9.138 billion year-on-year increase) | |||
| Operating Income | ¥2.7 billion (¥1.295 billion year-on-year increase) | |||
| Ordinary Income | ¥1.4 billion (¥855 million year-on-year increase) | |||
| Net Income | ¥200 million (¥67 million year-on-year increase) | |||
| We expect that market in Asia and other emerging countries will continue to be strong during this fiscal year. The United States will experience a gradual recovery, while the recovery in Japan and Europe will experience both period of growth and decline. We do not believe that these factors will lead to a true economic recovery this fiscal year. We are looking for significant growth in operating income based on the impact of new products and greater sales of high-value-added products. | ||||
| Based on continued growth in emerging countries and the pace of recovery in the United States, we expect a recovery in sales and profitability for the Positioning Business, propelled by growing demand for GPS-integrated products and three-dimensional measurement. The impact of the results of Q4 in the prior period on profits will last through the first half of this fiscal year, but we expect results to recover during the second half. | ||||
| Based on a recovery in Asia and a more gradual recovery in the United States, we expect increased sales and profits in the Eye Care Business, driven by the adoption of OCT (Optical Coherence Tomography) in the medical check-up markets and renewed capital investment in the ophthalmology field. | ||||
| In our Finetech Business, we are projecting increased sales and profits, driven by increased orders in the steady Asian markets, supported by a recovery in the semiconductor market, as well as continued growth in the FPD market. Profits during the first half will be affected by carry-over from Q4 in the prior fiscal year, but we expect a recovery during the second half. | ||||
| 3. | Results of Earnings Recovery Strategies (FY 2009) | ||
| At the beginning of the fiscal year, the TOPCON Group established targets of ¥3.5 billion fixed cost reductions and ¥1.8 in prime cost reductions for a total of ¥5.3 billion in cost savings. As a result of efforts to reduce personnel and other business expenses, fixed cost savings as of the end of the year amounted to ¥8.6 billion: ¥7.1 billion in fixed cost savings and ¥1.5 billion in prime cost savings. | |||
| However, the Group issued an upward revision during the interim fiscal close, targeting ¥7.7 billion in fixed cost savings and ¥1.7 billion in prime cost savings—a total of ¥9.4 in total cost savings. The Group did not achieve the targets set in this upward revision. This shortfall was due to a shift of focus during Q4 toward profit improvement through the expansion of sales. | |||
Q&A
| Q. | In the Positioning Business, both net sales and profits experienced significant growth compared to Q4 of the prior fiscal year. Please explain more about the circumstances both regionally and by product. |
| A. | Regionally, we have experienced growth in sales around the world. From a product perspective, Total Station has experienced significant growth in Asia, but the agricultural field has performed according to our forecasts. |
| Q. | The Eye Care Business also experienced significantly greater net sales and profits when compared to Q4 in the prior fiscal year. Please tell us more about sales of 3D OCT. |
| A. | We experienced a 1.6x growth in the number of units sold year-on-year. We project another 1.3x in year-on-year growth for this fiscal year. |
| Q. | Can you tell us more about specific changes in the structure of the Finetech Business we will see this fiscal year? |
| A. | You can refer to our "Mid-term Business (FY2010 – FY2012)" for specific details, but we believe that the impact of changes in our business line will begin to appear this period. |
-Cautionary Note regarding Forward-Looking Statements-
These materials contain forward-looking statements, including assumptions and projections based on the information available at the time these statements are made. However, please be aware that actual performance may differ from projected figures owing to unexpected changes in the economic environment in which we operate, as well as to market fluctuations.
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