We would like to thank all of you for your faithful support for SANYO.
Let us first look at business results of SANYO for the six-month period ended September 30, 2007. This period, continuously soaring prices of raw materials, including crude oil, had a significant impact on the businesses of SANYO. Against this background, with all employees teaming up and going for the same goal, the entire group devoted its comprehensive strength to enhancing profitability. As a result, we have successfully achieved a positive net profit being led by businesses such as rechargeable batteries, solar cells, electronic components, and digital cameras.
On November 27, 2007, SANYO announced its Medium-term Business Strategy "Master Plan" for three fiscal years from April 2008 to March 2011. In this plan, we clarified the way to revitalization by defining those businesses to be continued among the businesses of our group and by setting a business strategy for each of them. Please refer to here for further information on Master Plan.
SANYO is currently in the process of formulating a new Medium-term Management Plan for three fiscal years from April 2008 to March 2011 based on Master Plan. Prior to its implementation, we are determined to achieve "a restoration of profitability to the bottom line," which is our goal for this fiscal year, as the first step toward the revitalization of SANYO.
Recently, through various activities we have successfully been increasing our capability to further exert the strengths of SANYO to become a "Leading provider of Environment- and Energy-related products." Our major achievements include winning the "Good Design Grand Prize 2007" for "eneloop universe products," collaborating with IBM Japan for the world's first data center energy-saving air-conditioning equipment construction service, and cooperating with Coca-Cola USA in the development of a CFC-free beverage showcase cassette using an ozone-safe natural refrigerant. In addition, our employees are feeling increased confidence in response to the business results for this six-month period. Thus, foundations for revitalization are being steadily established.
It is our commitment to keep to the positive course we are on and continue to strive for further enhancement of the corporate value of SANYO.
Overview of operations in the six-month period ended September 30, 2007
For the business environment for this six-month period ended September 2007, economic expansion in China and other Asian countries and economic recovery in Europe continued. The Japanese economy, being helped by healthy business performance, also continued its recovery. Meanwhile, the environment for SANYO remained severe due to the impact of the subprime loan problems in the U.S., continually soaring raw material prices including crude oil, and sharp appreciation of the yen, resulting in an increase in uncertainty about the future.
In this surroundings, while sales increased in the Component Business Segment, which deals with rechargeable batteries and electronic components, sales decreased in the Consumer Business Segment and Commercial Business Segment. As a result, consolidated net sales for this six-month period were down 0.4% from the same period last year to 1,091.4 billion yen.
As for income, while being influenced by surging raw material prices, thanks to sales expansion in the digital cameras, batteries, and component businesses and profitability enhancement through cost reduction, consolidated operating income was up 50.3% from the same period last year to 23.8 billion yen and consolidated net income was 16.0 billion yen (3.6 billion yen loss for the same period last year). Thus, we successfully returned to profitability.
We would like to sincerely ask for your continuous support and understanding.
December 2007
Seiichiro Sano
Executive Director & President
