Annual Report 2013

Giving Shape to Ideas

Management Message

We achieved increased revenue and operating income in a challenging business environment. 
We will steadily progress with transforming existing business operations and developing new business in a move towards sustainable growth. President and CEO
Masatoshi Matsuzaki

With the eurozone economy entering into negative growth due to the impact of the European debt issue and the emerging nation economies that have driven international economic growth behaving sluggishly, challenging conditions persisted in the manufacturing industry in FY March 2013. The Konica Minolta Group achieved increased revenue and operating income through aggressively pursuing M&As in growth fields and increasing sales of core products in each business in accordance with the strategy of the Medium Term Business Plan GPLAN 2013, which launched in FY March 2012 with the keyword of “Growth.” Nevertheless, the operating income for the Business Technologies Business saw a year-on-year decrease and we were unable to achieve the income target we initially set forth. One factor was that our scenario of balancing increased costs due to investment in the transformation of business operations with production cost reductions, and increased income from expanded sales of core products did not develop as expected.

Meanwhile, initiatives for mid- to long-term growth developed smoothly. Specifically, we promoted strategies aimed at expanding the scope of our business such as M&As and strategic partnerships in growth areas.

In the Business Technologies Business, customer needs are progressively diversifying and becoming more sophisticated and the provision of document and IT-related value-added services is becoming a requirement in addition to hardware and maintenance support. Accordingly, in the office field, we proceeded with the M&As of U.S and European IT service providers and strengthened our capability to propose business process improvements to the customer. As a result, we are steadily expanding sales of multifunctional peripherals (MFPs) as we transform our existing business model in ways such as increasing sales of IT services packaged with MFPs.

In the production print field, in Japan and Korea we acquired prominent service providers with strong track records in on-demand output services, and in Europe we acquired companies with solid performance in print management services. These acquisitions will strengthen our sales, service, and solution proposal capabilities in the in-house printing market and capture the mass-quantity printing needs of businesses.

As a result, the effects of the M&As are steadily becoming apparent. For example, we received an order for a large project from a major Japanese corporation that recognized the originality of our package proposals including output services.

In the Industrial Business, we carried out an M&A in Europe and bolstered our competitive strengths in the light source color measurement domain in the measurement instrument field, with the aim of shifting our focus to business that can maintain stable and high profitability, such as in the industrial and professional fields.

The transformation from an analogue to a digital business structure proceeded in the Healthcare Business, and we achieved substantially increased income year on year. In order to further expand the scale of this business, we are actively promoting measures such as strengthening strategic partnerships with sales partners that have extensive international sales networks.

Furthermore, we saw steady progress in the cultivation of new business that will create future sources of revenue. Initiatives progressed in growth fields such as the industrial inkjet business, with the launch of a high-end inkjet printer for textile print on demand applications in which we lead the market.

With regards to the functional film business, we achieved several technical breakthroughs in the ongoing development in organic light emitting diode (OLED) lighting and advanced with preparations for mass production in order to build on the TAC film and create new business fields.

In order to respond promptly to a constantly changing business climate and generate strong growth while beating global competition, the Konica Minolta Group reorganized its administrative structure. Konica Minolta Holdings, Inc., which was previously the non-operating holding company of the Group, merged with seven affiliated Group companies and changed its trade name to Konica Minolta, Inc.

In FY March 2014, which marks the final year of “GPLAN 2013,” we will steadily promote the three basic policies of “Achieving strong growth, expanding business scale,” “Changing into a 'Global Company' ” and “Increasing the recognition of the Konica Minolta brand,” with the goal of soundly achieving increased revenues.

I would once again like to ask for the ongoing support of our stockholders and investors as the Konica Minolta Group aims for continuous strong growth through the creation of new value.

June 2013 President and CEO Masatoshi Matsuzaki
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