KONICA MINOLTA

About Konica Minolta

Giving Shape to Ideas

Konica Minolta Holdings, Inc.
August 28, 2003

(Continued.)

Year-to-Year Strategies

Group Targets on Consolidated Basis

[Billion yen]

  FY2002 FY2003 FY2004 FY2005
Net Sales 1,087.2 1,142.0 1,200.0 1,300.0
Operating income 77.2 66.5 93.0 145.0
Net income 29.1 23.5 30.0 65.0
FCF 92.9 10.0 26.0 53.0
Investments 45.4 53.0 55.0 60.0
Interest bearing debt 322.8 310.0 300.0 250.0
Operating income ratio 7.1% 5.8% 7.8% 11.2%
ROE 12.2% 6.6% 7.8% 14.7%
ROA 3.3% 2.4% 3.0% 6.4%

Exchange rates: US$=¥115, EUR=¥120

Consolidating goodwill (equity method goodwill):¥100 billion
Amortization of equity method goodwill: ¥5 billion a year, over a period of 20 years. The amounts will be posted in SG&A expenses.
FY2002 and FY2003 are simple addition of Konica and Minolta figures.

Cost and Effects of Integration from FY2003 through FY2005

[Billion yen]

  FY2003 FY2004 FY2005
Cost of integration
[SG&A of total costs]
-21.0
[-12.0]
-23.0
[-13.0]
-4.0
[3.0]
Effects of integration 1.0 21.0 34.0
Loss in sales 5.0 -5.0 0.0
Expansion of sales, including synergy effects 0.0 10.0 34.0
Effects on operating profit -16.0 13.0 65.0

Target figures of the business companies

[Billion yen]

    FY2002 Results FY2003 Forecasts FY2005 Forecasts
BT Net sales 594.7 617.0 700.0
Operating income 52.6 45.5 90.0
OT Net sales 54.1 108.0 120.0
Operating income 12.4 12.0 20.0
PI Net sales 163.1 166.0 150.0
Operating income 8.3 4.0 9.0
CA Net sales 117.6 161.0 200.0
Operating income 2.1 5.8 12.0
MG Net sales 117.4 153.0 140.0
Operating income 9.3 9.0 13.0
SE Net sales 9.7 10.5 13.0
Operating income 2.0 2.0 3.0
HD Net sales 306 -73.5 -23.0
Operating income -9.5 -9.3 3.0
Total Net sales 1,087.2 1,142.0 1,300.0
Operating income 77.2 69.0 150.0

Exchange rates: US$=¥115, EUR=¥120

HD: Holdings and other companies including inter-company adjustments
FY2003 net sales forecasts of the business companies include inter-company sales.
The figures exclude equity method goodwill.

Human Resources Planning

  1. Streamlining human resources by consolidating overlapping functions and companies.
  2. Shifting human resources to the focusing areas such as sales and R&D including job change.
  3. Downsizing of the group employees: reducing about 4,500 employees.
    Sept. 2003: about 38,300 employees
    Mar. 2006: about 33,800 employees

Capital investments and Allocation

  1. The total investment planned from FY2003 through 2006 (four years) amounts to 162 billion yen.
  2. Investments will be concentrated on the BT and OT businesses

Capital investment planned by each business and breakdown by ordinary and strategic investments

[Billion yen]

BT 65.0 Ordinary investments 28.0
Strategic investments 37.0
OT 33.0 Ordinary investments 3.0
Strategic investments 30.0
PI/CA 30.0 Ordinary investments 20.0
Strategic investments 10.0
MG 15.0 Ordinary investments 6.0
Strategic investments 9.0
Holdings and two
common functions
companies
19.0    
Total 162.0    

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