About Konica Minolta

Giving Shape to Ideas

2009 New Year Greeting from the President, Yoshikatsu Ota
— Strengthening Our Corporate Structure in Light of Changing Era —

Please accept my cordial wishes for a happy new year.

Last year, the financial crisis and the credit crunch started out in the United States and went on to send shock waves through the global economy, bringing sharp falls in share prices, abrupt fluctuation in foreign exchange rates, and other unprecedented disruption in the financial environment. These also cast long shadows over the real economy. In Japan, many businesses ― especially those manufacturing export goods ― bore the full brunt of the steep depreciation of the dollar and the euro, and are now experiencing a downturn severe enough to force a revision of financial forecasts.

Having an overseas sales ratio of over 70 percent, the Konica Minolta Group is no exception. In our 2nd Quarter for the Fiscal Year Ending March 31, 2009, we revised our exchange rates assumption for the dollar from 100 to 95 yen, and for the euro, from 155 to 120 yen. On that basis, we revised our forecast downward for both sales and profits. While these exchange rates assumptions apparently struck some people as austere, we have a good reason for this. As a global company, exchange-rate fluctuations are obviously an external variable factor indispensable for our calculations. We are determined not to consider fluctuation as an excuse and revise our financial forecasts every now and then.

In our core Business Technologies segment, we have been focusing on marketing color multi-functional peripherals (MFPs) for the office use, and high-speed MFPs for production printing, and simultaneously focusing on proactive business collaborations and acquisitions, achieving consistently good results in terms of expanding the business. However, due to the impact of falling prices in North America and Europe, and fluctuations in exchange rates, we anticipate a decline in profits for the full year.

In our strategically-positioned Optics segment, we succeeded in expanding sales of wide viewing angle (VA-TAC) film, pickup lenses for Blu-ray Discs (BDs) and glass substrates for hard-disk drives in the first half of the fiscal year, and both sales and profits were showing an upward trend. However, considering the protracting economic slowdown, we feel that more cautious production control and investment decisions may become necessary.

These harsh economic conditions are widely said to become long-term. It can be expressed as a “looming ice age”, with further economic cool down. I believe that we cannot ride out the current storm if we regard this recession and yen appreciation as transient phenomena, and simply wait for things to improve. It is now time to calmly accept a global economic paradigm shift. We see it as a good opportunity to undergo radical corporate reforms, building a strong corporate structure to generate profits even under these conditions.

Our Group will, as ever, seek for continuous growth. To that end, we think it essential to be meticulous in “selection and concentration”, investing business resources in a carefully-targeted way, to yield products having the overwhelming competitiveness that only Konica Minolta can deliver. One such example, destined for importance in years to come, is our effort to enter into business areas where we can utilize our environmentally-sound technologies, such as the highly energy-efficient organic electroluminescence (EL) lighting. A machine unable to contribute positively to the global environment will never be of value to the society of the future, no matter how advanced its functions may be.

In our marketing activities, the rapid appreciation of the yen has been a hindrance. Looked at from another angle, however, it may work in our favor in terms of the mergers and acquisitions to gain promising technologies and new sales channels outside our Group. We intend to actively pursue business collaborations and acquisitions in order to fortify our competitiveness even further.

If we are to surely materialize these measures, we need each Group employee to “dare to demonstrate audacious creativity and courage”. Encapsulating this idea in the slogan “simply BOLD”, the Konica Minolta Group has been forging ahead, since last year, with an initiative aimed at reforming our business culture, and involving the Group's entire workforce.

The Konica Minolta Group will continue to boldly demonstrate audacious creativity and courage, in line with our corporate philosophy, the Creation of New Value. We shall also continue living up to the expectations of our stakeholders as a global company with an essential role in the field of imaging.

Your continuing support and guidance will be greatly appreciated, as ever, in the new year.

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