President's Message

We achieved a record high gross margin and increases in
revenues and prots for the second consecutive scal year
I am pleased to provide an overview of our consolidated business results for the 72nd term (January 1, 2018 to December 31, 2018) as follows.

Regarding market conditions for the scal year under review, in the digital camera market, the shift towards mirrorless cameras accelerated further, and sales of mirrorless cameras remain strong. Meanwhile, sales of SLR type cameras declined, with overall sales for interchangeable lens-type cameras down by 8% on the previous scal year. Although sales of interchangeable lenses decreased by 6% year-on-year, high image quality lenses (for full-size use) performed strongly, resulting in an increase of 1% compared to the previous year (in terms of monetary amount). Meanwhile sales of compact digital cameras decreased signicantly, down by 35% on the previous year, while the surveillance camera and vehicle-mounted camera markets continued to grow.

Under these circumstances, in the scal year under review, the Group achieved increases in revenue for all segments, with sales standing at 61.815 billion yen (up 2.2% compared to the previous year).

The company achieved a record high gross margin for the second consecutive scal year thanks to the effects of the launch of new products in the house-brand interchangeable lens category. Additionally, by keeping the increase in SG&A expenses to a minimum, the company achieved increases in revenue and prots for a second consecutive year, along with signicant improvements in protability. Operating income stood at 5.424 billion yen (up 27.7% compared to the previous year), ordinary income at 5.877 billion yen (up 43.4% compared to the previous year) and profit attributable to owners of parent at 4.330 billion yen (up 52.5% compared to the previous year).

Total dividends
The total dividends for the scal year ended December 31, 2018 were increased by 10 yen per share from the level of the previous scal year, to 60 yen per share (a 25-yen interim dividend and a 35-yen year-end dividend), and the consolidated dividend payout ratio was 35.8%.

Forecast for the fiscal year ending December 2019
In FY2019, given the market environment and the progressive shift towards mirrorless cameras, we will accelerate the improvement and expansion of our lineup of house-brand interchangeable lenses for mirrorless cameras. We will also seek to secure new orders and launch high added-value products for drones, automotive cameras, surveillance cameras and factory automation (FA) markets.
March 2019
Shiro Ajisaka
President & CEO