Business Report 2010
Transcription
Business Report 2010
Making digital life enjoyable Making digital life enjoyable MELCO HOLDINGS INC. Investor Information (As of March 31, 2010) Accounts closed March 31 Scheduled shareholders’ meeting June Dates to determine stock ownership Shareholders entitled to vote: March 31 Shareholders entitled to year-end dividend: March 31 Shareholders entitled to interim dividend: September 30 First Section of Tokyo Stock Exchange and First Section of Nagoya Stock Exchange Listed stock exchanges 6676 Stock code 22,237,873 (shares excluding treasury stock 22,214,985) Number of shares issued 10,386 (As of March 31, 2010) Number of shareholders 100 shares Number of shares per unit http://melco-hd.jp/koukoku/ Notice to shareholders Transfer agent Mitsubishi UFJ Trust Banking Corporation 4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo Mitsubishi UFJ Trust Banking Corporation Security Agent Department Stock agencies For information regarding your shareholdings, please contact our transfer agent, Mitsubishi UFJ Trust Banking Corporation, anytime between 9:00 a.m. and 5:00 p.m. on regular banking days. Tel. 0120_232_711 (toll free) Requests for share related documentation can be handled by the Mitsubishi UFJ Trust Banking Corporation, or on the internet 24 hours a day. Tel. 0120_244_479 (toll free) http://www.tr.mufg.jp/daikou/ Managing underwriters (Main) Daiwa Securities SMBC (Other) Nomura Securities, Mizuho Investors Securities, Nikko Cordial securities MELCO HOLDINGS INC. http://melco-hd.jp/ Securities code: 6676 Business Report 2010 Headquarters 15, Shibatahondori 4-chome, Minami-ku, Nagoya, 457-8520, Japan TEL. 81-52-619-1551 FAX. 81-52-619-1800 BUFFALO INC. April.1,2009- March.31,2010 http://buffalo.jp/ Headquarters 15, Shibatahondori 4-chome, Minami-ku, Nagoya, 457-8520, Japan TEL. 81-52-619-1811 FAX. 81-52-619-1800 Tokyo Branch Office Kayabacho Tower, 21-2, Shinkawa 1-chome, Chuo-ku, Tokyo,104-0033, Japan TEL. 81-3-3523-3333 FAX. 81-3-3523-3300 Melco Group Strategy Corporate Direction Focusing on enhancing product strengths Actively investing in the groundwork for future growth The Melco Group, the nucleus of which is a Buffalo Inc., manufacturer of PC peripherals. While the Japanese economy is likely to continue recovering slowly in fiscal 2010, the impact will seem largely In fiscal 2009 (year ended March 31, 2010), the Japanese economy emerged from the worst of the global intangible in the prolonged deflationary environment. On the upside, new markets for digital home electronics financial crisis and returned to a recovery path, albeit a moderate one. The PC industry, to which the Melco peripherals are emerging as digital home electronics and home networks grow in prevalence. Group’s fortunes are closely linked, saw a mild recovery in consumer demand buoyed by the launch of a new Against such a backdrop, the Melco Group aims to actively offer a diverse range of products and solutions that operating system (Windows 7) in the fiscal second half. Corporate demand, however, remained sluggish, and the enrich consumers’ digital lives, capitalizing on its track record as an integrated PC peripheral manufacturer, related PC peripherals market faced ongoing headwinds. thereby facilitating growth of the digital home electronics peripherals market. Amid such an adverse market environment, the Melco Group endeavored to retain and increase its sales market In pursuit of future growth, the Melco Group will endeavor to expand overseas markets and cultivate new share while revisiting its basic philosophy of enhancing product strengths and actively launching products aimed businesses, its priority strategic challenges. To this end, the Group will actively invest in human resources training driving growth in the digital home electronics market. Despite these efforts, for the fiscal year as a whole, sales to develop globally competent personnel and invest in the resources required for new business development. declined 2.8% year on year to ¥116,911 million, owing to falling sales prices in the deflationary environment and By virtue of these initiatives, the Group projects sales of ¥130.0 billion (11.2% year-on-year growth), operating withdrawals from the loss-making domestic LCD business and North American memory products business. income of ¥8.0 billion (6.1% year-on-year growth), ordinary income of ¥8.0 billion (4.5% year-on-year growth), Overseas subsidiaries achieved substantial profit growth due to a strategic shift toward emphasizing profitability, and net income of ¥4.9 billion (126.1% year-on-year decrease) in fiscal 2010 (year ended March 31, 2010). while in the domestic market, the Group launched high-value-added products, rigorously streamlined management, and reduced cost and expenditures. The Group achieved record earnings by virtue of these The Melco Group will respond flexibly to societal changes and continue pushing ahead with a frontier spirit in efforts. Operating income increased 253.8% year on year to ¥7,542 million, ordinary income increased 238.8% pursuit of ongoing growth. to ¥7,652 million, and net income increased 605.2% to ¥4,990 million. *Windows is a registered trademark of Microsoft Corporation in the United States and other countries. Pursuing growth through three strategies Proliferation of digital home electronics products Overseas market expansion Cultivating new businesses Broadband Digital home Internet Home networks Ubiquitous networks Melco Holdings Inc. Makoto Maki 1 President and CEO Photo provided by the Asahi Shimbun newspaper 2 Eye Society of the future The growing prevalence of digital homes Alongside growing use of the Internet by digital terrestrial TVs, mobile phones increasingly feature wireless LAN connectivity. Connecting to home networks and using high-speed wireless LANs makes it easy to rapidly download Nintendo PlayStation 3 (PlayStation Portable) data-intensive content, such as application software and videos. Digital TV Add the latest functionality to older TVs with multifunctional digital terrestrial tuners We have also launched video recorder models that employ external hard disk drives to record digital terrestrial TV programs, making it easier to record many hours of video by connecting external drives even if the video recorder’ s hard disk drive runs out of space. Enjoy on-the-road access via PC or mobile phone to data stored at home Enjoy recorded programs anytime on a big-screen TV Game console Game online with friends around the globe Digital homes that integrate digital home electronics, home networks, and PC peripherals in these ways are already growing in prevalence. Ongoing integration will make it even easier for consumers to experience the fun and convenience of the digital home. Notebook PC Get online via wireless LAN even from your kitchen. Look up recipes with ease. Connect devices throughout the home Digital TV Analog TV Wi-Fi mobile phone Enjoy recorded programs anytime on a big-screen TV Enjoy clear digital broadcasts on an analog TV Swift video download via wireless LAN! Digital terrestrial TV tuner Connect Store Share Wireless LAN Network-attached storage (NAS) Shared access to music, videos, and images A home network linking TVs, PCs, and game consoles offers unfettered enjoyment of online content, TV programs, and recorded videos in any room. 3 Smartphone Store data HDD for use with TV *Nintendo DS and Wii are registered trademarks of Nintendo Co., Ltd. *The descriptions and illustrations herein were independently researched and produced by the Melco Group and are not recognized, endorsed, or approved by Nintendo. Readers are kindly asked to refrain from making inquiries to Nintendo regarding these descriptions and illustrations. *PlayStation is registered trademark of, and the PlayStation 3 a product of, Sony Computer Entertainment Inc. *©2010 Sony Computer Entertainment Inc. All rights reserved. Design and specifications are subject to change without notice. *PlayStation and PSP are registered trademarks of, and the PSP is a product of, Sony Computer Entertainment Inc. *©2008 Sony Computer Entertainment Inc. All rights reserved. Design and specifications are subject to change without notice. *iPhone is a trademark of Apple Inc. * is a trademark of Actvila Corporation. 4 Outline Business Overview Memory Digital Home Memory modules increase PCs’ memory capacity. Upgrading a PC’s Digital home products connect PCs and other home electronics memory capacity increases the number of programs that can be run at USB memory hardware via networks. The Melco Group’s steadily growing line of one time and enables the PC to process data faster and more digital home products includes Choi Tele Full digital terrestrial TV efficiently. Other memory products include conveniently portable tuners for conveniently enjoying high-vision broadcasts on PCs, USB memories, SD Cards and CompactFlash used in digital cameras, and microSD cards used in mobile phones. Digital terrestrial tuner for analog TV Digital terrestrial tuner for PC multifunctional digital terrestrial tuners for analog TVs that add the Memory module latest functionality to older models. Micro SD card Other Products Storage Supplies and Accessories Storage products are memory devices that store software and/or The Group offers accessories that make digital home electronics data. The Group’s storage products include external Blu-ray drives, (including PC and TV) more enjoyable and user-friendly, including external DVD drives, external hard disk drives, portable hard disk drives, network hard disk drives (NAS), and silicon disks (SSDs), a input devices such as PC mice and keyboards, multimedia devices External hard disk drive for TV compact, shock-resistant, low-noise portable storage device. (such as FM transmitters), USB and various other cables, and External hard disk drives accessories for TVs such as LCD TV shields. External hard disk drives are a core product that accounts for most Other Products and Services of the Group’s storage product sales. They are used to store PC Other hardware products include DOS/V parts. Service offerings data, digital photo and video collections, and other such files. External hard disk drive Recently, external hard disk drives are increasingly used to record PC mouse Bluetooth 2.0 headset such as webcams and headsets, portable music player accessories include PC set-up service for consumers, and hardware installation Internet set-up service (Buffalo Service Alliance) Kurouto Shikou and consulting services for businesses. digital terrestrial TV programs, driving demand for add-on hard disk drives. NAS (network hard disk drives) Digital Home Portable hard disk drive NAS (network-attached storage) is storage that is connected to a Many of the Melco Group’s products stand to benefit from the growing prevalence of digital homes. The products include multifunctional digital tuners that add the latest functionality to older-model TVs; external hard disk drives for recording digital terrestrial TV programs; wireless LANs, the core of home networks; and network hard disk drives (NAS) that serve as additional storage capacity for DVD recorders and home servers. network and enables large volumes of data to be shared among multiple PCs or other digital home electronics hardware. The Melco Group offers a broad line of NAS products, ranging from compact models convenient for household use to highly reliable, Network hard disk drive high-performance commercial models. Record Play Televi -sion Game console Wireless LAN router Network and Broadband Key networking products include wireless LAN routers, wired broadband routers, LAN hubs, and LAN adapters. Use of such Layer-3 Giga Intelligent Switch Internet Store networking products enables Internet access and data sharing Watch across multiple PCs. Home-network usage of wireless LANs in Watch particular is growing because they do not require bothersome wiring. Recently, growing use of digital appliances such as mobile phones, Television Home server digital terrestrial TVs, and game consoles also has been making PC wireless LANs increasingly prevalent. Wireless LAN router 5 External hard disk drive for TV Commercial wireless LAN router with built-in network administrator functionality Tuner unit Media player Digital terrestrial tuner 6 Group Companies Group Profile The Melco Group comprises Melco Holdings Inc. and 14 consolidated subsidiaries. As an integrated manufacturer of Melco Group PC peripherals, the Group supplies businesses and consumers throughout Japan with hardware and services required to build IT/network environments. The Group’s operations cover a full spectrum from product development to sales, ●MELCO HOLDINGS INC. 15, Shibatahondori 4-chome, Minami-ku, Nagoya, 457-8520, Japan Tel. 81-52-619-1551 ●BUFFALO INC. 15, Shibatahondori 4-chome, Minami-ku, Nagoya, 457-8520, Japan Tel. 81-52-619-1811 Fax 81-52-619-1800 installation, setup, maintenance services, and after-sales support. ●BUFFALO KOKUYO SUPPLY INC. 6-1, Arahamacho 4-chome, Minami-ku, Fax 81-52-619-1800 Tel. 81-52-619-7511 Fax 81-52-619-7555 Nagoya, 457-0831, Japan ●CFD SALES INC. 15, Shibatahondori 4-chome, Minami-ku, Nagoya, 457-8520, Japan Tel. 81-52-619-1311 Fax 81-52-619-7785 ●BUFFALO IT SOLUTIONS INC. Kayabacho Tower, 21-2, Shinkawa 1-chome, Chuo-ku, Tokyo,104-0033, Japan Tel. 81-3-6280-0777 Fax 81-3-6280-0779 ●BUFFALO LOGISTICS INC. Chukyo Warehouse, 1-3, Mutsuno 2-chome, Atsuta-ku, Nagoya, 456-0023, Japan Tel. 81-52-883-3035 Fax 81-52-883-3042 ●BUFFALO LEASE INC. Kayabacho Tower, 21-2, Shinkawa 1-chome, Chuo-ku, Tokyo,104-0033, Japan Tel. 81-3-3523-3354 Fax 81-3-3523-3300 ●BUFFALO DIRECT INC. Chukyo Warehouse, 1-3, Mutsuno 2-chome, Atsuta-ku, Nagoya, 456-0023, Japan Tel. 81-52-882-3302 Fax 81-52-882-3302 ●BUFFALO IT SOLUTIONS INC. ●BUFFALO LOGISTICS INC. ●BUFFALO LEASE INC. ●BUFFALO INC. MELCO HOLDINGS INC. ●BUFFALO DIRECT INC. ●MELCO PERSONNEL SUPPORT INC. ●BUFFALO KOKUYO SUPPLY INC. ●CFD SALES INC. ●LIBERTY SHIP INC. Asia ●BUFFALO TECHNOLOGY (TAIWAN) INC. Europe ●BUFFALO EU B.V. ●BUFFALO TECHNOLOGY UK LIMITED USA ●BUFFALO TECHNOLOGY (USA), INC. ●MELCO PERSONNEL SUPPORT INC. 15, Shibatahondori 4-chome, Minami-ku, Tel. 81-52-619-7224 Fax 81-52-619-7233 Nagoya, 457-8520, Japan ●LIBERTY SHIP INC. ■ Buffalo Inc. The Melco Group’s nucleus. Manufacturer of core Buffalo brand products. Proactively pursuing development and growth of products that will contribute to the digital home market’s growth. ■ Buffalo IT Solutions Inc. Provides PC setup, network installation, maintenance and other services to consumers and businesses. ■ Buffalo Logistics Inc. Manufactures, inspects, packages, and ships PC peripherals. ■ Buffalo Lease Inc. Provides equipment leasing services to communications carriers, video broadcasters, etc.. ■ Buffalo Direct Inc. Online direct marketer of Melco Group products. Tel. 81-3-3523-3368 Fax 81-3-3523-3300 Overseas Subsidiaries Asia BUFFALO TECHNOLOGY (TAIWAN) INC. Production and sales of Networking devices and computer ■ Buffalo Kokuyo Supply Inc. Develops, manufactures, and sells PC accessories, cables, and supplies. ■ CFD Sales Inc. Aims to be an all-around PC parts supplier. Operates under the Kurouto Shikou brand name. Kayabacho Tower, 21-2, Shinkawa 1-chome, Chuo-ku, Tokyo,104-0033, Japan peripherals 7F, No.18, Lane609, Sec.5, Chung Hsin Rd., Sanchung City, Taipei Hsien, TAIWAN Europe BUFFALO EU B.V. Europe head Office Polarisavenue 85, 2132 JH Hoofddorp, The Netherlands BUFFALO TECHNOLOGY UK LIMITED Sales of Networking devices and computer peripherals 2, Bracknell Beeches, Old Bracknell Lane, Bracknell, Berkshire RG12 7BW, United Kingdom U.S.A. BUFFALO TECHNOLOGY (USA), INC. Production and sales of Networking devices and computer peripherals 11100 Metric Boulevard, suite 750 Austin, Texas 78758, USA. Tel. 886-2-2999-9860 Fax 886-2-2999-2264 Tel. 31-23-554-6010 Fax 31-23-554-6019 Tel. 44-1344-381700 Fax 44-1344-381710 Tel. 1-512-794-8533 Fax 1-512-794-8520 ■ Melco Personnel Support Inc. Temp staffing agency that recruits and dispatches teams of clerical personnel, mainly to Melco Group companies. ■ Liberty Ship Inc. Provides online consumer-to-consumer and business-to-consumer communication services. 7 8 R&D Research & Development Buffalo’s technological prowess is a driving force behind advances in memory technology Topics Key Topics Launch of a high-design external hard disk drive with stylish piano-black casing Since 1996, Buffalo has been contributing to the formulation of global memory In December 2009, Buffalo launched a stylish, high-design external hard disk module standards as a member of the Joint Electron Device Engineering Council drive that can be placed alongside and connected to the latest PCs with TV (JEDEC), an organization that promotes standardization of electronic parts. Nearly tuners or large LCD displays or to digital terrestrial TVs. A storage meter on all notebook PCs in use throughout the world today are equipped with globally the device provides a quick indication of remaining capacity, giving users a standardized memory modules at least partially designed by Buffalo. Going guide to whether they should delete unneeded programs or add another forward, Buffalo will continue to proactively develop next-generation, high-speed hard disk drive. External hard disk drive for TV memory modules. World’s first* external USB 3.0 hard disk drive AOSS accelerates the spread of home networks In October 2009, Buffalo launched the first external hard disk drive in the In 2001, Buffalo independently developed AOSS (AirStation One-Touch Secure world to achieve USB 3.0 transfer speeds of up to 5Gbps, 10 times faster System) in the aim of boosting prevalence of wireless LANs. AOSS enables users than USB 2.0 (up to 480Mbps). Buffalo is expanding its USB 3.0 product to set up a secure wireless LAN connection with a single touch of a button. TV Because of its ease of configuration, AOSS has been incorporated into many *Source: The Melco Group (as of October 7, 2009) Automatic secure connection mobile phone handsets, digital home electronics including digital terrestrial TVs, and Blu-ray disk recorders. Connection and security Additionally, a push-button interface promoted by Buffalo based on AOSS-derived standard formulated by the Wi-Fi Alliance.* This exemplifies Buffalo’s status as a Push the AirStation AOSS button Push the AOSS button on the digital appliance globally recognized leader in development of home wireless network technologies. *An industry association of companies that manufacture and sell wireless LAN-related products. Products conducive to the digital home market’s development Growth in digital homes’ prevalence is accelerating as the complete switchover to Selected as a vendor of basic digital terrestrial tuners to be distributed for free by Japan’s MIC In September 2009, Buffalo was selected as a vendor of basic digital terrestrial tuners to be distributed for free by Japan’s MIC (Ministry of Internal Affairs and Communications) as part of a project to support purchases of digital terrestrial TV receivers with a view to the impending complete switchover to digital terrestrial broadcasts on July 24, 2011. USB 3.0 Blu-ray drive USB 3.0 portable hard disk drive Digital terrestrial tuner for analog TV Launch of Buffalo Tools™, a suite of software to enhance PC speed and convenience digital terrestrial broadcasts in 2011 approaches. As part of its efforts to grow the digital home market, Buffalo sells multifunctional digital tuners that add the latest Buffalo Tools™ is a feature-rich suite of optional software included in many functionality to older-model TVs. The Group’s R&D activities in this vein include developing products equipped with line-up with portable hard disk drives, silicon disks (SSD), and external Blu-ray drives. consumer electronics products, including Sony’s and Nintendo’s game consoles, technology was incorporated into the user-friendly Wi-Fi Protected Setup (WPS) USB 3.0 external hard disk drive LT-H91DTV (3-wave model) Buffalo storage products and hard disk drives. It includes TurboPC to enhance PC speed; TurboCopy to enhance file copying performance; and FeliCa™* contactless IC-card reader/writer functionality that enables users to Eco Manager, an environmentally friendly energy-efficiency tool designed to more easily pay for Internet services content. The Melco Group is driving growth of conserve energy by regulating the power use of Buffalo external hard drives. the digital home market through development of such products. Buffalo aims to include Buffalo Tools™ primarily in high-spec storage *FeliCa™ is a contactless IC-card (smartcard) system developed by Sony Corporation. products and hard drives slated for future launch. A range of products catering to corporate customers’ needs Buffalo Tools™ setup screen Improving data security as mandated by the Personal Information Protection Act, RUF2-HSCW USB memory amended Companies Act, and Financial Instruments and Exchange Act is an increasingly important priority for companies. Buffalo sells a diverse range of products catering to corporate customers’ needs, including SecureLock Manager, a software program for centralized management of secure USB memory sticks to prevent information leakage, and BN-ADT, a software program for centralized administration and configuration of network equipment to reduce the work required to configure settings. 9 SecureLock Manager setup screen 10 Topics Key Topics Digital Life Promotion Association established by three PC peripheral makers Social Contributions In February 2010, I-O Data Device, Inc., DigiOn, Inc., and Melco Holdings Inc., three major PC peripheral makers, established the Digital Life Promotion Association. The association defines new modes of viewing TV broadcasts (including the switchover to Exploratory IT Human Resources Project digital terrestrial broadcasting and TV viewing on PCs) as “digital Japan’s Information Technology Promotion Agency (IPA) is life” and aims to ensure development of a convenient, safe, and conducting an Exploratory IT Human Resources Project to reliable digital society for technology users. identify and cultivate IT talent. The project seeks out and Makoto Maki, President and CEO of Melco Holdings Inc., is Chairman develops exceptionally skilled individuals (“Super Creators”) of the Association. The association is making recommendations who have creative ideas and skills and are capable of driving on building environments and rules that will enable consumers to innovations in software development and utilizing those enjoy digital life (including digital terrestrial broadcasting) more innovations. Training is overseen by exceptionally skilled easily. project managers (PMs) with outstanding track records. The Melco (http://dlpa.jp/) Group serves as the project’s administrative organization. Through its involvement in the project, the Group has started new projects together with exceptionally skilled researchers Making further inroads into overseas markets To accelerate its overseas expansion, the Melco Group is structuring its operations to enable overseas subsidiaries to engage in product planning and development that translates overseas customers’ needs directly into new products. Part of these efforts was the January 2010 launch of Dualie, which was developed by Buffalo Technology (USA), Inc., while promotional efforts were handled by Buffalo Technology (UK), Ltd. capable of playing a leading role in creating next-generation IT markets. These projects have the potential to drive creation of new markets. In association with the product development personnel recruitment activities undertaken by the Group in 2009, the Group recruited a researcher who was awarded the Super Creator designation in the first half of fiscal 2008. Another individual who was designated a Super Creator in the second half of fiscal 2008 is slated to join the company in spring 2011. The Melco Group will continue endeavoring to optimally structure its overseas operations and expand overseas markets. *iPhone is a trademark of Apple Inc. The Melco Foundation To commemorate the 30th anniversary of its founding, the Melco Group established the Melco Foundation in 2007 to Europe-wide partnership signed with Ingram Micro contribute to society. The foundation aims to contribute to the development and widespread practice of managerial accounting and more broadly, to the development of Japanese Buffalo EU B.V. signed a Pan-European partnership agreement academia and culture through support for research related to with Ingram Micro Nederland BV in the aim of expanding its Japanese managerial accounting. sales network in Europe. Ingram Micro is one of the world’s In fiscal 2009, the Foundation supported 19 researchers largest vendors engaged in IT product wholesaling worldwide. through programs such as Research on 21st-century With this agreement, the Melco Group aims to drive expansion Corporate Organizations and Managerial Accounting as a of its sales network in European markets. Strategy Execution Function. With managerial accounting gaining importance, the fruits of such programs should contribute broadly to society. 11 12 Financial Report Financial Report Memory Products Storage Products Overseas Sales Unit sales of PC memory modules declined 23.4% year on We were forced to lower sales prices of our mainstay hard Overseas sales declined 5.0% year on year as economic year, and sales revenues declined 30.7% year on year to disk drive products. However, use of hard disk drives to headwinds continued to plague North America and Europe. Amid ¥10,151 million in the wake of stagnant demand for memory record digital terrestrial TV programs generated new demand such an environment, sales in Asia and Oceania grew upgrades due to an increase in new PC models’ factory in addition to that from conventional use with PCs. As a substantially by 37.3% year on year as a result of the Group’s -installed memory capacity as well as withdrawals from result, unit sales of hard disk drives grew 9.2% year on year, efforts to expand sales. Sales in both North America and Europe North American markets. Unit sales of USB and other flash and sales revenues grew 1.4% year on year to ¥42,646 declined, but the Melco Group achieved operating profit in both memory products grew 2.2% year on year, and sales million. Network hard drive (NAS) sales declined 3.4% year markets as it focused on strengthening its management structure revenues increased 8.3% to ¥9,699 million, by virtue of on year to ¥12,834 million, adversely affected by a year-on- while withdrawing from loss-making operations with an emphasis intense sales efforts. year decline in unit sales of 0.9% due to stagnant demand on balancing revenue and profits. Consolidated Ordinary Income and Ordinary Profit Margin 8,000 7,652 (million yen) 8,000 8 (%) 6,000 6 5,446 5,439 6.5 6.2 4,000 4 4.0 3.9 2,258 2,000 from overseas and domestic corporate customers. 2 1.9 0 0 2007/3 Networking Products 2008/3 2009/3 2010/3 2011/3 (Projected) Other Products Networking products have increased in prevalence as Unit sales of digital home products grew 84.7% year on year, products such as mobile phone handsets and digital and sales revenues rose 10.5% year on year to ¥3,778 terrestrial TVs are increasingly equipped with wireless LAN million. Sales of Digital terrestrial tuners for analog TV began connectivity. Unit sales of broadband products grew 10.4% to grow gradually, and Melco Group products were adopted year on year, and sales revenues grew 5.3% year on year to by the Ministry of Internal Affairs and Communications as ¥21,425 million. An increase in sales of high-power value- basic digital terrestrial tuners to be distributed for free as part added products compatible with the IEEE802.11n standard of a project to support purchases of digital terrestrial TV for enhanced wireless communications and cost cutting receivers. Unit sales of supplies and accessories grew 7.2%, efforts contributed to profits. buoyed by the Group’s efforts to increase market share, but Consolidated Net Income and Net Profit Margin Overseas Sales 4,900 4 4.3 3,615 3.8 25,200 10,600 25,000 (million yen) 5 (%) 4,000 26,268 12,062 3,000 3 2,728 2.6 2,000 sales revenue only grew marginally to ¥9,447 million. 2 2.0 21,723 10,418 Europe 20,260 9,740 20,000 Consolidated Sales 4,990 5,000 (million yen) 19,246 8,552 1,000 1 707 0.6 0 2007/3 2008/3 2009/3 0 2010/3 2011/3 (Projected) 150,000 (million yen) 21,570 130,000 21,280 120,276 120,000 23,009 22,982 20,957 116,911 59,168 20,352 Other 4,600 9,454 23,400 North America 33,240 (million yen) Network 6,063 4,574 10,000 Asia Oceania Storage 40,795 4,750 13 10,000 5 2.5 0 4,456 2009/3 2008/3 2009/3 0 2010/3 Memory 19,850 20,000 2,041 0 2008/3 10 2007/3 0 2007/3 (%) 6,119 35,850 23,607 15 16.4 12.9 20,000 62,200 5,000 30,000 28,652 10.5 55,480 60,000 26,962 9,264 10,000 21,425 49,461 55,355 29,464 30,000 20,151 24,400 90,000 Consolidated Shareholders’ Equity and Return on Equity 15,000 139,571 134,547 2010/3 2011/3 (Projected) 2007/3 2008/3 2009/3 2010/3 2011/3 (Projected) Note regarding forecasts: The above earnings forecasts were formulated based on information available as of the forecast date and are subject to numerous uncertainties. Actual results may differ from earnings forecasts as a result of changes in business conditions. 14 Financial Report Financial Report Consolidated balance sheet Fiscal year Item (million yen) Ended Ended March 31, 2010 March 31, 2009 Consolidated statement of income (million yen) Consolidated Statement of Changes in Shareholders' Capital Fiscal year ended March 31, 2010 (April 1, 2009 to March 31, 2010) Ended Ended March 31, 2010 March 31, 2009 Item (April 1, 2009 to March 31, 2010) (April 1, 2008 to March 31, 2009) Sales 116,911 120,276 Cost of sales 93,466 102,194 Selling, general and administrative expenses 15,902 15,949 7,542 2,132 201 196 91 69 7,652 2,258 Extraordinary income 130 313 Repurchase of stock Extraordinary loss Sale of treasury stock Cancellation of treasury stock Fiscal year Assets 57,617 46,345 5,352 5,735 Operating income 867 1,487 Non-operating income Intangible fixed assets 2,373 2,699 Non-operating expenses Investments etc. 2,112 1,549 Ordinary income Current assets Total fixed assets Tangible fixed assets Total assets 62,970 52,080 Liabilities Current liabilities Long-term liabilities Total liabilities 26,646 21,467 3,082 1,960 29,729 23,427 452 854 Current term net income before taxes and other adjustments 7,329 1,717 Corporation, resident and enterprise taxes 1,386 315 737 533 214 161 4,990 707 Adjustment for corporation taxes, etc. Gains (losses) attributable to minority interests Current term net income (million yen) Shareholders' capital Item Balance as of March 31, 2009 Valuation and translation adjustments Net Total Foreign Total unrealized Deferred valuation Stock Minority Total net Common Additional Retained Treasury currency option interests assets shareholders' paid-in hedging gains/losses and earnings stock stock translation capital capital on other gain/loss adjustments translation securities adjustments 1,000 774 26,810 Changes due to accounting treatment of overseas subsidiaries △57 28,527 5 0 △290 △285 4 405 28,652 − − − Cash dividends △755 △755 △755 Net income 4,990 4,990 4,990 △0 △0 △0 − − − − − − − − Changes during the period Net change in items other than shareholders’ capital during the period Total changes during the period Balance as of March 31, 2010 − 1,000 122 2 14 139 − 214 353 214 4,588 4,235 △0 4,234 122 2 14 139 − 774 31,045 △58 32,762 127 2 △276 △145 4 − 619 33,240 Net assets Fiscal year ended March 31, 2009 (April 1, 2008 to March 31, 2009) Shareholders' capital (million yen) Shareholders' capital Common stock Additional paid-in capital Retained earnings Treasury stock Total shareholders' capital 1,000 1,000 774 774 31,045 26,810 △58 △57 32,762 28,527 Valuation and translation adjustments Fiscal year Item Operating activity cash flow Investing activity cash flow (million yen) Ended Ended March 31, 2010 March 31, 2009 (April 1, 2009 to March 31, 2010) (April 1, 2008 to March 31, 2009) 12,133 4,164 △12,262 △2,155 △801 △1,440 8 △95 △922 472 Item Balance as of March 31, 2008 1,927 26,881 △637 29,172 275 8 △159 123 2 165 29,464 △5 △5 △5 △774 △774 △774 707 707 707 △573 △573 △573 △0 1 0 0 △1,151 1,151 − − Changes during the period Cash dividends 127 5 Financing activity cash flow Deferred hedging gains (losses) 2 0 Balance of cash/cash-equivalent conversions Foreign currency translation adjustments △276 △290 Increase of cash/cash-equivalents Total valuation and translation adjustments △145 △285 Cash/cash-equivalent opening balance 12,900 12,428 4 4 Cash/cash-equivalent closing balance 11,977 12,900 619 405 Total net assets 33,240 28,652 Total changes during the period Total liabilities and net assets 62,970 52,080 Balance as of March 31, 2009 Minority interest in consolidated subsidiaries 1,000 Net Total Foreign unrealized Deferred valuation Stock Minority Total net Additional Total currency Retained Treasury option interests assets and paid-in shareholders' gains/losses hedging translation earnings stock on other gain/loss translation capital capital adjustments securities adjustments Changes due to accounting treatment of overseas subsidiaries Net unrealized gains (losses) on other securities Stock option 15 Consolidated cash flow statement Common stock Valuation and translation adjustments Net income Repurchase of stock Sale of treasury stock Cancellation of treasury stock Net change in items other than shareholders’ capital during the period △8 △130 △408 1 239 △167 △66 579 △639 △269 △8 △130 △408 1 239 △806 774 26,810 △57 28,527 5 0 △290 △285 4 405 28,652 − △1,152 1,000 △269 16 Company Data Evolution of the Melco Group Origin of Company Names MELCO HOLDINGS INC. Company Profile Board of Directors Melco is an acronym for Maki Engineering Laboratory Company. Maki is the surname of Melco Company Name MELCO HOLDINGS INC. Board of Directors Holdings’ founder and current President and CEO, Makoto Maki. The name dates back to the Incorporated July 1,1986 President and CEO Makoto Maki company’s inception in 1975. President and CEO Makoto Maki Senior Managing Director Kuniaki Saiki Capital ¥1 billion Managing Director Hidetoshi Yamaguchi Director Tamio Matsuo Director Lee Yang Hun Director Hiromi Maki Director Iwao Tsusaka Senior Corporate Auditor Hiromichi Maki Corporate Auditor Toshio Nishikawa Corporate Auditor Yuzuru Kawashima Corporate Auditor Tomotsune Sumi Buffalo was named after the printer buffer, an early PC peripheral. Business activities In 1982, Melco had a major hit product in the internal printer buffer, a peripheral device that Melco Holdings : Holding Company allowed PCs to be used even while printing. The internal printer buffer became the cornerstone Holdings the shares of the group operating companies under its control of Melco’s subsequent dramatic growth. When Melco later solicited public suggestions for a No. of employees : 70 MELCO Group consolidated : 871 brand name, it decided on Buffalo as a name that aptly conveys an image of a dynamic growth Group affiliates : Total of 14 companies (9 domestic, 5 overseas) company and also evokes the printer buffer’s contribution to the company’s growth. (As of June 29, 2010) Evolution of Melco Group 1975 May ● Incorporated for the purpose of manufacturing and selling audio equipment. 1978 Aug. ● Melco became a joint-stock corporation upon establishment of Melco Inc. (currently Buffalo Inc.). BUFFALO INC. 1981 Jul. ● Entered the personal computer peripherals market in earnest. Company Name 1982 Nov. ● Began marketing an internal printer buffer. 1986 Jul. ● Established Buffalo (now Melco Holdings Inc.) 1988 Oct. ● Began marketing Japan’s first EMS board (memory module). 1991 Oct. ● Melco Inc. (now Buffalo Inc.) registered with JASDAQ. Company Profile BUFFALO INC. Board of Directors (As of June 29, 2010) Founded May 1,1975 Chairman and CEO Makoto Maki Incorporated August 5,1978 President and COO Kuniaki Saiki Chairman and CEO Makoto Maki Managing Director Hidetoshi Yamaguchi Capital ¥320 million Director Tamio Matsuo Director Masanao Tsuzuki Director Hajime Nakai Corporate Auditor Hiromichi Maki Corporate Auditor Nobumasa Kaneko 1992 Jan. ● Melco Inc. opened its High-Tech Center (now Buffalo Inc. headquarters) as its Technical R&D Center. Aug. ● Began marketing LAN products. Business activities 1994 Feb. ● Began marketing hard disks; shifted emphasis to manufacture of computer peripheral devices. Development, manufacture and sales of computer and broadband 1995 Jan. ● Melco Inc. listed on second section of Nagoya Stock Exchange. equipment, and supply of related services Aug. ● Melco Inc. listed on second section of Tokyo Stock Exchange. Board of Directors No. of employees : 434 Sep. ● Melco Inc. obtained ISO9001 certification, the international quality assurance standard. 1996 Sep. ● Melco Inc. listed on first section of Tokyo Stock Exchange and Nagoya Stock Exchange. 1999 Jan. ● Entered the wireless LAN market; released Airconnect 2000 Oct. ● Developed worldwide standard specification of DDR memory for notebook computers. 2001 Jan. ● Melco Inc. obtained ISO4001 certification, the environment management system standard. 2003 May ● Buffalo Inc. changed trade name to Melco Holdings Inc., moved head office. Oct. ● Melco Inc. changed company name to Buffalo Inc., moved head office. Oct. ● Melco Holdings Inc. and Buffalo Inc. swapped stock and shifted to holding company system. Oct. ● Melco Holdings Inc. listed on first section of Tokyo Stock Exchange and Nagoya Stock Exchange. 2004 Jan. ● Established new Digital Home Solutions Business Division. 2005 Mar. ● Began supply of special set-top boxes for NTT East and West corporations. Jul. ● Buffalo Inc. established its Technical Service Center in Minami-ku, Nagoya. 2007 Apr. ● Melco Holdings Inc. made Arvel Inc. as a consolidated subsidiary. May ● MTS Inc. changed its company name to Buffalo IT Solutions. Business locations Headquarters 15 Shibatahondori 4-chome, Minami-ku, Nagoya 457-8520 Japan TEL.81-52-619-1811 FAX.81-52-619-1800 Tokyo Branch Office Kayabacho Tower, 21-2 Shinkawa 1-chome, Chuo-ku, Tokyo 104-0033 Japan TEL.81-3-3523-3333 FAX.81-3-3523-3300 Osaka Branch Office Access Tanimachi Bldg., 1-18 Tanimachi 9-chome, Chuo-ku, Osaka 542-0012 Japan TEL.81-6-6191-1511 FAX.81-6-6191-1510 Nagoya Branch Office Kamiya Bldg., 11-50 Ohsu 4-chome, Naka-ku, Nagoya 460-0011 Japan TEL.81-52-249-6600 FAX.81-52-249-6601 Sendai Branch Office Miyagino Center Bldg., 5-22 Tsutsujigaoka 4-chome, Miyagino-ku, Sendai 983-0852 Japan TEL.81-22-291-0311 FAX.81-22-298-9470 Fukuoka Sales Office Yaoji Center Bldg., 9-2 Hakataekimae 4-chome, Hakata-ku, Fukuoka 812-0011 Japan TEL.81-92-477-3711 FAX.81-92-477-3755 Sapporo Sales Office San Keisei Bldg., 4-1 Kitaichijo Higashi 1-chome, Chuo-ku, Sapporo 060-0031 Japan TEL.81-11-200-8150 FAX.81-11-200-8151 Aug. ● Arvel Inc.’s name changed to Buffalo Kokuyo Supply Inc. 2008 Apr. ● Established Buffalo EU B.V. 2009 Mar. ● Melco Holdings Inc.’s head office moved to Minami-ku, Nagoya. 17 18