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Segments
Performance
Sumitomo Electric Industries, Ltd. (TSE: 5802) and its subsidiaries and affiliates globally undertake
product development, manufacturing and marketing as well as service provision in the five business
segments: “Automotive,” “Information & Communications,” “Electronics,” “Electric Wire & Cable,
Energy,” and “Industrial Materials & Others.”
In research and development, the Group endeavors to develop original new businesses and
products. We are also committed to identifying and developing the research themes that will carry
our Group to the next stage. With over 200,000 employees in approximately 30 countries around
the world, we will continue to develop as a global company.
Operating Income and Operating Income Ratio
Despite a decline in automotive demand during the first half of the year, owing to the aftereffects of the
earthquake and tsunami of March 11, the Group enjoyed increased orders from automakers thanks to
a production recovery in the second half as well as increased demand in the global market. As a result
of these factors, the market share of our wiring harnesses grew, and the net sales of our Automotive
segment, on a consolidated basis, came to ¥991.7 billion for an increase of ¥31.7 billion (3.3%) over
the previous year. Operating income, however, posted a year-on-year decrease of ¥9.8 billion to
¥54.3 billion, owing to lower production levels in the first-half period as a result of the March 11
disaster. The operating income ratio declined by 1.2 percentage points to 5.5%.
Information & Communications
Automotive
The March 11 earthquake and tsunami forced the Group’s optical fiber cable and opto-electronic device
manufacturing plants to cut production, and this segment’s business was also adversely impacted by the sharp
appreciation of the Japanese currency and declining demand in the domestic fiber cable market. In addition,
Commuture Corp. was removed from the list of the Company’s consolidated subsidiaries with effect from the second
half of the previous business year. As a result of these factors, net sales of the Information & Communications
segment, on a consolidated basis, posted a year-on-year decline of ¥56.2 billion (25.7%) to ¥162.0 billion. Due to
a fall in production levels caused by the earthquake and tsunami as well as a decline in the profitability of exports in
line with the yen’s appreciation, the operating income/loss account deteriorated by ¥8.9 billion from an operating
income of ¥3.0 billion for the previous year to an operating loss of ¥5.9 billion for the reporting period.
(Billions of yen) (%)
80 75
15
60
40
20
0
5
0
-5
-10
6.2
6
0.7
35
4.2
64
6.7
54
2008 2009 2010 2011 2012
Operating Income
Operating Income Ratio
10
5.5 5
(Billions of yen) (%)
10
8
10
3.0
5
4
1.8 1.3
3
1.4
-6
2008 2009 2010 2011 2012
Operating Income
Operating Income Ratio
0
5
0
-5
-10
Thanks to increased demand for flexible printed circuits used in smart phones, among other products,
net sales of the Electronics segment rose by ¥7.6 billion (4.3%) year on year, on a consolidated basis, to
¥185.8 billion. Operating income, however, fell by ¥3.3 billion year on year to ¥3.3 billion as a result of
the stronger yen and fiercer international competition. The operating income ratio declined by
1.9 percentage points to 1.8%.
Cable, Energy
Electronics
Net sales of the Electric Wire & Cable, Energy segment, on a consolidated basis, posted a year-on-year
increase of ¥43.7 billion (9.4%) to ¥508.6 billion. This was the result of growth in demand for lowvoltage
cables for use in post-disaster recovery work, as well as overseas electrical installation work
carried out by Sumitomo Densetsu Co., Ltd. and increased demand for charged particle beam-oriented
equipment made by Nissin Electric Co., Ltd. Operating income rose ¥3.5 billion to ¥16.9 billion, while
the operating income ratio improved by 0.4 of a percentage point to 3.3%. The value of orders for
installation work and plants, on a consolidated basis, came to ¥233.8 billion for a year-on-year increase
of ¥26.3 billion (12.7%).
During the reporting period, the Industrial Materials & Others segment saw increased demand for
cemented carbide tools against the background of increased automotive production worldwide
and expanding demand for industrial tools in the emerging economies. As a result, net sales, on a
consolidated basis, edged up by ¥346 million (0.1%) year on year to ¥277.9 billion, while operating
income rose ¥1.6 billion to ¥18.5 billion and the operating income ratio improved by 0.5 of a
percentage point to 6.6%.
(Billions of yen) (%)
20 7.8
8
15
10
5
0
0
17
1
0.6
2.9
5
3.7
7
2008 2009 2010 2011 2012
Operating Income Operating Income Ratio
6
4
3
1.8 2
(Billions of yen) (%)
20 19
5
17
16
4
13
12 3.1
3.3
3
9
2.9
8
8
2
1.9
1.7
4
1
2008 2009 2010 2011 2012
Operating Income Operating Income Ratio
(Billions of yen) (%)
35 10.0
10
30
25
20
15
10
5
0
30
6.1
17 18
6.6
2
0.8
0.9
0.4
2008 2009 2010 2011 2012
Operating Income
Operating Income Ratio
0
0
8
6
4
2
0
Annual Report 2012
SUMITOMO ELECTRIC
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