X-X01-7-C7792-A HQ0707〈MDOC〉 Printed in Japan AT A GLANCE CORPORATE DATA FINANCIAL HIGHLIGHTS Energy and Electric Systems Industrial Automation Systems Information and Communication As of March 31, 2007 Years ended March 31 Yen U.S. dollars Systems (millions) (thousands) MITSUBISHI ELECTRIC CORPORATION 2007 2006 2005 2007 868,789 860,111 644,111 Tokyo Building, 06 06 06 2-7-3, Marunouchi, 25,296 95,967 20,677 Net sales ¥3,855,745 ¥3,604,185 ¥3,410,685 $32,675,805 Chiyoda-ku, Tokyo 100-8310, Operating income 233,002 157,718 120,642 1,974,593 951,065 956,930 688,004 Japan 07 07 07 49,310 126,227 20,803 Phone: +81 (3) 3218-2111 Net income 123,080 95,692 71,175 1,043,051 ESTABLISHED: Total assets 3,452,231 3,313,742 3,162,472 29,256,195 January 15, 1921 Shareholders’ equity 1,059,209 942,202 720,637 8,976,347 MAIN PRODUCTS AND BUSINESS LINES MAIN PRODUCTS AND BUSINESS LINES MAIN PRODUCTS AND BUSINESS LINES Capital expenditure 140,557 134,413 125,657 1,191,161 PAID-IN CAPITAL: Turbine generators, hydraulic turbine Programmable logic controllers, inverters, Wireless communications equipment, ¥175,820 million R&D expenditure 132,722 130,639 130,541 1,124,763 generators, nuclear power plant equipment, servomotors, human-machine interface, mobile handsets, cable communications SHARES ISSUED: motors, transformers, power electronics motors, hoists, magnetic switches, no-fuse systems, satellite communications equipment, circuit breakers, gas insulated circuit breakers, short-circuit breakers, equipment, artificial satellites, radar 2,147,201,551 shares Yen U.S. dollars switches, switch control devices, surveillance- transformers for electricity distribution, equipment, antennas, missile systems, fire- CONSOLIDATED NET SALES: Per-Share Amounts system control and security systems, time and power meters, uninterruptible control systems, broadcasting equipment, ¥3,855,745 million Net income electrical equipment for locomotives and power supply, industrial sewing machines, data transmission devices, information Basic ¥57.34 ¥44.64 ¥33.16 $0.486 CONSOLIDATED TOTAL ASSETS: rolling stock, elevators, escalators, computerized numerical controllers, systems equipment, systems integration, Diluted 57.34 44.63 33.16 0.486 particle beam treatment systems, and electrical-discharge machines, laser and others ¥3,452,231 million Cash dividends declared 10 860.085 others processing machines, industrial robots, EMPLOYEES: See accompanying notes to consolidated financial statements. clutches, car audio equipment, car 102,835 navigation systems, automotive electrical equipment, car electronics, and others CONTENTS NET SALES BREAKDOWN BY BUSINESS SEGMENT Electronic Devices Home Appliances Others 01 At a Glance 02 To Our Shareholders 03 Corporate Strategy Others 14.5% Energy and Electric 21.9% 170,394 896,437 603,585 Systems 06 06 06 06 Corporate Social Responsibility 13,531 14,958 13,342 08 Research and Development 185,911 921,948 630,510 09 Intellectual Property 07 07 07 Home Appliances 21.3% 12,141 36,644 15,169 10 Review of Operations Industrial Automation 22.1% 10 Energy and Electric Systems Systems 11 Industrial Automation Systems 12 Information and Electronic Devices 4.3% Information and 15.9% MAIN PRODUCTS AND BUSINESS LINES MAIN PRODUCTS AND BUSINESS LINES MAIN PRODUCTS AND BUSINESS LINES Communication Systems Communication Systems Power modules, high-frequency devices, Color televisions, projection TVs, display Procurement, logistics, real estate, 13 Electronic Devices optical devices, LCD devices, printed monitors, video projectors, DVDs, room air advertising, finance and other services 14 Home Appliances circuit boards, system LSIs, and others conditioners, package air conditioners, 15 Corporate Governance refrigerators, electric fans, washing 16 Directors and machines, ventilators, solar power Executive Officers generation systems, hot water supply 17 Organization systems, fluorescent lamps, indoor lighting, compressors, chillers, humidifiers, 18 Subsidiaries and Affiliates NET SALES dehumidifiers, air purifiers, showcases, 19 Financial Section OPERATING INCOME 61 Shareholder Information cleaners, microwave ovens, IH cooking heaters, and others (Yen in millions) 1 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2007 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2007 1 TO OUR SHAREHOLDERS CORPORATE STRATEGY: IMPLEMENTING BALANCED MANAGEMENT Throughout fiscal year 2007, ended March 31, Based on the corporate statement, “Changes for the Better,” the Improving Performance through Balanced Management 2007, the Mitsubishi Electric Group focused its Mitsubishi Electric Group aspires to a brighter future through its com- Under a policy of balanced management, the Mitsubishi Electric balanced management initiatives for business mitment to bring innovations to society, industry and everyday life. Group attained all of its management targets in the fiscal year ended reform on “Growth,” “Profitability and We aim to construct a solid management structure to attain sus- March 31, 2007, including an operating income ratio of 6%, ROE Efficiency” and “Soundness.” Under its strategy of tainable growth by promoting balanced management initiatives that (return on equity) of 12.3% and a ratio of interest-bearing debt to “making strong businesses stronger,” the Group emphasize “Growth,” “Profitability and Efficiency,” and total assets of 18.6%. The Group achieved these targets through actively implemented business-strengthening “Soundness.” We will also continue to actively promote corporate business-reinforcement measures, structural reforms and improve- strategies and structural reforms in response to social responsibility (CSR) initiatives based on our Corporate ments in productivity and financial standing. changing business conditions, with the goal of Mission and our Seven Guiding Principles. The Mitsubishi Electric Moving forward, the Mitsubishi Electric Group has set more chal- increasing and strengthening profitability in each Group is taking thorough measures, particularly in the area of com- lenging targets to lower the ratio of interest-bearing debt to total business segment. At the same time, the Group pliance, to expand its training programs and strengthen its internal assets to 15% or less. We are also pursuing efforts to achieve other continued to strengthen production and sales sys- control systems. management targets on a continuous basis. tems both in domestic and overseas markets by In order to continue to meet the expectations of shareholders, we establishing and reinforcing operating bases. will enact reform measures to evolve into a conglomerate of highly In addition, Mitsubishi Electric carried out competitive, electric-electronic businesses, optimizing synergies to Framework for Balanced Management extensive companywide management improvement further increase corporate value. The Group implements balanced management through two initia- measures including our “Just in Time” initiative, tives: prioritizing front-line operations and focusing on organizing where we were able to reduce inventory and networks. Through prioritization of front-line operations, the Group increase productivity, as well as the continuation of works to bolster “craftsmanship” abilities in the areas of quality, our cost-reducing A-Sigma 21 Program. We also Management Policy costs, manufacturing technologies, new developments and intellectu- strengthened our competitive edge through appro- Accomplishment of al properties, as well as promoting greater competitiveness in mar- priate allocation of human resources (HR) and by “Balanced Corporate Management” keting and services. Through our focus on organizing networks, we optimizing our HR structure. Achieving Stable Results: Steady Growth and Improvement are strengthening our production and sales links and improving syner- As a result, the Mitsubishi Electric Group gies between business segments. We also continue to fortify corporate- recorded increased sales for the third consecutive wide support functions and promote global management through year and increased profits for the fifth consecutive collaborations such as the ties between parent factories in Japan and year. Consolidated net sales totaled ¥3,855.7 bil- Growth overseas facilities, as well as the interface between regional strategies lion, an increase of 7% compared with the previ- and business and product-line strategies. Integrating these two initia- ous fiscal year. Operating income soared by 48% tives into our management framework promotes business-strengthen- to ¥233.0 billion, and net income rose by 29% to ing strategies, efficient management structures, solid growth ¥123.1 billion. Operating income marked a record strategies, substantial environmental management and improvement high for the first time in 17 years, and the operat- of our financial standing. ing income ratio reached 6.0%, which accom- plished our stated management target. The Group Profitability Soundness will further reinforce its reform initiatives to con- Efficiency sistently attain our respective management targets. Management Framework Not being swayed by changing business environ- ments, the Mitsubishi Electric Group will continue to forge a path of steady growth by effectively Two Frameworks Implementing “Establish a robust managerial basis” and “ensure sustainable growth” Balanced refining our integrated “craftsmanship,” which is Management the foundation of our activities as a manufacturer, Increase corporate value Priority on the Promote Business- and by reinforcing our various businesses.