The Nikon Three-Year Plan

Nikon Corporation (YOSHIDA, Shoichiro, president) has established its new Three-Year Plan, which delineates the shape of the Nikon Group in fiscal 2003.

In March 2000, Nikon introduced "Vision Nikon 21," its leading concept for the first decade of the 21st century, and in October 2000 announced the Nikon Group Six-Year Concept, a basic policy for implementing the first six years of the Vision, starting in fiscal 2001.

This Three-Year Plan is based on Vision Nikon 21 and the Six-Year Concept, but defines more concretely the goals and strategies of individual companies and centers, with management targets defined for each fiscal year.

The plan includes the following items related to basic policy and other issues:

Background

In the Precision Equipment sector, we expect capital investment into semiconductor manufacturing will decline in the next three years.

Even so, we foresee that investments in KrF and ArF excimer laser steppers and 300-mm wafer equipment will steadily continue.

In the Imaging Products field, digital cameras will continue to grow, and in the Instruments field we expect new measurement and inspection products to pioneer new markets.

Outline of The Plan

• Basic Policy
  1. New Business Lines
     From fiscal 2001, the CMP equipment business will become fully operational, and by taking advantage of our competence in nanotechnology, we plan to enter the optical communications field, as well as life sciences.
     These new businesses are expected to generate approximately 20 billion Japanese Yen in revenues.
     In existing business fields, we plan increases in revenues through the development of new businesses, such as the after-sales business in Precision Equipment, and e-commerce in the Imaging Products field.
  2. R & D
     We will continue to strengthen our optoelectronics and precision technologies, our core competences, while moving to develop the next generation of products in our business fields, and actively developing new constituent and manufacturing technologies.
     We have budgeted R&D expenses at 6% of annual revenues for Nikon Corporation.
     We also plan to actively pursue alliance and M&A strategies with leading companies whose core competence is in other areas.
  3. Investment Plan
     Investment will stress R&D into next-generation lithography technology and reinforcement of production capacity in the Imaging Products field. For the 3-year period, we budget about 100 billion Japanese Yen.
  4. IT Utilization
     We will improve our business model by aggressively implementing information technology-upgrading our management information system and introducing faster, more efficient business operations.
     We will give information technology investments the highest priority.
  5. Financial Strategy
     In order to improve the company's financial strength, we will centralize the financial functions for each region into the European and American holding companies, reduce interest-bearing debt by expanding debt liquidity, enhance asset management and reduce financial expenses.
     By way of example, we will reduce the ratio of interest-bearing debt to total liabilities and shareholders' equity by at least 10 points by fiscal 2003, from 33% in fiscal 2000 [forecast].
• Management Targets for Fiscal 2003
  • Consolidated revenues

    670 billion Japanese Yen

  • Consolidated ROA

    5% minimum

  • Consolidated ROE

    12% minimum