Fujitsu 2009 Annual Report Download - page 22

Performance in Fiscal 2008
The business environment in which the Fujitsu Group operated in
the fiscal year under review was marked by an increasingly severe
global recession. Credit markets tightened around the world as the
scope of the financial crisis widened and a vicious cycle emerged as
real economies deteriorated. This led to negative growth in Europe
and the US, and economies also decelerated sharply in Asia, where
growth had been consistently high, especially in China and India. The
Japanese economy deteriorated substantially as well, primarily in the
corporate sector, with the recession becoming entrenched as exports
declined sharply and growth fell to negative double-digits for both
second-half quarters. IT investment remained firm in the first half of
the period, but in the second half, it plunged in the hardware sector
due to the impact of the global economic downturn, and in the soft-
ware sector, companies became more cautious in making invest-
ments. However, given the increasing importance of good corporate
citizenship and comprehensive risk management in the severe eco-
nomic climate, upfront investment to meet compliance and security
requirements remained firm, as did investment for strategic growth
objectives, such as bolstering global competitiveness.
Consolidated net sales for the Fujitsu Group in fiscal 2008,
ended March 31, 2009, totaled ¥4,692.9 billion, a decrease of 12.0%
compared to the previous fiscal year. However, the decrease was
6.0% excluding the effect of the yen’s appreciation. Japan net sales
alone declined by 6.3% and net sales outside Japan fell 22.0%, or
6% excluding the effects of exchange rates. Despite the recession,
sales in Technology Solutions were on par with the previous year
thanks primarily to firm sales from the services business. Economic
A Message From the CFO
Kazuhiko Kato
Corporate First Senior Vice President and Chief Financial Officer
conditions deteriorated rapidly starting in the third quarter, leading
to lower sales of logic LSI devices, electronic components, PCs and
other products, while mobile phones were impacted by a length-
ening of replacement cycles. The services business grew, driven by
an increase in business from the private sector in continental
Europe, but PC and UNIX server sales declined due to economic
deterioration in Europe and the US, while sales of hard disk drives
and electronic components also fell.
Operating income declined by ¥136.2 billion year on year to
¥68.7 billion. Technology Solutions delivered higher income despite
the harsh market conditions, but HDD and LSI device losses deep-
ened in the second half.
Other expenses, net, totaled ¥182.0 billion, an increase of ¥86.5
billion from the previous year. This was attributable to significant
loss in earnings of affiliates, net, revaluation losses on our holdings of
publicly listed shares, impairment losses on fixed assets in connec-
tion with a new business model for advanced LSI devices, and
restructuring charges associated with transferring the HDD business
and reorganizing LSI production systems.
As a result, we recorded a net loss of ¥112.3 billion.
Financial Issues and Initiatives in Fiscal 2008
The Fujitsu Group continued efforts to improve its financial position
in the fiscal year under review. However, a net loss of ¥112.3 billion
was incurred due to restructuring charges and impairment losses
associated with business reorganization, among other factors. The
owners’ equity ratio declined by 1.6 points compared to the previ-
ous fiscal year to 23.2%. Free cash flow was positive, but just ¥23.4
020 ANNUAL REPORT 2009
FUJITSU LIMITED