Fujitsu 2010 Annual Report Download - page 91

0
2,000
4,000
6,000
4,791.4 4,679.5
4,692.9
5,330.8
5,100.1
2006 2008 2009 20102007
(¥ Billions)
Net Sales
(Years ended March 31)
Management’s Discussion and Analysis of Operations
The following section, Management’s Discussion and Analysis of
Operations, provides an overview of the consolidated financial
statements of Fujitsu Limited (the “Company”) and its consolidated
subsidiaries (together, the “Group”) for the year ended March 31,
2010 (fiscal 2009). Forward-looking statements in this section are
based on management’s understanding and best judgment as of
March 31, 2010. The impact of exchange rate movements is calcu-
lated by taking the average exchange rates in fiscal 2008 for the
U.S. dollar, euro, British pound, Australian dollar, Korean won, and
other currencies and applying them to foreign currency-
denominated transactions in fiscal 2009.
1. Analysis of Results
Business Environment
During fiscal 2009, ended March 31, 2010, the business environ-
ment in which the Group operated was characterized by a serious
economic downturn in the first half of the fiscal year, and moderate
signs of a recovery in the second half, driven by global progress in
inventory adjustments and economic stimulus measures imple-
mented by nations around the world. China’s economy expanded
as a result of measures to stimulate domestic demand, and the U.S.
economy showed improvement as a result of pump-priming
measures and progress in inventory adjustments. In Europe, how-
ever, the economy remained stagnant due to weak personal con-
sumption resulting from a worsening employment outlook. In
Japan, the economy continued to rebound as a result of higher
exports, primarily to China and other emerging economies, as well
as the underlying support provided by the Japanese government’s
large economic stimulus program. The recovery remained fragile,
however, with lingering weakness in personal income and the job
market, as well as prolonged deflationary pressures.
With respect to investment in information and communication
technology (ICT), though there were signs of recovery in demand
for hardware, challenging conditions remained due to a slow
recovery in demand for software and services.
Net Sales
In fiscal 2009, consolidated net sales were ¥4,679.5 billion ($50,317
million), essentially unchanged from fiscal 2008. Sales declined by
7% when excluding the impact of converting Fujitsu Technology
Solutions (Holding) B.V. (Fujitsu Technology Solutions, name
changed from Fujitsu Siemens Computers (Holding) B.V. in April
2009) and FDK Corporation (FDK), both of which had been equity-
method affiliates until the fiscal year under review, into consoli-
dated subsidiaries, the impact of the transfer of the hard disk drive
(HDD) business, and the effect of exchange rate fluctuations. Sales
in Japan declined by 8.2%. Sales of system integration services and
ATM- and POS-related solutions services to customers in the manu-
facturing, retail/distribution, and financial services industries
declined due to corporate spending constraints. Sales of LSI
devices, server-related products, and PCs were also lower, primarily
as a result of weaker sales in the first half of the fiscal year. Sales
outside Japan increased by 16.6%. However, if the effects of busi-
ness realignment and currency exchange rate fluctuations are
excluded, sales actually decreased by 4%. The services business was
negatively impacted by the economic recession, particularly in
Europe. Sales of HDDs, PCs, and server-related products also
declined, primarily in the first half of the year.
Sales outside Japan as a ratio of total net sales came to 37.4%, up
5.4 percentage points from the previous fiscal year. The consolidation
of Fujitsu Technology Solutions, which had been an equity-method
affiliate until the fiscal year under review, resulted in increased sales
to customers in Europe, the Middle East and Africa (EMEA).
In fiscal 2009, Fujitsu Technology Solutions and FDK, both of
which had been equity-method affiliates until the fiscal year under
review, were converted into consolidated subsidiaries. The consoli-
dation of these companies boosted sales by ¥470.0 billion and
¥65.0 billion, respectively. On the other hand, the transfer of the
HDD business reduced net sales by ¥70.0 billion year on year.
Accordingly, the impact of business realignment was to increase
net sales by ¥465.0 billion compared to fiscal 2008.
In fiscal 2009, the average yen exchange rates against the U.S.
dollar, the euro, and the British pound were ¥93, ¥131, and ¥148,
respectively, representing a year-on-year appreciation of ¥8 against
the U.S. dollar, ¥13 against the euro, and ¥26 against the British
pound. Exchange rate fluctuations versus the U.S. dollar caused a
reduction in net sales of approximately ¥40.0 billion compared to
the previous year, with fluctuations in the euro , British pound, and
other currencies lowering net sales by approximately ¥5.0 billion,
¥70.0 billion, and ¥15.0 billion, respectively, year on year. As a result,
currency exchange rate fluctuations had a negative impact of
approximately ¥130.0 billion on net sales for fiscal 2009. Foreign
currency- denominated transactions of Fujitsu Technology
Solutions and FDK, which became consolidated subsidiaries from
fiscal 2009, were excluded from this calculation.
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FUJITSU LIMITED Annual Report 2010
Five-Year Summary/ Management’s Discussion and Analysis of Operations