Fujitsu 2010 Annual Report Download - page 92

0 0
50
100
150
250
200
10
8
6
4
2
181.4
3.8 94.3
2.0
68.7
1.5
204.9
3.8
182.0
3.6
2006 2008 2009 20102007
(¥ Billions) (%)
Cost of Sales, Selling, General & Administrative Expenses,
and Operating Income
In fiscal 2009, cost of sales totaled ¥3,436.4 billion ($36,951 million),
gross profit was ¥1,243.1 billion ($13,367 million), and the gross
profit margin was 26.6%.
Gross profit increased ¥41.6 billion year on year, primarily atop
beneficial effects from the consolidation of Fujitsu Technology
Solutions, lower depreciation costs in the LSI business, and higher
sales of mobile phones and electronic components. These factors
outweighed increased retirement benefit costs triggered by wors-
ening investment conditions for pension assets in the previous
fiscal year, a loss provision related to Japan’s next-generation super-
computer, and lower service business revenues. The gross profit
margin improved 1.0 percentage point year on year, mainly reflect-
ing benefits from progress on structural reforms in the LSI business
and the transfer of the HDD business, where profitability had dete-
riorated. These factors were joined by the promotion of cost-
reduction measures in response to declining prices and tepid
demand for ICT investment.
Selling, general and administrative (SG&A) expenses were
¥1,148.7 billion ($12,352 million), up ¥16.0 billion year on year. This
resulted primarily from the impact of consolidating Fujitsu
Technology Solutions and FDK, as well as an increase in strategic
upfront investments, largely in relation to cloud computing ser-
vices. Excluding these factors, expenses fell by over ¥70.0 billion
year on year, due in great part to efforts to reduce expenses and
enhance efficiency Group-wide. R&D expenses were ¥224.9 billion
($2,419 million), down ¥24.9 billion from the previous year. In addi-
tion to greater development efficiencies in the LSI business, R&D
expenses pertaining to servers and network products were lower.
The ratio of R&D expenditure to net sales was 4.8%, compared to
5.3% a year earlier.
As a result, operating income was ¥94.3 billion ($1,015 mil-
lion), an increase of ¥25.6 billion compared to fiscal 2008. The
operating income margin improved 0.5 of a percentage point year
on year, to 2.0%, chiefly due to benefits from structural reforms in
the LSI and HDD businesses, and the Group-wide promotion of
cost- reduction measures.
The Group strives to minimize the impact of currency
exchange rate fluctuations on earnings. During fiscal 2009, fluctua-
tions in currency exchange rates had the effect of lowering operat-
ing income by approximately ¥5.0 billion relative to the previous
year. For fiscal 2009, a one yen (¥1) fluctuation in the currency
exchange rate translated into an impact on operating income of
approximately ¥0.8 billion for the U.S. dollar, ¥0.1 billion for the
euro, and ¥0.1 billion for the British pound.
Condensed Consolidated Statements of Operations
(Billions of yen)
Years ended March 31 2009 2010
YoY
Change
Increase
rate
Net sales. . . . . . . . . . . . . . . . . . . . . . . . 4,692.9 4,679.5 (13.4) (0.3)%
Cost of sales . . . . . . . . . . . . . . . . . . . . 3,491.5 3,436.4 (55.1) (1.6)
Gross profit . . . . . . . . . . . . . . . . . . . . . 1,201.4 1,243.1 41.6 3.5
Selling, general and
administrative expenses . . . . . . . 1,132.7 1,148.7 16.0 1.4
Operating income . . . . . . . . . . . . . . 68.7 94.3 25.6 37.2
Other income (expenses) . . . . . . . (182.0) 18.3 200.4 —
Income (loss) before income
taxes and minority interests . . . (113.3) 112.7 226.0 —
Income taxes . . . . . . . . . . . . . . . . . . . 0.4 15.7 15.3 —
Minority interests in income (loss)
of consolidated subsidiaries . . . . . (1.3) 3.8 5.1 —
Net income (loss) . . . . . . . . . . . . . . . (112.3) 93.0 205.4 —
Principal Factors in YoY Change
(Billions of yen)
Net sales
Operating
income
I Effects of business realignment
and exchange rate fluctuations . . . . . . . . . . . . . 335.0 9.5
Effects of business realignment . . . . . . . . . . . 465.0 14.5
Consolidation of Fujitsu Technology
Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 470.0 (4.0)
[Amortization of goodwill and other
intangible assets, one-time charge for
development expenses] . . . . . . . . . . . . . [—] [(14.0)]
Consolidation of FDK . . . . . . . . . . . . . . . . . . . 65.0 2.0
Transfer of HDD business . . . . . . . . . . . . . . . (70.0) 16.5
Effects of exchange rate fluctuations . . . . . . . . . (130.0) (5.0)
II Increased retirement benefit costs . . . . . . . . . . . — (22.0)
III Change from previous year excluding
I and II above . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (348.0) 38.0
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13.4) 25.6
(Reference) Financial Indicators (Billions of yen)
Years ended March 31 2009 2010
YoY
Change
Net sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,692.9 4,679.5 (13.4)
[Sales outside Japan] . . . . . . . . . . . . . . . [1,499.8] [1,748.3] [248.4]
[Ratio of sales outside Japan] . . . . . . . [32.0%] [37.4%] [5.4%]
Operating income margin . . . . . . . . . . 1.5% 2.0% 0.5%
Return on equity . . . . . . . . . . . . . . . . . . . (13.2%) 12.0% —
Operating Income and
Operating Income Margin
Operating Income (Left Scale)
Operating Income Margin (Right Scale)
(Years ended March 31)
090 FUJITSU LIMITED Annual Report 2010
Management’s Discussion and Analysis of Operations