Fujitsu 2013 Annual Report Download - page 26

Performance in Fiscal 2012
The global economy during fiscal 2012 continued to experi-
ence a weak recovery. In Europe, ongoing deterioration in
economic conditions resulted from fiscal austerity measures
and rising unemployment, and in the US, concerns over fiscal
policy created conditions of uncertainty. In emerging countries,
although investment activity showed signs of improvement as
a result of expanded public works spending and monetary
easing, the rate of economic growth slowed on account of
sluggish consumer spending.
In Japan, the economy was buffeted by the global eco-
nomic slowdown, resulting in stagnation. Despite rising expec-
tations for an economic rebound due to a stock market rally
and yen depreciation spurred on by economic policy and mon-
etary easing from the fourth quarter, the impact on the real
economy in fiscal 2012 was limited.
With respect to ICT investment in Japan, spending on IT
services saw signs of recovery, but hardware investment
remained sluggish. Outside Japan, Europe saw economic con-
ditions continue to deteriorate, mainly in the first half, and
companies responded by putting firmer constraints on invest-
ment spending.
Under these conditions, consolidated net sales for fiscal
2012 were ¥4,381.7 billion (US$46,614 million), a decline of
1.9% from fiscal 2011. Excluding the impact of foreign
exchange fluctuations, sales were down by 3.0%.
Net sales in Japan fell by 2.6%. The primary cause of the
decrease was a drop in sales of PCs, mobile phones, LSI
devices, and electronic components and other hardware. Sales
A MESSAGE FROM THE CFO
stemming from the next-generation supercomputer systems,
for which deliveries peaked in fiscal 2011, also declined. Out-
side Japan, sales were essentially unchanged from the previ-
ous fiscal year, and on a constant currency basis, decreased by
3.0%. Sales of infrastructure services, particularly in Europe,
were buffeted by deteriorating economic conditions, and sales
of PCs in Europe and optical transmission systems in North
America were lower than fiscal 2011.
Gross profit was ¥1,203.7 billion, down ¥31.6 billion from
fiscal 2011. The decline was attributable to lower sales of PCs,
mobile phones, and LSI devices. The gross profit margin was
27.5%, a decline of 0.2 of a percentage point compared to
the prior fiscal year. Selling, general and administrative
expenses were ¥1,108.4 billion, a decline of ¥21.6 billion
from fiscal 2011, primarily as a result of efforts across the
Group to generate cost efficiencies. There was also an
increase in strategic investment in network-related technolo-
gies and cloud services.
By segment, the Technology Solutions segment achieved
higher sales year on year centered on services in Japan, with
infrastructure services such as network services, and system
integration performing steadily throughout the fiscal year.
However, the Ubiquitous Solutions segment posted a large
year-on-year decline in sales in the second half, mainly due to
the impact of intensifying competition. In addition, in the
Device Solutions segment, the core LSI device business saw
lower year-on-year sales in every quarter.
As a result, operating income was ¥95.2 billion, a decrease
of ¥10.0 billion compared to fiscal 2011. The operating income
margin declined 0.2 of a percentage point to 2.2%.
By segment, the Technology Solutions segment achieved
higher year-on-year operating income on a full-year basis,
although the Ubiquitous Solutions segment posted a large
decline in operating income in the second half, compared to
the same period of the previous fiscal year. In addition, perfor-
mance in the Device Solutions segment was lackluster on a
continuing operating loss in the LSI device business.
In other income (expenses), Fujitsu recorded a loss of
¥140.3 billion, representing a deterioration of ¥101.8 billion
from the previous fiscal year. This is mainly due to Fujitsu
having posted restructuring charges of ¥116.2 billion, and an
impairment loss of ¥34.2 billion under other expenses.
The restructuring charges stem from ¥90.3 billion for the
LSI device business, ¥20.0 billion for business outside Japan,
and ¥5.8 billion for others. Restructuring charges for the LSI
devices business consist of losses relating to transfer of pro-
duction facilities and an impairment loss on the standard logic
LSI devices production line, for which capacity utilization rates
have been declining. The losses relating to transfer of produc-
tion facilities consist of two items. One is guarantees, for a set
period of time, on a portion of the operational costs of the
Iwate Plant and test facilities that were transferred. The other
is personnel-related expenses in accordance with the transfer
Explanations for underlined words can be found in the glossary on page 147-148.
024 FUJITSU LIMITED ANNUAL REPORT 2013