Fujitsu 2014 Annual Report Download - page 112

other standard logic device production facilities of the Mie Plant and
facilities in the Aizu-Wakamatsu region). The loss on the sale and
integration of businesses primarily consists of expenses to cover the
settlement of retirement benefit obligations and losses on the dis-
posal of assets for the system LSI (SoC) business. The loss associated
with the restructuring of the standard logic device production facili-
ties primarily consists of expenses for consolidating the 200 mm
production lines and losses on the disposal of assets.
Other Operations/Elimination and Corporate
This category includes operations not included in the reportable
segments, such as Japan’s Next-Generation Supercomputer project,
facility services and the development of information systems for
Group companies, and welfare benefits for Group employees.
This category also includes expenses which are not classified into
an operating segment. The expenses consist of strategic expenses
such as basic research and development expenses, as well as group
management shared expenses incurred by the Company.
The category posted an operating loss of ¥72.8 billion ($707
million), representing an improvement of ¥8.2 billion over fiscal
2012, mainly due to Company-wide cost efficiency improvements.
Geographic Information
One of the Group’s management priorities is to increase sales and
raise profitability of its business in growing markets outside Japan.
Geographic financial information is important to the Group’s business
management and is useful for shareholders and investors in under-
standing the Group’s financial overview.
(Unit: billion yen)
Years ended March 31 2013 2014
YoY
Change
Change
(%)
Japan
Net sales . . . . . . . 3,306.4 3,465.1 158.6 4.8
Operating income . . 178.4 202.8 24.3 13.6
[
Operating income
margin
] . . . . . . . [5.4%] [5.9%] [0.5%]
Europe,
Middle East,
Africa (EMEA)
Net sales . . . . . . . 785.2 937.3 152.1 19.4
Operating income . . (19.2) 2.6 21.9 —
[
Operating income
margin
] . . . . . . . [(2.5%)] [0.3%] [2.8%]
The Americas
Net sales . . . . . . . 273.7 386.0 112.3 41.1
Operating income . . (2.3) 6.6 9.0 —
[ Operating income
margin
] . . . . . . . [(0.9%)] [1.7%] [2.6%]
APAC
(Asia-Pacific)
& China
Net sales . . . . . . . 468.7 542.1 73.3 15.6
Operating income . . 10.4 8.9 (1.5) (15.0)
[
Operating income
margin
] . . . . . . . [2.2%] [1.6%] [(0.6%)]
Elimination &
Corporate
Net sales . . . . . . . (452.4) (568.2) (115.7) —
Operating income . . (79.0) (78.5) 0.5 —
Consolidated
Net sales . . . . . . . 4,381.7 4,762.4 380.7 8.7
Operating income . . 88.2 142.5 54.2 61.5
[
Operating income
margin
] . . . . . . . [2.0%] [3.0%] [1.0%]
Japan
Net sales amounted to ¥3,465.1 billion ($33,642 million), an
increase of 4.8% compared to fiscal 2012. Sales of mobile phones
were down sharply, but sales of systems integration services, mainly
to public-sector and financial institutions, increased, as did sales of
PCs and network products. Operating income in Japan was ¥202.8
billion ($1,969 million), a year-on-year increase of ¥24.3 billion.
Despite deteriorating profitability in mobile phones, operating
income increased on the impact of workforce-related measures as
well the restructuring of the LSI device business, in addition to the
benefits of higher sales of systems integration services.
EMEA (Europe, Middle East, Africa)
Net sales amounted to ¥937.3 billion ($9,100 million), an increase
of 19.4% from fiscal 2012, although, on a constant-currency basis,
sales fell by 2%. The sales strategy for PCs switched to an emphasis
on profitability over volume and sales declined, primarily in emerg-
ing markets. Operating income was ¥2.6 billion ($25 million),
representing an improvement of ¥21.9 billion from fiscal 2012. In
Germany, in addition to improved profitability in PCs, there was also
a temporary reduction in the estimated expenses from copyright
levies imposed on PCs at a European subsidiary as a result of a
settlement with a copyright organization. Operating income for
infrastructure services improved owing to structural reforms. It
should also be noted that, to adjust for differences in accounting
between Japanese accounting standards and IFRS, fiscal 2013 oper-
ating income reflects approximately ¥5.0 billion in amortization
expenses for goodwill and approximately ¥17.0 billion in amortiza-
tion expenses for retirement benefits.
The Americas
Net sales amounted to ¥386.0 billion ($3,748 million), an increase of
41.1% from fiscal 2012. On a constant currency basis, sales increased
25%. Sales rose for car audio and navigation equipment and optical
transmission systems. Operating income for the region amounted to
¥6.6 billion ($64 million), an improvement of ¥9.0 billion from fiscal
2012. In addition to the effects of higher sales, lower amortization
expenses for goodwill and improved profitability in infrastructure
services contributed to the improvement of operating income.
APAC (Asia Pacific) & China
Net sales amounted to ¥542.1 billion ($5,263 million), a year-on-year
increase of 15.6%. Sales of car audio and navigation systems and
infrastructure services increased. Operating income was ¥8.9 billion
($86 million), a decrease of ¥1.5 billion from fiscal 2012. Despite
higher sales, operating income was adversely affected by the deterio-
rating profitability of certain Infrastructure Services projects in Australia.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF OPERATIONS
110 FUJITSU LIMITED ANNUAL REPORT 2014