Fujitsu 2006 Annual Report Download - page 48

46 Fujitsu Limited
The following section, Management’s Discussion and Analysis of
Operations, provides an overview of the consolidated financial state-
ments of Fujitsu Limited (the “Company”) and its consolidated subsid-
iaries (together, the “Group”) for the year ended March 31, 2006 (fiscal
2005). Forward-looking statements in this section are based on
management’s understanding and best judgment as of March 31, 2006.
1. Analysis of Results
Business Environment
Compared to previous years, the business environment in which the
Fujitsu Group operates was relatively stable during fiscal 2005. While
soaring crude oil prices and higher prices for raw materials, as well as
rising interest rates in the US, were cause for concern, the global economy
was boosted by growth in the US and Asia, especially China. Japan’s
economy also shifted to a firmer footing, helped by rising equity mar-
kets, a recovery in corporate earnings resulting from solid export growth,
and an upturn in household spending.
With respect to IT investment, there was continued robustness in over-
seas markets, and even within Japan, which had been seen as lagging other
markets, there was evidence of more aggressive spending on the part of
corporations seeking to ensure their future competitiveness, particularly
companies in the telecommunications and financial services industries.
Corporations are now broadening their objectives for employing IT
systems. While in the past the focus was on boosting management and
operational efficiency, IT systems are increasingly being used to support
innovation on the front lines of sales and marketing, product develop-
ment, manufacturing, procurement and distribution. In line with the
broader role IT systems are playing in corporate management, there is
now greater emphasis being placed on addressing the rising need for
security and business continuity, as well as on strengthening internal con-
trol in light of corporate regulatory reforms. In daily life as well, the
expansion of IT networks into the fabric of society is enhancing services
in such areas as medical and nursing care, education, and entertainment.
Recognizing the central role Fujitsu plays in supporting the infrastruc-
tures that underpin our customers’ businesses, as well as society as a
whole, we are very conscious of the important responsibility we bear in
maintaining the reliability of IT and in proposing new related applica-
tions. Going forward, along with placing even further emphasis on
ensuring stable systems operation, we will seek to take the lead in dem-
onstrating new uses of IT in our own operations. In addition, all of our
employees are committed to conducting themselves in a manner deserv-
ing of customers’ trust and that meets their high expectations. Seeking
to serve as a valued and indispensable partner in the operation and man-
agement of our customers’ businesses, we will strive to continuously pro-
vide the most advanced and efficient solutions based on superior
technology and sophisticated services.
Net Sales
Consolidated net sales for fiscal 2005 were ¥4,791.4 billion
(US$40,605 million), an increase of 0.6% over the previous fiscal year.
Excluding the impact of a change in accounting policies from this fiscal
year and the transfer of our flat panel display businesses last fiscal year,
net sales increased by 2.4%. In Japan, sales of server-related products and
PCs declined, but optical transmission systems in North America,
outsourcing services in the UK, consulting services in North America,
and HDDs for overseas markets all posted significantly higher sales.
앮 Management’s Discussion and Analysis of Operations
2002
2003
2004
2005
2006
5,006
4,617
4,766
4,762
4,791
(¥ Billions)
■ Net Sales
(Years ended March 31)