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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,
2009 (fiscal 2008). Forward-looking statements in this section are
based on management’s understanding and best judgment as of
March 31, 2009. Figures representing the percentage increase or
decrease in net sales excluding the impact of exchange rate move-
ments are calculated by taking the average exchange rates in fiscal
2007 for the U.S. dollar, Euro, British pound, Australian dollar, Korean
won, and other currencies, applying them to foreign currency-
denominated sales in fiscal 2008, and comparing the results to sales
in fiscal 2007.
1. Analysis of Results
Business Environment
In fiscal 2008, ended March 31, 2009, the business environment in
which the Group operates was characterized by a rapidly worsening
global economic recession. A contraction in credit and a worsening
cycle of deterioration in the real economy emerged against the
backdrop of a spreading financial crisis. This led to negative growth
in the United States and Europe, and triggered a major economic
slowdown in Asia, mainly China and India, which previously had
sustained high rates of growth.
In Japan, the economic recession grew more severe due to the
sudden drop in exports, resulting in double-digit negative growth
for two consecutive quarters during the second half of the year
(October 2008 to March 2009). The deterioration in the economy hit
the country’s corporate sector particularly hard. Consumer demand
also took a negative turn, tracking the rapid deterioration in Japan’s
personal income and employment conditions.
IT investments were firm through the first half of the year, but
hardware investments declined precipitously from the second half
due to the global economic recession. Companies also became
more selective with software investments. This adverse economic
climate did, however, serve to highlight the growing importance of
corporate social responsibility and comprehensive risk manage-
ment. This has underpinned solid upfront investments in response
to compliance- and security-related concerns, and other strategic
measures for enhancing competitiveness in global markets to
achieve future growth.
Net Sales
In fiscal 2008, consolidated net sales amounted to ¥4,692.9 billion
($47,888 million), a decrease of 12.0% from the previous fiscal year.
However, excluding the effects of the yen’s appreciation, the decline
in net sales was 6%. Sales in Japan declined 6.3% year on year. Despite
the economic recession, performance in Technology Solutions
remained on par with the previous fiscal year, largely due to healthy
sales in the Services business. Due to the impact of rapid economic
deterioration from the third quarter (October to December 2008),
however, sales results were dragged down by lower demand for
logic LSI devices, electronic components, PCs and other products, as
well as the lengthening of the replacement cycle for mobile phones.
Sales outside of Japan declined 22.0%, or 6% if the effects of currency
exchange rates are excluded. The Services business outside of Japan
grew, mainly on business targeting private-sector demand in conti-
nental Europe, but sales of PCs and UNIX servers fell due to the eco-
nomic turmoil in Europe and the United States, as did sales of hard
disk drives (HDDs) and electronic components.
0
2,000
4,000
6,000
4,762.7 4,692.9
5,330.8
5,100.1
4,791.4
2005 2006 2007 2008 2009
0
50
150
200
100
250
160.1
68.7
204.9
182.0
181.4
3.4
1.5
3.8
3.6
3.8
2005 2006 2007 2008 2009 0
2
6
10
8
4
(¥ Billions) (%)(¥ Billions)
Operating Income (Left Scale)
Operating Income Margin (Right Scale)
(Years ended March 31)(Years ended March 31)
Operating Income and
Operating Income Margin
Net Sales
FACTS & FIGURES Five-Year Summary/Management’s Discussion and Analysis of Operations
077
ANNUAL REPORT 2009
FUJITSU LIMITED