Fujitsu 2010 Annual Report Download - page 20

(Billions of yen)
Operating income
Sales
68.7 94.3
185.0
250.0
4,692.9 4,679.5 4,800.0 5,000.0
2009 2011 20122010
Medium-Term Objectives and Management Policies
Q.4
A.4
What are Fujitsu’s medium-term business objectives and its projections for fiscal 2010?
Our medium-term targets for fiscal 2011, ending March 31, 2012, are net sales of ¥5,000
billion and operating income of ¥250 billion. We plan to achieve the latter by raising the con-
solidated operating income margin to 5%. Another aim is to boost the ratio of sales outside
Japan to more than 40%. For fiscal 2010, we are projecting operating income of ¥185 billion.
As I explained in the Management Direction Briefing that I presented in July 2010, we remain staunchly committed to
the medium-term targets of ¥5,000 billion in net sales and ¥250 billion in operating income (operating income margin
of 5%) for fiscal 2011 that Fujitsu announced in July 2009. Our capacity to achieve these objectives hinges on accurately
grasping changes taking place in the ICT market*, then moving with urgency to develop new business models. For
example, cloud computing, a platform based on new technology, is emerging as the foundation that will underpin ICT.
Given this trend, I believe that we must lay the groundwork for offering cutting-edge services in this field. Beyond this,
in a world dominated by cloud computing, we must be able to deliver new value to customers through new busi-
nesses which can be profitable for us. Considering the surrounding business environment, this objective will not be
easily reached. The target operating income margin of 5% that we have set is vital for putting Fujitsu on an equal stand-
ing with other global ICT companies. As such, this is one challenge that we intend to face with vigor.
The ratio of sales outside Japan is currently around 37%, and we aim to raise this to over 40%. But this task is also
lite* business model, as Fujitsu’s profit structure continues to evolve. The networks business, meanwhile, turned a
profit a full year ahead of schedule. The fact that loss-making businesses, which were once a serious problem, now
have the prospects of being profitable operations is another major benefit of our structural reforms.
These initiatives have also led to a greater
sense of stability concerning our financial posi-
tion. In fiscal 2009, we shrunk our interest-
bearing debt primarily by using cash on hand,
mainly from the sale of shares of FANUC Ltd., to
cover the redemption of ¥300 billion in corpo-
rate bonds. The result was a net D/E ratio of 0.20
times, the lowest level Fujitsu has ever recorded.
* See pp. 48–55 for
changes in the ICT
market, including ICT
market projection graphs
by geographical region.
crucial to our management stability. Dramatic
sales growth from operations within Japan alone
is unlikely. At the same time, our customers are
developing their businesses globally. It’s only
natural that we capitalize on this trend to pro-
mote our own businesses worldwide.
For the current fiscal year, we stated a goal
of ¥200 billion in operating income back when
medium-term targets were announced in July
2009. However, I want to ramp up the pace of
investment in cloud computing and new busi-
nesses in fiscal 2010 to ensure that we achieve
the ¥250 billion in operating income planned for
fiscal 2011. Consequently, we are now conserva-
tively projecting operating income of ¥185
billion, since we will prioritize about ¥100 billion
in cloud-related investments in fiscal 2010.
Sales/Operating Income*
Medium-Term Targets
Performance Indicators*
Actual Actual Target Target
Targets for year
ending March 31, 2012
Operating
income margin Over 5.0%
Outside
Japan sales Over 40%
Free cash flow Over
150 billion yen
See pp. 22–23 for a
detailed account of
fiscal 2009 performance.
To page 022-023
To page 048–055
* Fab-lite:
A semiconductor
business model in which
a company minimizes its
own production scale,
with the bulk of produc-
tion outsourced to
external foundries. This
configuration allows for
a greater degree of
management freedom.
Forward-looking statements regarding the medium-term management plan and projections for fiscal 2010 are future projections
calculated based on a variety of judgments, estimates and assumptions. These statements reflect predictions based on management’s
judgment and objectives, as well as certain conditions and assumptions, at the end of fiscal 2009 (March 31, 2010). As such, future
results may differ materially from these projections.
Financial Highlights (Billions of yen)
(Years ended March 31) 2008 2009 2010
Net sales 5,330.8 4,692.9 4,679.5
Operating income 204.9 68.7 94.3
Net income (loss) 48.1 (112.3) 93.0
Interest-bearing loans 887.3 883.4 577.4
Net D/E ratio (times) 0.36 0.47 0.20
* Years ended March 31
018 FUJITSU LIMITED Annual Report 2010
A Conversation With the President