Fujitsu 2010 Annual Report Download - page 24

0
50
200
150
250
100
0
2
4
10
8
6
181.4
3.8
94.3
2.0
1.5
3.8
3.6 68.7
204.9
182.0
2006 2007 2008 2009 2010
Operating Income and
Operating Income Margin
(¥ Billions) (%)
A Message From the CFO
Performance in Fiscal 2009
Progress on inventory adjustments, along with economic measures
taken by governments worldwide, helped the global economy
turn towards recovery during fiscal 2009. This development not-
withstanding, lingering effects still remain from the economic
weakness in the wake of the financial crisis. In Japan, while the
economy began to rebound from the second half of the year, the
country’s employment and personal income outlook remain weak,
with deflationary trends having grown protracted. Given these
sobering factors, Japan’s economic recovery remains fragile at best.
Reflecting this climate, challenging conditions persisted
around investment in ICT. Specifically, corporate sector demand
has been slow to revive not only in hardware-related fields, as
prevailing sentiments with respect to equipment overcapacity take
their toll, but also in software- and service-related areas. Adverse
conditions also continue in the consumer sector—while PC sales
volumes have risen for models compatible with the latest operat-
ing systems, there is a growing preference for low-priced products,
and the replacement cycle for mobile phones has lengthened.
In this context, consolidated net sales for the Fujitsu Group in
fiscal 2009 amounted to ¥4,679.5 billion, largely unchanged from
the previous fiscal year. Excluding effects from the consolidation of
Fujitsu Technology Solutions (Holding) B.V. and FDK Corporation,
both of which were equity-method affiliates up through fiscal 2008,
as well as effects from the transfer of the hard disk drive (HDD)
business and currency exchange rates, net sales would have ended
7% lower. In Japan, sales were down 8.2%. In addition to lower
Solutions/Systems Integration sales as companies curbed their ICT
investments chiefly in the manufacturing, retail/distribution and
financial industries, LSI, server-related, and PC sales were all lower,
most notably in the first half of the year. Sales outside Japan, mean-
while, rose 16.6%. But here again, if the effects of business realign-
ment and currency exchange rates are excluded, sales were
actually 4% lower for the year. Services were affected by economic
weakness in Europe, while HDD, PC, and server-related sales also
declined. The ratio of sales outside Japan was 37.4%, representing a
year-on-year increase of 5.4 percentage points. EMEA (Europe,
Middle East and Africa) region sales rose for the year due to the
consolidation of former equity-method affiliate Fujitsu Technology
Solutions.
Operating income for fiscal 2009 was ¥94.3 billion, an increase
of ¥25.6 billion from a year ago. This growth was made possible by
improved earnings from transfer of the loss-making HDD business
and structural reforms in the LSI business, as well as company-wide
cost-cutting measures. Partially offsetting this was higher expenses
for retirement benefits, the result of worsening asset management
performance for pension assets in the previous fiscal year. Other
negative factors included an allowance for losses pertaining to the
development of a next-generation supercomputer and lower sales
from the services business.
Other income (expenses), net, totaled ¥18.3 billion, an improve-
ment of ¥200.4 billion from the previous fiscal year. In tandem with
gains posted from the sale of shares in FANUC Ltd., we saw
improved equity in earnings of affiliates with the consolidation of
Fujitsu Technology Solutions and FDK, both of which had posted
losses in the previous term. Another boost came from significantly
lower impairment losses and an absence of revaluation loss on
Operating income (left scale)
Operating income margin (right scale)
(Years ended March 31)
022 FUJITSU LIMITED Annual Report 2010