Fujitsu 2011 Annual Report Download - page 24

0
300
600
1,200
900 745.8
0.77
0.31
470.8
0.57
0.14
577.4
0.20
0.72
883.4
887.3
0.94
0.36 0.47
1.18
2007 20092008 2010 2011
2.0
1.5
1.0
0.5
0
(¥ Billions) (Times)
Interest-bearing Loans,
D/E Ratio and Net D/E Ratio
n฀n Interest-bearing loans (left scale)
D/E ratio (right scale)
Net D/E ratio (right scale)
(As of March 31)
0
100
200
400
300 257.6
113.4
296.4
23.4
38.1
2007 20092008 2010 2011
(¥ Billions)
Free Cash Flow
(Years ended March 31)
0
50
100
250
200
150
182.0
3.6
132.5
2.9
94.3
2.0
68.7
204.9
3.8
1.5
2007 20092008 2010 2011
10
8
6
4
2
0
(¥ Billions) (%)
Operating Income and
Operating Income Margin
n฀n Operating income (left scale)
Operating income margin (right scale)
(Years ended March 31)
Performance in Fiscal 2010
The overall business environment during fiscal 2010 was charac-
terized by a mild recovery, mainly attributable to higher demand
in China and other emerging markets. Growth came despite high
unemployment in Europe and the United States as well as Europe’s
fiscal austerity measures and ongoing concerns about stability in
its financial system. In Japan, the economy in the first half of the
fiscal year experienced a mild recovery, with improvement in
employment conditions, a recovery in capital spending, and rising
exports. The second half of the fiscal year, however, saw an
increasingly severe business environment with government incen-
tive policies running their course and an ongoing appreciation of
the yen. Then, with the Great East Japan Earthquake on March 11,
2011, the recovery trend came to a sudden halt and the country’s
near-term economic prospects became shrouded in uncertainty.
With respect to ICT investment, though there were signs of
recovery in demand for hardware during the first half, overall
investment continued to be restrained. A severe investment
environment now prevails following the Great East Japan Earth-
quake, with many investment projects postponed or cancelled.
In this climate, consolidated net sales for fiscal 2010
amounted to ¥4,528.4 billion, a decline of 3.2% from fiscal 2009.
Excluding the impact of foreign exchange fluctuations, however,
sales were on par with the previous fiscal year. Sales in Japan
were essentially unchanged from fiscal 2009. Although sales of
LSI devices and electronic components were strong as a result of
the continued market recovery since the previous year, sales of car
audio and navigation systems declined as new car sales stalled
after the government’s subsidy program for eco-friendly car pur-
chases ended in the first half of the fiscal year. In addition, sales
of PCs and other products were adversely affected by temporary
production stoppages and shipment delays resulting from the
Great East Japan Earthquake. Sales outside Japan decreased 9.2%.
Excluding the impact of exchange rate fluctuations, however,
sales were essentially unchanged from the previous fiscal year.
Particularly in the first half of the fiscal year, there were
higher sales of x86 servers in Europe, LSI devices and electronic
components in Asia, and optical transmission systems in North
America. The transfer of the HDD business in October 2009,
however, resulted in overall sales outside Japan remaining essen-
tially unchanged year on year.
The yen’s appreciation initially showed signs of bottoming out
heading into the third quarter. The average rates for the US dollar,
the euro and the British pound, however, moved to ¥86 (¥7 stronger
A MESSAGE FROM THE CFO
022 FUJITSU LIMITED ANNUAL REPORT 2011