Fujitsu 2012 Annual Report Download - page 25

impact of exchange rate fluctuations, however, sales were
essentially unchanged from the previous fiscal year. Similarly,
while sales were lower for electronic components and UNIX
servers, PC sales grew in Turkey, the Middle East, Russia, and
other emerging markets.
While the yen’s appreciation cooled modestly from the start
of the fourth quarter, the average rates for the US dollar, the
euro and the British pound moved to ¥79 (¥7 stronger year on
year), ¥109 (¥4 stronger), and ¥126 (¥7 stronger) for the year,
respectively. As a result of exchange-rate impact, net sales
declined by roughly ¥80.0 billion. The ratio of sales outside
Japan was 33.7%, down 1.4 percentage points year on year.
Gross profit was ¥1,235.4 billion, down ¥22.0 billion com-
pared to the previous year. This outcome was mainly the
result of lower sales of LSI devices and electronic compo-
nents. The gross profit margin was 27.7%, virtually
unchanged from the previous fiscal year. With the continua-
tion of upfront investments in networks, cloud services, and
other areas, selling, general and administrative expenses
rose ¥5.2 billion from fiscal 2010 to ¥1,130.1 billion.
As a result, operating income amounted to ¥105.3 billion, a
decrease of ¥27.3 billion compared to fiscal 2010. The operat-
ing income margin declined 0.5 of a percentage point to 2.4%.
Other income (expenses), net, amounted to a ¥38.5 billion
loss, a deterioration of ¥8.2 billion from the previous fiscal
year. Positive factors included a smaller net loss on foreign
exchange and an improved financial balance owing mainly to
a decline in interest-bearing loans. On the other hand, Fujitsu
recorded ¥15.1 billion in restructuring charges in connection
to the LSI devices and car audio and navigation systems, and
the services businesses outside Japan.
As a result, net income for fiscal 2011 was ¥42.7 billion,
representing a year-on-year decline of ¥12.4 billion.
Financial Initiatives in Fiscal 2011
The Fujitsu Group continued to improve its financial position
in fiscal 2011. The owners’ equity ratio rose by 1.4 percentage
points compared to the previous fiscal year to 28.6%, primar-
ily from a reduction in interest-bearing loans, and net income
posted for the year. Free cash flow was a positive ¥49.1 billion.
Although this figure was ¥64.2 billion less than in fiscal
2010, when excluding proceeds from the sale of investment
securities and other special items reported in that year, free
cash flow was actually a positive ¥43.5 billion, representing a
decline of ¥29.8 billion. This outcome largely stemmed from
deterioration in income before income taxes and minority
interests, as well as the increased allocation of cash to
datacenter-related capital investment. The balance of
interest-bearing loans amounted to ¥381.1 billion, a decline
of ¥89.6 billion year on year, owing to progress in loan
repayment and redemptions of ¥100.0 billion in convertible
bonds that reached maturity. In redeeming the convertible
bonds, we supplemented the use of cash on hand for this
purpose by issuing a total of ¥50.0 billion in straight bonds
with maturities of three and five years, respectively. This put
the D/E ratio at 0.45 times, an improvement of 0.12 points
from the previous fiscal year-end.
Consequently, the net D/E ratio was 0.14 times, essentially
identical to the previous fiscal year-end. Both the D/E ratio
and net D/E ratio were at their lowest levels ever.
Yen Exchange Rates (Average) (Yen)
Fiscal 2010 Fiscal 2011 Fiscal 2012
U.S. Dollar 93 86 79
Euro 131 113 109
British Pound 148 133 126
(For reference) Impact on operating income (actual) of a one yen (¥1) fluctuation in
the currency exchange rate for fiscal 2012 (approximate)
US dollar: ¥0.6 billion; Euro: ¥0.3 billion; British pound: ¥0.0 billion
Corporate Executive Vice President and
Director, Chief Financial Officer
Kazuhiko Kato
023
FUJITSU LIMITED ANNUAL REPORT 2012
Management