Fujitsu 2013 Annual Report Download - page 19

Q.1
A.1
A review of fiscal 2012
Looking back, what was the year ended March 31, 2013 like for Fujitsu? How would you rate Fujitsu’s
business performance?
The Technology Solutions segment experienced steady growth, primarily in Japan, but our system LSI,
PC, and mobile phone businesses deteriorated further than anticipated. Consequently, we posted oper-
ating income of ¥95.2 billion, which did not meet our initial operating income forecast of ¥135.0 billion
or our revised operating income target of ¥100.0 billion announced in February 2013. Under these cir-
cumstances, we set a clear direction for structural reforms in the semiconductor and European busi-
nesses, paving the way for a recovery in fiscal 2013 and beyond.
Performance in Fiscal 2012
In fiscal 2012, we implemented growth strategies based on
three priorities: going on offense with structural reforms, accel-
erating globalization, and creating new services businesses.
However, the global economy managed only a weak recovery
overall, and the Japanese economy stalled due to the impact of
the global economic slowdown. From the fourth quarter, there
were heightened expectations for a domestic economic recovery
supported by the yen’s depreciation and rising stock prices, but
this had only a limited impact on our performance in fiscal
2012. In this market environment, the Technology Solutions
segment experienced steady growth centered on Japan. How-
ever, the system LSI, PC, mobile phone, and other businesses
struggled. As a result, we posted operating income of ¥95.2
billion, which did not meet our initial operating income forecast
or our revised target announced in February 2013. That said, we
continued to steadily execute upfront investments in growth,
even amid this challenging environment.
Structural Reforms
We recorded an extraordinary loss after setting a clear direction
for concrete measures in underperforming businesses, such as LSI
and European businesses, and taking structural reforms to
strengthen management fundamentals. However, based on the
expected effects of recording these structural reform-related
losses, we are now able to chart a course to recovery in fiscal
2013 and beyond. In the past, Fujitsu had expanded its business
fields by incorporating various ICT-related technologies into its
portfolio. However, given our finite business resources and inten-
sifying competition, we have determined that seeking to prevail
in all of these fields would be unfeasible. Consequently, we have
focused on developing a framework and specializing in our core
businesses. Under this policy, for several years we have imple-
mented structural reforms, and as part of these efforts, in fiscal
2012 we set a clear direction for structural reform policies in the
system LSI business and the European business.
New Expansion in ICT
ICT has generally been used with emphasis on improving back-
office productivity and enhancing business processes. However,
the maintenance and operation of increasingly complex ICT
assets now pose a common problem for customers. At the same
time, considering that it is becoming possible to use ICT without
time and capacity restrictions, ICT is expected to help with making
companies even more competitive and solving issues faced by
society. At Fujitsu, we believe it is crucial to coordinate two priori-
ties in this regard: modernization, which seeks to strengthen the
ICT platform by stripping out the complexity of previous ICT sys-
tems, including third party products, and innovation, which can
be achieved by applying new data utilization technologies.
In April 2013, we announced the Fujitsu Technology and
Service Vision. This vision presents future scenarios for how the
Fujitsu Group thinks ICT can contribute to changes in society.
This is the first time that we have systematically compiled and
presented technologies and product concepts, as well as current
product lineups, designed to achieve such a vision. This concept
will underpin our development of new technologies and ser-
vices as we boldly take the lead at the forefront of changes in
the market and in our customer’s businesses.
See pp. 024 -025 for a more detailed account of fiscal 2012 performance.
See pp. 026 -031 for a more detailed account of Fujitsu Technology and
Service Vision.
Fiscal 2012 Full-Year Major Items in Other Income and Expenses
Restructuring Charges –¥116.2 billion
LSI Devices Business –¥90.3 billion
•Losses relating to transfer of production facilities –¥33.1 billion
•Impairment losses of standard logic LSI devices production line –¥28.6 billion
•Personnel-related expenses –¥28.4 billion
Global Business –¥20.0 billion Personnel-related expenses related to structural reforms mainly in Fujitsu Technology
Solutions (Holding)B.V.
Others –¥5.8 billion Early retirement incentive plan for managerial levels
Impairment Loss –¥34.2 billion Impairment loss on goodwill in European subsidiary and fixed assets of subsidiaries in Japan
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FUJITSU LIMITED ANNUAL REPORT 2013
MANAGEMENT