Fujitsu 2013 Annual Report Download - page 20

Future challenges and measures
What are some of the challenges that must be addressed in order to achieve your targets for fiscal 2013,
and to meet your medium-term goals?
Our fiscal 2013 targets are net sales of ¥4,550.0 billion and operating income of ¥140.0 billion, repre-
senting both higher revenue and earnings. Our medium-term goals are operating income of at least
¥200.0 billion, net income of ¥100.0 billion or above, and free cash flow of at least ¥100.0 billion.
What is the purpose and thinking behind the structural reforms announced in February 2013?
To shift to our target business model, we will implement structural reforms to deal with underperform-
ing businesses, restructuring the semiconductor business and structurally transforming the European
business. We will build corporate strength by taking the offensive with workforce-related measures,
streamlining corporate functions, and reviewing costs.
Q.2
Q.3
A.2
A.3
Fiscal 2013 Business Projections and Strategic Positioning
Our fiscal 2013 targets are net sales of ¥4,550.0 billion, operating
income of ¥140.0 billion, and an operating income margin of 3.1%,
representing both higher revenue and earnings. The main factors
behind the projected improvement in operating income are the
effects of approximately ¥25.0 billion from structural reforms of the
semiconductor and European businesses, and approximately ¥20.0
billion in cost savings from workforce-related measures and cuts in
corporate expenses. In other areas, although we expect certain
business results to worsen due to special factors such as higher UK
pension costs, we plan to offset the impact of these negative
factors by improving
earnings in core busi-
nesses through execu-
tion of our growth
strategies. The Ubiqui-
tous Solutions segment
should continue to face
challenging business
conditions for some
time. Nonetheless, we
expect the Japanese ICT
market to steadily
rebound, mainly on the
Semiconductor Business Restructuring Initiatives
In exploring solutions for the semiconductor business, we took a
basic approach of preserving and utilizing our semiconductor
technology base, ensuring stable supplies to customers, and
considering the impact on jobs and local communities. Taking
these factors into consideration, we decided on the following
direction for restructuring. This decision resulted in our recording
an extraordinary loss; however, we believe it will have a beneficial
impact on operating income in fiscal 2013.
back of the full-fledged rollout of cloud computing systems by
corporations, and the introduction of big data-related services.
In our medium-term strategy, we see fiscal 2013 as a year to
make a fresh start that paves the way for a sharp turnaround in
earnings. Based on rigorous efforts to strengthen our manage-
ment fundamentals, we will work toward our key goals of creating
new services and executing our growth strategies for global
expansion, and accelerating a positive growth cycle by integrat-
ing various Group-wide business resources as “One Fujitsu.”
Medium-Term Goals
Looking at our medium-term goals, in fiscal 2015, we aim to
generate operating income of at least ¥200.0 billion, net income of
¥100.0 billion or above, and free cash flow of at least ¥100.0
billion. We expect the owners’ equity ratio to fall below 20% at the
end of fiscal 2014 as a result of recording extraordinary losses on
structural reforms in fiscal 2012, and the shifting of unrecognized
pension liabilities onto the balance sheet in fiscal 2013 in line
with a change in accounting standards. We intend to restore the
owners’ equity ratio as quickly as possible by continuously
improving the bottom line. To do so, we will expand earnings
from our core businesses by shifting business resources to sales
divisions and growth fields, in addition to cutting costs through
structural reforms. We will steadily execute clear-cut growth
strategies and accelerate progress on our medium-term goals.
(1) System LSI: We reached a basic agreement on establishing a new
fabless company that will conduct system LSI design and development
with capital participation by outside investors, and on transferring
the design, development, and other capabilities of Fujitsu Semi-
conductor Limited and that of Panasonic Corporation to the new
company.
(2) 300 mm Line of the Mie Plant: We are considering the transfer of
the 300 mm line to a new foundry company that would include the
participation of Taiwan Semiconductor Manufacturing Company, Ltd.
(3) Microcontroller and Analog Device Business: We concluded a
definitive agreement to sell the microcontroller and analog device
business to the U.S.-based Spansion group, with the deal scheduled
to be completed between July and September 2013.
018 FUJITSU LIMITED ANNUAL REPORT 2013