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Fujitsu Ld. (FUJ)

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Tuesday 30 April, 2013

Fujitsu Ld.

Final Results

RNS Number : 5608D
Fujitsu Ld
30 April 2013
 



                                                                                               Fujitsu Limited

 

Consolidated Financial Results for the Full-Year Ended March 31, 2013

 

Fujitsu Limited

Stock exchange listings:

Tokyo, Osaka, Nagoya

Code number:

6702

URL:

http://jp.fujitsu.com/

Representative:

Masami Yamamoto, President and Representative Director

Contact person:

Isamu Yamamori,


Vice President, Public and Investor Relations Office


Tel. +81 3 6252 2175

Scheduled annual shareholders' meeting date:

June 24, 2013

Scheduled dividend payment date:

-

Supplementary material:

No

Financial results meeting:

Yes (targeted at media and analysts)

 

 

1. Consolidated Results for the Full-Year Ended March 31, 2013

 

(Monetary amounts are rounded to the nearest million yen.)

(1) Consolidated Financial Results

(The percentage figures represent the percentage of increase or decrease against the same period of the previous year.)

 

                                                                                                                                                                        Yen (Millions)

 

 

Net Sales


Operating Income


Net Income (Loss)


Change (%)

Change (%)

Change (%)

FY 2012
(4/1/12-3/31/13)

4,381,728

-1.9

95,278

-9.5

-72,913

-

FY 2011
(4/1/11-3/31/12)

4,467,574

-1.3

105,304

-20.6

42,707

-22.5

ReferenceComprehensive income :    FY2012;               -32,959 million yen      [ - %]

                                                                           FY2011;                34,310 million yen       [-11.5 %]

 

                                                                                                                                                                                      Yen


Net Income (Loss) per Common Share

Rate of Return

on Equity (%)

Operating Income Margin (%)

Basic

Diluted

FY 2012
(4/1/12-3/31/13)

-35.24

-

-9.0

2.2

FY 2011
(4/1/11-3/31/12)

20.64

20.55

5.1

2.4

 

 

Yen (Millions, except per share data)


Total Assets

Net Assets

Owners' Equity

Ratio (%)

Net Assets per Share

March 31, 2013

3,049,054

909,809

25.6

377.62

March 31, 2012

2,945,507

966,598

28.6

406.42

ReferenceOwners' Equity:                March 31, 2013;        781,416 million yen

                                                                     March 31, 2012;        841,039 million yen

 

 

 

(3) Consolidated Cash Flows                                                                                                                 Yen (Millions)


Cash Flows from

Operating Activities

Cash Flows from

Investing Activities

Cash Flows from

Financing Activities

Cash and

Cash Equivalents

FY 2012
(4/1/12-3/31/13)

71,010

-161,481

100,384

284,548

FY 2011
(4/1/11-3/31/12)

240,010

-190,830

-138,966

266,698

                                                                                                             

2. Dividends per Share of Common Stock

 

 

Dividends per Share (Yen)

Total Amount of Dividends

(Million Yen)

Dividend Payout Ratio (%)

Ratio of Dividends to Net Assets (%)


1Q

2Q

3Q

Year-

End

Full Year

FY 2011

-

5.00

-

5.00

10.00

20,694

48.4

2.5

FY 2012

-

5.00

-

0.00

5.00

10,346

-

1.3

FY 2013 (Forecast)

-

0.00

-

-

-


-


Note; Year-end dividend amounts for fiscal 2013 (fiscal year ending March 31, 2014) has yet to be determined.

 

3. Consolidated Earnings Forecast for FY2013

(The percentage figures represent the percentage of increase or decrease against the same period of the previous year.)

                                                                                                                                     Yen (Millions, except per share data)


Net Sales


Operating Income


Net Income


Net Income per Common Share

Change (%)

Change (%)

Change (%)

1H FY2013

2,050,000

-1.1

-10,000

-

-30,000

-

-14.50

FY 2013

4,550,000

3.8

140,000

46.9

45,000

-

21.75

 

4. Other Information

 

(1)   Significant Changes to Subsidiaries in the Current Reporting Period

      (Changes to specified subsidiaries resulting from changes in scope of consolidation): None

 

(2)   Changes in accounting policies and accounting estimates, and restatements

     

     

     

     

 

(3)  

1. Number of issued shares at end of period

As of March 31, 2013

2,070,018,213

shares

As of March 31, 2012

2,070,018,213

shares

2. Treasury stock held at end of period

As of March 31, 2013

723,691

shares

As of March 31, 2012

652,484

shares

3. Average number of issued and outstanding shares during period

Full Year FY 2012

2,069,330,470

shares

Full Year FY 2011

2,069,526,185

shares

 

 

 

(Reference Information) Summary of FY2012 Full-Year Non-consolidated Results

 

(Monetary amounts less than one million yen are rounded down.)

Non-consolidated Results for the Full-Year Ended March 31, 2013

 

(1) Non-consolidated Financial Results

(The percentage figures represent the percentage of increase or decrease against the same period of the previous year.)

 

Yen (Millions)

 

 

Net Sales


Operating Income


Net Income (Loss)


Change (%)

Change (%)

Change (%)

FY 2012
(4/1/12-3/31/13)

2,087,898 

-1.7

27,850

-1.6 

-338,025

-

FY 2011
(4/1/11-3/31/12)

2,124,276

1.5

28,313

-19.8

54,808

22.4

                                                                                                                                                                                     Yen


Net Income (Loss) per Common Share

Basic

Diluted

FY 2012
(4/1/12-3/31/13)

-163.35 

-

FY 2011
(4/1/11-3/31/12)

26.48

26.36

 

(2) Non-consolidated Financial Position                                                           Yen (Millions, except per share data)

 

 

Total Assets

Net Assets

Owners' Equity

Ratio (%)

Net Assets per Share

March 31, 2013

1,664,396 

410,369

24.7 

198.31

March 31, 2012

2,021,325

758,703

37.5

366.64

ReferenceOwners' Equity:                  March 31, 2013;          410,369 million yen

                                                                     March 31, 2012;          758,703 million yen

 Notes;

 1. Compliance with Audit Procedures

 

   These materials fall outside the jurisdiction of the audit procedures of the Financial Instruments and

   Exchange Act. Therefore, at the time of disclosure, a portion of the audit has not yet been completed.

   Upon completion of the audit, a statutory audit report will be submitted on June 24, 2013.

 

 2. Precautions on Usage of Earnings Projections

 

   These materials may contain forward-looking statements that are based on management's current information,

   views and assumptions and involve known and unknown risks and uncertainties that could cause actual results,

   performance or events to differ materially from those expressed or implied in such statements. Actual results

   may differ materially from those projected or implied in the forward-looking statements due to, without

   limitation, the following factors listed below.

   For information regarding the assumptions used to prepare these projections, please refer to "3. FY2013

   Earnings Projections".

 

 

   - General economic and market conditions in key markets

      (Particularly in Japan, North America, Europe, and Asia, including China)

   - Rapid changes in the high-technology market (particularly semiconductors, PCs, etc.)

   - Fluctuations in exchange rates or interest rates

     -Fluctuations in capital markets

     - Intensifying price competition

   - Changes in market positioning due to competition in R&D

      - Changes in the environment for the procurement of parts and components

      - Changes in competitive relationships relating to collaborations, alliances and technical provisions

       - Risks related to public regulations, public policy and tax matters

      - Risks related to product or services defects

       - Potential emergence of unprofitable projects

      - Risks related to R&D investments, capital expenditures, business acquisitions, business restructuring, etc.

      - Risks related to natural disasters and unforeseen events

       - Changes in accounting policies

 


Part I: Financial Results

 

1. Explanation of Financial Results

 

<Business Environment>

 

During fiscal 2012 (April 1, 2012 - March 31, 2013), the global economy continued to experience a weak recovery. In Europe, the development of a framework to economically assist countries in southern Europe has caused sovereign debt yields to decline, while economic conditions continued to deteriorate as a result of fiscal austerity measures and rising unemployment. In the US, the employment situation appeared to be improving, but concerns over fiscal policy resulted in continued uncertainty. The rate of economic growth in emerging market countries moderated on account of depressed consumer spending, although there were signs of improvement in investing as a result of expanded public sector spending and monetary easing.

 

In Japan, the economy remained weak as a result of the expiration of subsidies for hybrid car purchases and an anemic recovery in the global economy. However, despite rising expectations for an economic rebound due to a stock market rally and yen depreciation spurred on by the government's economic policy and monetary easing by the Bank of Japan, the impact on the real economy has been limited.

 

With respect to investments in information and communication technology (ICT) in Japan, spending on services has been recovering as plans to invest that had been delayed were put back into motion. Spending on services hardware has remained at low level. Outside of Japan, primarily in Europe, economic conditions continued to deteriorate, and companies have been putting firmer constraints on investment spending.

 

FY2012 Full-Year Financial Results                                                                                 (Billion Yen)


FY2011

4/1/11-

3/31/12

FY2012

4/1/12-

3/31/13

Change vs. FY 2011


Change vs.

Feb. Forecast

 

 

Change (%)


Net Sales

4,467.5

4,381.7

-85.8

-1.9


11.7

Cost of Sales

3,232.1

3,177.9

-54.1

-1.7



Gross Profit

1,235.4

1,203.7

-31.6

-2.6



[Gross Profit Margin]

[ 27.7%]   

[ 27.5%]   

[ -0.2%]




Selling, General and Administrative Expenses

1,130.1

1,108.4

-21.6

-1.9



Operating Income (Loss)

105.3

95.2

-10.0

-9.5


-4.7

[Operating Income Margin]

[ 2.4%]

[ 2.2%] 

[ -0.2%]




Other Income and Expenses

-38.5

-140.3

-101.8

-


34.6

Income (Loss) Before Income Taxes and Minority Interests

66.7

-45.1

-111.8

-



Income Taxes

29.9

24.2

-5.7

-19.1



Income (Loss) Before Minority Interests

36.7

-69.3

-106.0

-



Minority Interests (Loss)

-5.9

3.5

9.5

-



Net Income (Loss)

42.7

-72.9

-115.6

-


22.0

* Change (%) Constant Currency 

 

 

Quarterly Breakdown of Results                                                                                                                  (Billion Yen)



1Q

2Q

3Q

4Q


FY2012

Full-Year


Change vs. Feb. Forecast

Consolidated

Sales

957.3

1,114.4

1,048.2

1,261.6


4,381.7


11.7


Change from FY2011

-28.7

8.1

-31.4

-33.8


-85.8



Operating Income

-25.0

32.7

-4.1

91.7


95.2


-4.7


Change from FY2011

-7.9

8.5

-7.3

-3.3


-10.0



 

[Results by Business Segment]

Technology Solutions

Sales

627.1

713.3

700.6

901.3


2,942.3


-22.6


Change from FY2011

-32.0

-12.9

14.4

37.9


7.4



Operating Income

0.8

46.2

23.5

110.2


180.9


0.9


Change from FY2011

-1.6

3.0

-2.3

10.6


9.6



Ubiquitous Solutions

Sales

234.6

314.7

266.5

274.3


1,090.2


10.2


Change from FY2011

-0.8

34.4

-34.6

-62.9


-64.0



Operating Income

-2.0

12.4

-2.0

1.2


9.6


-10.3


Change from FY2011

-2.0

8.0

-4.1

-12.2


-10.3



Device

Solutions

Sales

130.3

138.3

129.5

142.1


540.3


0.3


Change from FY2011

-10.5

-9.2

-8.6

-15.8


-44.3



Operating Income

-3.6

-3.3

-9.3

2.1


-14.2


-2.2


Change from FY2011

-2.6

0.4

-0.9

-0.9


-4.0



 

FY2012 Full-Year Major Items in Other Income and Expense                                     (Billion Yen)

Item

3Q

4Q

Full Year

Description


Change vs. Feb. Forecast


Other Income and Expenses

(Special Items)

-87.1

-63.5

-150.5



19.4


Restructuring Charges

-59.1

-57.0

-116.2



25.7


LSI Devices Business

-57.0

-33.2

-90.3

-Losses relating to transfer of production facilities. [-33.1]

-Impairment losses of standard logic LSI devices production line. [-28.6]

-Personnel-related expenses [-28.4]


21.6

Global Business

-19.1

-20.0

Personnel-related expenses related to structural reforms mainly in Fujitsu Technology Solutions(Holding)B.V.

-0

Others

-1.0

-4.7

-5.8

Early retirement incentive plan for managerial levels

4.1

Impairment Loss

-28.0

-6.2

-34.2

Impairment loss on goodwill in European subsidiary and fixed assets of subsidiaries in Japan.


-6.2

 

Issues and Initiatives in FY 2012

 

In fiscal 2012, moving beyond the adverse effects from the Great East Japan Earthquake and the flooding in Thailand, Fujitsu anticipated that ICT spending in Japan would undergo a full-fledged recovery in the second half of the fiscal year. For fiscal 2012, the company initially projected consolidated net sales of 4,550.0 billion yen (an increase of 1.8% from fiscal 2011), consolidated operating income of 135.0 billion yen (an increase of 29.6 billion yen), and consolidated net income of 60.0 billion yen (an increase of 17.2 billion yen).

 

Actual results for fiscal 2012 were consolidated net sales of 4,381.7 billion yen (168.2 billion yen below initial projections) and consolidated operating income of 95.2 billion yen (39.7 billion yen below initial projections). The Technology Solutions segment achieved higher year-on-year operating income, and it essentially met initial projections. However, with intensification of competition in the market for hardware products beyond anticipated levels, and the protracted recession in European markets, performance in the Device Solutions and Ubiquitous Solutions fell below initial projections. In response, Fujitsu decided to undertake structural reforms, primarily in its LSI device business and operations outside Japan, resulting in the recording of 150.7 billion yen in other income and expenses, including a goodwill impairment loss and restructuring charges (90.3 billion yen of which is attributable to the LSI device business, and 49.8 billion yen of which is attributable to business operations outside Japan).

 

As a result, Fujitsu recorded a consolidated net loss of 72.9 billion yen (US$776 million), the Company's first net loss since fiscal 2008 in the wake of the global financial crisis.

 

Since being reorganized as a wholly owned subsidiary of Fujitsu in March 2008, the LSI device business has continually been optimizing its manufacturing resources. In response to a sudden deterioration in the market, however, there was a heightened need to accelerate structural reforms in order to strengthen the fundamentals of the business. Accordingly, in October 2012 the Iwate Plant was transferred to Denso Corporation, and in December 2012 the assembly line facilities were transferred to J-Devices Corporation. The Fujitsu Group has reached a basic agreement with Panasonic Corporation to integrate their system LSI (SoC) businesses, and the transfer of the 300 mm line of the Mie Plant to a new foundry company, including Taiwan Semiconductor Manufacturing Company, Ltd., is under consideration. In April 2013 a definitive agreement was reached to transfer the microcontroller and analog device business to US-based Spansion Inc. In addition, to rationalize the size of the workforce, an early retirement incentive plan was implemented for approximately 2,400 employees (of whom approximately 2,000 are in Japan).

 

With respect to business operations outside Japan, to strengthen the management fundamentals of Fujitsu Technology Solutions (Holding) B.V., which has been adversely impacted by deteriorating market conditions, particularly for its hardware business in continental Europe, the decision was made to implement workforce rationalization measures involving approximately 1,500 employees. Fujitsu plans to stabilize the business by transforming it from a hardware-oriented business to one that focuses on services.

 

In March 2013, a special contribution of 114.3 billion yen (800 million British pounds) was made to Fujitsu's UK pension fund, while the composition of the pension portfolio has been revised to reduce the future risk of an increase in pension obligations.

 

In addition to these measures, as part of the structural reforms designed to strengthen Fujitsu's management fundamentals, an early retirement incentive plan for management level personnel at Fujitsu Group companies in Japan was implemented.

 

As a result of the net loss recorded in fiscal 2012 incurred due to the structural reforms implemented, Fujitsu's consolidated owners' equity ratio has declined to 25.6%. Unrecognized obligation for retirement benefits, which are mandated to be reflected on the balance sheet in fiscal 2013, are 465.8 billion yen (an increase of 64.9 billion yen from the previous fiscal year), despite the allocation of amortization expenses and an improvement in the investment performance of benefit plans. This is primarily due to lower discount rates as a result of the decline in interest rates in and outside Japan.

 

Because of the valuation loss on the shares of subsidiaries involved in the LSI device business and business outside of Japan, on an unconsolidated basis Fujitsu has negative retained earnings of 104.3 billion yen. For this reason, the Company regrettably will not pay a fiscal 2012 year-end dividend.

 

To quickly restore its consolidated owners' equity and resume dividend payments, Fujitsu is moving forward on implementing structural reforms to shift to a stable earnings structure. In addition, the Company is also thoroughly reforming its cost structure and shifting resources into growth fields. In fiscal 2015, Fujitsu aims to generate operating income of at least 200.0 billion yen, net income of at least 100.0 billion yen, and free cash flow of at least 100.0 billion yen.

 

<Profit and Loss>

 

Note: In these explanatory materials, the yen figures for net sales, operating income, and other figures are converted into US$ amounts, for reference purposes, at a rate of $1=94 yen, the approximate Tokyo foreign exchange market rate on March 31, 2013. Figures for and comparisons to prior reporting periods are provided only for reference. The impact of foreign exchange fluctuations has been calculated by using the average US dollar, euro, and British pound foreign exchange rates for fiscal 2011 to translate the current period's net sales outside Japan into yen.

 

Consolidated net sales for fiscal 2012 were 4,381.7 billion yen (US$46,614 million), a decline of 1.9% from fiscal 2011. Excluding the impact of foreign exchange fluctuations, sales were down by 3%. 

 

Net sales in Japan fell by 2.6%. A drop in hardware sales of PCs, mobile phones, LSI devices and electronic components were the primary source of the decrease. Sales revenues stemming from the next-generation supercomputer systems, for which deliveries peaked in fiscal 2011, also declined. Outside of Japan, sales were essentially unchanged from the previous fiscal year, and on a constant currency basis, sales decreased by 3%. Sales of infrastructure services, particularly in Europe, were buffeted by deteriorating economic conditions, and sales of PCs in Europe and optical transmission systems in North America were lower.

   

Yen appreciation in the first half of the fiscal year turned into yen depreciation in the second half. For fiscal 2012, the average yen exchange rates against major currencies were 83 yen to the US dollar (representing a yen depreciation of 4 yen), 107 yen to the euro (an appreciation of 2 yen), and 131 yen to the British pound (a depreciation of 5 yen). As a result, the impact of foreign exchange fluctuations for the period was to increase net sales by approximately 30 billion yen compared to fiscal 2011. Sales generated outside Japan as a percentage of total sales were 34.2%, an increase of 0.5 of a percentage point compared to the previous fiscal year.

Gross profit was 1,203.7 billion yen, down 31.6 billion yen from fiscal 2011. The decline was attributable to lower sales of PCs, mobile phones and LSI devices. The gross profit margin was 27.5%, a decline of 0.2 of a percentage point compared to the prior fiscal year.

 

Selling, general and administrative expenses were 1,108.4 billion yen, a decline of 21.6 billion yen from fiscal 2011, primarily as a result of efforts across the Group to generate cost efficiencies. There was also upfront development spending in network-related technologies and cloud services.

 

As a result of the above factors, Fujitsu recorded operating income of 95.2 billion yen (US$1,013 million), a decline of 10.0 billion yen from the previous fiscal year.

 

In other income and expenses, Fujitsu recorded a loss of 140.3 billion yen, representing a deterioration of 101.8 billion yen from the previous fiscal year. As an extraordinary loss, Fujitsu posted restructuring charges of 116.2 billion yen, and an impairment loss of 34.2 billion yen.

The restructuring charges stem from 90.3 billion yen for the LSI device business, 20.0 billion yen for business outside Japan, and 5.8 billion yen for others. Restructuring charges for the LSI devices business consist of losses relating to transfer of production facilities and an impairment loss on the standard logic LSI devices production line, for which capacity utilization rates have been declining. The losses relating to transfer of production facilities consist of two items. One is guarantees, for a set period of time, on a portion of the operational costs of the Iwate Plant and test facilities that were transferred. The other is personnel-related expenses in accordance with the transfer of the LSI assembly and testing facilities. In addition, personnel-rationalization expenses were included in restructuring charges for the LSI devices business. The restructuring charges for business outside Japan consist of personnel-related expenses, primarily for the European subsidiary Fujitsu Technology Solutions (Holding) B.V. Other restructuring charges include the losses mainly related to the personnel-related expenses associated with rationalizations at managerial levels in Japan.

 

The impairment loss stems mainly from the European subsidiary Fujitsu Technology Solutions (Holding) B.V. In light of continued deterioration of economic conditions in Europe, the business plan of Fujitsu Technology Solutions has been revised as investments planned at the time of acquisition are less likely to be collectible, and an impairment loss was recorded on the unamortized balance of goodwill and intangible assets.

 

Income (loss) before income taxes and minority interests amounted to a 45.1 billion yen loss, a year-on-year deterioration of 111.8 billion yen. Fujitsu posted income of 3.5 billion yen from minority interests, representing an improvement of 9.5 billion yen from the previous fiscal year, as a result of the recovering financial performance of the car audio and navigation equipment joint venture.

 

Fujitsu reported a consolidated net loss of 72.9 billion yen (US$776 million), representing a deterioration of 115.6 billion yen from fiscal 2011. Tax burden was relatively high due to the expanded the net loss recorded by underperforming subsidiaries that have limits on recognition of deferred tax assets.

 

Comprehensive income was a 32.9 billion yen loss (US$350 million loss), with a 36.4 billion yen recorded in other comprehensive income, primarily as a result of a 22.8 billion yen foreign currency translation adjustments stemming from the ongoing depreciation of the yen.

 

Statement of Comprehensive Income                                                                                                        (Billion Yen)


FY2011

FY2012

Income(loss) before Minority Interests

36.7

-69.3

Other Comprehensive Income

-2.4

36.4


Unrealized Gain and Loss on Securities, Net of Taxes

0

11.5


Foreign Currency Translation Adjustments

-3.0

22.8


Share of Other Comprehensive Income of Associates Accounted for Using the Equity Method

0.5

1.9

Comprehensive Income

34.3

-32.9

 

Comparison to Consolidated Earnings Projections Announced in February 2013

For fiscal 2012, net sales exceeded the consolidated earnings projections announced in February 2013 by 11.7 billion yen in accordance with yen depreciation, while operating income fell below those projections by 4.7 billion yen mainly because of intensifying competition at Ubiquitous Solutions segment. Net income was improved from the previous projections by 22.0 billion yen. A part of restructuring initiatives related to LSI devices have postponed to FY2013, although personnel-related expenses increased.

 

<Results by Business Segment>

 

Information on fiscal 2012 consolidated net sales (including intersegment sales) and operating income broken out by business segment is presented as follows.

 

 

 

Technology Solutions


                            (Billion Yen)

 

 

FY2012

Change vs.

FY2011

Net Sales

2,942.3

0.3 %


Japan

1,936.4

1.2 %


Outside Japan

1,005.9

-1.6 %

Operating Income

180.9

9.6 

Consolidated net sales in the Technology Solutions segment amounted to 2,942.3 billion yen (US$31,301 million), essentially unchanged from fiscal 2011.

 

Sales in Japan increased 1.2%. Server-related sales declined due to the high-volume production of dedicated servers for use in the K computer, a next-generation supercomputer, during the first half of fiscal 2011. A decline in large-scale system deals also had an adverse impact. Sales of network products increased, mainly in routers, due to higher spending by telecommunications carriers to handle larger volumes of communications traffic and to expand LTE coverage. In system integration services, despite the impact of fewer large-scale system deals and a shift toward spending on hardware by telecommunications carriers, sales as a whole increased due to a recovery in spending, primarily in the manufacturing and public sectors. Sales of infrastructure services also rose on steady growth of outsourcing services, in addition to higher demand related to network services, as telecommunications carriers tried to keep up with higher volumes of communications traffic. Sales outside Japan declined 1.6%. On a constant currency basis, sales fell by 4%. Infrastructure services sales declined on account of the economic downturn in Europe. Meanwhile, sales of optical transmission systems in the first half of this fiscal year declined due to a shift toward spending on wireless networks by North American telecommunications carriers. In addition, sales of UNIX servers decreased in anticipation of the introduction of new models.

 

The segment posted operating income of 180.9 billion yen (US$1,924 million), up 9.6 billion yen compared to fiscal 2011. In Japan, despite the impact of lower sales of large-scale system integration and server-related system deals, in addition to higher upfront R&D spending for network products, income rose overall on the back of higher network-related sales and the impact of cost reduction mainly for x86 servers. Outside Japan, operating income declined as a result of the impact of lower sales in the European business, reduced sales of optical transmission systems and UNIX servers in North America, as well as increased expenses related to retirement benefit obligations in the UK.

(a) Services


                              (Billion Yen)

 

 

FY2012

Change vs.

FY2011

Net Sales

2,387.2

0.7 %


Japan

1,516.4

1.5 %


Outside Japan

870.7

-0.7 %

Operating Income

131.6

    7.6   

 

Net sales in the Services sub-segment amounted to 2,387.2 billion yen (US$25,396 million), essentially unchanged from fiscal 2011. In Japan, sales rose 1.5% from the previous fiscal year. For system integration services, despite the impact of fewer large-scale system deals, primarily in the financial services sector, in addition to a shift toward spending on hardware by telecommunications carriers to handle higher communications traffic, sales increased due to a recovery in spending in the manufacturing and public sectors. In Infrastructure services, overall sales rose on steady growth of outsourcing services and higher demand related to network services, as telecommunications carriers tried to keep up with higher volumes of communications traffic. This was despite negative factors in the ISP business, which included a drop in subscribers and a shift from packaged products that include connection fees to stand-alone products. Sales outside Japan were on par with fiscal 2011. On a constant currency basis, sales declined 3%. While the datacenter businesses in Australia and North America grew steadily, sales were adversely affected by lower corporate spending stemming from the economic downturn in Europe as well as the impact of fiscal austerity policies put in place by the UK government.

 

Operating income for the Services sub-segment was 131.6 billion yen (US$1,400 million), an increase of 7.6 billion yen compared to the previous fiscal year. In Japan, operating income increased due to higher sales of network services, despite the impact of fewer large-scale system deals. Outside Japan, operating income was adversely impacted by a decline in sales in Europe and an increase in expenses related to retirement benefit obligations in the UK, despite the positive impact of higher sales and cost efficiencies in Australia and North America.

 

In light of continued deterioration of economic conditions in Europe and intensified competition, Fujitsu has revised the business plan for Fujitsu Technology Solutions (Holding) B.V. (FTS), the wholly owned European subsidiary acquired in April 2009. This revision is due to the likelihood that the investment at acquisition will not be recoverable within 10 years as initially planned. As a result, Fujitsu recorded an impairment loss of 28.0 billion yen, during the third quarter, on the unamortized balance of goodwill recognized in accordance with the acquisition in April 2009. With the business environment deteriorating, Fujitsu decided to implement workforce rationalization as a part of structural reforms to improve FTS's profitability, and recorded an extraordinary loss of 18.4 billion yen on restructuring costs including for personnel-related expenses in the fourth quarter.

 

(b) System Platforms


                              (Billion Yen)

 

 

FY2012

Change vs.

FY2011

Net Sales

555.1

-1.5 %


Japan

419.9

0.5 %


Outside Japan

135.1

-7.3 %

Operating Income

49.3

2.0 

 

Net sales in the System Platforms sub-segment were 555.1 billion yen (US$5,905 million), a decline of 1.5% from the year earlier. Sales in Japan were essentially unchanged. Sales of server-related products declined due to the high-volume production of dedicated servers for use in the K computer, a next-generation supercomputer, during the first half of fiscal 2011. In addition, there was the adverse impact of fewer large-scale system deals. Sales of network products rose, mainly in routers, on account of higher investments by telecommunications carriers to handle higher network traffic and to expand LTE coverage. Sales outside Japan declined 7.3%. On a constant currency basis, sales decreased 10%. Sales of UNIX servers declined in anticipation of the introduction of new models. Sales of optical transmission systems in the first half of the fiscal year decreased due to a shift toward spending on wireless networks by North American telecommunications carriers.

 

The System Platforms sub-segment posted operating income of 49.3 billion yen (US$524 million), up 2.0 billion yen compared to fiscal 2011. In Japan, although income from server-related products declined and upfront R&D spending in network products rose, operating income increased due to the effect of higher sales of network products and cost reductions mainly for x86 servers. Outside Japan, income was adversely impacted by lower sales of optical transmission systems in North America and for UNIX servers.

 

Ubiquitous Solution


                              (Billion Yen)

 

 

FY2012

Change vs.

FY2011

Net Sales

1,090.2

-5.5 %


Japan

823.0

-7.0 %


Outside Japan

267.1

-0.8 %

Operating Income

9.6

-10.3 

 

Net sales in the Ubiquitous Solutions segment were 1,090.2 billion yen (US$11,598 million), a decline of 5.5% from fiscal 2011. Sales in Japan were down by 7.0%. In spite of large-volume orders received from corporations, sales of PCs declined on sluggish sales of consumer PCs and lower sales prices. In mobile phones, sales of smart phones stagnated as a result of the intensifying competition, while the market for feature phones contracted. Sales of the Mobilewear sub-segment's car audio and navigation systems decreased due to lower sales of consumer-market car navigation products and the impact of lower vehicle sales on account of the government's subsidy program for eco-friendly vehicles having ended in September 2012. This decline came despite the impact of disruptions during the previous fiscal year, when vehicle production was temporarily suspended in the wake of the Great East Japan Earthquake. Sales outside Japan were essentially unchanged from fiscal 2011. Unit sales of PCs fell, however, sales of Mobilewear rose compared to fiscal 2011, when there was a temporary suspension of automobile production outside Japan because of the flooding in Thailand.

 

The Ubiquitous Solutions segment posted operating income of 9.6 billion yen (US$102 million), down 10.3 billion yen from the previous fiscal year. Despite the effect of restructuring initiatives in Mobilewear, operating income in Japan declined on account of increased procurement costs caused by yen depreciation, as well as lower sales prices for PCs. In fiscal 2012, operating income rose temporary on account of the revised provision to recycling expenses prior to the start of the small electric appliance recycling scheme. Outside Japan, operating income was adversely affected by lower PC sales and higher procurement costs in Europe for components and materials denominated in US dollars because of the depreciation of the euro against the dollar, mainly in the first half of the fiscal year.

 

Device Solutions


                       (Billion Yen)

 

 

FY2012

Change vs.

FY2011

Net Sales

540.3

-7.6 %


Japan

295.9

-13.7 %


Outside Japan

244.4

1.1 %

Operating Income

-14.2

-4.0 

 

Net sales in Device Solutions amounted to 540.3 billion yen (US$5,748million), a decline of 7.6% compared to fiscal 2011. Sales in Japan fell 13.7%. LSI device sales decreased due to delayed market recovery, particularly for digital audio-visual equipment and sluggish sales of LSI devices for use in Fujitsu's own servers. In addition, shipments of CPUs for the next-generation supercomputer system were completed during the first half of fiscal 2011. Sales of electronic components, particularly of batteries and semiconductor packages, also fell. Sales outside Japan increased 1.1%. On a constant currency basis, sales decreased 3%. LSI device sales declined, mainly to Asia. For electronic components, sales of batteries, particularly to the US, declined, but sales of semiconductor packages to Asia increased, primarily in the first half.

 

The Device Solutions segment recorded an operating loss of 14.2 billion yen (US$151 million), representing a deterioration of 4.0 billion yen from fiscal 2011. In Japan, earnings were adversely affected by lower sales of LSI devices and a decline in production line capacity utilization rates. Production lines for 300 mm wafers maintained high utilization rates, but capacity utilization rates on the production lines for products of standard logic devices continued to decline. Operating income for electronic components deteriorated because of the impact of lower sales and the burden of development expenditures incurred by an affiliate developing semiconductors for communications equipment. Outside Japan, there was a positive impact of yen depreciation for both LSI devices and electronic components.

The Fujitsu Group continually optimizes its manufacturing organization in accordance with changes in the economic and business environment. As part of these efforts, since being reorganized as a wholly owned subsidiary of Fujitsu in March 2008, the LSI device business has continually been optimizing its manufacturing resources. In response to a sudden deterioration in the market, however, there was a heightened need to accelerate structural reforms in order to strengthen the fundamentals of the business. Accordingly, in October 2012 the Iwate Plant was transferred to Denso Corporation, and in December 2012 the assembly line facilities were transferred to J-Devices Corporation. The Fujitsu Group has reached a basic agreement with Panasonic Corporation to integrate their system LSI (SoC) businesses, and the transfer of the 300 mm line of the Mie Plant to a new foundry company, including Taiwan Semiconductor Manufacturing Company, Ltd., is under consideration. In April 2013 a definitive agreement was reached to transfer the microcontroller and analog device business to US-based Spansion Inc. In addition, to rationalize the size of the workforce, an early retirement incentive plan was implemented for approximately 2,400 employees (of whom approximately 2,000 are in Japan).

Fujitsu recorded 90.3 billion yen in restructuring expenses (33.1 billion yen losses relating to transfer of production facilities, 28.6 billion yen impairment losses of standard logic LSI devices production line and 28.4 billion yen relating to personnel-related expenses). Losses relating to transfer of production facilities include guarantees, for a set period of time, on a portion of the operational costs of the Iwate Plant and the LSI assembly and test facilities that were transferred, and personnel-related expenses and impairment losses and others in accordance with the transfer of the LSI assembly and testing facilities. Impairment losses and others of standard logic LSI devices production line are relating to 200mm lines and others of Mie and Aizu-wakamatsu regions, for which capacity utilization rates have been declining.

 

Other/Elimination and Corporate

This segment recorded an operating loss of 81.0 billion yen (US$862 million), a deterioration of 5.3 billion yen from fiscal 2011. This was on account of up-front investments associated with the development of new businesses and other factors.

 

<Results by Geographic Segments>

 

Sales and operating income for Fujitsu and its consolidated subsidiaries according to country and region are as follows.

 

Net Sales                                                             (Billion Yen)


FY 2012

Japan

3,306.4

<-2.6%>

Outside Japan

1,527.6

<0.7%>


EMEA

785.2

<-4.0%>


The Americas

273.7

<-1.4%>


APAC &China

468.7

<11.1%>

< > Indicates % change over previous year

 

Operating Income                                         (Billion Yen)

 

 

FY2011

FY2012

Change vs.
FY2011

Japan

177.8

[5.2%]

178.4

[5.4%]

0.6

[0.2%]

Outside

Japan

8.0

[0.5%]

-4.1

[-0.3%]

-12.2

[ -0.8%]


EMEA

-0

[-0.0%]

-12.4 

[-1.6%]

-12.4

[-1.6%]


The Americas

0.4

[0.2%]

-2.2

[-0.8%]

-2.7

[-1.0%]


APAC &

China

7.6

[1.8%]

10.4

[2.2%]

2.8

[0.4%]

Note: Numbers inside brackets indicate operating income margin.

 

In Japan, net sales amounted to 3,306.4 billion yen (US$35,174 million), a decrease of 2.6% compared to fiscal 2011. Sales of PCs and mobile phones decreased due to intensifying competition and LSI devices were impacted by lower demand, although sales of network products and infrastructure services, primarily in network-related sales, increased. Operating income in Japan was 178.4 billion yen (US$1,898 million), a year-on-year increase of 0.6 billion yen. The positive impact of higher sales of network-related business, yen depreciation for electronic components and the effect of restructuring initiatives in car audio and navigation systems were offset by lower revenue from PCs, mobile phones and LSI devices.

 

Net sales outside Japan were 1,527.6 billion yen (US$16,251 million), a roughly on par with fiscal 2011. Operating loss outside Japan was 4.1 billion yen (US$44 million) a year-on-year deterioration of 12.2 billion yen, mainly in EMEA.

 

Net sales in EMEA amounted to 785.2 billion yen (US$8,353 million), a decrease of 4.0% from fiscal 2011. Sales of PCs decreased primarily in continental Europe and sales of infrastructure services were adversely affected by constrained corporate spending stemming from the economic downturn, mainly in the first half of the fiscal year as well as the impact of public sector fiscal austerity policies. Operating loss was 12.4 billion yen (US$132 million), representing a deterioration of 12.4 billion yen from fiscal 2011. Infrastructure services were adversely impacted by low revenue and an increase in expenses related to retirement benefit obligations in the UK. In addition to the decrease of PCs sales, there was an adverse impact from higher procurement costs in Europe for components and materials denominated in US dollars due to depreciation of the euro against the dollar mainly in the first half of the fiscal year.

 

Net sales in the Americas were 273.7 billion yen (US$2,912 million), a decline of 1.4% from fiscal 2011. On a constant currency basis, sales declined 5.0%. Sales of optical transmission systems decreased due to constrained investment by North American telecommunications carriers, mainly in the first half of the fiscal year. Sales of UNIX servers declined in anticipation of the introduction of new models. Operating loss for the region amounted to 2.2 billion yen, (US$23 million), a deterioration of 2.7 billion yen from fiscal 2011. Income declined as a result of lower revenue from optical transmission systems.

 

In APAC and China, net sales were 468.7 billion yen (US$4,986 million), a year-on-year increase of 11.1%. Sales of car audio and navigation systems increased due to recovery following the Thai flooding in the previous fiscal year. Sales of Infrastructure services also increased. Operating income was 10.4 billion yen (US$111 million), an increase of 2.8 billion yen from fiscal 2011.


(1) Assets, Liabilities and Net Assets

 

Consolidated total assets at the end of fiscal 2012 amounted to 3,049.0 billion yen (US$32,436 million), an increase of 103.5 billion yen from the end of fiscal 2011. This represented an increase of approximately 110.0 billion yen as a result of yen depreciation. Current assets increased by 20.5 billion yen compared with the end of fiscal 2011, to 1,722.2 billion yen. Notes and accounts receivable decreased by 5.3 billion yen as sales in the fourth quarter of fiscal 2012 were lower than in the same period of fiscal 2011. As shipments of CPUs for the next-generation supercomputer system were completed, inventories at the end of fiscal 2012 decreased to 323.0 billion yen, down 11.0 billion yen from the ending balance of fiscal 2011. The monthly inventory turnover ratio, which is an indication of asset utilization efficiency, was 1.00 times, essentially unchanged from the end of fiscal 2011.

 

Non-current assets increased by 83.0 billion yen from the end of fiscal 2011, to 1,326.7 billion yen. Tangible fixed assets decreased by 22.4 billion yen compared with the end of fiscal 2011, primarily as a result of the impairment of fixed assets in the LSI device business. Intangible assets decreased by 42.9 billion yen from the end of fiscal 2011, primarily as a result of the impairment of goodwill of a European subsidiary. Other non-current assets increased 148.4 billion yen, mainly due to an increase in prepaid pension expense associated with a special contribution into benefit pension schemes for the Company's UK-based subsidiary.

 

Consolidated total liabilities amounted to 2,139.2 billion yen (US$22,757 billion), an increase of 160.3 billion yen compared to the end of fiscal 2011. The balance of interest-bearing loans was 534.9 billion yen, an increase of 153.8 billion yen from the end of fiscal 2011. Short-term borrowings increased to finance a portion of working capital and a special contribution into UK pension schemes. As a result, the D/E ratio was 0.68 times, an increase of 0.23 of a percentage point compared to the end of fiscal 2011, and the net D/E ratio was 0.32 times, an increase of 0.18 of a percentage point compared to the end of fiscal 2011. In addition, the provision for business structure improvement increased 66.8 billion yen due to structural reform in the LSI device business and businesses outside Japan.

 

Net assets were 909.8 billion yen (US$9,679 million), a decrease of 56.7 billion yen from the end of fiscal 2011. The decline in net assets reflects a decrease in shareholders' equity of 93.4 billion yen resulting mainly from the net loss recorded and the payment of dividends during fiscal 2012. Accumulated other comprehensive income increased by 33.8 billion yen, primarily as a result of yen depreciation and rising share prices. The decline in owners' equity lowered the owners' equity ratio by 3 percentage points compared to the end of fiscal 2011, to 25.6%.

 

                                                                                                                                           (Billion Yen)


FY2011

  (March 31, 2012)

FY2012

(March 31, 2013)

Change

Cash and Cash Equivalents at End of Period *

266.6

286.6

19.9

Interest-bearing Loans

 381.1

534.9

153.8

Net Interest-bearing Loans

114.4

248.3

133.9

Owners' Equity

841.0

781.4

-59.6

Note (*); The difference of cash and cash equivalents at end of period between balance sheet and cash flow statement is overdraft.

It is included in interest-bearing loans as short-term borrowings. 

 

(2) Cash Flows

 

Net cash provided by operating activities during fiscal 2012 amounted to 71.0 billion yen (US$755 million), a year-on-year decrease of 169.0 billion yen. There was an outflow of 114.3 billion for a special payment to the pension scheme of Fujitsu's UK subsidiary. Working capital increased due to sluggish sales of PCs and mobile phones. Regarding restructuring charges relating to the LSI device business and business outside Japan, outflow is expected in fiscal 2013.

 

Net cash used in investing activities was 161.4 billion yen (US$1,717 million). Outflows mainly consisted of the acquisition of property, plant and equipment amounting to 111.5 billion yen, primarily related to datacenters, and the acquisition of intangible assets amounting to 64.4 billion yen, primarily software. A cash inflow of 10.9 billion yen primarily represents the sales proceeds for fixed and other assets stemming from the transfer of the Iwate Plant and the LSI assembly and test facilities of the LSI device business. Compared to fiscal 2011, net outflows decreased by 29.3 billion yen, reflecting lower capital expenditures on property, plant and equipment.

 

Free cash flow, the sum of cash flows from operating and investing activities, was negative 90.4 billion yen (US$962 million), representing a decrease in net cash inflows of 139.6 billion yen compared with the same period in the previous fiscal year. Excluding one-time items such as the contribution to the pension fund held by a UK subsidiary company, cash inflows amounted to 8.4 billion yen, which was 35.0 billion yen less than the previous fiscal year.

 

Net cash provided by financing activities was 100.3 billion yen (US1,067 million). Short-term borrowings financed capital associated with a contribution made to the pension scheme of a UK subsidiary. This represents an increase in net cash inflows of 239.3 billion yen compared to the previous fiscal year.

 

As a result of the above factors, cash and cash equivalents at the end of fiscal 2012 were 284.5 billion yen (US$3,027 million), an increase of 17.8 billion yen compared to the end of fiscal 2011.

 

(3) Status of Retirement Benefit Plans

 

The balance of unrecognized obligation for retirement benefits is 465.8 billion yen. For retirement benefit plans in Japan, the amount of unrecognized obligation for retirement benefits is 308.7 billion yen. Although plan assets increased as a result of good investment performance, the amount of unrecognized obligation for retirement benefits increased by 16.7 billion yen since the end of the prior fiscal year because a decline in the discount rate raised the amount of projected benefit obligation. Similarly, for retirement benefit plans outside of Japan, even though plan assets increased as a result of good investment performance, the amount of unrecognized obligation for retirement benefits increased by 48.2 billion yen since the end of the prior fiscal year, to 157.1 billion yen, because of lower discount rates and a weaker yen.

                                                                                                                                                          (Billion Yen)


 FY2011

(March 31, 2012)

FY2012

(March 31, 2013)

Change

a. Projected Benefit Obligation

b. Plan Assets

-1,868.4

1,352.0

-2,151.1

1,686.9

-282.7

334.9

c. Projected Benefit Obligation in Excess of Plan Assets (a) + (b)

-516.3

-464.2

52.1

 

Net of Prepaid Pension Cost and Allowance for Retirement Benefits

-115.4

1.6

117.1

 

Unrecognized Obligation for Retirement Benefits

-400.9

-465.8

-64.9


In Japan

Outside Japan

-292.0

-108.9

-308.7

-157.1

-16.7

-48.2

 

(Assumptions used in accounting for the plans

Discount Rates

In Japan

2.5%

1.7%

-0.8%

Outside Japan (Mainly in UK)

Mainly 5.0%

Mainly 4.4%

-0.6%

 

3. FY2013 Earnings Projections

 

With respect to the operating environment Fujitsu faces in fiscal 2013, in Japan ICT spending is recovering, primarily in the manufacturing and retailing/distribution sectors, as a result of an improved export environment because of the recent weakening of the yen, higher public sector investment, and a recovery in consumer spending. Outside of Japan, a mild recovery is underway, as the credit market uncertainties in Europe have started to recede, and there are signs that the economy has bottomed out in the US. Against this backdrop, in its consolidated earnings projections for fiscal 2013, Fujitsu is anticipating growth in its services business and servers and network-related products in Japan. Outside Japan, in its car audio and navigation equipment business and electronic component business are expected to grow.

 

At the same time, Fujitsu has factored into its projections the positive impact of a variety of structural reforms implemented in fiscal 2012 to strengthen its fundamentals, including approximately 25 billion yen of impact stemming from structural reforms in its underperforming businesses, such as its LSI device business and parts of its operations outside Japan and approximately 20 billion yen of impact stemming from workforce related measures and rationalization of corporate function, as it aims to achieve its medium-term performance targets based on the management direction the company announced on February 7, 2013. Regarding the LSI device business, Fujitsu has factored into its projections the impact of restructuring charges carried over from fiscal 2012, while transfer of the microcontroller and analog device business have both been included in net sales and operating income.

 

The earnings projections for fiscal 2013 also assume yen exchange rates of 93 yen for the US dollar, 120 yen for the euro, and 140 yen for the British pound. For the full year, the impact of these exchange rates alone is expected to boost net sales by approximately 140.0 billion yen and operating income by approximately 10.0 billion yen.

 

For the first half of fiscal 2013, Fujitsu is projecting consolidated net sales of 2,050.0 billion yen. Despite the favorable impact on sales anticipated from exchange rates and a strong services business in Japan, sales are projected to decline by 20.0 billion yen compared to the first half of fiscal 2012 due to the continuation of a severe competitive environment in mobile phones, as the cycle of demand for smartphones turns down, and because a recovery in Fujitsu's services businesses outside Japan is not expected until the second half of the fiscal year. 

 

Fujitsu is projecting an operating loss of 10.0 billion yen for the first half, representing deterioration of approximately 20.0 billion yen from the first half of fiscal 2012. Despite the fact that lower overhead costs resulting from structural reforms in the LSI device business and parts of its operations outside Japan implemented in fiscal 2012 is expected to begin having a positive impact from the second quarter of fiscal 2013, operating income is projected to decline. This is due to higher retirement benefit expenses in pension plans outside of Japan as a result of lower discount rates, in addition to the impact of lower sales.

 

For the first half of fiscal 2013, Fujitsu is projecting a net loss of 30.0 billion yen, representing a year-on-year deterioration of approximately 20.0 billion yen, due to the impact of lower operating income.

 

For the full 2013 fiscal year, Fujitsu is projecting net sales of 4,550.0 billion yen, an increase of 170.0 billion yen compared to the previous fiscal year. Despite a drastic decline in sales of mobile phones and other products in the Ubiquitous Solutions segment, sales are projected to rise primarily in the second half of the fiscal year, due to higher sales of services and servers both in and outside Japan, and because of a projected rebound in demand for LSI devices and electronic components, in addition to the favorable impact of exchange rates.

 

Full-year operating income for fiscal 2013 is projected to be 140.0 billion yen, an improvement of 45.0 billion yen compared to fiscal 2012. Operating income in the Technology Solutions segment is projected to increase by approximately 10.0 billion yen. Operating income in Japan is projected to increase because of the impact of higher sales in the services business and the impact of workforce rationalization measures. Operating income outside Japan is projected to decrease. Outside of Japan, although there should be a positive impact of structural reforms and lower goodwill amortization expenses, retirement benefit expenses are projected to rise in accordance with revisions to accounting standards. Operating income in the Ubiquitous Solutions segment is projected to be essentially unchanged from fiscal 2012. Lower sales of mobile phones and increasing procurement costs on the depreciating yen, is expected to be offset by a sales strategy focusing on profitability in PCs and lower development expenses. The Device Solutions segment is projected to return to profitability with operating income of 25.0 billion yen. In addition to the impact of higher sales of LSI devices and electronic components, as well as the favorable impact of exchange rates, the segment will also benefit from the impact of the structural reforms in the LSI device business implemented in fiscal 2012, resulting in a projected 40.0 billion yen improvement in operating income compared to fiscal 2012.

 

Fujitsu is projecting full-year net income of 45.0 billion yen. Restructuring expenses of structural reform of the LSI device business carried over from 2012 is factored. Over 30 billion yen of amortization of actuarial loss stemming from both Japan and outside Japan is factored in net income.

 

FY2013 Full-Year Consolidated Forecast                                                                       (Billion Yen)


First-Half


Full-Year


FY2012

(Actual)

FY2013

(Forecast)

Change vs. First-Half FY2012


FY2012

(Actual)

FY2013

(Forecast)

Change vs. FY2012



Net Sales

2,071,8

2,050.0

-21.8


4,381.7

4,550.0

168.2

Operating Income

7.6

-10.0

-17.6


95.2

140.0

44.7

[Operating Income Margin]

[ 0.4%]

[ -0.5%]

[ -0.9%]


[ 2.2%]

[ 3.1%]

[ 0.9%]

Other Income

and Expenses

-4.5

-

4.5


-140.3

-35.0

105.3

Net Income

-11.0

-30.0

-18.9


-72.9

45.0

117.9










4. Policy on Dividends and Dividends Forecast

 

Article 40 of Fujitsu Limited's Articles of Incorporation grants the Board of Directors the authority to distribute retained earnings. As part of Fujitsu's basic policy on the exercise of this authority, a portion of retained earnings is paid to shareholders to provide a stable return, and a portion is retained by the Company to strengthen its financial base and support new business development opportunities that will result in improved long-term performance. In addition, while taking into consideration its level of profit, when a sufficient volume of internal reserves is secured, including through the acquisition of its own shares, Fujitsu aims to more proactively distribute profits to shareholders.

 

In its non-consolidated financial results for fiscal 2012, Fujitsu posted a loss on valuation of shares in affiliates of approximately 380 billion yen, primarily on non-recoverable losses in the Company's semiconductor, European and UK subsidiaries. Specifically, factors included the impact of deteriorated business conditions on its subsidiary responsible for LSI devices, Fujitsu Semiconductor Limited, and the subsidiary conducting operations in continental Europe, Fujitsu Technology Solutions, as well as an as an extraordinary loss posted due to the implementation of structural reforms. In addition, Fujitsu will recognize unrecognized obligation for retirement benefits for its subsidiary in the UK, Fujitsu Services Holdings PLC. The posting of these valuation losses caused negative retained earnings, on a non-consolidated basis, as of the end of fiscal 2012. As such, the company will not pay a fiscal 2012 year-end dividend.

 

Annual dividends amounted to 5 yen per share, representing only the interim dividend.

 

With respect to the payment of dividends from retained earnings in FY2013, the Company decided to cut the interim dividends and leave the dividends at the end of fiscal year hanging.

 

 

To view the full announcement of the FY 2013 Full-Year Financial Results, please paste the following link into your web browser;

http://www.fujitsu.com/global/about/ir/


This information is provided by RNS
The company news service from the London Stock Exchange
 
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