TIDMFUJ
RNS Number : 8378R
Fujitsu Ld
31 October 2013
Fujitsu Limited
Consolidated Financial Results for the First-Half Ended
September 30, 2013
October 31, 2013
Fujitsu Limited
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Stock exchange listings: Tokyo, Nagoya
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Code number: 6702
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URL: http://jp.fujitsu.com/
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Representative: Masami Yamamoto, President and Representative Director
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Contact person: Isamu Yamamori
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Vice President, Public and Investor Relations Division
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Tel. +81 3 6252 2175
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Scheduled filling date of statutory financial report: November 14, 2013
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Scheduled dividend payment date: -
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Supplementary material: No
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Financial results meeting: Yes (for media and analysts)
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1. Consolidated Results for the First-Half Ended September 30,
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 Change Operating Change Net Income Change
(%) Income (%) (Loss) (%)
------------------- ---------- ------- ---------- ------- ----------- -------
1H FY 2013 2,151,601 3.9 10,821 149.6 -9,626 -
(4/1/13-9/30/13)
------------------- ---------- ------- ---------- ------- ----------- -------
1H FY 2012 2,071,813 -1.0 4,336 -38.5 -14,413 -
(4/1/12-9/30/12)
------------------- ---------- ------- ---------- ------- ----------- -------
Reference Comprehensive income : 1H FY2013 22,477 million yen [
- %]
1H FY2012 -18,327 million yen [ - %]
Yen
Net Income (Loss) per
Common Share
------------------- ------------------------
Basic Diluted
------------------- ---------- ------------
1H FY 2013 -4.65 -
(4/1/13-9/30/13)
------------------- ---------- ------------
1H FY 2012 -6.97 -
(4/1/12-9/30/12)
------------------- ---------- ------------
(2) Consolidated Financial Position Yen (Millions)
Total Assets Net Assets Owners' Equity
Ratio (%)
----------- ------------- ----------- ---------------
September
30, 2013 2,952,778 771,153 21.7
----------- ------------- ----------- ---------------
March 31,
2013 2,920,326 752,438 21.4
----------- ------------- ----------- ---------------
Reference Owners' Equity: September 30, 2013 641,663 million yen
March 31, 2013 624,045 million yen
2. Dividends per Share of Common Stock
Dividends per Share (Yen)
-------------------- ----------------------------------
Year- Full
1Q 2Q 3Q End Year
-------------------- ---- ------ ---- ------ ------
FY 2012 - 5.00 - 0.00 5.00
-------------------- ---- ------ ---- ------ ------
FY 2013 - 0.00
-------------------- ---- ------ ---- ------ ------
FY 2013 (Forecast) - - -
-------------------- ---- ------ ---- ------ ------
Note: Revisions to forecast of dividends in this quarter:
None
Year-end dividend amount for FY2013 (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 Change Operating Change Net Income Change Net Income
(%) Income (%) (Loss) (%) (Loss) per
(Loss) Common Share
-------- --------- ------ --------- ------ ---------- ------ -------------
FY 2013 4,620,000 5.4 140,000 58.6 45,000 - 21.75
-------- --------- ------ --------- ------ ---------- ------ -------------
Note; Revisions to forecast of financial results in this
quarter: Yes
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) Application of accounting procedures specific to preparation
of quarterly consolidated financial
statements: None
(3) Changes in accounting policies and accounting estimates, and
restatements
1. Changes in accounting policies arising from revision of
accounting standards: Yes
2. Changes arising from factors other than 1: None
3. Changes in accounting estimates: None
4. Restatements: None
(4) Number of Issued Shares (Common shares)
1. Number of issued As of September 2,070,018,213 shares
shares at end of period 30, 2013
------------------------- ---------------- -------------- -------
As of March 31, 2,070,018,213 shares
2013
------------------------- ---------------- -------------- -------
2. Treasury stock held As of September 789,397 shares
at end of period 30, 2013
------------------------- ---------------- -------------- -------
As of March 31, 723,691 shares
2013
------------------------- ---------------- -------------- -------
3. Average number of 1H FY 2013 2,069,254,358 shares
issued and outstanding
shares during period
------------------------- ---------------- -------------- -------
1H FY 2012 2,069,345,406 shares
------------------------- ---------------- -------------- -------
Notes:
1. Compliance with Quarterly Review Procedures
These materials fall outside the jurisdiction of the quarterly
review procedures of the Financial Instruments and Exchange Act.
Therefore, at the time of disclosure, a portion of the review has
not yet been completed.
Upon completion of the review, a statutory quarterly report will
be submitted on November 14, 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.
- 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
1. Explanation of Financial Results
1-1. Overview
<Business Environment>
During the first half of fiscal 2013 (April 1, 2013 - September
30, 2013), the global economy continued to experience a moderate
recovery. In Europe, signs of an economic rebound were apparent as
the growth rate turned positive. In the US, ongoing quantitative
easing and other factors continued to drive a turnaround in the
economy, although concerns about the federal government's fiscal
policy have resulted in persistent uncertainty.
In Japan, the economy is experiencing a mild recovery due to yen
depreciation and a rising stock market spurred on by the
government's economic policy and monetary easing put in place by
the Bank of Japan. Exports also showed signs of picking up due to
the improved economic environment resulting from a weaker yen.
Investments in information and communication technology (ICT)
are moderately increasing on the back of what appears to be a
turnaround in corporate capital expenditures.
FY2013 Second-Quarter Financial Results (Billion Yen)
FY2012 FY2013
--------------------- -------------------- -----------------------------------------
1Q 2Q 1Q 2Q
4/1/12- 7/1/12- 4/1/13- 7/1/13- Change vs. 2Q
6/30/12 9/30/12 6/30/13 9/30/13 FY 2012
--------------------- --------- --------- ----------- ---------
Change
(%)
--------------------- --------- --------- ----------- --------- -------- -------
< -4 >
Net Sales 957.3 1,114.4 999.2 1,152.3 37.9 3.4
Cost of Sales 706.7 804.8 739.6 841.8 36.9 4.6
--------------------- --------- --------- ----------- --------- -------- -------
Gross Profit 250.6 309.5 259.6 310.5 0.9 0.3
[Gross Profit [ 26.2%] [ 27.8%] [ 26.0%] [ 26.9%] [ -0.9%]
Margin]
Selling, General
and Administrative
Expenses 277.3 278.4 282.4 276.8 -1.6 -0.6
--------------------- --------- --------- ----------- --------- -------- -------
Operating Income
(Loss) -26.7 31.0 -22.8 33.6 2.5 8.3
[Operating Income [ -2.8%] [ 2.8%] [ -2.3%] [ 2.9%] [ 0.1%]
Margin]
--------------------- --------- --------- ----------- --------- -------- -------
Other Income and
Expenses 0.1 -4.6 4.1 -4.8 -0.1 -
Income (Loss)
Before Income
Taxes and Minority
Interests -26.6 26.3 -18.7 28.8 2.4 9.1
--------------------- --------- --------- ----------- --------- -------- -------
Income Taxes -1.8 14.4 1.2 14.2 -0.1 -1.2
--------------------- --------- --------- ----------- --------- -------- -------
Minority Interests 0.7 0.8 2.0 2.1 1.3 154.1
--------------------- --------- --------- ----------- --------- -------- -------
Net Income (Loss) -25.4 11.0 -21.9 12.3 1.2 11.5
--------------------- --------- --------- ----------- --------- -------- -------
< > Change (%) Constant Currency
FY2013 First-Half Financial Results (Billion Yen)
FY2012 FY2013 Change vs. 1H FY2012 Change
vs. July
2013 projections
1H 1H
4/1/12- 4/1/13-
9/30/12 9/30/13
------------------- ---------- --------- -----------------
Change
(%)
------------------- ---------- --------- ---------- ---------- -----------------
< -3 >
Net Sales 2,071.8 2,151.6 79.7 3.9 101.6
------------------- ---------- --------- ---------- ---------- -----------------
Operating Income 4.3 10.8 6.4 149.6 20.8
[Operating Income [ 0.2%] [ 0.5%] [ 0.3%] [ 1.0%]
Margin]
------------------- ---------- --------- ---------- ---------- -----------------
Other Income and
Expenses -4.5 -0.7 3.8 - -0.7
------------------- ---------- --------- ---------- ---------- -----------------
Net Income (Loss) -14.4 -9.6 4.7 - 20.3
------------------- ---------- --------- ---------- ---------- -----------------
< > Change (%) Constant Currency
Quarterly Breakdown of Results (Billion Yen)
FY2012 FY2013
------- ------------------ -------------------------------------- ------------------
1Q 2Q 3Q 4Q 1Q 2Q
-------------------------- -------- -------- -------- -------- -------- --------
Total Sales 957.3 1,114.4 1,048.2 1,261.6 999.2 1,152.3
-------
Operating Income -26.7 31.0 -5.8 89.7 -22.8 33.6
[Operating [-2.8%] [2.8%] [-0.6%] [7.1%] [-2.3%] [2.9%]
Income Margin]
-------------------------- -------- -------- -------- -------- -------- --------
[Results by Business Segment]
Technology
Solutions Sales 627.1 713.3 700.6 901.3 677.5 785.3
Operating
Income -0.8 44.5 21.8 108.3 2.5 55.7
[Operating [-0.1%] [6.2%] [3.1%] [12.0%] [0.4%] [7.1%]
Income Margin]
------------------------------ -------- -------- -------- -------- -------- --------
Services Sales 513.6 575.6 576.5 721.4 554.9 631.6
------------
Operating
Income 3.2 30.7 20.0 70.5 5.5 36.7
[Operating [0.6%] [5.3%] [3.5%] [9.8%] [1.0%] [5.8%]
Income Margin]
------------------------------ -------- -------- -------- -------- -------- --------
System
Platforms Sales 113.4 137.6 124.1 179.8 122.5 153.7
------------
Operating
Income -4.0 13.7 1.8 37.8 -2.9 19.0
[Operating [-3.6%] [10.0%] [1.5%] [21.0%] [-2.4%] [12.4%]
Income Margin]
------------------------------ -------- -------- -------- -------- -------- --------
Device
Solutions Sales 130.3 138.3 129.5 142.1 145.3 159.0
-------------
Operating
Income -3.6 -3.3 -9.3 2.1 7.6 10.4
[Operating [-2.8%] [-2.4%] [-7.2%] [1.5%] [5.3%] [6.5%]
Income Margin]
------------------------------ -------- -------- -------- -------- -------- --------
Ubiquitous
Solutions Sales 234.6 314.7 266.5 274.3 215.9 262.7
-------------
Operating
Income -2.0 12.4 -2.0 1.2 -17.1 -11.6
[Operating [-0.9%] [4.0%] [-0.8%] [0.5%] [-7.9%] [-4.4%]
Income Margin]
------------------------------ -------- -------- -------- -------- -------- --------
*In accordance with the amended IAS 19 Employee Benefits of the
International Financial Reporting Standards (IFRS), which the
Fujitsu Group's consolidated subsidiaries outside of Japan have
adopted, the figures for fiscal 2012 have been retroactively
revised. As a result, selling, general and administrative expenses
have increased, and operating income has decreased, by 1.6 billion
yen in the first quarter of fiscal 2012, by 1.6 billion yen in the
second quarter, by 1.7 billion yen in the third quarter, and by 1.9
billion yen in the fourth quarter. In terms of the impact on
segment results, all of these changes were in the Services
sub-segment. Similarly, other income statement figures, including
net income, have also been revised.
Net assets have been reduced due to the unrecognized obligation
for retirement benefits of subsidiaries outside Japan as of the end
of fiscal 2012, which amounted to 157.3 billion yen, being brought
onto the consolidated balance sheet.
1-2. Second Quarter
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=98 yen, the
approximate Tokyo foreign exchange market rate on September 30,
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 the second
quarter of fiscal 2012 to translate the current period's net sales
outside Japan into yen.
<Profit and Loss>
Consolidated net sales for the second quarter of fiscal 2013
were 1,152.3 billion yen (US$11,758 million), an increase of 3.4%
from the second quarter of fiscal 2012 as a result of foreign
exchange fluctuations and other factors. Net sales in Japan fell by
6.7%. In addition to a significant decrease in sales of mobile
phones, sales of network services also declined. On the other hand,
sales of system integration services rose in the public, financial
services and other sectors. Sales outside of Japan rose 25.1%.
Excluding the impact of foreign exchange rate fluctuations, sales
rose by 2%. Sales of PCs in Europe declined, as did sales of UNIX
servers in the US. However, sales of optical transmission systems
and car audio and navigation systems in North America increased, as
did LSI devices and electronic components.
For the second quarter of fiscal 2013, the average yen exchange
rates against major currencies were 99 yen for the US dollar
(representing yen depreciation of 20 yen from the second quarter of
fiscal 2012), 131 yen for the euro (depreciation of 33 yen), and
153 yen for the British pound (depreciation of 29 yen). The impact
of foreign exchange movements was to increase net sales by
approximately 80 billion yen compared to the second quarter of
fiscal 2012. Sales generated outside Japan as a percentage of total
sales amounted to 38.5%, an increase of 6.7 percentage points
compared to the second quarter of the previous fiscal year, mainly
as a result of foreign exchange rate fluctuations and falling
mobile phone sales in Japan.
Gross profit was 310.5 billion yen, an increase of 0.9 billion
yen from the second quarter of fiscal 2012. Despite the adverse
impact from the decline in sales of mobile phones, gross profit
increased because of foreign exchange movements and a variety of
measures implemented to reduce costs. The gross profit margin was
26.9%, a decline of 0.9 of a percentage point from the second
quarter of the prior fiscal year.
Selling, general and administrative expenses were 276.8 billion
yen, a decrease of 1.6 billion yen from the second quarter of
fiscal 2012. Despite the higher expenses resulting from yen
depreciation, expenses declined due to progress in implementing
Group-wide measures to generate cost efficiencies.
Fujitsu recorded operating income of 33.6 billion yen (US$343
million), an increase of 2.5 billion yen from the previous fiscal
year's second quarter. While there was the adverse impact stemming
from lower sales of mobile phones, workforce-related measures and
structural reforms in the LSI business and businesses outside Japan
contributed to this result.
There was a loss of 4.8 billion yen in other income and
expenses, essentially unchanged from the previous fiscal year. The
company posted a loss of 3.8 billion yen in other expenses on
personnel-related expenses, primarily in its businesses outside
Japan, and restructuring expenses for its LSI device business. On
the other hand, there were improvements in foreign currency
translation adjustment and other items.
Fujitsu reported consolidated net income of 12.3 billion yen
(US$126 million), an increase of 1.2 billion yen compared to the
second quarter of fiscal 2012.
<Results by Business Segment>
Information on fiscal 2013 second-quarter consolidated net sales
(including intersegment sales) and operating income broken out by
business segment is presented as follows.
Technology Solutions
(Billion Yen)
------------ -------------------------------------
Second Change
Quarter vs.
FY2013
2Q FY2012
------------ --------------- --------------------
Net Sales 785.3 10.1 %
--------------- --------------------
Japan 499.1 4.4 %
Outside
Japan 286.2 21.8 %
----------- --------------- --------------------
Operating
Income 55.7 11.1
------------ --------------- --------------------
Consolidated net sales in the Technology Solutions segment
amounted to 785.3 billion yen (US$8,013 million), an increase of
10.1% from the same period in fiscal 2012. Sales in Japan increased
4.4%. Orders continued to be strong from the first quarter, and
sales exceeded projections. For systems integration services,
despite the adverse impact of a shift toward spending on hardware
by telecommunications carriers, sales grew on account of increased
investments, primarily in the financial services and public
sectors. Server-related sales increased due to the contribution of
large-scale systems deals in the public sector. In network
products, although demand for 3G telecommunications equipment to
handle increasing volumes of communications traffic has passed its
peak, overall sales increased as a result of spending by
telecommunications carriers to expand LTE service area coverage. In
infrastructure services, on the other hand, sales fell on the
impact of a shift away from packaged products that include
connection fees to stand-alone products in the ISP business, and
because there was increased demand related to network services in
the same period of the previous fiscal year, against the backdrop
of telecommunications carriers efforts to handle with higher
volumes of communications traffic. Sales outside Japan increased
21.8%. On a constant currency basis, sales were on par with the
same period in fiscal 2012. Sales of new UNIX server models were
weak, although optical transmission systems sales in North America
increased on recovered investments by telecommunications
carriers.
The segment posted operating income of 55.7 billion yen (US$568
million), up 11.1 billion yen compared to the second quarter of
fiscal 2012. In Japan, operating income rose as a result of the
impact of personnel measures and the impact of increased sales of
systems integration services, despite a drop in sales of network
services and higher upfront R&D spending in network products.
Outside Japan, in addition to the impact of structural reforms and
lower amortization expenses for goodwill, operating income was
positively impacted by higher sales of network products.
(a) Services
(BillionYen)
------------ ------------------------------------
Second Change
Quarter vs.
FY2013
2Q FY2012
------------ --------------- -------------------
Net Sales 631.6 9.7 %
--------------- -------------------
Japan 389.9 3.7 %
Outside
Japan 241.6 21.1 %
----------- --------------- -------------------
Operating
Income 36.7 5.9
------------ --------------- -------------------
Net sales in the Services sub-segment amounted to 631.6 billion
yen (US$6,445 million), an increase of 9.7% from the second quarter
of the previous fiscal year. Sales in Japan rose 3.7%. In systems
integration services, despite the adverse impact of a shift toward
spending on hardware by telecommunications carriers, sales rose due
to increased spending, primarily in the financial services and
public sectors. In infrastructure services, sales fell on account
of the impact of a shift away from packaged products that include
connection fees to stand-alone products in the ISP business. Also
impacting comparisons was the increased demand related to network
services in the second quarter of fiscal 2012, when
telecommunications carriers made efforts to keep up with higher
volumes of communications traffic. Sales outside Japan increased
21.1%. On a constant currency basis, sales were on par with the
same period in fiscal 2012.
Operating income for the Services sub-segment was 36.7 billion
yen (US$374 million), an increase of 5.9 billion yen compared to
the second quarter of the previous fiscal year. In Japan, despite a
decline in sales of network services, operating income as a whole
increased on the impact of workforce-related measures and the
positive effect of higher sales of system integration services.
Outside Japan, the impact of structural reforms contributed to
earnings and goodwill amortization expenses declined.
(b) System Platforms
(Billion Yen)
------------ -------------------------------------
Second Change
Quarter vs.
FY2013
2Q FY2012
------------ --------------- --------------------
Net Sales 153.7 11.7 %
--------------- --------------------
Japan 109.1 6.9 %
Outside
Japan 44.5 25.3 %
----------- --------------- --------------------
Operating
Income 19.0 5.2
------------ --------------- --------------------
Net sales in the System Platforms sub-segment were 153.7 billion
yen (US$1,568 million), an increase of 11.7% from the same period
of the previous fiscal year. Sales in Japan increased 6.9%.
Server-related sales increased due to the contribution of
large-scale systems deals in the public sector. In network
products, although demand for 3G communications equipment to handle
increasing volumes of communications traffic has passed its peak,
overall sales increased as a result of spending by
telecommunications carriers to expand LTE service area coverage.
Sales outside Japan increased 25.3%. On a constant currency basis,
sales were on par with the same period in fiscal 2012. Sales of new
UNIX server models were weak. Optical transmission system sales in
North America increased on a recovery in investments by
telecommunications carriers.
Operating income for the System Platforms sub-segment was 19.0
billion yen (US$194 million), an increase of 5.2 billion yen over
the same period of fiscal 2012. In Japan, operating income was
positively impacted by higher sales, despite higher upfront R&D
spending in network products. Outside Japan, income was positively
impacted by higher sales of network products.
Ubiquitous Solutions
(BillionYen)
------------ ------------------------------------
Second Change
Quarter vs.
FY2013
2Q FY2012
------------ --------------- -------------------
-16.5
Net Sales 262.7 %
--------------- -------------------
-27.1
Japan 182.4 %
Outside
Japan 80.3 24.4 %
----------- --------------- -------------------
Operating
Income -11.6 -24.0
------------ --------------- -------------------
Net sales in the Ubiquitous Solutions segment were 262.7 billion
yen (US$2,681 million), a decline of 16.5% from the second quarter
of fiscal 2012. Sales in Japan were down by 27.1%. Enterprise PC
sales grew on account of large-volume orders in the financial
services industry and higher demand for upgrades prior to the end
of support for an operating system product. In consumer PCs, sales
increased owing to higher sales prices that resulted, to some
extent, from yen depreciation, even as unit sales fell due to the
shrinking market. In mobile phones, sales fell on account of the
shrinking market for feature phones, which has continued from the
first quarter, and the impact of the revised smartphone sales
strategies of telecommunications carriers. Another factor in the
year-on-year decline was the record high quarterly shipment of
mobile phones in the second quarter of fiscal 2012 that coincided
with the release of multiple new models. Sales of the Mobilewear
sub-segment's car audio and navigation systems were adversely
impacted by lower sales of new vehicles due to the conclusion of
the government's subsidy program for eco-friendly vehicles, but
sales as a whole were roughly on par with the same period in fiscal
2012 as a result of strong sales of luxury vehicles. Sales outside
Japan increased 24.4%. On a constant currency basis, sales
increased 3%. Unit sales of PCs in Europe declined due to an
emphasis on profitability, but Mobilewear sales rose, primarily in
North America.
The Ubiquitous Solutions segment posted an operating loss of
11.6 billion yen (US$118 million), representing a deterioration of
24.0 billion yen from the second quarter of the previous fiscal
year. Operating income in Japan was positively impacted by higher
sales of PCs. In mobile phones, operating income was adversely
impacted by the significant decline in unit sales, in addition to
the impact of higher costs from yen depreciation and functionality
enhancements. Operating income for Mobilewear was adversely
impacted by higher development expenses. Outside Japan, operating
income benefitted from an emphasis on profitability for sales of
PCs. Other contributing factors included depreciation of the euro
versus the dollar, ongoing from the same period of the previous
fiscal year, which caused dollar-denominated parts procurement
costs to rise, as well as increased sales of Mobilewear.
Device Solutions
(BillionYen)
------------ ------------------------------------
Second Change
Quarter vs.
FY2013
2Q FY2012
------------ --------------- -------------------
Net Sales 159.0 15.0 %
--------------- -------------------
Japan 74.1 -5.0 %
Outside
Japan 84.9 41.1 %
----------- --------------- -------------------
Operating
Income 10.4 13.8
------------ --------------- -------------------
Net sales in Device Solutions amounted to 159.0 billion yen
(US$1,622 million), an increase of 15% compared to the second
quarter of fiscal 2012. Sales in Japan declined 5%. Sales of LSI
devices used in smartphones increased, but sales of LSI devices
used in IT equipment and manufacturing equipment decreased. Sales
of electronic components increased. Sales outside Japan increased
41.1%. On a constant currency basis, sales increased 12%. Sales of
LSI devices for smartphones increased. Sales of electronic
components, primarily to China, increased.
The Device Solutions segment recorded operating income of 10.4
billion yen (US$106 million), an improvement of 13.8 billion yen
compared to the second quarter of fiscal 2012, and representing the
third straight quarter of profitable results. In Japan, operating
income for LSI devices was adversely affected by lower sales, but
overhead expenses decreased because of an early retirement
incentive plan and other factors. Capacity utilization rates on the
production lines for 300mm wafers remained high owing to an
increase in demand for use in smartphones, but capacity utilization
rates on the production lines for standard logic devices remained
low. Fujitsu is planning to consolidate the production lines for
standard logic devices in the Aizu-Wakamatsu region so as to raise
capacity utilization rates. Operating income outside of Japan
improved on higher demand and the impact of higher sales resulting
from the weaker yen.
In April 2013, Fujitsu entered into a definitive agreement to
sell its microcontroller and analog business to the Spansion Group.
This sale was completed in August.
1-3. First-Half
Note: In these explanatory materials, the yen figures for net
sales, operating income, and other figures are converted into US$
amounts, for reference purposes, at a rate of $1=98 yen, the
approximate Tokyo foreign exchange market rate on September 30,
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 the first half
of fiscal 2012 to translate the current period's net sales outside
Japan into yen.
<Profit and Loss>
Consolidated net sales for the first half of fiscal 2013
amounted to 2,151.6 billion yen (US$21,955 million), an increase of
3.9% from the first half of fiscal 2012 as a result of foreign
exchange fluctuations and other factors. Net sales in Japan
declined by 6.3%. Sales of system integration services rose in such
sectors as the financial services sector and the public sector, but
there was a significant decline in sales of mobile phones. Sales of
network services in Japan also declined. Sales outside of Japan
rose 24%. Excluding the impact of foreign exchange fluctuations,
sales rose by 3%. Sales of PCs in Europe declined, as did sales of
UNIX servers in the US, but sales of optical transmission systems
and car audio and navigation systems in North America increased,
and there were also higher sales of LSI devices and electronic
components.
For the first half of fiscal 2013, the average yen exchange
rates against major currencies were 99 yen for the US dollar
(representing yen depreciation of 20 yen from the first half of
fiscal 2012), 130 yen for the euro (depreciation of 29 yen), and
152 yen for the British pound (depreciation of 26 yen). The impact
of foreign exchange movements was to increase net sales by
approximately 145 billion yen compared to the first half of fiscal
2012. Sales generated outside Japan as a percentage of total sales
were 39.9%, an increase of 6.4 percentage points compared to the
first half of the previous fiscal year.
Gross profit was 570.1 billion yen, an increase of 9.9 billion
yen from the first half of fiscal 2012. Despite the adverse impact
from the decline in sales of mobile phones, gross profit increased
because of foreign exchange movements and a variety of measures
implemented to reduce costs. The gross profit margin was 26.5%, a
decline of 0.5 of a percentage point from the first half of the
previous fiscal year, primarily as a result of lower profitability
in the company's mobile phone business.
Selling, general and administrative expenses were 559.3 billion
yen, an increase of 3.4 billion yen from the first half of fiscal
2012. The increase was the result of the weaker yen. Fujitsu has
been pursuing Group-wide measures to generate cost efficiencies,
and expenses declined on a constant currency basis.
Fujitsu recorded operating income of 10.8 billion yen (US$110
million), an increase of 6.4 billion yen from the first half of the
previous fiscal year. While there was the adverse impact stemming
from lower sales of mobile phones, workforce-related measures
contributed approximately 12 billion yen to operating income, and
the impact of structural reforms in the LSI business in Japan as
well as other businesses outside Japan contributed approximately 11
billion yen.
There was a loss of 0.7 billion yen in other income and
expenses, an improvement of 3.8 billion yen from the first half of
fiscal 2012. The company posted a loss of 3.8 billion yen in other
expenses on personnel-related expenses, primarily in its businesses
outside Japan, and restructuring expenses for its LSI device
business. On the other hand, there were improvements in foreign
currency translation adjustment, gain on sales of investments
securities and other items.
Fujitsu reported a consolidated net loss of 9.6 billion yen
(US$98 million), an improvement of 4.7 billion yen over the net
loss posted in the first half of fiscal 2012.
Comparison to Consolidated Earnings Projections Announced in
July 2013
Net sales exceeded the most recent projections announced on July
30, 2013, by 101.6 billion yen. Starting with Technology Solutions,
where sales of services in and outside of Japan and sales of
network products outside Japan were strong, all three major
segments exceeded their sales projections. Operating income
exceeded projections by 20.8 billion yen. Operating income in the
Ubiquitous Solutions segment fell below projections on intensified
competition in the mobile phone market, but operating income in
both the Technology Solutions and Device Solutions segments
exceeded projections as a result of the impact of higher sales and
the weaker yen.
Net income also exceeded the most recent projections.
(Billion Yen)
FY2012 July 2013 FY2013 Change vs. July
First-Half Forecast First-Half 2013 Forecast
-------------------- ----------- --------- -----------
Change (%)
-------------------- ----------- --------- ----------- ------- ----------
Net Sales 2,071.8 2,050.0 2,151.6 101.6 5.0
-------------------- ----------- --------- ----------- ------- ----------
Operating Income 4.3 -10.0 10.8 20.8 -
[Operating Income [0.2%] [-0.5%] [0.5%] [1.0%]
Margin]
-------------------- ----------- --------- ----------- ------- ----------
Other Income and
expenses -4.5 - -0.7 -0.7 -
-------------------- ----------- --------- ----------- ------- ----------
Net Income -14.4 -30.0 -9.6 20.3 -
-------------------- ----------- --------- ----------- ------- ----------
*In accordance with the adoption of the amended IAS 19, the
figures for the first half of fiscal 2012 have been retroactively
revised. As a result, operating income has decreased by 3.3 billion
yen.
<Results by Business Segment>
Information on fiscal 2013 first-half consolidated net sales
(including intersegment sales) and operating income broken out by
business segment is presented as follows.
Technology Solutions
(Billion Yen)
------------ -------------------------------------
First-Half Change
FY2013 vs.
1H FY2012
------------ ----------------- ------------------
Net Sales 1,462.9 9.1 %
----------------- ------------------
Japan 904.3 2.7 %
Outside
Japan 558.6 21.4 %
----------- ----------------- ------------------
Operating
Income 58.3 14.5
------------ ----------------- ------------------
Consolidated net sales in the Technology Solutions segment
amounted to 1,462.9 billion yen (US$14,928 million), up 9.1% from
the first half of fiscal 2012. Sales in Japan increased 2.7%. For
systems integration services, despite the adverse impact of a shift
toward spending on hardware by telecommunications carriers, sales
grew on account of increased spending, primarily in the financial
services and public sectors. Server-related sales increased due to
the contribution of a large-scale systems deal in the public
sector, although the initial launch period for new UNIX server
products was slower than expected. In network products, although
demand for 3G communications equipment to handle increasing volumes
of communications traffic has passed its peak, overall sales
increased as a result of spending by telecommunications carriers to
expand LTE coverage. In infrastructure services, on the other hand,
sales fell on the impact of a shift away from packaged products
that include connection fees to stand-alone products in the ISP
business, and because there was increased demand related to network
services in the same period of the previous fiscal year, against
the backdrop of telecommunications carriers efforts to handle with
higher volumes of communications traffic. Sales outside Japan
increased 21.4%, and on a constant currency basis, increased 1%.
Sales of new UNIX server models were weak but sales of optical
transmission systems in North America increased on a recovery in
spending by telecommunications carriers.
The segment posted operating income of 58.3 billion yen (US$595
million), up 14.5 billion yen compared to the first half of fiscal
2012. In Japan, operating income rose as a result of the impact of
workforce-related measuresand the impact of increased sales of
systems integration services, despite a drop in sales of network
services and higher upfront R&D spending in network products.
Outside Japan, in addition to the impact of structural reforms and
reduction in amortization expenses for goodwill, operating income
was positively impacted by higher sales of network products.
(a) Services
(BillionYen)
------------ ------------------------------------
First-Half Change
FY2013 vs.
1H FY2012
------------ ----------------- -----------------
Net Sales 1,186.6 8.9 %
----------------- -----------------
Japan 711.1 2.8 %
Outside
Japan 475.4 19.6 %
----------- ----------------- -----------------
Operating
Income 42.2 8.2
------------ ----------------- -----------------
Net sales in the Services sub-segment amounted to 1,186.6
billion yen (US$12,108 million), an increase of 8.9% from the first
half of fiscal 2012. Sales in Japan rose 2.8%. In systems
integration services, despite the adverse impact of a shift toward
spending on hardware by telecommunications carriers, sales rose due
to increased spending, primarily in the financial services and
public sectors. In infrastructure services, sales fell on account
of the impact of a shift away from packaged products that include
connection fees to stand-alone products in the ISP business. Also
impacting comparisons was the increased demand related to network
services in the first half of fiscal 2012, when telecommunications
carriers made efforts to keep up with higher volumes of
communications traffic. Sales outside Japan increased 19.6%. On a
constant currency basis, sales were on par with the same period in
fiscal 2012.
Operating income for the Services sub-segment was 42.2 billion
yen (US$431 million), an increase of 8.2 billion yen compared to
the first half of fiscal 2012. In Japan, despite a decline in sales
of network services, operating income as a whole increased on the
impact of workforce-related measures and the positive impact of
higher sales of system integration services. Outside Japan, the
impact of structural reforms contributed to earnings and
amortization expenses for goodwill declined.
(b) System Platforms
(Billion Yen)
------------ -------------------------------------
First-Half Change
FY2013 vs.
1H FY2012
------------ ----------------- ------------------
Net Sales 276.3 10.0 %
----------------- ------------------
Japan 193.1 2.4 %
Outside
Japan 83.1 32.9 %
----------- ----------------- ------------------
Operating
Income 16.0 6.3
------------ ----------------- ------------------
Net sales in the System Platforms sub-segment were 276.3 billion
yen (US$2,819 million), an increase of 10% compared to the first
half of fiscal 2012. Sales in Japan increased 2.4%. Server-related
sales increased due to the contribution of a large-scale systems
deal in the public sector, although the initial launch period for
new UNIX server products was slower than expected. In network
products, although demand for 3G communications equipment to handle
increasing volumes of communications traffic has passed its peak,
overall sales increased as a result of spending by
telecommunications carriers to expand LTE service area coverage.
Sales outside Japan increased 32.9%. On a constant currency basis,
sales increased 7%. Sales of new UNIX server models were weak but
optical transmission system sales in North America increased on a
recovery in spending by telecommunications carriers.
The Systems Platform sub-segment posted operating income of 16.0
billion yen (US$163 million), up 6.3 billion yen compared to the
first half of fiscal 2012. In Japan, operating income was
positively impacted by higher sales, despite higher upfront R&D
spending in network products. Outside Japan, income was positively
impacted by higher sales of network products and an emphasis on
profitability for sales of PC servers.
Ubiquitous Solutions
(BillionYen)
------------ ------------------------------------
First-Half Change
FY2013 vs.
1H FY2012
------------ ----------------- -----------------
-12.9
Net Sales 478.6 %
----------------- -----------------
-22.9
Japan 328.6 %
Outside
Japan 150.0 21.7 %
----------- ----------------- -----------------
Operating
Income -28.7 -39.1
------------ ----------------- -----------------
Net sales in the Ubiquitous Solutions segment were 478.6 billion
yen (US$4,884 million), a decline of 12.9% from the first half of
fiscal 2012. Sales in Japan were down by 22.9%. Enterprise PC sales
grew due to high demand in line with the conclusion of support for
an OS product. In consumer PCs, sales increased owing to higher
sales prices that resulted, to some extent, from yen depreciation,
even as unit sales fell due to the shrinking market. Still, PC
sales overall increased. In mobile phones, sales fell on account of
the shrinking market for feature phones and the impact of revisions
in the smartphone sales strategies of telecommunications carriers.
Also impacting comparisons were the record high shipments of mobile
phones coinciding with the release of multiple new models in the
second quarter of fiscal 2012. Sales of the Mobilewear
sub-segment's car audio and navigation systems were adversely
impacted by lower sales of new vehicles due to the conclusion of
the government's subsidy program for eco-friendly vehicles, but
sales as a whole increased because of strong sales of luxury
vehicles. Sales outside Japan increased 21.7%. On a constant
currency basis, sales increased 3%. Unit sales of PCs in Europe
declined due to an emphasis on profitability, but Mobilewear sales
rose, primarily in North America.
The Ubiquitous Solutions segment posted an operating loss of
28.7 billion yen (US$293 million), deteriorating by 39.1 billion
yen from the first half of the previous fiscal year. Operating
income in Japan was positively impacted by higher sales of PCs. In
mobile phones, operating income was adversely impacted by the
significant decline in unit sales, in addition to the impact of
higher costs from yen depreciation and the cost of functionality
enhancements. Operating income for Mobilewear was adversely
impacted by higher development expenses. Outside Japan, operating
income benefitted from an emphasis on profitability for sales of
PCs. In addition, in the same period of the previous fiscal year,
the depreciation of the euro versus the dollar caused
dollar-denominated parts procurement costs to rise, negatively
impacting operating income. Operating income in Mobilewear was
positively impacted by higher sales.
Device Solutions
(BillionYen)
------------ ------------------------------------
First-Half Change
FY2013 vs.
1H FY2012
------------ ----------------- -----------------
Net Sales 304.4 13.3 %
----------------- -----------------
Japan 141.6 -5.7 %
Outside
Japan 162.8 37.4 %
----------- ----------------- -----------------
Operating
Income 18.0 25.0
------------ ----------------- -----------------
Net sales in Device Solutions amounted to 304.4 billion yen
(US$3,106 million), an increase of 13.3% compared to the first half
of fiscal 2012. Sales in Japan declined 5.7%. Sales of LSI devices
used in smartphones increased, but sales of LSI devices used in
audio-visual equipment and manufacturing equipment decreased. Sales
of electronic components, including semiconductor packages and
batteries, decreased. Sales outside Japan increased by 37.4%. On a
constant currency basis, sales increased 11%. Sales of LSI devices
for smartphones increased. Sales of electronic components,
primarily to the Americas and China, increased.
The Device Solutions segment recorded operating income of 18.0
billion yen (US$184 million), an improvement of 25.0 billion yen
compared to the first half of fiscal 2012. In Japan, operating
income for LSI devices was adversely affected by lower sales, but
overhead expenses decreased because of an early retirement
incentive plan and other factors. Capacity utilization rates on the
production lines for 300mm wafers remained high because of an
increase in demand for use in smartphones, but capacity utilization
rates on the production lines for standard logic devices continued
to be low. Fujitsu is planning to consolidate the production lines
for standard logic devices in the Aizu-Wakamatsu region and thereby
raise capacity utilization rates. Operating income outside of Japan
improved on higher demand and the impact of higher sales resulting
from the weaker yen.
Other/Elimination and Corporate
This segment recorded an operating loss of 36.7 billion yen
(US$374 million), representing an improvement of 6.0 billion yen
from the first half of fiscal 2012 as a result of Group-wide
progress in generating cost efficiencies.
<Geographic Information>
Sales and operating income for Fujitsu and its consolidated
subsidiaries according to country and region are as follows.
Net Sales (Billion Yen)
First-Half
FY2013
---------------- ----------
Japan 1,551.2
[-2.2%]
---------------- ----------
Outside Japan 881.4
[25.7%]
----------
EMEA 419.7
[20.2%]
-------------- ----------
The Americas 193.7
[53.0%]
-------------- ----------
APAC & China 267.9
[18.9%]
-------------- ----------
Note: Numbers inside brackets indicate % changes over same
period in previous year.
Operating Income (Billion Yen)
Second Change First Change
Quarter vs. Half vs.
FY2013 2Q FY2013 1H
FY2012 FY2012
------------ --------- --------- --------- ---------
Japan 45.6 -10.7 47.9 -14.4
[5.4%] [-1.1%] [3.1%] [-0.8%]
------------ --------- --------- --------- ---------
Outside 6.0 10.6 0.2 19.0
Japan [1.3%] [2.6%] [0.0%] [2.7%]
--------- --------- --------- ---------
EMEA -0.0 6.7 -8.7 10.5
[-0.0%] [3.8%] [-2.1%] [3.4%]
---------- --------- --------- --------- ---------
The 2.7 3.0 4.3 6.9
Americas [2.7%] [3.2%] [2.2%] [4.3%]
---------- --------- --------- --------- ---------
APAC 3.2 0.7 4.7 1.4
& [2.4%] [0.3%] [1.8%] [0.4%]
China
---------- --------- --------- --------- ---------
Note: Numbers inside brackets indicate operating income
margin.
In accordance with the adoption of the amended IAS 19, the
figures for the second quarter and first half of fiscal 2012 have
been retroactively revised. Accordingly, operating income outside
Japan, primarily for the EMEA region, has decreased by 1.6 billion
yen and 3.3 billion yen, respectively.
2. Explanation of Financial Condition
(1) Assets, Liabilities and Net Assets
Consolidated total assets at the end of the second quarter were
2,952.7 billion yen (US$30,130 million), an increase of 32.4
billion yen from the end of fiscal 2012. The impact of the weaker
yen caused the yen value of non-yen assets to increase by
approximately 60 billion yen. Current assets increased by 4.8
billion yen compared with the end of fiscal 2012, to 1,727.1
billion yen. Notes and accounts receivable, trade decreased by 98.2
billion yen compared to the end of the prior fiscal year,
reflecting the collection associated with the large concentration
of sales at the end of the previous fiscal year. In preparation for
future expected sales, particularly in the services business,
inventories at the end of the quarter increased to 370.1 billion
yen, an increase of 47.1 billion yen from the ending balance of
fiscal 2012. The monthly inventory turnover ratio, which is an
indication of asset utilization efficiency, was 0.96 times, an
improvement 0.03 times compared to the end of the second quarter of
fiscal 2012. Non-current assets increased by 27.6 billion yen from
the end of fiscal 2012, to 1,225.6 billion yen. Investments and
other non-current assets increased by 27.9 billion yen because the
rise in stock prices increased the value of investment
securities.
Consolidated total liabilities amounted to 2,181.6 billion yen
(US$22,261 million), an increase of 13.7 billion yen compared to
the end of fiscal 2012. Trade notes and accounts payable decreased
due to the payment reflecting sales that were concentrated at the
end of the previous fiscal year. The payment of expenses associated
with the restructuring of the LSI device business and businesses
outside Japan caused the provision for business structure
improvement to decline. The balance of interest-bearing loans was
641.8 billion yen, an increase of 106.9 billion yen from the end of
fiscal 2012. Borrowings increased to finance a portion of working
capital. As a result, the D/E ratio was 1.00 times, a deterioration
of 0.14 of a percentage point compared to the end of fiscal 2012,
and the net D/E ratio was 0.48 times, a deterioration of 0.08 of a
percentage point compared to the end of fiscal 2012. Both ratios
have deteriorated compared to the end of the second quarter of the
previous fiscal year because of the deterioration in owners' equity
resulting from the losses recorded in the second half of fiscal
2012 and the first half of fiscal 2013.
Net assets were 771.1 billion yen (US$7,868 million), an
increase of 18.7 billion yen from the end of fiscal 2012.
Shareholders' equity decreased by 9.6 billion yen as a result of
the net loss recorded in the second quarter, but accumulated other
comprehensive income increased by 27.2 billion yen as a result of
yen depreciation and the rise in stock prices. The owners' equity
ratio was 21.7%, essentially unchanged from end of fiscal 2012.
(Billion Yen)
FY2012 2Q FY2013 Change 2Q FY2012
(March 31, (Sept. 30, (Sept. 30,
2013) 2013) 2012)
--------------------------- ------------ ------------ ------- ------------
Cash and Cash Equivalents
at End of Period 286.6 331.7 45.1 274.1
Interest-bearing Loans 534.9 641.8 106.9 428.2
Net Interest-bearing
Loans 248.3 310.1 61.7 154.0
Owners' Equity 624.0 641.6 17.6 702.2
--------------------------- ------------ ------------ ------- ------------
D/E Ratio (Times) 0.86 1.00 0.14 0.61
Net D/E Ratio (Times) 0.40 0.48 0.08 0.22
Shareholders' Equity
Ratio 28.3 % 27.6 % -0.7 % 32.6 %
Owners' Equity Ratio 21.4 % 21.7 % 0.3 % 25.4 %
----------------------- -------- ------- ------- -------
1. D/E ratio: Interest-bearing loans/Owners' equity
2. Net D/E ratio: (Interest-bearing loans - Cash and cash
equivalents at end of period)/Owner's equity
3. The figures for the second quarter of fiscal 2012 and
full-year fiscal 2012 have been retroactively revised in accordance
with the adoption of the amended IAS 19 Employee Benefits. Owners'
equity for the second quarter of fiscal 2012 has been reduced by
103.0 billion yen, and it has been reduced by 157.3 billion yen for
full-year fiscal 2012. D/E ratio and others are also revised.
(2) Cash Flows
Net cash flows from operating activities in the first half
amounted to 4.1 billion yen (US$42 million). This represents a
decrease in cash inflows of 56.1 billion yen compared to the first
half of fiscal 2012. The decrease is attributable to the payment of
expenses associated with the restructuring of the LSI device
business and businesses outside Japan. In addition, in comparison
with the first half of fiscal 2012, in which tax payments declined
because of the liquidation of a subsidiary in Europe, payment of
corporate income taxes and other taxes increased in the current
period.
Net cash used in investing activities was 59.2 billion yen
(US$604 million). Outflows mainly consisted of the acquisition of
property, plant and equipment amounting to 55.8 billion yen, mainly
related to datacenters, and the acquisition of intangible assets,
primarily software, amounting to 31.0 billion yen. Compared to the
same period in fiscal 2012, net outflows decreased by 18.5 billion
yen. The sale of investment securities and the sale of a business
in conjunction with the restructuring of LSI device business
resulted in an inflow of cash.
Free cash flow, the sum of cash flows from operating and
investing activities, was negative 55.1 billion yen (US$562
million), representing a decrease in net cash inflows of 37.5
billion yen compared with the same period in the previous fiscal
year, mainly due to the payment of business restructuring
expenses.
Net cash provided by financing activities was 91.7 billion yen
(US$936 million). A portion of working capital was financed through
short-term borrowings. In addition, short-term borrowings in the
previous fiscal year that were used to finance a special
contribution to the pension fund of a UK subsidiary were repaid and
replaced by long-term borrowings. Compared to the first half of
fiscal 2012, when cash on hand was used to redeem 60.0 billion yen
in straight corporate bonds at maturity, cash inflows increased by
63.2 billion yen.
As a result of the above factors, cash and cash equivalents at
the end of the second quarter of fiscal 2013 were 331.7 billion yen
(US$3,385 million), an increase of 47.1 billion yen compared to the
end of fiscal 2012.
(3) Status of Retirement Benefit Plans
Of Fujitsu's unrecognized obligation for retirement benefits,
157.3 billion yen, representing the portion from the pension plans
of subsidiaries outside Japan, was reflected on the consolidated
balance sheets through other comprehensive income at the beginning
of fiscal 2013. The portion from the pension plans of Fujitsu and
its subsidiaries in Japan will be reflected on the consolidated
balance sheets at the end of fiscal 2013.
The amortization expenses stemming from the actuarial losses in
the pension plans of subsidiaries outside Japan are transferred
from other comprehensive income.
(Billion Yen)
Unrecognized Obligation Amortization Expenses
for Retirement Benefits
(Off Balance Sheet)
--------------------------------------- --------------------------
FY2012 First-Half FY2013
(As of March 31, 2013) (4/1/13-9/30/13)
----------- ---------------------------------------
(Before Revisions) (After Revisions) Amounts Transferred
From Other
Comprehensive
Income
---------- ------------------- ------------------ ----- -------------------
Total 466.1 308.7 21.7 8.5
------------------- ------------------ ----- -------------------
In Japan 308.7 308.7 13.2 -
---------- ------------------- ------------------ ----- -------------------
Outside
Japan 157.3 - 8.5 8.5
---------- ------------------- ------------------ ----- -------------------
Note: Amortization expenses exclude one-time amortization
expenses of 4.5 billion yen stemming from a partial buyout in the
retirement benefit plans at a European subsidiary.
3. FY2013 Earnings Projections
Net sales exceeded projections announced on July 30, 2013 for
the first half, by approximately 100 billion yen, and operating
income exceeded projections by approximately 20 billion yen.
Although results for mobile phones fell short of projections as
unit sales declined and costs increased due to yen depreciation,
the weaker yen also boosted results for the Services sub-segment
outside of Japan and the Device Solutions segment. In addition, for
the Services sub-segment in Japan, there was a solid recovery in
ICT spending, particularly in the financial and public sectors, and
results for network products were positively impacted by an
increase in investments by telecommunications carriers. These
factors caused sales and operating income to exceed projections.
The higher operating income also caused quarterly net income to
exceed projections.
As a result, the full-year earnings projections announced on
July 30 have been revised. Assumptions regarding the foreign
exchange rate for the second half of the fiscal year have not been
changed.
Projected net sales for the full fiscal year have been revised
upward by 70 billion yen, to 4,620 billion yen. The Technology
Solutions segment accounts for 50 billion yen of the increase.
Although projected sales for System Products have been revised
downward, the upward revision to sales in the Services segment
reflects the positive impact of the weaker yen on Services outside
Japan and the impact of a recovery in ICT spending on Services in
Japan. Sales of Ubiquitous Solutions have been revised upward by 40
billion yen. Although sales of mobile phones are projected to be
lower because of lower unit sales, overall sales in the segment are
projected to be higher on higher demand for replacement PCs,
primarily among enterprise customers, and the positive impact of
higher vehicle production on sales in the Mobilewear business.
Sales of Device Solutions have been revised downward by 30 billion
yen, comprised of 10 billion yen for LSI devices and 20 billion yen
for electronic components, despite the positive impact of foreign
exchange rates. The lower sales projection for LSI devices reflects
a decrease in projected demand in the second half for use in
smartphones, and the lower sales projection for electronic
components reflects waning demand for use in PCs.
There has been no change to the consolidated operating income
projection of 140 billion yen, although the composition has
changed. Operating income for Ubiquitous Solutions has been revised
down by 22 billion yen because of lower unit sales and higher costs
in the mobile phone business, while operating income in the
Technology Solutions segment has been revised upward by 17 billion
yen owing to the solid performance of network products and the
services businesses in and outside of Japan. In addition, the
operating loss in the Other/Elimination and Corporate segment is
projected to improve by 5 billion yen due to progress in
streamlining group-wide expenses.
There has been no change to the full-year net income projection
of 45 billion yen.
FY2013 Full-Year Consolidated (Billion
Forecast Yen)
FY2012 Previous FY2013 Change Change Change
Forecast* vs. vs. (%)
(Actual) (Forecast) Previous FY2012
Forecast*
---------------------- --------- ---------- ----------- ----------- ------- ---------
Net Sales 4,381.7 4,550.0 4,620.0 70.0 238.2 5.4
---------------------- --------- ---------- ----------- ----------- ------- ---------
Operating Income 88.2 140.0 140.0 - 51.7 58.6
[Operating Income [ 2.0%] [ 3.1%] [ 3.0%] [ -0.1%] [ 1.0%]
Margin]
---------------------- --------- ---------- ----------- ----------- ------- ---------
Other Income and
Expenses -140.3 -35.0 -35.0 - 105.3 -
---------------------- --------- ---------- ----------- ----------- ------- ---------
Net Income -79.9 45.0 45.0 - 124.9 -
---------------------- --------- ---------- ----------- ----------- ------- ---------
[Operating Income by Business
Segment]
----------- -----------
Technology Solutions 173.9 190.0 207.0 17.0 33.0 19.0
--------- ---------- ----------- ----------- ------- ---------
Services 124.6 138.0 150.0 12.0 25.3 20.3
System Platforms 49.3 52.0 57.0 5.0 7.6 15.6
--------------------- --------- ----------
Ubiquitous Solutions 9.6 7.0 -15.0 -22.0 -24.6 -
---------------------- --------- ---------- ----------- ----------- ------- ---------
Device Solutions -14.2 25.0 25.0 - 39.2 -
---------------------- --------- ---------- ----------- ----------- ------- ---------
Other/Elimination
and Corporate -81.0 -82.0 -77.0 5.0 4.0 -
---------------------- --------- ---------- ----------- ----------- ------- ---------
* Previous Forecast as of July 30, 2013.
** In accordance with the adoption of the amended IAS 19, the
figures for fiscal 2012 have been retroactively revised. As a
result, operating income for Services has been reduced by 7.0
billion yen.
4. Major Subsequent Events
After the completion of the first half of FY2013, Fujitsu issued
the following straight bonds.
1) 32(nd) Series Unsecured Straight Bonds
Total amount of issue: 30 billion yen
Interest rate: 0.267% per annum
Issue price: 100% of the denomination of each bond
Term and redemption method: October 14, 2016 (3 years), bullet repayment
Issue date: October 16, 2013
Collateral: The bonds are not secured by any pledge, mortgage or
other charge on any assets or revenues of the Company
or of others, nor are they guaranteed. There are no
assets reserved as security for the bonds.
Application of funds: The funds are scheduled to be allocated as a portion of
the funds for the repayment of borrowings and the
redemption of bonds that reached maturity by the end of
October 2013.
2) 33(rd) Series Unsecured Straight Bonds
Total amount of issue: 35 billion yen
Interest rate: 0.41% per annum
Issue price: 100% of the denomination of each bond
Term and redemption method: October 14, 2018 (5 years), bullet repayment
Issue date: October 16, 2013
Collateral: The bonds are not secured by any pledge, mortgage or
other charge on any assets or revenues of the Company
or of others, nor are they guaranteed. There are no
assets reserved as security for the bonds.
Application of funds: The funds are scheduled to be allocated as a portion of
the funds for the repayment of borrowings and the
redemption of bonds that reached maturity by the end of
October 2013.
3) 34(th) Series Unsecured Straight Bonds
Total amount of issue: 15 billion yen
Interest rate: 0.644% per annum
Issue price: 100% of the denomination of each bond
Term and redemption method: October 14, 2020 (7 years), bullet repayment
Issue date: October 16, 2013
Collateral: The bonds are not secured by any pledge, mortgage or
other charge on any assets or revenues of the Company
or of others, nor are they guaranteed. There are no
assets reserved as security for the bonds.
Application of funds: The funds are scheduled to be allocated as a portion of
the funds for the repayment of borrowings and the
redemption of bonds that reached maturity by the end of
October 2013.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EAKEFDFEDFEF
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