3Q FY2018 Consolidated Financial Results

Transcription

1 3Q FY2018 Consolidated Financial Results January 31, 2019 Fujitsu Limited

2 Contents 1. Financial Results for 3Q FY2018 (1) Financial Results / Business Segment Information (2) Cash Flows (3) Assets, Liabilities and Equity 2. Earnings Forecast for FY2018 (1) Financial Forecast / Business Segment Information (Reference) (1) Business Segment Information [9 Months] Business Segment Information [Quarterly Breakdown of Results] Business Segment Information [ Breakdown-In and Outside Japan] (2) Financial Results of Consolidated Subsidiaries Outside Japan (3) Supplementary Information for FY2018 Forecasts 2

3 1.Financial Results for 3Q FY2018 Continuing Operations Financial Results [3Q] 3Q 3Q FY2018 1, Operating Profit [Business Model Transformation Expenses] [ - ] [-43.6] [-43.6] - [Operating Profit Margin] [1.0%] [-2.9%] [-3.9%] Financial income (expenses), etc Profit for the Period Before Income Taxes Profit for the Period Attributable to Owners of the Parent (%) Exchange Rate U.S. dollar / Yen Euro / Yen British pound / Yen Euro / U.S. dollar

4 1.Financial Results for 3Q FY2018 Financial Results [3Q] [] Excl. restructuring Impact of restructuring : Approx billion yen rose, particularly for services in Japan. : Approx billion yen Impact from restructuring of the PC and mobile device businesses [Operating Profit] Decrease of 39.2billion yen Excl. special items : Approx billion yen Primarily for services and system products in Japan. Special items : Approx billion yen 1 Business model transformation expenses : Approx billion yen - Reorganization of product business in Europe: Approx billion yen (incl. closure of Augsburg site in Germany : Approx billion yen) - Reorganization of manufacturing structure: Approx billion yen 2 Others: Approx billion yen - Restructuring PC and mobile device businesses and others [Financial income (expenses), etc.] Increase of 0.3 billion yen [Profit for the Period Attributable to Owners of the Parent] Decrease of 41.6 billion yen Including gain on the sale of discontinued operations in the same period of the previous year, not recorded this year: Approx billion yen 4

5 1.Financial Results for 3Q FY2018 Continuing Operations Financial Results [9 Months] 9 Months 9 Months FY2018 2, , Operating Profit [Business Model Transformation Expenses] [ - ] [-43.6] [-43.6] - [Operating Profit Margin] [1.3%] [2.4%] [1.1%] Financial income (expenses), etc Profit for the Period Before Income Taxes Profit for the Period Attributable to Owners of the Parent Exchange Rate U.S. dollar / Yen Euro / Yen British pound / Yen Euro / U.S. dollar (%) 5

6 1.Financial Results for 3Q FY2018 Financial Results [9 Months] [] Excl. restructuring : Approx billion yen rose, particularly in services in Japan. Impact of restructuring : Approx billion yen Impact from restructuring of the PC and mobile device businesses [Operating Profit] Increase of 28.0 billion yen Excl. special items : Approx billion yen Primarily in services and system products in Japan. Special items : Approx billion yen 1 Impact of revision to the retirement benefit plan: Approx billion yen 2 Business model transformation expenses : Approx billion yen 3 Impact of the sales of businesses: Approx billion yen - Impact of restructuring PC and mobile device businesses: Approx billion yen - Impact of the sales of businesses: Approx billion yen Impact on profit comparison for this year from the gain recorded the previous year : billion yen Impact on profit recorded this year : +8.3billion yen [Financial income (expenses), etc.] Decrease of 9.0 billion yen - Gain on the sale of shares accompanying the unwinding of cross-shareholdings in the same period of the previous year, not recorded this year: billion yen - Impact of the revaluation of shares still held in accordance with the majority sale of the PC business: Approx billion yen (Total gain on the sale of the PC business: billion yen, operating profit: billion yen, financial income billion yen) [Profit for the Period Attributable to Owners of the Parent] Decrease of 3.9 billion yen Including gain on the sale of discontinued operations in the same period of the previous year not recorded this year: Approx billion yen 6

7 1.Financial Results for 3Q FY2018 Factors Behind in Operating Profit Improvement Excl. Special items Business model transformation expenses [Breakdown of BMT expenses] -Reorganization of product business in Europe: Approx billion yen - Reorganization of manufacturing structure: Approx billion yen Others Q 3Q FY2018 Excl. Special items 7 [Breakdown of others] Restructuring PC and mobile device businesses -2.5 Revision to the retirement benefit plan -1.7 losses relating to the sale of businesses Q FY2018

8 1.Financial Results for 3Q FY2018 Business Segment Information [3Q] OPPL BMT Expenses BMT Expenses BMT Expenses Services System Platforms , Technology Solutions Ubiquitous Solutions Device Solutions Other/Elimination and Corporate Total Services System Platforms Technology Solutions Ubiquitous Solutions Device Solutions Other/Elimination and Corporate 3Q Total BMT is an acronym for business model transformation 3Q FY2018 8

9 1.Financial Results for 3Q FY2018 Business Segment Information [3Q] Technology Solutions Technology Solutions 3Q 3Q FY2018 (%) [] Services saw significant growth in Japan. System Platforms was in line with the previous year Services System Platforms Operating profit [BMT Expenses] [Operating profit margin] [ - ] [-24.4] [-24.4] - [4.0%] [2.5%] [-1.5%] [Operating Profit] Business model transformation expenses of 24.4 billion yen were recorded (related to the reorganization of Fujitsu s product business in Europe). Excluding that, operating profit rose by approximately 14.0 billion yen. (breakdown) Japan Outside Japan

10 1.Financial Results for 3Q FY2018 Business Segment Information [3Q] Technology Solutions (Services) Services (%) Solutions/SI Infrastructure Services Operating profit [BMT Expenses] [Operating profit margin] 3Q 3Q FY [ - ] [-1.1] [-1.1] - [4.7%] [5.7%] [1.0%] (breakdown) Japan Outside Japan [] (Solutions/SI) from the public sector increased, and revenues from the manufacturing industry as well as the retailing and distribution industry, which were strong last year, continued to increase. Excluding the roughly 6.0 billion yen in additional revenue stemming from the transfer of the management of certain projects from the Infrastructure Services category, it was a new record level of revenue. (Infrastructure Services) In Japan, revenue continued to be strong. Outside Japan, weak performance continued in the US and Europe. [Operating Profit] Business model transformation expenses of 1.1 billion yen were recorded. Excluding that, operating profit rose by approximately 8.8 billion yen, primarily driven by the impact of higher revenue in Japan. 10

11 1.Financial Results for 3Q FY2018 Business Segment Information [3Q] Technology Solutions (System Platforms) System Platforms (%) System Products Operating profit Network Products [BMT Expenses] [Operating profit margin] 3Q 3Q FY [ - ] [-23.2] [-23.2] - [-0.2%] [-18.0%] [-17.8%] (breakdown) Japan Outside Japan [] (System Products) In addition to a continued rise in revenue from x86 servers both inside and outside Japan, revenue from software also rose. (Network Products) fell due to continued weak sales of mobile phone base stations and other products. [Operating Profit] Business model transformation expenses of 23.2 billion yen were recorded. Excluding that, operating profit rose by approximately 5.0 billion yen. In addition to the impact of higher revenue from x86 servers, operating profit also rose due to an improved product mix with higher revenue from software. 11

12 1.Financial Results for 3Q FY2018 Business Segment Information [3Q] Ubiquitous Solutions Ubiquitous Solutions Operating profit [BMT Expenses] [Operating profit margin] 3Q 3Q FY2018 (%) [ - ] [-18.6] [-18.6] - [0.6%] [-15.1%] [-15.7%] (breakdown) Japan Outside Japan [] fell by approximately 37.0 billion yen due to the impact of the decline in revenue from business restructuring. The impact is from the restructuring of the mobile phone business and the fact that revenue from the consumer PC business is no longer consolidated. Excluding the impact of restructuring, revenue fell by approximately 4.5%, due to a fall in revenue from enterprise PCs in Europe. [Operating Profit] Business model transformation expenses of 18.6 billion yen were recorded. Excluding that, operations are essentially break-even in Q3. 12

13 1.Financial Results for 3Q FY2018 Business Segment Information [3Q] Device Solutions Device Solutions (%) LSI Electronic Components Operating profit [BMT Expenses] [Operating profit margin] 3Q 3Q FY [ - ] [-0.5] [-0.5] - [3.0%] [2.0%] [-1.0%] [] (LSI devices) Overall demand for LSI devices for smartphones remained low, and poor sales continued. (Electronic components) There were continued weak sales of components for semiconductor manufacturing equipment and PCs. [Operating Profit] Business model transformation expenses of 0.5 billion yen were recorded. Excluding that, operating profit fell by 1.0 billion yen, due to the impact of lower overall demand for both LSI devices and electronic components. (breakdown) Japan Outside Japan

14 1.Financial Results for 3Q FY2018 Cash Flows 9 Months 9 Months FY2018 Ⅰ Cash flows from operating activities Ⅱ Cash flows from investing activities Ⅰ+Ⅱ Free Cash Flow Ⅲ Cash flows from financing activities Ⅳ Cash and Cash Equivalents at End of Period [Cash flows from operating activities] Net cash flows fell by 54.5 billion yen from the previous year due to an increase in outflows for tax expenses in light of the previous year s profits, as well as an increase in inventory due to a major business deal in the fourth quarter. [Cash flows from investing activities] For investing activities, cash inflows exceeded cash outflows, resulting in a net inflow, due to the impact of the sale of common shares as part of the unwinding of cross shareholding arrangements, as well as the majority sale of the PC business and a semiconductor subsidiary. 14

15 1.Financial Results for 3Q FY2018 Assets, Liabilities and Equity Total Assets Total Liabilities Total Equity Year-end End of 3Q FY2018 3, , , , , , Total Equity Attributable to Owners of the Parent 1, , Reference: Financial Indices Interest-bearing Loans Net Interest-bearing Loans D/E Ratio (Times) Net D/E Ratio (Times) Equity Attributable to Owners of the Parent Ratio (%)

16 2.Earnings Forecast for FY2018 Financial Forecast FY2018(Forecast) Current Forcast vs. Previous Forecast (%) Continuing Operations 4, , Operating Profit [Operating Profit Margin] [4.5%] [3.6%] [-%] [-0.9%] Profit for the Year Attributable to Owners of the Parent Exchange Rate (* Exchange rates which are currently forecasted for the fourth quarter.) U.S. dollar / Yen Euro / Yen British pound / Yen Euro / U.S. dollar Ratio of Outside Japan 36.8% 37.7% - 0.9% * * * * 16

17 2.Earnings Forecast for FY2018 Financial Forecast 17 FY2018 (Forecast) Current Forcast vs. Previous Forecast Technology Solutions 3, , Services 2, , System Platforms Ubiquitous Solutions Device Solutions Other/Elimination and Corporate Total 4, , Technology Solutions Services System Platforms Ubiquitous Solutions Device Solutions Other/Elimination and Corporate Total The actual amount of business model transformation expenses for the third quarter was reclassified from Other/Elimination and Corporate to each segment. OPPL (%)

18 2.Earnings Forecast for FY2018 Business Segment Information Technology Solutions [ and Operating Profit ] Operating profit 3, ,100.0 Technology Solutions FY2018 (Forecast) Current Forcast vs. Previous Forecast (%) 3, , Services 2, , System Platforms Operating profit [BMT Expenses] [Operating profit margin] [-8.3] [-24.4] [-24.4] [-16.0] - [6.2%] [6.6%] [-0.8%] [0.4%] FY2018(Forecast) (breakdown) Japan 1, , Outside Japan 1, ,

19 2.Earnings Forecast for FY2018 Business Segment Information Technology Solutions (Services) [ and Operating Profit ] Operating profit 2, ,640.0 Services FY2018 (Forecast) Current Forcast vs. Previous Forecast (%) 2, , Solutions/SI 1, , Infrastructure Services 1, , Operating profit [BMT Expenses] [Operating profit margin] [-8.3] [-1.1] [-1.1] [7.2] - [6.3%] [7.3%] [-0.1%] [1.0%] FY2018(Forecast) 19

20 2.Earnings Forecast for FY2018 Business Segment Information Technology Solutions (System Platforms) [ and Operating Profit ] Operating profit System Platforms FY2018 (Forecast) Current Forcast vs. Previous Forecast (%) System Products Network Products Operating profit [BMT Expenses] [Operating profit margin] [ - ] [-23.2] [-23.2] [-23.2] - [5.7%] [2.4%] [-5.0%] [-3.3%] FY2018(Forecast) 20

21 2.Earnings Forecast for FY2018 Business Segment Information Ubiquitous Solutions [ and Operating Profit ] Operating profit Ubiquitous Solutions Operating profit [BMT Expenses] [Operating profit margin] FY2018 (Forecast) Current Forcast vs. Previous Forecast (%) [ - ] [-18.6] [-18.6] [-18.6] - [1.7%] [-3.6%] [-4.0%] [-5.3%] FY2018(Forecast) (breakdown) Japan Outside Japan

22 2.Earnings Forecast for FY2018 Business Segment Information Device Solutions [ and Operating Profit ] Operating profit Device Solutions FY2018 (Forecast) Current Forcast vs. Previous Forecast (%) LSI Electronic Components Operating profit [BMT Expenses] [Operating profit margin] [ - ] [-0.5] [-0.5] [-0.5] - [2.4%] [2.3%] [-0.1%] [-0.1%] FY2018(Forecast) (breakdown) Japan Outside Japan

23 2.Earnings Forecast for FY2018 Cash Flows FY2018 (Forecast) vs. Previous Forecast Free Cash Flow

24 (Reference) Business Segment Information [9 Months] OPPL 9 Months BMT Expenses 9 Months FY2018 BMT Expenses BMT Expenses 2, , Services 1, , System Platforms Technology Solutions Ubiquitous Solutions Device Solutions Other/Elimination and Corporate Total , , Services System Platforms Technology Solutions Ubiquitous Solutions Device Solutions Other/Elimination and Corporate Total 24

25 (Reference) Technology Solutions Services System Platforms Ubiquitous Solutions Device Solutions Other/Elimination and Corporate Total Business Segment Information [Quarterly Breakdown of Results] FY2018 1Q 2Q 3Q 4Q 1Q 2Q 3Q OPPL OPPL OPPL OPPL OPPL OPPL , , , OPPL

26 (Reference) Business Segment Information [ Breakdown-In and Outside Japan 3Q] 3Q 3Q FY2018 (%) Technology Solutions Services System Platforms Ubiquitous Solutions Device Solutions Other/Elimination and Corporate Total Japan Outside Japan Japan Outside Japan Japan Outside Japan Japan Outside Japan Japan Outside Japan , Japan Outside Japan Ratio of Outside Japan 38.5% 38.3% -0.2% 26

27 (Reference) Business Segment Information [ Breakdown-In and Outside Japan 9 Months] Technology Solutions Services System Platforms Ubiquitous Solutions Device Solutions Other/Elimination and Corporate Total 9 Months 9 Months FY2018 2, , Japan 1, , Outside Japan , , Japan 1, , Outside Japan Japan Outside Japan Japan Outside Japan Japan Outside Japan (%) , , Japan 1, , Outside Japan 1, , Ratio of Outside Japan 37.5% 38.4% 0.9% 27

28 (Reference) Financial Results of Consolidated Subsidiaries Outside Japan[3Q] 3Q BMT Expenses 3Q FY2018 BMT Expenses BMT Expenses Outside Japan Operating Profit EMEIA Operating Profit Americas Operating Profit Asia Operating Profit Oceania Operating 1.2 Profit Note: 1. and operating profit are stated to reflect region of consolidated subsidiaries. EMEIA Europe, Middle East, India and Africa 2. includes Inter-region revenue. 28

29 (Reference) Financial Results of Consolidated Subsidiaries Outside Japan[9 Months] 9 Months BMT Expenses 9 Months FY2018 BMT Expenses BMT Expenses 1, , Outside Japan Operating Profit EMEIA Operating Profit Americas Operating 1.3 Profit Asia Operating Profit Oceania Operating 2.8 Profit Note: 1. and operating profit are stated to reflect region of consolidated subsidiaries. EMEIA Europe, Middle East, India and Africa 2. includes Inter-region revenue. 29

30 (Reference) Supplementary Information for FY2018 Forecasts 1. Exchange Rates(Average)and Impact of Fluctuation 9 Months FY2018 4Q (Forecast) vs. Previous Forecast Impact of Exchange Rate Fluctuation 4Q (Forecast)* U.S. dollar / Yen Billion yen Euro / Yen Billion yen British pound / Yen Billion yen Euro / U.S. dollar Billion yen * Impact of 1 yen fluctuation on operating profit (yen appreciation). Impact of 0.01 dollar fluctuation on operating profit (euro depreciation). 30

31 (Reference) Supplementary Information for FY2018 Forecasts 2. Capital Expenditures and Depreciation (Property, Plant and Equipment) FY2018 FY2018 (Forecast) vs. Previous Forecast Technology Solutions Ubiquitous Solutions Device Solutions Other / Corporate Capital Expenditures 9 Months Full year Depreciation 3. R&D Expenses R&D Expenses [As % of ] [4.0%] [3.6%] [3.9%] [3.6%] - 31

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33 Cautionary Statement 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, Europe, North America, and Asia, including China) Fluctuations in exchange rates or interest rates Fluctuations in capital markets Intensifying price competition s in market positioning due to competition in R&D s in the environment for the procurement of parts and components s 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 s in accounting policies