Fujitsu : Supplementary material for FY 2020 Full-Year Financial Results

FY2020

Consolidated Financial

Results

April 28, 2021

Fujitsu Limited

1	Copyright 2021 FUJITSU LIMITED

Contents

１．Financial Results for FY2020

２．Earnings Forecast for FY2021

2	Copyright 2021 FUJITSU LIMITED

1. Financial Results for FY2020

3	Copyright 2021 FUJITSU LIMITED

1.Financial Results for FY2020

FY 2020 Financial Summary

• Performance
• • Despite the impact of COVID-19, and despite lower revenue relative to the previous year because of last year's strong demand for PCs, due to steady progress in profitability improvements, we achieved our highest ever operating profit and profit for the year.
• Financial Status/Capital Efficiency
• • Free Cash Flow: 236.3 billion yen (+3.3 billion yen vs. previous year)
  • Capital efficiency also improved - ROE: 15.1%, EPS: 1,013.8 yen (+28.1% vs. previous year)

• Shareholder Returns
• • Including both increasing dividends over 5 consecutive years and purchases of treasury stock, shareholder returns have amounted to around 60 billion yen

4	Copyright 2021 FUJITSU LIMITED

1.Financial Results for FY2020

Consolidated PL

	FY2019	FY2020	Change
	（Actual）	（Actual）	(%)
Revenue	3,857.7	3,589.7	-268.0	-6.9
Operating Profit	211.4	266.3	54.8	25.9
[Operating Profit Margin]	[5.5%]	[7.4%]	[1.9%]
Financial income (expenses), etc	17.0	25.5	8.4	49.5
Profit for the Year	228.5	291.8	63.2	27.7
Before Income Taxes
Profit for the Year	160.0	202.7	42.6	26.7
Attributable to Owners of the Parent

(Billions of yen)

Change vs.

Jan forecast

-20.2

29.3

[0.8%]

25.7

Exchange Rate
U.S. dollar / Yen	109	106	-3	-2.8		1
Euro / Yen	121	124	3	2.5		4
British pound / Yen	138	139	1	0.7		-1
Euro / U.S. dollar	1.11	1.17	0.06	5.4		0.07

5	Copyright 2021 FUJITSU LIMITED

1.Financial Results for FY2020

Consolidated PL (YoY)

■ Revenue

• Revenue fell compared to the previous year, due to the negative impact of COVID-19 and a significant increase in demand for PCs last year that did not recur this year, resulting in a relative fall in revenue.

■ OPPL

• Excl. special items and restructuring: Profits increased significantly due to ongoing improvements in profitability and greater efficiency in expenses
• Special items: Profits increased due to profits from the sale of businesses, as well as business model transformation expenses recorded last year that did not recur this year.

■ Financial Income (Expenses), etc.

• Profits increased due to profits from the listing of an internal startup company and from the impact of foreign exchange.

■ Profit for the Period Attributable to Owners of the Parent

• Profit increased significantly due to the recording of one-time gains, in addition to the increase in operating profit excluding special items and restructuring.

6	Copyright 2021 FUJITSU LIMITED

1.Financial Results for FY2020

Financial Results

			(Billions of yen)
	FY2019	FY2020	Change
	（Actual）	（Actual）

Excl. restructuring	Revenue	3,713.8	3,539.4	-174.4
OPPL	231.3	250.2	18.9
and special items
[Operating Profit
	[6.2%]	[7.1%]	[0.9%]
	Margin]
Impact of	Revenue	143.9	50.2	-93.6
restructuring *1	OPPL	-6.0	-2.9	3.1
Special items *2	Revenue	-	-	-
OPPL	-13.7	18.9	32.7

Impact of COVID-19

-146.9

-48.2

[-1.0%]

Excl.

Impact of

COVID-19

-27.4

67.1

[1.9%]

	Revenue	3,857.7	3,589.7	-268.0	-146.9	-121.1
Total	OPPL	211.4	266.3	54.8	-48.2	103.0
	[Operating	[5.5%]	[7.4%]	[1.9%]
	Profit Margin]

*1	Restructured businesses: low profitability countries in Europe,product business in North America,
	mobile phone retail store business, device business (semiconductor Mie plant and printed circuit board).
*2	FY2020 sales of business +25.4 billion yen : mobile phone retail store business, Business Model Transformation expenses
	( "BMT expenses" ) -6.4 billion yen : restructuring costs for plants in Japan
	FY2019 sales of business +9.6 billion yen, BMT expenses -23.4 billion yen : restructuring costs for plants in Japan and business in North America and others.
	7	Copyright 2021 FUJITSU LIMITED

1.Financial Results	Factors Behind Change in Operating Profit
for FY2020
								(Billions of yen)
						Impact of COVID-19
			Improvement Excl. Impact of	COVID-19			Rate of change
			･Sales	-27.4				･Decrease in sales -146.9
						[-4%]
			･Operating Profit	+67.1				･Operating Profit -48.2

Restructuring and special items
･Sales	-93.6
･Operating Profit	+35.8

211.4				Decrease in profit	Improvement in	Decrease in OPEX
[5.5%]
			due to decrease in	gross margin	and others
				revenue -4.9	ratio	+37.7
				(decrease in revenue -27.4)	+34.3
						(+1.0%)
					･Technology Solutions +52.8
					･Ubiquitous -12.1
					･Device +26.4
FY2019

266.3

[7.4%]

FY2020

8	Copyright 2021 FUJITSU LIMITED

1.Financial Results for FY2020

Revenue by Segments

Breakdown of change vs LY

Positive impact excl COVID-19 : System Platforms (5G base station), Device Solutions

Negative impact excl COVID-19 : Ubiquitous Solutions (Recoil from the previous year's special demand)

Impact of COVID-19 : Revenue decreased mainly in Technology Solutions

(Billions of yen)

		FY2020	Change
		（	Actual
		）
Excl. restructuring and special items	3,539.4	-174.4
Technology Solutions	3,017.0	-141.2
	Solutions/Services		1,765.9	-117.0
	System Platforms		665.4	18.4
	International Regions Excluding Japan		697.1	-14.6
	Common		-111.5	-28.0
Ubiquitous Solutions		310.8	-94.2
Device Solutions		293.8	24.5
Inter-segment Elimination		-82.3	36.4

Breakdown of Change

Excl. Impact of	Impact of
COVID-19	COVID-19
-27.4	-146.9
24.2	-165.4
-15.0	-102.0
43.1	-24.7
20.8	-35.4
-24.7	-3.3
-122.1	27.8
33.9	-9.3
36.4	-

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1.Financial Results for FY2020

Profitability Improvement

Reduction in Operating Expenses

		Gross margin ratio	… Improvement by 1.0%
			FY2020	Solutions/services	Improvement in profitability continued from the first half
				・
		Gross margin ratio	30.5%	System Platforms	Improved due to the impact of product mix
				・
		vs LY	1.0%	Device Solutions	Increased sales led to recovery of fixed costs.
				・
		Effect of reduced operating expenses +37.7 billion yen
		（Billions of yen）
			FY2020
			General expenses	-35.0 billion yen	Work Life Shift and efficient development of system platforms
				・	and others
		OPEX	825.6
		R&D expenses	15.0 billion yen	Strengthen service businesses, Internal DX, WLS and others
				・
		vs LY	-37.7	Others	-12.5 billion yen	Increase and decrease	in one-shot items
				・

10	Copyright 2021 FUJITSU LIMITED

1.Financial Results

Overall orders in Japan (Fujitsu Limited only)

for FY2020

FY2020(Actual)

Industries

1Q

2Q

3Q

4Q

[Excl. Orders

Total

[Excl. Orders

For PC ]

For PC ]

Private Enterprise

93%

85%

93%

100%

[

99%]

92%

[

93%]

[Manufacturing & Distribution]

Finance＆Retail

89%

84%

100%

91%

[

93%]

90%

[

94%]

JAPAN

79%

85%

101%

125%

[ 123%]

93%

[

96%]

［Local Government & Healthcare］

Public ＆ Social Infrastructure

109%

96%

127%

97%

[

99%]

107%

[ 107%]

Total

93%

88%

106%

101%

96%

［Excl. Orders For PC］

[98%]

[89%]

[109%]

[101%]

[99%]

11	Copyright 2021 FUJITSU LIMITED

1.Financial Results	Progress in Business Model Transformation
for FY2020

• Business Reorganization Outside Japan

・European product business: Completed the closure of a factory, the transfer of production to EMS, and the consolidation of R&D functions.

・Exit from unprofitable countries in Europe: Completed the exit from 23 countries as planned (Management buyouts, sale of businesses, closures, etc.)

・Business reorganization in North America: Completed the withdrawal from the product business and the reorganization of the retailing systems business

• Reorganization of Manufacturing Facilities in Japan

・Increasing the efficiency of production systems in the product business: Will complete major reforms this fiscal year, optimizing our manufacturing organization

12	Copyright 2021 FUJITSU LIMITED

1.Financial Results for FY2020

Change vs Jan Forecast

Change vs Jan Forecast

OPPL

Forecast	237.0 billion yen	⇒ Actual	266.3 billion yen	＋
29.3 billion yen
●Excl. restructuring and special items		+20.0 billion yen
・Technology Solutions			+2.0 billion yen
・Ubiquitous Solutions			+9.0 billion yen
・Device Solutions			+9.0 billion yen
●Special items
Forecast	10.0 billion yen	⇒ Actual	18.9 billion yen	+9.0 billion yen

13	Copyright 2021 FUJITSU LIMITED

1.Financial Results for FY2020

Business Segment Information

(Billions of yen)

Revenue

	FY2019		FY2020		Change				Change vs.
	Special items/	Special items/	Excl.	Special items/	Impact of
	（Actual）	（Actual）	Jan forecast
	restructuring	restructuring		Special items	restructuring	COVID-19
Technology Solutions	3,212.9	54.5	3,043.6	26.5	-169.2	-141.2	-28.0	-165.4	-36.3
Ubiquitous Solutions	455.2	50.2	334.6	23.7	-120.6	-94.2	-26.4	27.8	15.6
Device Solutions	308.4	39.1	293.8	-	-14.6	24.5	-39.1	-9.3	3.8
Inter-segment Elimination	-118.8	-	-82.3	-	36.4	36.4	-	-	-3.3
Total	3,857.7	143.9	3,589.7	50.2	-268.0	-174.4	-93.6	-146.9	-20.2

OPPL

Technology Solutions

Ubiquitous Solutions

Device Solutions

Total

187.9	-9.8	188.4	-10.4	0.5	1.1	-0.5	-51.7	10.4
26.7	0.7	48.0	26.4	21.2	-4.5	25.7	7.6	10.0
-3.2	-10.6	29.8	-	33.0	22.3	10.6	-4.0	8.8
211.4	-19.8	266.3	16.0	54.8	18.9	35.8	-48.2	29.3

14	Copyright 2021 FUJITSU LIMITED

1.Financial Results for FY2020

Business Segment Information

Technology Solutions
				(Billions of yen)
Technology	FY2019	FY2020	Change
Solutions	(Actual)	(Actual)
		(%)
Revenue	3,212.9	3,043.6	[-165.4]	-169.2	-5.3
Operating	187.9	188.4	[-51.7]	0.5	0.3
profit
[Operating profit	[5.8%]	[6.2%]		[0.4%]
margin]
Revenue (breakdown)	[ ]Figures in brackets indicate the Impact of COVID-19

Japan	2,304.2	2,193.4	-110.8	-4.8
Outside Japan	908.6	850.1	-58.4	-6.4

[Revenue]

Revenue fell significantly due to the impact of COVID-19 and restructuring.

Impact of COVID-19:-165.4 billion yen

Impact of business restructuring: -28.0 billion yen

Excluding the above effects: +24.2 billion yen

[Operating Profit]

Despite the impact of reduced revenue due to COVID-19, profit increased significantly due to improvements in profitability and increased sales volume in Network Products

Impact of COVID-19:-51.7 billion yen

Impact of business restructuring: +2.7 billion yen

Impact of special items: -3.3 billion yen

Excluding the above effects: +52.8 billion yen

15	Copyright 2021 FUJITSU LIMITED

1.Financial Results for FY2020

Business Segment Information

		（			）
	Technology Solutions	Solutions/Services
						(Billions of yen)
Solutions/	FY2019		FY2020	Change
Services	(Actual)		(Actual)	(%)
	Revenue	1,883.0		1,765.9	[-102.0]	-117.0	-6.2
	Operating	179.5		183.5	[-36.4]	4.0	2.2
	profit
	[Operating profit	[9.5%]		[10.4%]		[0.9%]
	margin]
				[ ]Figures in brackets indicate the Impact of COVID-19

[Revenue]

Revenue fell significantly due to the impact of COVID-19. Even excluding the impact of COVID-19, revenue fell, as there was a drop in hardware-related business, such as PC deployment support services.

[Operating Profit]

Cost improvements and expense reduction efforts were able to overcome the impact of COVID-19, resulting in higher profits.

16	Copyright 2021 FUJITSU LIMITED

1.Financial Results for FY2020

Business Segment Information

Technology Solutions (System Platforms)

(Billions of yen)

System	FY2019	FY2020	Change
Platforms	(Actual)	(Actual)	(%)
		Revenue	647.0	665.4	[-24.7]	18.4	2.8
		System	440.1	420.3	[-32.0]	-19.8	-4.5
		Products
		Network	206.8	245.1	[7.2]	38.2	18.5
		Products
		Operating	27.4	41.2	[-3.3]	13.7	49.9
		profit
		[Operating profit	[4.2%]	[6.2%]		[2.0%]
		margin]
Revenue (breakdown)	[ ]Figures in brackets indicate the Impact of COVID-19
		Japan	529.5	537.0		7.5	1.4
	Outside Japan	117.5	128.4		10.9	9.3

[Revenue] (System Products)

Fall in revenue due to the significant impact of COVID-19:-32.0 billion yen

Impact of changes in sales channels due to the closure of a factory in Europe: +28.0 billion yen

(Network Products)

Revenue rose, primarily in 5G base stations

[Operating Profit]

Profits rose due to the effects of higher revenue in Network Products, as well as greater efficiency in development expenses

17	Copyright 2021 FUJITSU LIMITED

1.Financial Results for FY2020

Business Segment Information

Technology Solutions（International Regions Excluding Japan）

(Billions of yen)

International	FY2019	FY2020
Regions	Change
(Actual)	(Actual)	(%)
Excluding Japan
	Revenue	766.3	723.7	[-35.4]	-42.6	-5.6
	Operating	3.8	11.6	[-10.2]	7.7	199.3
	profit
	[Operating profit	[0.5%]	[1.6%]		[1.1%]
	margin]

[Revenue]

Revenue was significantly impacted by the negative effects of COVID-19 and business restructuring

Impact of business restructuring: -28.0 billion yen

-> Low profitability countries in Europe, the product business in North America

Impact of COVID-19:-35.4 billion yen

Excluding the above factors: +20.8 billion yen

-> Secured major public sector contracts in Europe, etc.

[ ]Figures in brackets indicate the Impact of COVID-19

[Operating Profit]

Special items: +6.3 billion yen (BM transformation expenses in North America recorded in the previous year did not recur this year)

Excluding the above factors: +1.3 billion yen

-> Ongoing improvements in profitability and efficiency in expenses

18	Copyright 2021 FUJITSU LIMITED

1.Financial Results for FY2020

Business Segment Information

		（	Common）
	Technology Solutions
					(Billions of yen)
	Common	FY2019	FY2020	Change
	(Actual)	(Actual)
	Excl. Special items		-32.6	-47.8	-15.2
	Special items		9.6	-	-9.6
	Operating profit		-22.9	-47.8	-24.9

• Increase in internal DX investments to deliver data-driven management
• Carried out investments relating to building secure network environments and rethinking office environments to accelerate the Work Life Shift

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■For Stability

1.Financial Results for FY2020

Two Business Areas for Value Creation

(Technology Solutions)

■For Growth … Digital（DX、Modernization）

The digital domain which encompasses areas of business opportunity for our customers

… Traditional IT（Maintenance and operation of systems and sales of hardware products）

The business domain which contributes to the stable operation of customer IT platforms and improves quality

For Growth	Contributing to customers'
business growth
For Stability	Contributing to customers'
business stability

Revenue					(Billions of yen)
		FY2019		FY2020		Change
		composition	composition	composition
		（Actual）	（Actual）
		％	ratio(%)		ratio(%)
			ratio( )
	Growth Rate			100%
	For Growth	987.9	31	988.9	32	1.0	1
	Growth Rate			92%
	For Stability	2,225.0	69	2,054.7	68	-170.2	-1
Growth Rate			95%		[-165.4]
Technology Solutions	3,212.9	100	3,043.6	100	-169.2	-
				[ ]Figures in parentheses indicate the Impact of COVID-19
			20				Copyright 2021 FUJITSU LIMITED

1.Financial Results for FY2020

Business Segment Information

Ubiquitous Solutions

(Billions of yen)

Ubiquitous	FY2019	FY2020	Change
Solutions	(Actual)	(Actual)
		(%)
Revenue	455.2	334.6	[27.8]	-120.6	-26.5
Excl. Special	26.4	21.6	[7.6]	-4.7	-18.0
items
Special	0.3	26.3		25.9	-
items
Operating	26.7	48.0	[7.6]	21.2	79.3
profit
[Operating profit	[5.9%]	[14.4%]		[8.5%]
margin]

Revenue (breakdown)		[ ]Figures in brackets indicate the Impact of COVID-19
Japan		323.4	224.6	-98.8	-30.6
Outside Japan		131.8	109.9	-21.8	-16.6

[Revenue]

Business restructuring: -26.4 billion yen

-> Impact of excluding the mobile phone retail store business from the consolidated results

Even excluding restructuring and special items, revenue fell significantly relative to last year, due to the extraordinary demand last year related to the end of service for Windows 7, which did not recur this year.

[Operating Profit]

One-time profits relating to the sale of businesses were +25.4 billion yen

Excluding restructuring and special items, profits fell due to the significant impact of lower revenue.

21	Copyright 2021 FUJITSU LIMITED

1.Financial Results for FY2020

Business Segment Information

Device Solutions

(Billions of yen)

Device	FY2019	FY2020	Change
Solutions	(Actual)	(Actual)	(%)
	Revenue	308.4	293.8	[-9.3]	-14.6	-4.7
	Operating	-3.2	29.8	[-4.0]	33.0	-
	profit
	[Operating profit	[-1.1%]	[10.1%]		[11.2%]
	margin]
Revenue (breakdown)	[ ]Figures in brackets indicate the Impact of COVID-19
	Japan	112.1	75.8		-36.2	-32.3
	Outside Japan	196.3	217.9		21.6	11.0

[Revenue]

Business restructuring: -39.1 billion yen

Excluding special items and restructuring, revenue rose 9.1%, primarily in electronic components

[Operating Profit]

Impact of special items: +10.0 billion yen

Excluding special items and restructuring: +23.0 billion yen -> Due to the effects of higher revenue in electronic components and improved profitability

22	Copyright 2021 FUJITSU LIMITED

1.Financial Results for FY2020

Cash Flows

			（	）
				Billions of yen
	FY2019	FY2020		Change
	（Actual）	（Actual）
Ⅰ Cash flows from operating activities	347.2	307.9		-39.3
Ⅱ Cash flows from investing activities	-114.2	-71.5		42.6
Ⅰ Ⅱ	233.0	236.3		3.3
+ Free Cash Flow
Ⅲ Cash flows from financing activities	-193.1	-219.6		-26.4
Ⅳ Cash and Cash Equivalents at End of Year	453.0	481.8		28.7

[Cash flows from operating activities]

• Compared with the previous year: Positive: Higher profits, excluding special items and restructuring, etc. Negative: Higher tax expenses, etc.

[Cash flows from investing activities]

• In addition to inflows from the reorganization of the mobile phone retail store business and the PC business, among others, inflows also increased due to the sale of fixed assets.

[Cash flows from financing activities]

• Outflows increased due to the public purchase of Fujitsu Frontech stock, among other factors.

23	Copyright 2021 FUJITSU LIMITED

1.Financial Results for FY2020

Assets, Liabilities and Equity

				(Billions of yen)
		Year-end	Year-end	Change
		FY2019	FY2020
Total Assets	3,187.4	3,190.2	2.7
Total Liabilities	1,839.0	1,643.3	-195.7
Total Equity	1,348.4	1,546.9	198.4
	Total Equity Attributable to Owners of the Parent	1,240.9	1,450.1	209.1
	Equity Attributable to Owners of the Parent Ratio (%)	38.9	45.5	6.6

ROE	EPS	(Yen)
Return on Equity Attributable to Owners of the Parent	Earnings per share(Basic)
15.1%		1,013.8

13.5%	791.2
	512.5
9.4%

FY2018	FY2019	FY2020	FY2018	FY2019	FY2020
（Actual）	（Actual）	（Actual）	（Actual）	（Actual）	（Actual）

Figures calculated based on the standards after consolidation of shares are shown.

24	Copyright 2021 FUJITSU LIMITED

1.Financial Results for FY2020

Returns to Shareholders

■ Dividend (Per Share)					■ Total return amount			(Billions of yen)
	FY2018	FY2019	FY2020		FY2018	FY2019	FY2020
	（Actual）	（Actual）	（Actual）		（Actual）	（Actual）	（Actual）
End of First Half	70 Yen	80	Yen	100 Yen	Dividends	30.5	36.2	39.9
End of Fiscal Year	80 Yen	100	Yen	100 Yen	Purchase of treasury stock	22.3	30.1	20.1
Annual	150 Yen	180	Yen	200 Yen	Total return amount	52.8	66.3	60.0

Figures calculated based on the standards after consolidation of shares are shown.

25	Copyright 2021 FUJITSU LIMITED

2. Earnings Forecast for FY2021

26	Copyright 2021 FUJITSU LIMITED

2.Earnings Forecast for FY2021

Financial Forecast

				(Billions of yen)
	FY2020	FY2021	Change
	（Actual）	(Forecast)	(%)
Revenue	3,589.7	3,630.0	40.2	1.1
Operating Profit	266.3	275.0	8.6	3.3
[Operating Profit Margin]	[7.4%]	[7.6%]	[0.2%]
Profit for the Year Attributable to	202.7	205.0	2.3	1.1
Owners of the Parent
Exchange Rate
U.S. dollar / Yen	106	105	-1	-0.9
Euro / Yen	124	120	-4	-3.2
British pound / Yen	139	140	1	0.7
Ratio of Revenue Outside Japan	32.7%	33.4%	0.7%

27	Copyright 2021 FUJITSU LIMITED

2.Earnings Forecast for FY2021

Business Segment Information

(Billions of yen)

		FY2020	FY2021	Change
		(Actual)	(Forecast)
	Revenue	3,043.6	3,200.0	156.3	・ Revenue: 5% Growth
	Excl. special items	195.8	240.0	44.1	⊕ Resumption of projects put on hold
	⊕ DX business expansion
	%	[6.4%]	[7.5%]	[1.1%]	⊕ Higher revenue in Network Products
Technology	・ OPPL
Solutions	special items	-7.4	-	7.4	⊕ Impact of increased revenue
					in Solutions and Services
	OPPL	188.4	240.0	51.5	⊕ Improvements in profitability
	⊖ Executing growth investments
	%	[6.2%]	[7.5%]	[1.3%]
	Revenue	334.6	230.0	-104.6
		21.6	5.0	-16.6	・ Revenue
	Excl. special items	⊖demand for remote work and the GIGASchool
					project will not recur in fiscal 2021
Ubiquitous	%	[6.5%]	[2.2%]	[-4.3%]	・ OPPL
				⊖Decline in profit because of lower revenue
Solutions		26.3	-	-26.3
special items
	OPPL	48.0	5.0	-43.0
	%	[14.4%]	[2.2%]	[-12.2%]

28	Copyright 2021 FUJITSU LIMITED

2.Earnings Forecast for FY2021

Business Segment Information

(Billions of yen)

		FY2020	FY2021	Change
		(Actual)	(Forecast)
	Revenue	293.8	300.0	6.1	・ Revenue
Device	special items	-	-	-	⊕High levels of demand for electronic components
	will continue
Solutions	OPPL	29.8	30.0	0.1	・ OPPL
					In line with the previous year
	%	[10.1%]	[10.0%]	[-0.1%]
Inter-segment	Revenue	-82.3	-100.0	-17.6
Elimination
	Revenue	3,589.7	3,630.0	40.2
	Excl. special items	247.3	275.0	27.6
Total	%	[6.9%]	[7.6%]	[0.7%]
	special items	18.9	-	-18.9
	OPPL	266.3	275.0	8.6
	%	[7.4%]	[7.6%]	[0.2%]

Operating income from Impact of restructuring in FY2020 of -2.9 billion yen is included in Excl. special items.

29	Copyright 2021 FUJITSU LIMITED

2.Earnings Forecast for FY2021

Factors Behind Change in Operating Profit

Breakdown of Technology Solutions

(Billions of yen)

240.0

[7.5%]

Improvement in	Investment in growth
gross margin ratio	OPEX
+50.0	-50.0
188.4

[6.2％]

Increase in profit due

to increase in revenue +50.0

(increase in revenue +156.3)

･Operating Profit +51.5

Expansion of Earnings

• Building out important focus areas
• Continued strengthening of

the Services business

Global Offerings

Cloud-first

DX Business

Improved Profitability

• Transforming the Services delivery structure
• Structural transformations in regions outside Japan
• Limiting unprofitable projects

Growth Investments

• Enhancing service delivery
• Internal DX (data-driven management)
• Transforming the ways we work

FY2020

FY2021

30	Copyright 2021 FUJITSU LIMITED

2.Earnings Forecast	Path to Achieving Technology Solutions Goals
for FY2021

				(Billions of yen)
				10.0%
Operating Profit Margin
			7.5%
	5.8%	6.2%
			3,500.0
Revenue	3,212.9	3,043.6	3,200.0
FY	2019	2020	2021	2022
	(Actual)	(Actual)	(Forecast)	(Financial Targets)
OPPL	187.9	188.4	240.0	350.0
				31

Factors Behind Change in Operating Profit

			(Billions of yen)
	FY2019	FY2020	FY2021
	⇒FY2020	⇒FY2021	⇒FY2022
Impact of changes in sales	[-169.2]	[156.3]	[300.0]
[] is the changes in sales	-52.5	+50.0	+60.0
Improvement in gross	+68.0	+50.0	+50.0
margin
Investment in growth	-15.0	-50.0	-
[OPEX]
Total	+0.5	+50.0	+110.0

Copyright 2021 FUJITSU LIMITED

2.Earnings Forecast for FY2021

Cash Flows

Free Cash Flow			(Billions of yen)
	FY2019	FY2020	FY2021
	(Actual)	(Actual)	(Forecast)
Free Cash Flow	233.0	236.3	210.0

32	Copyright 2021 FUJITSU LIMITED

2.Earnings Forecast for FY2021

Capital Allocation Policy

• Capital Allocation Policy (Material republished from July 2020)

Over the next

(1) Cash flow: Create free cash flow of over 1 trillion yen over the

5 years

next five years

(2) Allocation: Cash flow will be optimally allocated to growth

(FY20-24) investments and shareholder returns

(1) Stable Generation of			(2) Thought Process About Allocation
Cash Flow
		Financial Foundation

		Growth
	Business	Investme
Free	nts
Cash
Cash
Flow
Flow
(FCF)		(500-600 billion yen)
		Sharehol
			der
	Optimization
		Returns
	of owned
	assets

Over 1 Trillion Yen

Note: Business cash flow = FCF - lease payments + growth investments

Executing Strategic Growth Investments

We will actively execute necessary investments to create value that can be delivered to customers and society, and to accomplish Fujitsu's own transformation into a DX company (500-600 billion yen over 5 years)

• Investments for creating value
• Investments for our own transformation

Delivering Stable Shareholder Returns

We are aiming for stable shareholder returns over the medium-to-long term that correspond to the stage of growth in our businesses and profits

• Dividends: We will carry out stable dividend payments based on continued growth in our businesses
• Stock Buybacks: Surplus funds reserved over long time periods will be used as capital for flexible stock buybacks (responding while bearing in mind changes in capital needs)
• We aim to increase business growth, profitability, and capital efficiency through optimal allocation of cash flow
• From a capital efficiency perspective, we will focus on earnings per share (EPS), with the goal of continued growth in EPS going forward

33	Copyright 2021 FUJITSU LIMITED

2.Earnings Forecast for FY2021

Capital Allocation Policy

• Allocation: Growth Investments - 500-600 billion yen over 5 years

We will actively pursue growth investments in fiscal 2021, leading to business expansion and improvements in profitability

（

）

Billions of yen

FY2020

FY2021

FY22-24

FY20-24

（

Actual

（

Forecast

）

（

5 Years

）

vs LY

Average

）

Growth

40.0

100.0

60.0

120.0

500.0

ESG/Risk management

Investment

(Pension and others)

+100.0 billion yen

OPEX

15.0

65.0

50.0

Major

Investment

Areas

• Value Creation: Enhancing our Services business (Global offerings)

	Transforming our service delivery structure (Japan Global Gateway)
Internal	Acquiring high-skill personnel, talent development

Transformation: Internal DX to implement data-driven management, transforming the ways we work

34	Copyright 2021 FUJITSU LIMITED

2.Earnings Forecast for FY2021

Capital Allocation Policy

• Allocation: Shareholder Returns - 400-500 billion yen over 5 years

In addition to ensuring stable dividends, we will actively conduct share buybacks, keeping capital efficiency in mind, and expand the overall amount of returns

（

）

Billions of yen

FY2017

FY2018

FY2019

FY2020

FY2021

FY22-24

（

Actual

（

Actual

（

Actual

（

Actual

（

Forecast

）

vs LY

Average

）

）

）

）

110 Yen

150 Yen

180 Yen

200 Yen

220 Yen

20 Yen

Dividends

22.6

30.5

36.2

39.9

43.1

3.2

50.0

Share Repurchaces

0.1

22.3

30.1

20.1

50.0

29.9

50.0

Total shareholder returns

22.7

52.8

66.3

60.0

93.1

33.1

100.0

Shareholder Returns - 400-500 billion yen over 5 years

35	Copyright 2021 FUJITSU LIMITED

2.Earnings Forecast for FY2021

Capital Allocation Policy

• Shareholder Returns for Fiscal 2021 (Reprint)

• Dividends:	220 yen/share (110 yen intermediate, 110 yen year-end), an
	increase of 20 yen, year over year
	Total dividend: 43.1 billion yen

• Stock Buybacks: 50 billion yen (buyback period: May 6, 2021 - March 31, 2022)

Total Returns:

93.1 billion yen (+33.1 billion yen compared to the previous year)

36	Copyright 2021 FUJITSU LIMITED

2.Earnings Forecast for FY2021

Improvement of Corporate Value

• In fiscal 2020, we achieved our highest ever operating profit and profit for the year [A first step toward achieving our medium-term targets]
• In fiscal 2021, we aim to expand our businesses and strengthen our earnings capability through active growth investments [Achieving increases in revenue and profits]
  We will expand overall shareholder returns by actively conducting stock buybacks, in addition to stable dividends

Financial Targets

•	Business Expansion:	Increased revenue in Technology	3.5 trillion yen	(Target timeframe: Fiscal 2022)
Solutions
•	Strengthening Earnings	Operating profit margin in	10%	(Target timeframe: Fiscal 2022)
	Capability:	Technology Solutions
	+
•	Improving Capital	Average annual growth rate of	12％	(Fiscal 2020-24, compared to fiscal 2019)
	Efficiency:	company-wide EPS

• • Quantified as a target KPI under the capital allocation policy
• Working to expand business, strengthen earnings capability, and improve capital efficiency through optimal capital allocation

37	Copyright 2021 FUJITSU LIMITED

38

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, Oceania, and Asia, including China)
• 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

39

Supplementary

40	Copyright 2021 FUJITSU LIMITED

(Supplementary) Financial Results for FY2020

Business Segment Information [Quarterly Breakdown of Results]

(Billions of yen)

				FY2019 (Actual)
			1Q	2Q	3Q	4Q
Technology	Revenue	677.1	807.1	770.0	958.5
Solutions	OPPL	7.5	56.2	40.9	83.1
	Solutions/	Revenue	388.7	483.4	444.4	566.3
	Services	OPPL	18.0	43.4	38.4	79.5
	System	Revenue	122.3	166.4	141.0	217.2
	Platforms	OPPL	-6.4	16.3	4.8	12.7
	International Regions	Revenue	186.2	182.4	203.2	194.3
	Excluding Japan	OPPL	-0.5	3.4	-1.2	2.2
	Common	Revenue	-20.2	-25.2	-18.8	-19.2
	OPPL	-3.5	-6.9	-1.1	-11.3
Ubiquitous Solutions	Revenue	102.9	138.4	111.4	102.4
OPPL	3.5	10.4	8.8	3.9
Device Solutions	Revenue	83.4	85.2	71.5	68.2
OPPL	-7.7	0.9	0.6	2.9
Inter-segment	Revenue	-24.7	-40.8	-29.8	-23.4
Elimination
Total	Revenue	838.7	990.0	923.2	1,105.7
OPPL	3.3	67.6	50.4	90.0

	FY2020 (Actual)
1Q	2Q	3Q	4Q
679.1	698.3	753.5	912.6
12.6	29.6	52.3	93.7
376.8	418.7	427.2	543.1
17.8	36.4	40.9	88.3
151.7	140.0	169.7	203.9
5.0	2.2	11.9	21.9
171.0	163.8	192.4	196.2
-3.7	2.9	8.6	3.8
-20.5	-24.3	-36.0	-30.7
-6.4	-11.8	-9.2	-20.3
73.8	83.7	84.1	92.8
4.2	4.5	30.9	8.3
68.3	70.3	75.5	79.6
5.3	5.7	10.2	8.4
-18.5	-23.3	-18.8	-21.7
802.7	829.0	894.3	1,063.5
22.2	39.9	93.4	110.5

41	Copyright 2021 FUJITSU LIMITED

(Supplementary) Financial Results for FY2020

Two Business Areas for Value Creation

(Technology Solutions)

For Growth/For Stability: Composition of Businesses

For Growth • SI Development (New / Modernization / Upgrades)

• Cloud Services Related IaaS / SaaS
  Cloud Integration
  Applications (Applications run in the cloud) Software (Software run in the cloud)
• Cybersecurity-RelatedServices
• Consulting Services
• Advanced Products: HPC, 5G Network-RelatedFor Stability • System Maintenance and Operations Services
• Conventional (On Premise) Applications
• Application Maintenance Services (On Premise)
• System Platforms

Legacy Processor-Related

Legacy Network-Related

42	Copyright 2021 FUJITSU LIMITED

(Supplementary) Financial Results for FY2020

Two Business Areas for Value Creation

(Technology Solutions)

(Billions of yen)

			FY2019 (Actual)
			For	For	Total
			Growth	Stability
Technology	Growth Rate
Solutions	Revenue	987.9	2,225.0	3,212.9
		composition	[31%]	[69%]	[100%]
		ratio
	Solutions/	Growth Rate
	Services	Revenue	816.2	1,066.8	1,883.0
		composition	[43%]	[57%]	[100%]
		ratio
	System	Growth Rate
	Platforms	Revenue	136.5	510.5	647.0
		composition	[21%]	[79%]	[100%]
		ratio
	International Regions	Growth Rate
	Excluding Japan	Revenue	35.2	731.1	766.3
		composition	[5%]	[95%]	[100%]
		ratio
	Common	Revenue	-	-83.5	-83.5
		composition	[-%]	[100%]	[100%]
		ratio

FY2020 (Actual)		Change
For	For	Total	For	For	Total
Growth	Stability	Growth	Stability
100%	92%	95%
988.9	2,054.7	3,043.6	1.0	-170.2	-169.2
[32%]	[68%]	[100%]	[1%]	[-1%]	[-%]
96%	92%	94%
785.4	980.5	1,765.9	-30.8	-86.2	-117.0
[44%]	[56%]	[100%]	[1%]	[-1%]	[-%]
126%	97%	103%
171.4	494.0	665.4	34.9	-16.5	18.4
[26%]	[74%]	[100%]	[5%]	[-5%]	[-%]
91%	95%	94%
32.1	691.6	723.7	-3.1	-39.5	-42.6
[4%]	[96%]	[100%]	[-1%]	[1%]	[-%]
-	-111.5	-111.5	-	-28.0	-28.0
[-%]	[100%]	[100%]	[-%]	[-%]	[-%]

43	Copyright 2021 FUJITSU LIMITED

(Supplementary) Financial Results for FY2020

Business Segment Information

[ Revenue Breakdown-In and Outside Japan]

								(Billions of yen)
					FY2019	FY2020	Change
					(Actual)	(Actual)	(％)
			Revenue	3,212.9	3,043.6	-169.2	-5.3
	Technology Solutions		Japan	2,304.2	2,193.4	-110.8	-4.8
				Outside Japan	908.6	850.1	-58.4	-6.4
		Solutions/	Revenue	1,883.0	1,765.9	-117.0	-6.2
			Japan	1,838.8	1,725.2	-113.5	-6.2
		Services
			Outside Japan	44.1	40.7	-3.4	-7.8
		System	Revenue	647.0	665.4	18.4	2.8
			Japan	529.5	537.0	7.5	1.4
		Platforms
			Outside Japan	117.5	128.4	10.9	9.3
		International Regions	Revenue	766.3	723.7	-42.6	-5.6
			Japan	1.1	0.4	-0.6	-58.6
		Excluding Japan
			Outside Japan	765.2	723.2	-42.0	-5.5
		Common	Revenue	-83.5	-111.5	-28.0	-
			Revenue	455.2	334.6	-120.6	-26.5
	Ubiquitous Solutions		Japan	323.4	224.6	-98.8	-30.6
				Outside Japan	131.8	109.9	-21.8	-16.6
			Revenue	308.4	293.8	-14.6	-4.7
	Device Solutions		Japan	112.1	75.8	-36.2	-32.3
				Outside Japan	196.3	217.9	21.6	11.0
	Inter-segment Elimination	Revenue	-118.8	-82.3	36.4	-
			Revenue	3,857.7	3,589.7	-268.0	-6.9
	Total		Japan	2,629.2	2,417.6	-211.6	-8.1
				Outside Japan	1,228.5	1,172.0	-56.4	-4.6
		Ratio of Revenue Outside Japan	31.8%	32.7%	0.9%

44	Copyright 2021 FUJITSU LIMITED

(Supplementary) Financial Results for FY2020

Breakdown of International Regions

Excluding Japan

(Billions of yen)

					Change
			FY2019	FY2020
			Special items/	Excl.
			(Actual)	(Actual)
			Special
					restructuring
					items/restructuring
International Regions	Revenue	766.3	723.7	-28.0	-14.6
Operating
Excluding Japan	3.8	11.6	9.1	-1.3
Profit
	NWE	Revenue	356.0	347.8	-	-8.1
	[Northern & Western	Operating	4.7	5.3	-1.6	2.2
	Europe]	Profit
	CEE	Revenue	171.6	170.4	-	-1.1
	[Central & Eastern	Operating	10.8	5.3	-0.6	-4.8
	Europe]	Profit
	Americas	Revenue	66.6	50.7	-12.1	-3.7
	Operating	-17.4	-5.4	11.3	0.6
		Profit
	Asia	Revenue	86.4	79.8	-	-6.5
	Operating	2.3	2.6	-	0.2
		Profit
	Oceania	Revenue	74.5	74.3	-	-0.2
	Operating	2.0	1.7	-	-0.2
		Profit
	Others	Revenue	11.0	0.4	-15.8	5.2
	Operating	1.2	1.9	-	0.6
		Profit

Note: Revenue includes Inter-region revenue.

45	Copyright 2021 FUJITSU LIMITED

(Supplementary) Financial Results for FY2020

Changes in Financial Indicators

			(	)
				Billions of yen
	FY2018	FY2019		FY2020
	（Actual）	（Actual）	（Actual）
Interest-bearing Loans	316.2	405.5		316.3
(Net Interest-bearing Loans)	(-100.4)	(-46.2)		(-165.5)
D/E Ratio (Times)	0.28	0.33		0.22
Equity Attributable to Owners of the Parent Ratio (%)	36.5	38.9		45.5
ROE(%) *1	9.4	13.5		15.1
EPS(Yen)*2	512.50	791.20		1,013.78

*1 Return on Equity Attributable to Owners of the Parent (%) *2 Earnings per share(Basic)

46	Copyright 2021 FUJITSU LIMITED

(Supplementary) Earnings Forecast for FY2021

Business Segment Information

Breakdown of Technology Solutions

(Billions of yen)

	FY2020		FY2021		Change	Excl.
	（Actual）	Special items	（Forecast）	Special items	Special items
		Special items

	Technology Solutions	3,043.6	-	3,200.0	-	156.3	156.3	-
		Solutions/Services	1,765.9	-	1,980.0	-	214.0	214.0	-
Revenue		System Platforms	665.4	-	680.0	-	14.5	14.5	-
		System Products	420.3	-	410.0	-	-10.3	-10.3	-
			Network Products	245.1	-	270.0	-	24.8	24.8	-
		International Regions Excluding	723.7	-	735.0	-	11.2	11.2	-
		Japan
		Common	-111.5	-	-195.0	-	-83.4	-83.4	-
	Technology Solutions	188.4	-7.4	240.0	-	51.5	44.1	7.4
OPPL		Solutions/Services	183.5	-	230.0	-	46.4	46.4	-
	System Platforms	41.2	-5.0	56.0	-	14.7	9.7	5.0
		International Regions Excluding	11.6	-2.3	22.0	-	10.3	8.0	2.3
		Japan
		Common	-47.8	-	-68.0	-	-20.1	-20.1	-

47	Copyright 2021 FUJITSU LIMITED

(Supplementary)

Earnings Forecast Assumption used for FY2021 Forecasts

for FY2021

1. Exchange Rates	（		）
	Average and Impact of Fluctuation
				FY2020					Impact of
			FY2019			FY2021		Exchange Rate
			(Actual)	(Actual)			(Forecast)		Fluctuation
									(Forecast)*
U.S. dollar / Yen			109	106			105		-0.7	Billion yen
Euro / Yen			121	124			120		-0.1	Billion yen
British pound / Yen		138	139			140		0.0	Billion yen

* Impact of 1 yen fluctuation on operating profit (yen appreciation).

48	Copyright 2021 FUJITSU LIMITED

(Supplementary)
Earnings Forecast	Assumption used for FY2021 Forecasts
for FY2021
	2. Capital Expenditures and Depreciation		(	)
	（Property, Plant and Equipment）
					Billions of yen
			FY2019	FY2020			FY2021
			(Actual)	(Actual)			(Forecast)
		Technology Solutions	53.8	46.6			57.5
		Ubiquitous Solutions	0.2	0.2			0.5
		Device Solutions	42.4	40.7			42.0
	Capital Expenditures	96.4	87.5			100.0
	Depreciation	84.5	76.0			85.0

Capital expenditures and depreciation do not include the impact of adopting IFRS 16 (Leases).

3. R&D Expenses
R&D Expenses	123.3	113.8		115.0
[As % of Revenue]	[3.2%]	[3.2%]		[3.2%]

49	Copyright 2021 FUJITSU LIMITED