FY2013 Financial Results Briefing - Fujitsu Global · overseas market Global ATM (Spain→ European...
Transcript of FY2013 Financial Results Briefing - Fujitsu Global · overseas market Global ATM (Spain→ European...
Bunmei Shimojima President and Representative DirectorFujitsu Frontech LimitedApril 28, 2014
FY2013 Financial Results Briefing- FY2013 Financial Results and FY2014 Targets -
Copyright 2014 FUJITSU FRONTECH LIMITED
1. Summary of FY2013 Full-Year Consolidated Financial Results
1
Copyright 2014 FUJITSU FRONTECH LIMITED
The key points of the FY2013 financial results Net sales increased by 7% year on year to 107.9 billion yen, hitting an all time record high
since the Company was listed. Operating income increased by 72% year on year to 4.1 billion yen. Net income was 1.8 billion yen, 4.5 times as much as the previous fiscal year.
Consolidated Results of Operations
Item Net sales Operating income
Ordinary income Net income Net income
per share
FY2013 107.9 4.1 4.0 1.8 74.60 yen
FY2012 100.5 2.4 2.4 0.4 16.72 yen
Year-on-year +7.4 +1.7 +1.6 +1.4 +57.88 yenFigures announced in
April 103.0 3.7 2.5 1.5 62.63 yen
Change from the figures announced in April +4.9 +0.4 +1.5 +0.3 +11.97 yen
[Billion yen]
2
FY2013 27.5 (25.4%)
FY2012 19.8 (19.7%)
Overseas sales Overseas sales ratio in parentheses [Billion yen]
Average exchange rate during period (1USD=)
FY2013 100 yen*
FY2012 83 yen*The effects of the exchange rates Net sales: +4.7 billion yen Operating income: +0.6 billion yen
Copyright 2014 FUJITSU FRONTECH LIMITED
Increase in mechanical components for overseas
Increases in POS and RFID for both Japan and overseas
Increase in display systems, mainly bidding systems
for the used car market
Increase in financial services including ATM services
for stores and ATM outsourcing services
[Billion yen]
1.6 1.117.3 17.8
22.6 23.6
19.8 21.5
39.2 43.9
0
20
40
60
80
100
120
FY2012 FY2013
100.5Financial business: 43.9 billion yen (year-on-year increase of 4.7 billion yen, up 12%)
Retail business: 21.5 billion yen (year-on-year increase of 1.7 billion yen, up 9%)
Industrial/Public business: 23.6 billion yen (year-on-year increase of 1.0 billion yen, up 4%)
Service business: 17.8 billion yen (year-on-year increase of 0.5 billion yen, up 3%)
Financial business Retail businessIndustrial/Public business Service business
Sales by Segment (Major Factors for Changes)
Other
107.9
*A new segment “Other,” which does not belong to any reporting segment, has been added since the third quarter of FY2013, and businesses such as the metal mold, precision cutting and welfare which previously belonged to the Industrial/Public business have been reclassified into “Other” business segment.
3
Copyright 2014 FUJITSU FRONTECH LIMITED
Year-on-year increase +1.72.4
4
+1.8
+1.1
+0.6
4.1
Cost reduction
FY2012 results FY2013 results
[Billion yen]
Change to lean structure*(Increased business efficiency)
Decrease in price,etc.
Effect of exchange
rates
Efforts to “increase business efficiency” to build lean management base hasstarted to steadily bear fruits.
As the price competition is intensifying, we are planting seeds for new growth strategies.
Major Factors for Changes in Operating Income
-1.8
* Improvement of plant processIn-house productionHR measures, etc.
Copyright 2014 FUJITSU FRONTECH LIMITED
Outline Total assets Net assets Capital adequacy ratio Net assets per share
FY2013 65.2 35.5 54.1% 1,473.37 yen
FY2012 64.8 34.7 53.1% 1,437.15 yen
Increase/Decrease +0.4 +0.8 +1.0% +36.22 yen
OutlineC/F from
operating activities
A
C/F from investing activities
B
Free C/FA + B
C/F from financing activities
C
C/FA + B + C
Cash and cash equivalents at the end of year
FY2013 7.8 0.3 8.1 (4.2) 3.9 6.2
FY2012 6.8 (4.4) 2.4 (2.4) 0 2.1
Increase/Decrease +1.0 +4.7 +5.7 -1.8 +3.9 +4.1
[Billion yen]
[Billion yen]
Consolidated financial positions
Consolidated statements of cash flows
Consolidated Financial Positions and Cash Flows
5
Copyright 2014 FUJITSU FRONTECH LIMITED
2. Summary of FY2014 Full-year Targets
6
Copyright 2014 FUJITSU FRONTECH LIMITED
Item Net sales Operating income
Ordinary income
Net income
Net income per share
FY2014 forecast
First half 47.1 0.4 0.2 0.1 4.18 yen
Full year 110.0 4.9 4.3 3.0 125.34 yen
FY2013 results
First half 48.8 0.4 0.2 (0.4) (16.50) yen
Full year 107.9 4.1 4.0 1.8 74.60 yen
Increase/Decrease
First half -1.7 ±0 ±0 +0.5 +20.68 yen
Full year +2.1 +0.8 +0.3 +1.2 +50.74 yen
[Billion yen]
Consolidated Earnings Forecast
FY2014 forecast 29.5 (26.8%)
FY2013 results 27.5 (25.4%)
Overseas sales Overseas sales ratio in parentheses [Billion yen] Average exchange rate
during period (1USD=)
FY2014 assumption 100 yenFY2013 100 yen
7
Copyright 2014 FUJITSU FRONTECH LIMITED
Increase in mechanical components for overseas Increase due to a start of systems business such as ATM
for overseas
Decrease due to the change in distribution channelsof POS in Europe and the U.S.
Increase due to a steady deployment of totalizatorterminals
Decrease due to narrowing down product models inthe smartphone test supporting business
Increase in the ATM services for stores
[Billion yen]
1.1 0.617.8 19.2
23.6 23.6
21.5 16.8
43.9 49.8
0
20
40
60
80
100
120
FY2013 FY2014
Financial business: 49.8 billion yen (year-on-year increase of 5.9 billion yen, up 13%)
Retail business: 16.8 billion yen (year-on-year decrease of 4.7 billion yen, down 22%)
Industrial/Public business: 23.6 billion yen (unchanged year on year at 0.0 billion yen, 0% change)
Service business: 19.2 billion yen (year-on-year increase of 1.4 billion yen, up 8%)
Financial business Retail business
Industrial/Public business Service business
Other
Sales by Segment (Major Factors for Changes)
107.9 110.0
8
Copyright 2014 FUJITSU FRONTECH LIMITED
Year-on-year increase +0.8
4.1
9
+0.5
+1.7 -1.4
4.9
FY2013 results FY2014 targets
[Billion yen]
Change to lean structure(continuing efforts to
increase business efficiency)
Cost reductionDecrease in
price, strategic investment
Major Factors for Changes in Operating Income Strictly continue efforts to “increase business efficiency” to build lean
management base. Implement incubation and strategic investment for new growth.
Copyright 2014 FUJITSU FRONTECH LIMITED
Development of the next-generation totalizator terminals Introduction of cash management solution services to the markets Approach to businesses related to the Tokyo Olympic Games
(Reference) Medium-term Strategic Investments
Enhancement of manufacturingsystem at the major plant
in the PhilippinesIncreased production of
mechanical components for overseas market
Global ATM(Spain → European markets)
Overseas investments
Investment in Japan
Introduction of new POSproducts to theChinese market
TCR (Teller Cash Recycler)development
Introduction of newself-checkout systems for
Europe and the U.S.
Cross-boarder M&A
Overseas strategies for ATM cover both systems and mechanical components in the future.
10
Copyright 2014 FUJITSU FRONTECH LIMITED
Dividends
Dividend policy:
16 yen 16 1718
1.2 billion yen
0.4
1.8
3.0
0
5
10
15
20
25
30
FY2008 FY2012 FY2013 FY2014
Stable payouts of 16 yen for 5 years
Item Interim Year-end Full year
FY2013 8 yen 9 yen (scheduled)
17 yen (scheduled) (increased dividend)
FY2014 9 yen (planned)
9 yen (planned)
18 yen (planned) (increased dividend)
Placing a focus on stable dividend payouts, dividends are decided in consideration of profits in each fiscal year and future business developments.
Past dividend distributions
Dividend per share (left axis)
Net income (right axis)
3.0
2.5
2.0
1.5
1.0
0.5
0
[Billion yen][Yen]
11
Copyright 2014 FUJITSU FRONTECH LIMITED
Overseas net sales ratio:FY2013 25.4%→FY2014 26.8%
Start of the ATM system business in Spain Geographical and segmental expansion of
the mechanical components business Establishing POS sales structure for China
and Asia
Review of processes for the new product development
Review of manufacturing system Optimizing supply chains
Cash management solution services TCR RFID solution
Policies for FY2014
A. Promoting a total businessranging from products tosolution / services
B. Strategic expansion of globalbusiness
C. Development into LCM businesswith service as the core
1) Strategic business promotion
2) Strict continuation of efforts to increase business efficiency
(i) Expansion of global businesses
(ii) Strict enforcement of business efficiency
(iii) Creating new businesses/new products
Medium-term management policy Policies for FY2014
12
Copyright 2014 FUJITSU FRONTECH LIMITED
<Market trend> Continued growth of the global ATM market at a high growth rate Continued expansion of the Chinese market, bill recycling
type ATM becoming mainstream, and advancement of the shiftto domestic production
<Measures for FY2014> Continued sales expansion of the global bill recycling units Special demands in China related to the banknote serial number reading
function becoming mandatoryPromotion of vigorous sales expansion of new bill dispensing units andbill recycling units compliant with the above mandated requirements.
Entry into the ATM and TCR markets- Commencement of supply of new-model ATMs to Spain (from March 2014)- Joint development of teller machines for bank branches with a manufacturer
13
Financial Business (1)
Expansion of systems business such as ATM in addition tomechanical components sales
Overseas business
Segment net sales: FY2013 results 43.9 billion yen, FY2014 targets 49.8 billion yen
New-model ATM for Spain
Mechanical components
Copyright 2014 FUJITSU FRONTECH LIMITED
<Market trend> Continued replacement demand for older
ATM models after 10 years since theissuance of new bills
Now is the time before emerging demands for replacement of banking terminals by the next-generation systems
<Measures for FY2014> Continued strong sales of new-model ATMs,
FACT-V X200. Aiming for further salesexpansion through the market launch ofa web-linkage feature
FY2014 becoming in between time forbanking terminals before renewal.Promoting new developments for the next-generation systems starting fromFY2015
Financial Business (2)
14
<Market trend> The biometric market has become active
worldwide as security awareness is heightened
Demand expansion from financial marketto the markets for government agenciesand public sectors
<Measures for FY2014> Introduction of laptops with a palm vein
authentication sensor as well as externalsensors (SL) to the overseas markets
Promotion ofintroduction of theproduct for banks andlocal governments inJapanIncreased number oftablets equipped with the product
Domestic business
Securing replacement demandby enhancing solutions
Expansion to markets for government agencies and
public sectors
Palm vein authentication
Laptop with the palm vein authentication sensor
Copyright 2014 FUJITSU FRONTECH LIMITED
Start of the ATM system business in Spain Introducing new-model ATMs in Spain where we have a large number of ATM
installed baseAiming for further expansion into Europe and Central/South America
Expansion of the gaming market using mechanical components Growing shipment of bill dispensing units for money changer manufacturers
in North America for which continued growth expectedWith the momentum for installation of bill storage devices for table gameson the rise, aiming for promotion of bill acceptor units as well
Ultra-thin palm vein authentication sensor Mounted on corporate-use tablets and laptop
PCsAdopted as terminals used for external activities byfinancial institutions
15
Financial Business (3) Topics
Tablet with the palm vein authentication sensor
Copyright 2014 FUJITSU FRONTECH LIMITED16
Retail Business (1)
Retail Store systems business
<Market trend> Expansion of use of smart devices in store operations Diversification of retail sites (Omni channel) Growing trend of low price due to commoditization
of POS<Measures for FY2014: Japan> Simultaneous sales expansion of the existing POS and
mobile solutions by adopting WS-POS**WS-POS:Web Services for Point of Service
Promoting use of RFID in retail store systems<Measures for FY2014: Overseas> Introducing new SCO products for
Europe and the U.S. (from Sep. 2014) Adding low-priced POS for China and
Asia to the product lines
<Domestic business> Increase in gross profits by
sales expansion of POS forspecialty stores and mobilesolutions
Eliminating the effect of the yendepreciation by reducing costsfor procurement
Continuing to reduce costs bypromoting higher efficiency
<Overseas business> Higher efficiency achieved by
reviewing distribution channelswithin the Fujitsu Group(Direct operation of POS inEurope and the U.S.)
Improving profits
Proposing new “store front”
Segment net sales: FY2013 results 21.5 billion yen, FY2014 targets 16.8 billion yen
SCO for Europe and the U.S.
Copyright 2014 FUJITSU FRONTECH LIMITED
Use of RFID in store systems Accelerated adoption of RFID in the apparel industry due to reduced RFID brand-tag prices
[Benefits to customers]− Display of the product information of a chosen
product[Benefits to stores]− Grasping the hot-selling products by knowing
what are tried on− Product strategies by analyzing customer behaviors
RFID solution deployment Proposal to brand-specific apparel stores and
collaboration for POS packages, etc.− Increased accuracy of inventory
→ sales and purchasing strategies− Shorter time for customers waiting in a line for
checkout− Prevention of theft
Cloud-based linkage Provision of an RFID tracking system on a cloud platform
− Integrated control of RFID data at a center− Systems linkage for operations including receiving/shipping
and inspecting goodsTarget: apparel, medical, public sectors, etc.
17
Retail Business (2) Topics
RFID shelf sensor
Copyright 2014 FUJITSU FRONTECH LIMITED18
Industrial/Public Business (1)
Public racing
<Market trend> Sales of totalizator terminal peaked out
due to the shrinking number of sales counters, led by the increased number of Internet votes
<Measures for FY2014> Steady deployment of the 7th generation
totalizator terminal Entering the server business for race track
operators - Sales expansion of
cashless servers Planning and developing
the 8th generationtotalizator terminal
<Market trend> Continuing the business for replacement
aimed at reducing costs for operation,as the systems are aging
Increase in projects for building andmaintaining stadiums and infrastructuretargeted at the 2020 Tokyo Olympic Games
<Measures for FY2014> Offering a total system in use at
used-car auction house(bidding system + operation system +video system, etc.)
Approach to businesses related to theTokyo Olympic Games
Industrial/Public system
Expansion of the business by offering a total solution
for race tracks
Proposing a total solution combined with the peripheral systems
Segment net sales: FY2013 results 23.6 billion yen, FY2014 targets 23.6 billion yen
Cashless terminal
Copyright 2014 FUJITSU FRONTECH LIMITED
Expansion of the Chinese airport business Our share in FIDS (Flight Information Display System)
− Operating in 19 airports (57% share in China)Design and manufacture in Japan to exportto China
Product equipped with a color LCD unit uniquelydeveloped by the Company− Development of FSC (Field Sequential Color)
LCD units controllable by general-purpose PCs
Manufacturing FIDS in China(i) Scheme change from the manufacture in
Japan to China
(ii) Aiming for expansion of business to cover the entireairport display systems including medium- andsmall-sized monitors other than FIDS
19
Industrial/Public Business (2) Topics
FSC LCD unit
Hangzhou Airport (Zhejiang)
Hongqiao Airport (Shanghai)
Copyright 2014 FUJITSU FRONTECH LIMITED20
Service Business (1)
Financial service
<Market trend> Strong desire of medium-sized financial
institutions for BCP, security, andfocusing on their core businesses, leading to a robust demand
Expansion of ATM installation sites fromconvenience stores to general retailstores
<Measures for FY2014> Start of the sale of options for the ATM
service for stores (such as the cashmanagement solutions)
Enhancing BCP-compliant features of the ATM outsourcing service
<Market trend> A robust demand for services, owing to
the progress of renovation of retail stores Trend of low price continuously growing
<Measures for FY2014> Expansion of service features offered by
the POS help desk services for thecloud-based products (TeamCloud/M)
Expanding pricevariations offeredby the help deskservices
Retail service
Tapping into potential markets by expanding features of
the existing services
Enhancing variation ofthe LCM service for stores
Segment net sales: FY2013 results 17.8 billion yen, FY2014 targets 19.2 billion yen
POS help desk
Copyright 2014 FUJITSU FRONTECH LIMITED21
Service Business (2)
Start of the sale of the cash management solutions (TC/CM) Significantly enhanced efficiency of store cash management and its linkage with the store ATMs
(i) Store proceeds management (visualized flow of cash) and a significant reduction of the operational load for preparations of change fund used at counters
(ii)Cost reduction by using secure transportation of ATM funds for delivery of store change fund as well (iii)Expediting clearing of sales proceeds and ensuring security equivalent to a night depository safe
by depositing store proceeds in ATMs
Topics
[Headquarter]
[Store back office]
Automatic change dispenserAutomatic change dispenser
Deposit proceedsDeposit proceeds
POS
Change fund delivery
Collection/refilling
Customer
Withdrawal
Cash Recycler Call center
Servicecenter
Deposit
ATM
Bank
[Store floor]
HQ account
Clearing of fundsClearing of funds
POS sales/Balance Info Cloud center
Deposit/withdrawal,cash information,
inquiry/coordination
Deposit/withdrawal,cash information,
inquiry/coordination
Deposit/withdrawal,cash information,
inquiry/coordination
Deposit/withdrawal,cash information,
inquiry/coordination
Deposit/withdrawal Information
Purchase
Securetransportation plan
Copyright 2014 FUJITSU FRONTECH LIMITED
B to B to Front
Logistics/stores
Internet SNS
Financial institutionsDistribution/retail Public racing
Bank branches/ATMTicket sales
counters
B
B
Front
to
to
(Contact point between
companies and consumers)
(Companies/organizations)
1. Collaboration inter-industryRetail/Internet/
banks/securities/credit
Renovation of front officesSales/office administration→Place to offer various
services Stores: payment/delivery
to home/Internet Bank branches:
investment/ insurance
2. Interactive network among consumers and companies/ consumers connected through SNS
(Consumers)
3.
CustomersCustomers
Customers
Fujitsu FrontechService
Retail business Industrial/PublicFinancial business
22
Copyright 2014 FUJITSU FRONTECH LIMITED
■ Expand into newmarket/business
● Apply technologies in whichthe Company has strengthsto new businesses
● Enter new markets
e.g.) Take approach to the medicaland logistics markets
• Bank/ATM• Store/POS• Public racing/totalizator
terminal• Mechanical components• Palm vein authentication • RFID
■ Innovation
● Create new business● Create new value
e.g.) Start cash managementsolutions services
■ Deepen technologiesand values offeredPromote a total business
● Add new features and products● Develop into the LCM business
e.g.) Deploy RFID solution
Existingbusinesses
Existing technologies
New technologies
New businesses
23
Copyright 2014 FUJITSU FRONTECH LIMITED
By creating new businesses with the “B to B to Front”
approach (the front line facing with the consumers) based on
our strategic advancement of business and strict continuation
of efforts to increase business efficiency, we will strive to
achieve:
<FY2014 targets>
Consolidated net sales: 110.0 billion yen
Consolidated operating income: 4.9 billion yen
24
Copyright 2014 FUJITSU FRONTECH LIMITED
<Notes Regarding Forward-Looking Statements>
●This material contains certain statements about projections and forecasts for the future plans, strategies, and performance based on assumptions made using information available to Fujitsu Frontech at that time.
● In addition, this material contains various risks and uncertainties (including economic trend, fierce competitions in the related industries, market demands, foreign exchange rates, tax rules and other regulations). Accordingly, please be informed that the actual results may materially differ from the forecasts made by the Company.
<Trademark>The proper nouns herein including product names are the trademarks or
registered trademarks of the respective companies.
25
Copyright 2014 FUJITSU FRONTECH LIMITED26