FY2013 Financial Results Briefing - FY2013 Financial Results and FY2014 Targets -

Transcription

1 FY2013 Financial Results Briefing - FY2013 Financial Results and FY2014 Targets - Bunmei Shimojima President and Representative Director Fujitsu Frontech Limited April 28, 2014

2 1. Summary of FY2013 Full-Year Consolidated Financial Results 1

3 Consolidated Results of Operations [Billion yen] Item Net sales Operating income Ordinary income Net income Net income per share FY yen FY yen Year-on-year yen Figures announced in April Change from the figures announced in April yen yen Overseas sales Overseas sales ratio in parentheses [Billion yen] FY (25.4%) FY (19.7%) FY2013 FY2012 Average exchange rate during period (1USD=) 100 yen* 83 yen The key points of the FY2013 financial results *The effects of the exchange rates Net sales: +4.7 billion yen Operating income: +0.6 billion yen Net sales increased by 7% year on year to 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. 2

4 Sales by Segment (Major Factors for Changes) [Billion yen] FY FY2013 Financial business: 43.9 billion yen (year-on-year increase of 4.7 billion yen, up 12%) Increase in mechanical components for overseas Retail business: 21.5 billion yen (year-on-year increase of 1.7 billion yen, up 9%) Increases in POS and RFID for both Japan and overseas Industrial/Public business: 23.6 billion yen (year-on-year increase of 1.0 billion yen, up 4%) Increase in display systems, mainly bidding systems for the used car market Financial business Industrial/Public business Other Retail business Service business *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. Service business: 17.8 billion yen (year-on-year increase of 0.5 billion yen, up 3%) Increase in financial services including ATM services for stores and ATM outsourcing services 3

5 Major Factors for Changes in Operating Income Efforts to increase business efficiency to build lean management base has started to steadily bear fruits. As the price competition is intensifying, we are planting seeds for new growth strategies. * Improvement of plant process In-house production HR measures, etc Cost reduction +0.6 Effect of exchange rates -1.8 Decrease in price, etc. [Billion yen] Change to lean structure* (Increased business efficiency) Year-on-year increase +1.7 FY2012 results FY2013 results 4

6 Consolidated Financial Positions and Cash Flows Consolidated financial positions [Billion yen] Outline Total assets Net assets Capital adequacy ratio Net assets per share FY % 1, yen FY % 1, yen Increase/Decrease % yen Consolidated statements of cash flows [Billion yen] Outline C/F from operating activities A C/F from investing activities B Free C/F A+ B C/F from financing activities C C/F A + B + C Cash and cash equivalents at the end of year FY (4.2) FY (4.4) 2.4 (2.4) Increase/Decrease

7 2. Summary of FY2014 Full-year Targets 6

8 Consolidated Earnings Forecast [Billion yen] Item Net sales Operating income Ordinary income Net income Net income per share FY2014 forecast FY2013 results Increase/ Decrease First half yen Full year yen First half (0.4) (16.50) yen Full year yen First half -1.7 ±0 ± yen Full year yen Overseas sales Overseas sales ratio in parentheses [Billion yen] FY2014 forecast 29.5 (26.8%) FY2013 results 27.5 (25.4%) FY2014 assumption FY2013 Average exchange rate during period (1USD=) 100 yen 100 yen 7

9 Sales by Segment (Major Factors for Changes) [Billion yen] FY2013 FY2014 Financial business: 49.8 billion yen (year-on-year increase of 5.9 billion yen, up 13%) Increase in mechanical components for overseas Increase due to a start of systems business such as ATM for overseas Retail business: 16.8 billion yen (year-on-year decrease of 4.7 billion yen, down 22%) Decrease due to the change in distribution channels of POS in Europe and the U.S. Industrial/Public business: 23.6 billion yen (unchanged year on year at 0.0 billion yen, 0% change) Increase due to a steady deployment of totalizator terminals Decrease due to narrowing down product models in the smartphone test supporting business Financial business Industrial/Public business Other Retail business Service business Service business: 19.2 billion yen (year-on-year increase of 1.4 billion yen, up 8%) Increase in the ATM services for stores 8

10 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 Change to lean structure (continuing efforts to increase business efficiency) +1.7 Cost reduction -1.4 Decrease in price, strategic investment [Billion yen] 4.9 Year-on-year increase +0.8 FY2013 results FY2014 targets 9

11 (Reference) Medium-term Strategic Investments Overseas investments Introduction of new POS products to the Chinese market Introduction of new self-checkout systems for Europe and the U.S. TCR (Teller Cash Recycler) development Global ATM (Spain European markets) Overseas strategies for ATM cover both systems and mechanical components in the future. Cross-boarder M&A Enhancement of manufacturing system at the major plant in the Philippines Increased production of mechanical components for overseas market Investment in Japan 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 10

12 Dividends Dividend policy: Placing a focus on stable dividend payouts, dividends are decided in consideration of profits in each fiscal year and future business developments. Item Interim Year-end Full year FY yen 9 yen (scheduled) 17 yen (scheduled) (increased dividend) FY yen (planned) 9 yen (planned) 18 yen (planned) (increased dividend) [Yen] 30 Past dividend distributions 3.0 [Billion yen] Dividend per share (left axis) 16 yen Net income (right axis) billion yen Stable payouts of 16 yen for 5 years FY2008 FY2012 FY2013 FY

13 Policies for FY2014 Medium-term management policy 1) Strategic business promotion A. Promoting a total business ranging from products to solution / services B. Strategic expansion of global business C. Development into LCM business with service as the core 2) Strict continuation of efforts to increase business efficiency Policies for FY2014 (i) Expansion of global businesses Overseas net sales ratio: FY % FY % 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 (ii) Strict enforcement of business efficiency Review of processes for the new product development Review of manufacturing system Optimizing supply chains (iii) Creating new businesses/new products Cash management solution services TCR RFID solution 12

14 Financial Business (1) Segment net sales: FY2013 results 43.9 billion yen, FY2014 targets 49.8 billion yen Overseas business Expansion of systems business such as ATM in addition to mechanical components sales <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 shift to 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 mandatory Promotion of vigorous sales expansion of new bill dispensing units and bill 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 Mechanical components New-model ATM for Spain 13

15 Financial Business (2) Domestic business Securing replacement demand by enhancing solutions <Market trend> Continued replacement demand for older ATM models after 10 years since the issuance 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 sales expansion through the market launch of a web-linkage feature FY2014 becoming in between time for banking terminals before renewal. Promoting new developments for the next-generation systems starting from FY2015 Palm vein authentication Expansion to markets for government agencies and public sectors <Market trend> The biometric market has become active worldwide as security awareness is heightened Demand expansion from financial market to the markets for government agencies and public sectors <Measures for FY2014> Introduction of laptops with a palm vein authentication sensor as well as external sensors (SL) to the overseas markets Promotion of introduction of the product for banks and local governments in Japan Increased number of tablets equipped with the product Laptop with the palm vein authentication sensor 14

16 Financial Business (3) Topics Start of the ATM system business in Spain Introducing new-model ATMs in Spain where we have a large number of ATM installed base Aiming 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 expected With the momentum for installation of bill storage devices for table games on the rise, aiming for promotion of bill acceptor units as well Ultra-thin palm vein authentication sensor Mounted on corporate-use tablets and laptop PCs Adopted as terminals used for external activities by financial institutions Tablet with the palm vein authentication sensor 15

17 Retail Business (1) Segment net sales: FY2013 results 21.5 billion yen, FY2014 targets 16.8 billion yen Retail Store systems business Proposing new store front <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 Improving profits <Domestic business> Increase in gross profits by sales expansion of POS for specialty stores and mobile solutions Eliminating the effect of the yen depreciation by reducing costs for procurement Continuing to reduce costs by promoting higher efficiency <Overseas business> Higher efficiency achieved by reviewing distribution channels within the Fujitsu Group (Direct operation of POS in Europe and the U.S.) SCO for Europe and the U.S. 16

18 Retail Business (2) Topics 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 RFID shelf sensor 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 goods Target: apparel, medical, public sectors, etc. 17

19 Industrial/Public Business (1) Segment net sales: FY2013 results 23.6 billion yen, FY2014 targets 23.6 billion yen Public racing Expansion of the business by offering a total solution for race tracks <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 7 th generation totalizator terminal Entering the server business for race track operators - Sales expansion of cashless servers Planning and developing the 8 th generation totalizator terminal Cashless terminal Industrial/Public system Proposing a total solution combined with the peripheral systems <Market trend> Continuing the business for replacement aimed at reducing costs for operation, as the systems are aging Increase in projects for building and maintaining stadiums and infrastructure targeted 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 the Tokyo Olympic Games 18

20 Industrial/Public Business (2) Topics 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 export to China Product equipped with a color LCD unit uniquely developed 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 Hangzhou Airport (Zhejiang) Hongqiao Airport (Shanghai) (ii) Aiming for expansion of business to cover the entire airport display systems including medium- and small-sized monitors other than FIDS FSC LCD unit 19

21 Service Business (1) Segment net sales: FY2013 results 17.8 billion yen, FY2014 targets 19.2 billion yen Financial service Tapping into potential markets by expanding features of the existing services <Market trend> Strong desire of medium-sized financial institutions for BCP, security, and focusing on their core businesses, leading to a robust demand Expansion of ATM installation sites from convenience stores to general retail stores <Measures for FY2014> Start of the sale of options for the ATM service for stores (such as the cash management solutions) Enhancing BCP-compliant features of the ATM outsourcing service Retail service Enhancing variation of the LCM service for stores <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 the cloud-based products (TeamCloud/M) Expanding price variations offered by the help desk services POS help desk 20

22 Service Business (2) Topics 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 [Headquarter] Deposit/withdrawal, cash information, inquiry/coordination Service center Bank POS sales/balance Info Cloud center [Store floor] [Store back office] Deposit proceeds Deposit/withdrawal Information Deposit/withdrawal, cash information, inquiry/coordination Customer Purchase POS Automatic change dispenser Cash Recycler Call center Deposit Change fund delivery Withdrawal ATM Collection/refilling Clearing of funds Secure transportation plan HQ account 21

23 B to B to Front B to B (Companies/ organizations) to Front (Contact point between companies and consumers) (Consumers) Fujitsu Frontech Retail business Customers Distribution/retail Logistics/stores Financial institutions Bank branches/atm Internet Service Industrial/Public Financial business Customers SNS Customers Public racing Ticket sales counters 1. Collaboration inter-industry 3. Retail/Internet/ banks/securities/credit Renovation of front offices Sales/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 22

24 New technologies Deepen technologies and values offered Promote a total business Add new features and products Develop into the LCM business e.g.) Deploy RFID solution Innovation Create new business Create new value e.g.) Start cash management solutions services Existing businesses Bank/ATM Store/POS Public racing/totalizator terminal Mechanical components Palm vein authentication RFID Expand into new market/business Apply technologies in which the Company has strengths to new businesses Enter new markets e.g.) Take approach to the medical and logistics markets New businesses Existing technologies 23

25 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: billion yen Consolidated operating income: 4.9 billion yen 24

26 <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

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