[Company analysis] Fujitsu Ltd. (富士通)

「Fujitsu Ltd. (富士通)」has the top share in Japan in the IT service market, and the fourth largest in the world. They mainly carry out manufacturing and sales of communication systems, information processing systems, electronic devices, and related services. The number of consolidated employees is approximately 132,138.

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is JPY million, as of 2019

Company name	Fujitsu Ltd.
Company name (Japanese)	富士通
Date of establishment	Thursday, June 20, 1935
Headquarters location	〒211-8588 神奈川県川崎市中原区上小田中4-1-1
Capital	324,600
Consolidated sales	3,952,437
Consolidated operating profit	130,227
Consolidated total assets	3,104,842
Consolidated capital	1,253,630
Capital adequacy ratio	40.4%
Consolidated number of employees	132,138

 

 

 

2. Summary and Features

 
「Fujitsu」was originated from「Fuji Electric Holdings Co., Ltd.(富士電機)」, which was jointly established by 「Furukawa Electric Co., Ltd.(古河電気工業)」and「Siemens」in 1923. Before the establishment, it was a telephone division separated from「Fuji Electric」and became independent as「Fuji Electric FA Components & Systems Co., Ltd.(富士電機機器制御)」on June 20, 1935. In 1965, they became capital independent from「Fuji Electric」, and in 1967 they changed the company name to「Fujitsu」.

In 2008, this company acquired the computer division of「Siemens」and established「Fujitsu Siemens Computers」. In 2010, they integrated the mobile phone business with「Toshiba Corporation(東芝)」, In 2009,  smartphone shipments of「Fujitsu」surpassed「Sony(ソニー)」in volume and became No. 2 in Japan after「Apple」. This company also conducted hard disk business, but due to the worse business performance, it was transferred to「Showa Denko K.K.(昭和電工)」 on October 1, 2009. In addition, the production base in Thailand, which was transferred to「Toshiba」, eventually became property of「Western Digital」.

「Fujitsu」has maintained its top share in the IT service market in Japan for many years. It is the fourth largest in the world after「IBM」,「Accenture」and「HP Delloite」. In server market, they are No.1 in Japan and No.9 in the world. they have very high technical ability, service ability, and marketing ability that are suitable for the name of Japan's top class IT company. In addition, one of the strengths of「Fujitsu」is, they do not rely solely on a specific business division but they have various businesses which have top market share.

Apparently,「Fujitsu」is the top class IT company in Japan, but their brand power is still inferior to「IBM」or other world classs IT companies.  In the tablet / smartphone business, they are struggling to secure operating income. In the PC market, they are working hard like「NEC」, but they are having trouble with price competition with overseas manufacturers.

As an aside,「Fujitsu」is currently very popular with job hunting students as it has ranked 1st in the manufacturing industry and 2nd overall in the job hunting popularity ranking in the Japanese IT industry. This company has very unique new employee hiring system which is called "Challenge & Innovation recruitment". This is a new recruitment system that started in fiscal 2010. Through this, they are able to recruit people with various backgrounds, such as former Japanese swimmers, Japanese number one player for haiku and Go, and this is to win the international business competition.

 

 

 

3. Major Business

 

■ Technical solution
They carry out IT system consulting related services and system platform business related to IT infrastructure. This division is the highest in terms of sales weight, but recent results have leveled off. However, operating income has been secured at around 6%, and it is evaluated as operating efficiently.

■ Ubiquitous solution
They are currently implementing the PC business and mobile hardware business such as tablets and mobile phones. Many of them are for corporate customers, and sales themselves have leveled off, but operating profit has been in the red and in the black.

■ Equipment solution
They manufacture and sell LSIs and other electronic components. Sales here have also leveled off, but operating income has been declining due to a recent decline in demand for smartphones and fluctuations in the exchange rate.

 

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated sales		4,132,972	4,098,379	3,952,437
Consolidated operating profit		117,455	182,489	130,227
Consolidated total assets		3,191,498	3,121,522	3,104,842
Consolidated net assets		1,019,202	1,204,902	1,253,630
Breakdown of sales	Technology solution	3,126,600	3,052,700	3,123,700
	Ubiquitous solution	645,500	663,900	509,900
	Device solution	544,300	560,000	487,000
	Others and Adjustments	-183,500	-178,200	-168,200