Message to Shareholders

Fujitsu annual report 1998

Networking is the foundation of today’s industry. We provide a broad range of value-added, network- based solutions to help our customers – from individuals to large corporations – achieve their goals. In so doing, we are well positioned to consolidate our leadership in the global IT industry as we enter the 21st century.

Fiscal 1997 Results Looking Ahead: Building Our Long active as a solutions Despite adverse economic condi- Global Solutions Business provider in the Asia/Oceania tions in Japan and Asia, consoli- ’s broad lineup of com- region, our 1990 acquisition of dated net sales for fiscal 1997 rose petitive products – from large- ICL helped us to extend our 11% to ¥4,985.3 billion, a record scale and midrange servers to reach to Europe as well. Like- high. By geographical area, do- personal computers, peripherals, wise, by making long-time part- mestic sales were up 2%, while and services – and ner Amdahl Corporation a overseas sales jumped 31% to strong customer focus enable us full-fledged member of the ¥1,757.0 billion, rising from to offer comprehensive business Fujitsu Group last September, 30% to 35% of total sales. Oper- solutions in a wide range of in- we made clear our intention to ating income increased 5% to dustries. And in order to meet build our solutions business in ¥211.2 billion. However, ex- the needs of customers doing North America, the largest IT change losses due to currency de- business in an increasingly global market in the world. Having clines in Asia, plus amortization marketplace, we have been ex- marketed products based on of goodwill-related expenses inci- panding our overseas operations Fujitsu technologies for more dent to the Amdahl acquisition, and working to increase synergy than 25 years, Amdahl has re- combined to limit net income to among them. As a result of cently been moving forcefully ¥5.5 billion. these efforts, overseas markets into services and software, have grown to account for 35% which now account for about of overall consolidated sales. two-thirds of its business. Tak-

2 Crafting leading-edge IT solutions for customers around the world

Tadashi Sekizawa, Chairman (right) Naoyuki Akikusa, President (left) ing advantage of this expertise the lead in North America and Leveraging Our Strength in and Amdahl’s impressive cus- Europe, respectively. Supporting Network Technology tomer base, including numerous these efforts are Fujitsu’s abun- Increasingly, networking is play- Fortune 100 companies, and by dant know-how and solid track ing a vital role in creating such marshalling the extensive re- record in constructing sophisti- solutions. Fujitsu has long been sources of the entire Fujitsu cated, large-scale systems, as at the forefront of network tech- Group, we are determined to be well as the talents of the Group’s nology, developing and deploy- the world’s leading IT solutions 52,000 highly qualified services ing advanced optical transmission company on a worldwide basis. and software personnel around and digital switching systems To achieve this goal, we will the world. These strengths, to- that have contributed to the pursue a strategy that aims to gether with our comprehensive communications infrastructures leverage the combined resources capabilities in the development of countries around the world. of the Fujitsu Group while and manufacture of computers, In the , where net- relying on local operations to communications systems and work implementation is furthest provide the customized, market- electronic devices, enable us to advanced, Fujitsu is a market sensitive attention that their offer our customers optimal so- leader in the high-speed optical customers require. In this re- lutions of uncompromising transmission field. Our track gard, Fujitsu will concentrate on quality. record also includes furnishing the Japanese and Asian markets, ATM switching systems for the while Amdahl and ICL will take North Carolina Information

3 Message to Shareholders

Fujitsu annual report 1998

Highway, the world’s first com- “Reliability and Creativity” attributable to the drop in mercial broadband ISDN net- and “What Mankind Can DRAM prices and amortization work. We will continue to be a Dream, Technology Can of goodwill and restructuring leader in the construction of glo- Achieve” have been Fujitsu’s cor- costs associated with the bal communications infrastruc- porate mottoes for many years. Amdahl acquisition. However, ture by providing the most In the spirit of these slogans, we by pushing to commercialize advanced and reliable optical will continue to stress research high value-added products in transmission, switching and mo- and development and to seek the electronic devices field and bile communications systems. original and creative ways of uti- other measures, we are actively At the same time, backed by our lizing our current technology to working to make our business know-how in communications realize the dreams of tomorrow. and management more effi- technology and network man- By maintaining an unwavering cient. Through these efforts, agement, we will move further focus on the customer and stay- and by concentrating our re- into the LAN and WAN fields, ing ahead of the pack in antici- sources in growth fields, we will working to more fully integrate pating market needs, we can resolutely pursue our previously computer and communications offer optimal solutions that will stated goal of achieving 10% technologies in order to offer enable us to enhance the trust of ROE by fiscal 2000. CTI and other solutions that our customers and secure our Fujitsu aims at nothing less meet a wide variety of customer leadership position in the global than being the world’s leading needs. IT industry. IT company in terms of growth Fujitsu will continue to pur- and profitability. We thank our sue the development of key elec- Financial Targets shareholders for their ongoing tronic devices essential to Fujitsu is committed to achiev- support and encouragement in creating competitive products. ing greater growth and profit- this endeavor. This includes emphasizing re- ability by providing solutions search and development in sys- that anticipate market needs July, 1998 tem LSI and other leading-edge and by aggressively pursuing technologies, as well as strength- worldwide business develop- ening our world-leading market ment. We use global standard shares in flash memories and indicators, such as return on Tadashi Sekizawa, Chairman compound semiconductors used equity (ROE) and free cash in mobile information and com- flows, to measure management munications equipment. efficiency. In fiscal 1997 we experienced a decline in ROE, Naoyuki Akikusa, President

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