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Management Direction

1. Basic Management Policy

Through its constant pursuit of innovation, the Fujitsu Group aims to contribute to the creation of a networked society that is rewarding and secure, bringing about a prosperous future that fulfills the dreams of people throughout the world. To achieve this vision, the Fujitsu Group strives for sustainable profit and growth, while continually enhancing its corporate value.

2. Medium- to Long-Term Corporate Management Strategy and Priority Tasks

Based on such recognition, since fiscal 2015, the Fujitsu Group has been addressing transformation of the business portfolio, having set performance targets: an operating profit margin of at least 10%, free cash flow of at least 150 billion yen, owners’ equity ratio of at least 40%, and ratio of revenue outside Japan of at least 50%.

As a result of steady implementation of initiatives for "Business Structure Transformation," the Group achieved gratifying results. On the other hand, with regard to initiatives for “Growth Strategy Transformation,” sufficient results have yet to be achieved. In fiscal 2017, it became clear that the Group has three issues to be addressed.

The first issue is the need to gain sufficient return on upfront investment, which the Group has executed vigorously so far, including in the international business. Going forward, the Group will more stringently focus investment with an eye toward future growth while striving to achieve efficient recoupment of the upfront investment made so far.

The second issue is the need to fully adjust to the change in the business environment in the network business. In fiscal 2018, the Group will implement measures to strengthen fundamentals of the business areas requiring transformation without hesitation.

The third issue is to suppress swelling of unprofitable projects. With regard to large-scale unprofitable projects that emerged in fiscal 2017, the Group has already began applying quality assurance functions to prevent future losses.

Regarding the Group’s business, the IT services in Japan remain strong. Through the upfront investments and structural reforms the Group has made so far, the effects of development of AI and other advanced technologies in the global eco-system are beginning to be reflected in the business. By strengthening the relationship between Japanese operations and other Asian operations and operating them as one, profitability has been improved. Currently, on the other hand, the network business and the businesses outside Japan are expected to face challenging circumstances.

In fiscal 2018, the Group is resolved to achieve the performance forecast by accomplishing transformation and resolving the three issues confronting the Group mentioned above.

In light of the results over the past three years, we will revise the timeframe for the process of achieving the performance targets. However, it is imperative to achieve the performance targets in order to prevail in global competition by continuing investment for growth in the digital era and maintaining competitiveness. The Group’s vision is unchanged.

In order to realize the Group’s vision, the Group will continue its vigorous transformation.

Moving forward on its own transformation, and supporting the business of its customers, the Fujitsu Group aims to use ICT to contribute to the creation of a prosperous society. To do so, the Company seeks to expand ICT usage areas through business and social innovation, while also expanding its business globally.

Based on the recognition that establishment and operation of the internal control framework including the compliance system is one of the most important management matters from the viewpoint of maintaining and enhancing corporate value, the Fujitsu Group is working to ensure compliance, adhering to the Code of Conduct included in the FUJITSU Way. Having also positioned the further strengthening of initiatives about compliance as an issue to be addressed, the Fujitsu Group will continue these initiatives.