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Business and Other Risks

2. Customers

Fujitsu Group operations are highly influenced by the business trends of customers. Examples of potential risks are described below.

2-1. Changes in Customers' ICT Investment Trends

A growing proportion of our technology solutions and other businesses is with the public institutions such as the Japanese, local and foreign governments; telecommunications carriers; financial services institutions; and large manufacturers. The business environment within these industries, including shifting market trends and structural reforms, could lead to changes in customers’ IT investment trends, having a significant impact on Group sales and profitability. In addition, the trends in sales of our customers’ products and services have a large impact on the demand for and prices of the Group’s products and services. Accordingly, soft demand and falling prices for customers’ products and services, a decline in the size of customers’ businesses, or customers’ reduced market share, as well as restrains on customer ICT investments could negatively impact Group sales and earnings.

In our business outside Japan, for example, government related projects in the UK are an especially important part of our business. Accordingly, changes and restraints placed on the ICT investment plans of the UK government could impact sales and profitability.

2-2. Ability to Maintain Long-Term Relationships with Customers

The Fujitsu Group is creating long-lasting ties with its customers, striving to be a valued and trusted business partner and provide solutions across the full IT system lifecycle. Accordingly, business stability hinges on maintaining relations with customers. An inability to maintain trusted relationships with such customers, or the failure to renew contracts with them, could therefore affect sales and profitability.