II. Risks in Fujitsu Group Business Activities

1 Economic and Financial Market Trends

1-1 Economic Trends in Key Markets

[ Overview and impact of risks ]
The Fujitsu Group provides a variety of ICT services to clients in corporate and public institutions, in Japan and every region of the globe. In addition, we are developing the business brand Fujitsu Uvance as our uniform global strategy. Revenue and profit or loss generated from these operations are greatly affected by economic conditions and/or sudden changes in the supply and demand balance in each respective market. In particular, the economic trends and sudden changes in the supply and demand balance in our key markets, namely Japan, Europe, North America, and Asia (including China), can impact Fujitsu Group operations.

[ Measures against the risks ]
To respond to the rapidly changing market, we are working to reduce risk by clarifying the business strategy of the entire Group and our business portfolio strategies, as well as implementing continuous structural reforms.

1-2. Exchange Rates, Interest Rates, and Capital Markets

[ Overview and impact of risks ]
The Fujitsu Group is expanding its business outside Japan. Therefore, sudden fluctuations in exchange rates may reduce the price competitiveness of products and services that we export from Japan and affect the imports of components from outside of Japan, which would significantly impact the revenue and profit or loss of our business outside of Japan. With respect to assets and liabilities held by the Group outside Japan, there is a possibility that exchange rate fluctuations could lead to depreciation of assets and appreciation of liabilities.

In addition, the Fujitsu Group also has interest-bearing loans, which include debt directly impacted by interest rate fluctuations. Consequently, rising interest rates could increase borrowing costs such as interest expense and procurement costs
Further, stock market trends in and outside of Japan have a substantial effect on the value of Group stockholdings in other companies and the management of pension assets. Weak stock market performance could thus force us to incur losses on the devaluation of marketable securities held or a reduction in pension assets, leading to an increased burden on the company.

[ Measures against the risks ]
The Fujitsu Group collects information on the financial market environment, including exchange rate fluctuations, and analyzes financial institution trends and hedges risks with foreign exchange forward contracts as necessary. In addition, we work to share information across the entire Group and to minimize any impact to the company.

Top of Page