fy2014 1st half financial results briefing · ②aggressively developing new ways of use other than...

Bunmei Shimojima President and Representative DirectorFujitsu Frontech LimitedOctober 29, 2014

FY2014 1st Half Financial Results Briefing

Copyright 2014 FUJITSU FRONTECH LIMITED

1. Summary of FY2014 1st HalfConsolidated Financial Results

1


Consolidated Results of Operations

Item Net sales Operating income

Ordinary income Net income Net income

per share

FY2014First half

48.8 0.4 0.6 0.3 14.32 yen

FY2013

First half48.8 0.4 0.2 -0.4 -16.50yen

Year-on-year ±0 ±0 +0.4 +0.7 +30.82 yen

Figures announced in April

47.1 0.4 0.2 0.1 4.18 yen

Change from the figures announced in April +1.7 ±0 +0.4 +0.2 +10.14 yen

[Billion yen]

2

Average exchange rate during period (1USD=)

FY2014

First half103 yen

FY2013

First half99 yen


Sales・Operating income by Business Segment

Item

FY2013First half

FY2014First half

Increase/Decrease

Net sales Operating income Net sales Operating

income Net sales Operating income

Financial business 17.8 0.9 21.3 0.7 +3.5 -0.2

Retail business 10.9 -0.8 8.7 -0.5 -2.2 +0.3

Industrial/Public business 10.8 0.3 9.5 0.2 -1.3 -0.1

Service business 8.7 0.5 8.8 0.5 +0.1 ±0

Other 0.6 0 0.5 0 -0.1 ±0

Corporate - -0.5 - -0.5 - ±0

Total 48.8 +0.4 48.8 0.4 ±0 ±0

[Billion yen]

3


Increase in mechanical components for overseas Increase in palm vein authentication system

Decrease due to transfer of domestic retail solution business

Decrease due to transfer of SCO software business of subsidiary in North America

Decrease in overseas POS business

Decrease due to an end of a big project for display system Decrease in smartphone test supporting business

Increase in ATM services for stores Increase in maintenance service for retail business

products

[Billion yen]

0.6 0.58.7 8.8

10.8 9.5

10.9 8.7

17.8 21.3

0

10

20

30

40

50

60

FY2013

First half

FY2014

First half

48.8

Financial business: 21.3 billion yen (year-on-year increase of 3.5 billion yen, up 20%)

Retail business: 8.7 billion yen (year-on-year decrease of 2.2 billion yen, down 20%)

Industrial/Public business: 9.5 billion yen (year-on-year decrease of 1.3 billion yen, down 12%)

Service business: 8.8 billion yen (year-on-year increase of 0.1 billion yen, up 1%)

Financial business Retail businessIndustrial/Public business Service business

Sales by Business Segment

Other

48.8

4


Sales by regions Domestic: Decrease due to transfer of businesses and end of big projects. Overseas: Increase due to demand expansion of mechanical components,

mainly in China. Decrease in Americas due to transfer of SCO software business of subsidiary in North America

ItemFY2013

First halfFY2014

First halfIncrease/Decrease

Domestic(Retail Solution)

35.3(1.0)

33.2(0)

-2.1(-1.0)

Overseas(Overseas sales ratio)

13.5(27.6%)

15.6(31.9%)

+2.1(+4.3%)

Americas(SCO software)

5.4(0.4)

4.9(0)

-0.5(-0.4)

Europe 3.5 4.2 +0.7

Asia 4.1 6.4 +2.3

[China] [2.4] [4.7] [+2.3]

Other 0.5 0.1 -0.4

Total 48.8 48.8 ±0

[Billion yen]

5


Outline Total assets Net assets Capital adequacy ratio Net assets per share

FY2014First half

65.2 35.8 54.6% 1,483.57 yen

FY2013 65.2 35.5 54.1% 1,473.37 yen

Increase/Decrease ±0 +0.3 +0.5% +10.20 yen

Outline

C/F from operating activities

A

C/F from investing activities

B

Free C/FA + B

C/F from financing activities

C

C/FA + B + C

Cash and cash equivalents at

the end of year

FY2014First half

3.9 -1.6 2.3 -0.7 1.7 8.0

FY2013First half

3.9 -0.4 3.5 -2.3 1.3 3.4

Increase/Decrease ±0 -1.2 -1.2 +1.6 +0.4 +4.6

[Billion yen]

[Billion yen]

Consolidated Financial Positions and Cash Flows

6


2. Summary of FY2014 Full-year Targets

7


Item Net sales Operating income

Ordinary income

Net income

Net income per share

FY2014 planned 110.0 4.9 4.3 3.0 125.15 yen

FY2013 107.9 4.1 4.0 1.8 74.60yen

Increase/Decrease +2.1 +0.8 +0.3 +1.2 +50.55 yen

[Billion yen]

Consolidated Earnings Forecast

Average exchange rate during period (1USD=)

FY2014 assumption

100 yen

FY2013 100 yen

8


Sales by Segment

Item FY2013 FY2014 Increase/Decrease

Financial business 43.9 48.2 +4.3

Retail business 21.5 18.4 -3.1

Industrial/Public business 23.6 23.6 ±0

Service business 17.8 19.2 +1.4

Other 1.1 0.6 -0.5

Total 107.9 110.0 +2.1

Financial business: Increase of sales in mechanical component business Retail business: Decrease of sales due to transfer of solution businesses

done last year Industrial/Public business and Service business: Show recovery on second

half[Billion yen]

9


Sales by regions

Overseas: Sales growth in China and Europe, by increase in salesof bill recyclingunitDecrease of sales in Americas due to transfer of software business of

subsidiary in North America

Item FY2013 FY2014 Increase/Decrease

Domestic 80.4 80.0 -0.4

Overseas(Sales ratio)

27.5(25.4%)

30.0(27.3%)

+2.5(+1.9%)

Americas 10.6 9.6 -1.0

Europe 7.0 8.8 +1.8

Asia 8.9 11.4 +2.5

[China] [5.3] [7.9] [+2.6]

Other 1.0 0.2 -0.8

Total 107.9 110.0 +2.1

[Billion yen]

10


Financial business Retail business Industrial/Public

businessService

business

Description of each segments' business(Main products)

ATM

POS terminal

RFID

Handheld terminalTotalizator terminal

Display system

Flight information display system

Banking terminal

Refer to P12 Refer to P13

Details in P15

Details in P16

ATM、POS call center

ATM service for stores

LCM serviceMechanical component

Details in P14

Domestic

Domesticand

Overseas

Overseas

Palm vein authentication

11


Policies for each segments in FY2014 (1)

＜Circumstances of 1st Half＞Overseas mechanical component business continually showed good performance,

especially in China and EuropePalm vein authentication showed good performance in domestic and overseas market,

especially for financial institutions and public offices＜Policies for 2nd Half＞Domestic ATM: steady performance / Banking terminals: business negotiations are

becoming activeOverseas ATM: Acquired authentication of ECB and roll out starting from Spain

Financial business

＜Circumstances of 1st Half＞Released low-priced POS for China and Asia, and “Patio100”, the new smartphone type hand-held terminalRFID showed good performance mainly in overseas linen-tag

＜Policies for 2nd Half ＞Development of new platform for POS and new mobile terminalContinuing actions for improving profits

Retail business

Sales：FY2013(Result) 43.9 billion yen, FY2014(Plan) 48.2 billion yen

Sales：FY2013(Result) 21.5 billion yen, FY2014(Plan) 18.4 billion yen

Patio100

12


Policies for each segments in FY2014 (2) Industrial / Public business

＜Circumstances of 1st Half ＞Expansion of services for public racecourses(New cashless

terminals and etc.)Released “Eco-board”, an ecology-conscious scoreboard

＜Policies for 2nd Half＞Development of next generation totalizator terminalEnhancing competitiveness by functional extension of large scale display system Aggressively expand sales of patient guide system for hospitals and Eco-board

Service business

＜Circumstances of 1st Half＞Showed steady performance, especially in ATM service for storesRetail call center obtained a Three-Star Customer Service Rating, highest ratingin HDI-Japan Benchmarking (Twice in a row)

＜Policies for 2nd Half＞Expand business for financial and retail fields by dedicated organization for

LCM service

Sales：FY2013 (Result) 23.6 billion yen, FY2014 (Plan) 23.6 billion yen

Sales：FY2013 (Result) 17.8 billion yen, FY2014 (Plan) 19.2 billion yen

Ecology-consciousl scoreboard(Tokunoshima Amagicho Stadium)

13


(Topics) Global Financial Business

14

Due to expansion of demand of mechanical components in China and Europe, financial business’s overseas sales ratio has reached52%

(1) Mechanical component business①Demands of BRU for ATMs are expanding in Europe and China.

・Europe: In good condition especially in Eastern Europe.・China: Mandatory banknote serial number reading function has lead to more demand.

②Aggressively developing new ways of use other than ATM, which are expected to expand in the future.ex.）TCR, SCO, ticket vending machine, depositing machine, redemption KIOSK

(2) System business①Starting system business, leveraging the strength of mechanical component.

・ATM：Starting sales in Europe, and business negotiations are active.・TCR and other systems are also being considered.

②Considering providing solution in the future.

1st Half Result Y o Y comparison

10.7 billion yen +3.3 billion yen (+45%)

FY2014 (forecast) Y o Y comparison

20.4 billion yen +4 billion yen (+24%)

FY2014 1st Half (Result)

Business circumstances

Forecast for FY 2014

ATM Series 100Large size BRU(G750)

Small size BDU(F53)


【Introductionexample1:Sensorbuilt in tablet】2,000 tablets were introduced to Fukuoka Financial Group. Being used for external

activities, it gave changesto their sales operationstyle.

(Topics) Palm Vein Authentication System Business

15

・Biometric authentication market is active due to increasing demand of security

・The vein authentication market will show 32% annual growth until 2017(Researched by TechSci Research)- Domestic：For financial institutions and public offices- Overseas：For Brazil, Turkey, China and other developing countries

【Introduction example2: Autonomypreventing divulging of information】

Installed to all PCs in Souka city hall,which are used by1,300 staff members,protecting informationof citizens.

Business circumstances・Shipment planning for FY2014：150,000 units (double the number of FY2013)

- Promoting large scale business negotiations for financial institutions andpublic offices in domestic and overseas market.

- Improved accuracy of authentication, and super-thin compact size sensor have been equipped to tablets.

Market trend


(Topics) RFID business

16

・FY2014 shipment planning：Over 50 million tags (double the number of FY2013.- Domestic: Introduction of tags for medical and apparel business are in progress- Overseas: Sales of Linen tags, which can be washed repeatedly, are showing

large growth.

・Commercializing RFID solution platform, and start sales from this second half.

・Along with price reduction of RFID tags, the market is gaining momentum

・Installation are accelerating aiming for business efficiency andenhancing traceability

Market trend

Business circumstances

【Introduction example1：Label tag for blood collection tube 】

Speeding up the reading compared to traditional barcodes.

Reading 100 tags in 4 seconds（5 minutes using barcodes）

Operating in 20 hospitals

【Introduction example2：Managing line products for medical use】Realizing automation of checking of washing and antisepsis

Conveyor reading all at once


Development of the next-generation totalizator terminals Introduction of cash management solution services to the markets Commercialization of RFID solution platform Approach to businesses related to the Tokyo Olympic Games

Major Strategic Investments

Enhancement of manufacturingsystem at the major plant

in the PhilippinesIncreased production of

mechanical components for overseas market

Global ATM(Spain → European markets)

Overseas investments

Investment in Japan

Introduction of new POSproducts to theChinese market

TCR development

Introduction of newself-checkout systems for

Europe and the U.S.

Cross-boarder M&A

Overseas strategies for ATM cover both systems and mechanical components in the future.

17


By creating new businesses with the “B to B to Front”

approach (the front line facing with the consumers) based on

our strategic advancement of business and strict continuation

of efforts to increase business efficiency, we will strive to

achieve:

<FY2014 targets>

Consolidated net sales: 110.0 billion yen

Consolidated operating income: 4.9 billion yen

18


<Notes Regarding Forward-Looking Statements>

●This material contains certain statements about projections and forecasts for the future plans, strategies, and performance based on assumptions made using information available to Fujitsu Frontech at that time.

● In addition, this material contains various risks and uncertainties (including economic trend, fierce competitions in the related industries, market demands, foreign exchange rates, tax rules and other regulations). Accordingly, please be informed that the actual results may materially differ from the forecasts made by the Company.

<Trademark>The proper nouns herein including product names are the trademarks or

registered trademarks of the respective companies.

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