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    4901   JP3814000000

FUJIFILM HOLDINGS CORPORATION

(4901)
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FUJIFILM : Strategy and Value Creation

11/29/2021 | 09:01am EST

Strategy and Value Creation

FUJIFILM, from

Top Management

Strategy and

Corporate Governance

Financial and

Founding to Now

Commitment

Value Creation

Corporate Information

The Fujifilm Group's Vision and Ideals

Realization of

a Sustainable Society

In April 2021, we formulated the new medium-term management plan VISION2023 covering fiscal 2021 to fiscal 2023. This action plan guides us toward achieving the goals set forth in Sustainable Value Plan 2030 (SVP2030), a long-term plan targeting fiscal 2030.

We will accelerate the growth of the Fujifilm Group and contribute to the realization of a sustainable society by promoting the priority measures set forth in VISION2023, and by providing valuable products and services based on our leading-edge, proprietary technologies.

Targets Under SVP2030

Fiscal 2030

Revenue: JPY 3,500.0 billion or more

CO2 emissions*: Down 45% (vs. fiscal 2013)

SVP

2030

through

  • Resolving global environmental and social issues with innovation
  • Impacting society in a positive way through a wide range of business
  • Adequately responding to the expectations of society through stakeholder engagement

Targets Under VISION2023

Fiscal 2023

Revenue: JPY 2,700.0 billion

Operating income: JPY 260.0 billion

CO2 emissions*: Down 38% (vs. fiscal 2013)

VISION

2019

Fiscal 2017: Formulation of SVP2030

VISION

2023

Achievements under VISION2019

Fiscal 2019

Revenue: JPY 2,315.1 billion

Operating income: JPY 186.6 billion

CO2 emissions*: Down 30% (vs. fiscal 2013)

  • CO2 emission reductions are based on the entire product life cycle.

Targets are set in four priority areas and in the basis of our business activities via a two-pronged approach: considering society and the environment in our business processes and resolving social issues through our business activities.

Priority Areas

Business Segments Goals in the SDGs

Address climate change

Healthcare

Environ-

Promote recycling of resources

Materials

ment

Address energy issues

Business Innovation

Ensure product and chemical safety

Imaging

Reduce healthcare disparities and

Health

build a healthy society through the

global provision of leading-edge

Healthcare

products and services in all areas of

prevention, diagnosis and treatment

Contribute to the creation of a

safe and secure society in the

age of advancing DX through the

development and provision of

Daily

leading-edge functional materials

Materials

Contribute to enriching and making

Life

people's lives peaceful through

Imaging

the development and provision of

high-quality,high-performance

products and services in the field of

photography and videography

Work

Contribute to social change where

every person is motivated in the

Style

workplace through global provision of

Business Innovation

products and solutions that increase

productivity and creativity

Basis of Business Activities

Supply Chain

Strengthen CSR foundations across the entire supply chain

including factors of the environment, ethics and human rights

Governance

Improve and maintain governance structures by further

disseminating an open, fair and clear corporate culture

Process for Identifying Materiality

Step 1

Clarifying the Basic Policies

Have a long-term perspective to contribute to resolving social issues as a global company and show the future vision clearly

Step 2

Extracting Social Issues

Based on Business Strategy

List issues from external perspectives (e.g., various guidelines such as ISO 26000, GRI and the SDGs) and in terms of potential of issue resolution by all our divisions

Step 3

Evaluation of Materiality

Evaluate materiality via a two-pronged approach:

  1. Considering society and the environment in our business processes
  2. Resolving social issues through our business activities

Step 4

Planning and Review

Promote measures as companywide policy after coordinating goals for identified materiality with the relevant business divisions and finalizing materiality in the deliberations at the ESG Committee

For details of each step, please see the Sustainability Report 2021 Management Performance, pages 9-12.

23 FUJIFILM Holdings Corporation

INTEGRATED REPORT 2021 24

Strategy and Value Creation

Opportunities, Risks, Targets and Initiatives in Priority Areas

By assessing opportunities and risks and setting targets for initiatives in each of our priority areas, and by developing these initiatives in our business segments, we aim to resolve social issues through our business activities.

Priority

Opportunities

Risks

Main Business

Areas

Segments

FUJIFILM, from

Top Management

Strategy and

Corporate Governance

Financial and

Founding to Now

Commitment

Value Creation

Corporate Information

Major Initiatives and Targets for Priority Areas per Business

Target 1 Reduce CO2 emissions over product life cycles*1

Investment with Consideration of

Environmental Impact

Environ-

ment

  • Growing needs for efficiently storing enormous volumes of data with less energy and at low cost in the era of big data
  • Increasing demand for systems, products and technologies for weather monitoring and prediction in response to abnormal weather events, and for diagnosing deterioration of infrastructure such as buildings and water sources

Supply chain disruptions and factory stoppages due

to abnormal weather events caused by temperature

increases (e.g., heavy rain, floods, drought, forest

thinning)

Material shortages due to tree and forest withering

(Paper: pulp, Film: cellulose)

Material shortages due to fossil fuel depletion

Increase in manufacturing costs due to carbon taxes

on fossil fuel

Securing water necessary for film production to

mitigate natural disasters, etc.

Healthcare

Materials

Business

Innovation

Imaging

Goals in the SDGs

30%45%

FY2019 (Actual)

FY2030 (Target)

Target 2 Reduce CO2 emissions through products and services*2

  • Incorporating contribution to decarbonization in investment decisions
    • Targeting implementation of renewable energy at the new bio CDMO factories

Energy Strategy

  • Switching to high-efficiency facilities across the Group
  • Promoting social infrastructure development through environmental initiatives

Creating and Promoting Environmentally Conscious Products

Increasing needs for solutions that support medicine

Major, unpredictable changes in healthcare

and improve work efficiency due to an aging

administration policies due to healthcare reforms

population and shortages of medical practitioners

Strengthened laws and regulations for medical

Healthcare

Increasing unmet medical needs, mainly for cancer,

equipment

rare diseases and gene therapies

Increasing difficulty of new drug discovery

Expanding market for biopharmaceuticals, which

16

90

million tons

million tons

FY2019 (Actual)

FY2030 (Target)

  • Reducing society's power consumption through promoting use of large-capacity magnetic tape as an alternative to hard disk drives
  • Reducing power load by introducing printing plate materials that do not need development processing
  • Developing materials contributing to energy storage

are expected to deliver high efficacy with few

Heightened competition in the market for contract

Goals in the SDGs

Health

process development and manufacturing of

side effects

biopharmaceuticals due to technological innovations

  • Enhanced industrialization of regenerative medicine
  • Rising awareness of healthy life expectancy and lifestyle-related ailments

Stronger demand for display-related materials with

Tougher competition from alternative materials for

growth in the OLED market

TAC film

Expansion in the semiconductor market from spread

Fierce competitive environment in the

of 5G and autonomous driving

semiconductor materials market

Expansion in the industrial printing markets for

Weaker-than-expected demand in graphic arts film

packaging and textiles, and growth in inkjet digital

and printing plates

Materials

printing in these markets

Higher raw materials prices

Imaging

Growth in the number of images taken and printing

Escalation of competition in the mirrorless digital

needs due to smartphone proliferation

camera market

Expansion of demand for instant photo systems in

Daily

Enhancement of smartphone camera performance

Goals in the SDGs

emerging countries

(driving users away from cameras)

Life

Single-lens reflex camera and smartphone users

Escalation of competition in the high-performance

switching over to or purchasing mirrorless digital

industrial lens market due to competitors'

cameras due to enhanced performance

technological enhancements

Growth in demand for lenses as IoT advances and

Procurement risk due to tight supply-demand

security becomes more important

balance in semiconductors

  • Increase in demand for high-performance lenses from shifts to 4K and 8K imaging

*1 Reducing CO2 in the entire product life cycle (Figures vs. fiscal 2013 levels)

*2 Target of CO2 emissions reduction in society, which is to be achieved by replacing the conventional products with our environmentally conscious products and services (Cumulative reduction since fiscal 2017)

Target Implementing medical AI-based products and services in all countries and regions

57

196

Implementing products and services based on

medical AI technology in all countries and regions

countries

countries

by fiscal 2030 to improve access to healthcare

FY2019 (Actual)

FY2030 (Target)

Target 1 Contribute to creation of a safe and secure society in the age of advancing DX through the development and provision of leading-edge functional materials

Target 2 Contribute to enriching and making people's lives peaceful through the development and provision of high-quality,high-performance products and services in the field of photography and videography

Work Style

  • Stronger demand for office equipment and related services in emerging markets such as China and Southeast Asia
  • Increased demand for IT infrastructure development/ management services related to security, network and so forth, in response to the changes in work environments such as telecommuting
  • Growing market for business solutions and services that utilize AI and the cloud for DX and improving productivity in office work
  • Decreased demand for printing with establishment of telecommuting and advancements in business process digitization
  • Decline in profitability due to tougher competition in office equipment markets

Business

Innovation

Goals in the SDGs

Target Provide solutions and services bringing business innovation to 50 million people around the world

50

Providing 50 million workers with work styles helping

them be more productive and creative through

solutions and services that bring innovation to their

million people

businesses

FY2030 (Target)

25 FUJIFILM Holdings Corporation

INTEGRATED REPORT 2021 26

(Billions of yen)
For details, please see the Sustainability Report 2021 SVP Stories, pages 14-15.

Strategy and Value Creation

Targets for Achieving SVP2030 and Initiatives in Fiscal 2020

FUJIFILM, from

Top Management

Strategy and

Corporate Governance

Financial and

Founding to Now

Commitment

Value Creation

Corporate Information

Reflecting on the VISION2019 Medium-Term Management Plan, and on Fiscal 2020

Priority Area

Priority Issues

Major Targets for FY2030

Major Activities in FY2020

Reduce the Fujifilm Group's

Raising our FY2030 targets for reducing CO2

1. Address climate change

CO2 emissions by 45% by

emissions

FY2030 (compared to the

(Targets on the left are revised targets)

2. Promote recycling of

FY2013 level)

Obtained SBTi certification with higher targets

resources

Contribute to a reduction in the

Newly certified 30 products under the Fujifilm

3. Address energy issues

CO2 emissions generated in

Group Green Value Products certification system

toward a decarbonized

society by 90 million tons by

(total: 166 products)

Environment

society

FY2030

Named on the CDP A List for Water Security,

4. Ensure product and

Minimize adverse effect of

earned the highest "Leadership" rank in the CDP

chemical safety

chemical substances on human

Supplier Engagement Rating for three consecutive

health and the environment

years

First time selected for Health and Productivity

1. Fulfill unmet medical needs

Develop new treatment

Stock Program

2. Improve accessibility to

solutions / Improve

Opened a cancer-focused medical screening

accessibility to new treatment

center in India

medical services

solutions

Released PCR test kits, manufactured APIs for

3. Contribute to identifying

Expand and scale up AI and IoT

COVID-19 vaccine candidates and provided

diseases at an early stage

technologies to reduce burden

contract manufacturing for drug preparations

4. Contribute to health

Health

on medical professionals

Announced large-scale investments in Denmark

promotion and beauty

5. Promote management of a

Promote management of

and U.S. biopharmaceutical manufacturing

health and productivity to

facilities

healthy workplace

maintain employees' vitality

Launched SYNAPSE Radiotherapy, a radiotherapy

Enhancing our business portfolio and building the foundation for the next leap forward

In the VISION2019 medium-term management plan, we positioned our businesses in the following three stages: improving profitability, accelerating further growth and investing to create a future. Taking measures according to the stage of growth, we worked to improve the profitability of each business and set priority issues such as accelerating growth in the healthcare field and establishing a new growth strategy and further improving profitability of the document solutions business.

In healthcare, with the medical systems business and the bio CDMO business as growth drivers, we have been proactively making investments for sustainable growth, including the acquisition of Hitachi, Ltd.'s diagnostic imaging business, the acquisition of a facility in Denmark for the bio CDMO business and large-scale capital investment. In the document solutions business, we achieved an operating

margin of more than 10% in fiscal 2019, one year ahead of the initial plan, by improving profitability through promotion of operational reforms and shortening development lead times. In addition, by making Fuji Xerox a wholly owned subsidiary of the Company, we have established a foundation that will lead to faster decision-making and further synergy creation within the Fujifilm Group.

VISION2019

FY2019

FY2020

(Actual)

(Actual)

Revenue

2,600.0

2,315.1

2,192.5

100%

100%

100%

Operating

230.0

186.6

165.5

income

8.8%

8.1%

7.5%

Net income

150.0

125.0

181.2

attributable

Record

to FUJIFILM

5.8%

5.4%

high

8.3%

Holdings

ROE*

7.3%

6.3%

8.7%

* Return on equity

planning support software that utilizes AI in Japan

1. Contribute to creating a

Aim at 100% preservation of

Developed technology for magnetic tape storage

media with high recording capacity of 580TB,

safe and secure society

records archived on tapes.

which is 50x the conventional capacity

2. Contribute to enriching

Offering opportunities to enjoy

Enhanced the AI functionality of "Hibimikke (Crack

humanity and relationships

photos that give forms to

Daily Life

Finder)" a social infrastructure image diagnostic

between people

memories

service

Addressing Priority Issues and Performance Trends

Priority issues

Measures FY2017

FY2018

FY2019

FY2020

Acquisition of Biogen

Bio CDMO business

Accelerating growth in

Acquisition of Wako Pure

Acquisition of Irvine

(Denmark) Manufacturing

Decision to make large-scale

Decision to acquire Hitachi,

the healthcare field

Chemical Industries, Ltd.

Scientific

capital investment

Ltd.'s diagnostic imaging

Transfer of J-TEC shares

business*

Establishing a new

Converted Fuji Xerox to a

Established FUJIFILM

growth strategy and

Announced structural

wholly owned subsidiary

RIPCORD, a service company

further improving

Decided to terminate the

reforms at Fuji Xerox

to drive DX alongside

profitability of the

technology agreement with

U.S.-based RIPCORD

document solutions business

U.S.-based Xerox Corporation

1. Create environments

Support work-style reform for

that lead to a motivated

customers

workplace

Improve the rate of women in

2. Develop and utilize diverse

Work Style

managerial positions

human resources

Strengthen CSR foundations

Supply Chain

across the entire supply

Promote sustainable

chain including factors of

procurement

the environment, ethics and

human rights

Received the Nikkei Superior Products and

Services Award and the Nikkei Business Daily

Award for the CocoDesk personal workspace,

supporting telecommuting for businesspersons

Launched provision of our IT Expert Service, an

outsourcing service helping SMEs to leverage IT

Improved the rate of women in managerial positions

(14.5% in FY2019 to 15.4% in FY2020)

Re-informed our suppliers across the world about

the Request to Suppliers and collected receipts

from 213 suppliers

* Acquisition completed on March 31, 2021

Healthcare Field: Performance Trends

Document Solutions Business: Performance Trends

Revenue Operating income

Operating margin

Revenue Operating income

Operating margin

(Billions of yen)

567.8

(Billions of yen)

600

504.1

12.0%

1,200

1,047.8

1,005.6

14.0%

484.3

958.3

443.0

854.7

9.8%

11.0%

9.6%

6.8%

8.6%

300

6.6%

6.0%

600

7.0%

4.5%

33.3

33.1

55.8

0.8%

96.4

105.0

73.3

19.7

8.4

0

FY2017

FY2018

FY2019

FY2020

0

FY2017

FY2018

FY2019

FY2020

Improve and maintain

Improve compliance awareness

Governance

governance structures by

across the entire global Group

further disseminating an open,

fair and clear corporate culture

and reinforce risk management

Establishment of the Fujifilm Group AI Policy

Revision of Corporate Governance Guidelines

Establishment of the Fujifilm Group Global

Healthcare Code of Conduct and providing

education to employees engaged in related

businesses

Surveying all Group employees on understanding

of Company policies and awareness of compliance

A business portfolio with steady profits, even amid the COVID-19 pandemic

In fiscal 2020, both sales and profits decreased year-over- year due to the impact of the spread of COVID-19, but the medical systems business, bio CDMO business and regenerative medicine business performed particularly well in contributing to pandemic control. Sales also increased in the highly functional materials field, which captured demand for working and learning at home. This was a year

in which we built a resilient business portfolio and generated solid profits even amid the COVID-19 pandemic. In addition, net income attributable to FUJIFILM Holdings reached a record high, thanks to gains on the sale and valuation of investment securities, which gained significant value from strategic investments in venture companies, mainly in the healthcare segment. Also contributing were improvements in losses attributable to noncontrolling interests as a result of converting Fuji Xerox into a wholly owned subsidiary.

27 FUJIFILM Holdings Corporation

INTEGRATED REPORT 2021 28

Strategy and Value Creation

Medium-Term Management Plan VISION2023

In April 2021, we announced our medium-term management plan VISION2023, effective through fiscal 2023. Through four priority measures, we will accelerate growth in healthcare and highly functional materials and build a more resilient business platform to facilitate sustainable growth.

Accelerate business growth in healthcare and advanced materials and build a more resilient business platform to facilitate sustainable growth

  • Continue active growth investments
  • Concentrate management resources on "New/Future Potential" and "Growth Driver" businesses
  • Accelerate and strengthen the cash generation and investment cycle

FUJIFILM, from

Top Management

Strategy and

Corporate Governance

Financial and

Founding to Now

Commitment

Value Creation

Corporate Information

Performance Targets

(Billions of yen)

FY2021

FY2021

FY2023

FY2020 (Actual)

Latest Earnings

VISION2023

VISION2023

Forecast*6

Revenue

2,192.5

2,440.0

2,500.0

2,700.0

100%

100%

100%

100%

Operating income

189.5

215.0

235.0

270.0

(Excluding one-time expenses)

8.6%

8.8%

9.4%

10.0%

One-time expenses

24.0

35.0

35.0

10.0

165.5

180.0

200.0

260.0

Operating income

Record

7.5%

7.4%

8.0%

high

9.6%

1 Reinforce business portfolio management

Implement appropriate strategies according to business phase

Optimal allocation of group-wide management resources

3 Enter into new markets for further growth

Continue to invest in fields and markets where our technological strengths*4 can be leveraged

2 Strengthen cash flow management

Thorough business approach that emphasizes capital efficiency

Improve ROE*1, ROIC*2 and CCC*3

4 Create stronger integrated business synergies through M&A

FUJIFILM Healthcare*5

→Combine AI technology with our extensive product lineup to create new value

Income before

235.9

185.0

220.0

265.0

Record

income taxes

10.8%

7.6%

8.8%

high

9.8%

Net income attributable to

181.2

130.0

160.0

200.0

Record

FUJIFILM Holdings

8.3%

5.3%

6.4%

high

7.4%

Earnings per share for net income

¥453.28

¥325.18

¥400.18

¥500.27

attributable to FUJIFILM Holdings

ROE

8.7%

6.2%

7.1%

8.4%

ROIC

4.3%

4.6%

4.9%

6.1%

CCC

123 days

124 days

124 days

103 days

FUJIFILM Business Innovation

  • • Accelerate global business deployment
    • Strengthen solution and service businesses

(Note 1) Fiscal 2020 exchange rates (actual): USD = JPY 106, EUR = JPY 124, silver price (per kg) = JPY 84,000 VISION2023 exchange rate assumptions: USD = JPY 104, EUR = JPY 124, silver price (per kg) = JPY 84,000 Latest exchange rate forecast for fiscal 2021: USD = JPY 109, EUR = JPY 132, silver price (per kg) = JPY 95,000

(Note 2) Operating income fluctuation per change in one foreign exchange unit: USD = JPY 0.3 billion, EUR = JPY 0.8 billion

VISION2023:

Four priority measures

VISION2023 is based on the principles of accelerating growth in healthcare and highly functional materials and building a more resilient business platform to facilitate sustainable growth. Here, we will promote four priority measures to achieve these goals.

Reinforce business portfolio management

With our business segments reorganized into four areas- Healthcare, Materials, Business Innovation and Imaging- we will execute strategies befitting the phase of each business within these segments, with each business classified into one of four stages-New/Future Potential, Growth Driver, Earnings Base and Non-Core.

Strengthen cash flow management

In addition to growth in revenue and operating income and achieving ROE targets, we will adopt ROIC and CCC as new indicators and strengthen our ability to generate cash, through rigorous business management mindful of capital efficiency. In particular, we will focus on ROIC, an indicator of management efficiency in terms of effectively utilizing

invested capital, with a group-wide target of 6.1% in fiscal 2023. In addition, through the efficient use of assets and business portfolio management, we will generate a cumulative total of JPY 1 trillion in operating cash flow over three years, which we will prioritize use in growth investment.

Enter into new markets for further growth

We will invest in areas where we can leverage the Fujifilm Group's technological strengths, such as AI technology, biotechnology and photo regulation materials technology as we work to enter new markets.

Create stronger integrated business synergies through M&A

Fujifilm will create synergistic benefits with FUJIFILM Healthcare, which has taken over Hitachi, Ltd.'s diagnostic imaging business. Also, FUJIFILM Business Innovation will generate integration benefits in accelerating global operational presence and reinforcing the Solutions & Services Business.

*1 Return on equity

*2 Return on invested capital

*3 Cash conversion cycle. Number of days from when payment is made to purchase raw materials to when payment is collected for products or services

*4 AI/IT technologies, biotechnology, optical control material technology, etc. *5 Successor company for diagnostic imaging business of Hitachi, Ltd. acquired

on March 31, 2021

Performance Targets in the

VISION2023: Record profits

We are targeting revenue of JPY 2.7 trillion in fiscal 2023, with operating income to reach a record high in fiscal 2022 and further grow in fiscal 2023. Our goal for net income attributable to FUJIFILM Holdings is to reach a record high of JPY 200 billion in fiscal 2023. The plan does not incorporate one-time gains such as the gain on the sale and valuation of investment securities recorded in fiscal 2020, but it does include expected temporary profit declines in fiscal 2021. In addition, we will achieve ROE of 8.4% in fiscal 2023.

*6 As of the Q1 fiscal 2021 financial results announcement *7 After segment eliminations

*8 Fiscal 2020 figures are forecasts as of the time when VISION2023 was announced

*9 Revenue in the fiscal 2020 earnings forecast reference data is based on the reclassification of revenue from "Production Services" under Business Innovation (Document Solutions) to the Materials area in the forecast announced on February 9, 2020 (reference data)

Performance Targets by Segment

(Billions of yen)

FY2021

FY2021

FY2023

Revenue*7

FY2020*8

Latest Earnings

VISION2023

Forecast*6

VISION2023

Healthcare

550.0

750.0

770.0

860.0

Materials*9

570.0

600.0

620.0

720.0

Business

780.0

800.0

800.0

820.0

Innovation*9

Imaging

280.0

290.0

310.0

300.0

Total

2,180.0

2,440.0

2,500.0

2,700.0

Operating income

FY2021

FY2021

FY2023

[Operating

FY2020*7

Latest Earnings

margin]

VISION2023

Forecast*6

VISION2023

Healthcare

56.0

70.0

78.0

103.0

[10.2%]

[9.3%]

[10.1%]

[12.0%]

Materials

52.0

56.0

62.0

95.0

[9.1%]

[9.3%]

[10.0%]

[13.2%]

Business

71.0

75.0

75.0

82.0

Innovation

[9.1%]

[9.4%]

[9.4%]

[10.0%]

Imaging

11.0

16.0

22.0

25.0

[3.9%]

[5.5%]

[7.1%]

[8.3%]

Corporate expenses /

-30.0

-37.0

-37.0

-45.0

consolidated

adjustment

Total

160.0

180.0

200.0

260.0

[7.3%]

[7.4%]

[8.0%]

[9.6%]

29 FUJIFILM Holdings Corporation

INTEGRATED REPORT 2021 30

Strategy and Value Creation

Medium-Term Management Plan VISION2023

Message from CFO

Strengthening our business portfolio management and building a more resilient business foundation facilitating sustainable growth

Masayuki Higuchi

Director and Corporate Vice President

CFO and General Manager of

Corporate Planning Division

FUJIFILM Holdings Corporation

Reinforcing Business Portfolio Management-Strategic execution fitting business phases

FUJIFILM, from

Top Management

Strategy and

Corporate Governance

Financial and

Founding to Now

Commitment

Value Creation

Corporate Information

Planting seeds from a long-term perspective

Driving growth and profit in the medium term

High

New/Future Potential

Growth Driver

Medical Systems:

Medical Systems:

AI/IT systems, endoscopes (rigid endoscopes,

Endoscopes (flexible endoscopes, treatment tools)

surgical tools)

IVD (equipment, reagents)

potential)

Bio CDMO: Gene therapeutics CDMO

Diagnostic ultrasound systems (POC, stationary)

Life Sciences: Drug discovery support

X-ray equipment (CT, MRI, DR, etc.)

Bio CDMO:

(iPS cells, cell culture media, reagents)

Electronic Materials, Display Materials and Other

Antibody drug CDMO

(growth

Electronic Materials:

Advanced Materials: New materials

etc.

Graphic Communication:

Semiconductor materials

Digital printing, inkjet

Business Solutions

etc.

attractiveness

Non-Core

Earnings Base (cash cows)

Market

Judged based on compatibility with strategy, growth

Office Solutions

potential and profitability

Consumer Imaging

Professional Imaging

Graphic Communication:

Analog printing

etc.

Along with the formulation of our medium-term management plan VISION2023, we have reorganized our businesses into four segments: Healthcare, Materials, Business Innovation and Imaging. Starting in fiscal 2021, we are disclosing financial information such as revenue and

respective growth phases. In order to classify the businesses, we examined each business from various perspectives, including its positioning, potential and stage. Our basis for this examination is the approach of concentrating investment in areas where we can leverage

Low

Our profitability

High

The arrows (

) indicate the flow of management resources, including cash.

operating income for Healthcare as an independent segment to illustrate progress in this management plan.

In addition, each of our businesses will be categorized as one of New/Future Potential, Growth Driver, Earnings Base and Non-Core. For each of these, we will implement appropriate strategies and reallocate management resources across the Group in accordance with their

the Company's strengths and where we can generate higher returns over the medium to long term. We will concentrate investing our management resources into New/Future Potential and Priority businesses for growth, as these will drive our future generations. Meanwhile, we will pursue management efficiency and control investments in Earnings Base businesses, maximizing cash flow.

Specifically, over the three years of the VISION2023 plan, we will invest a total of more than 1.2 trillion yen in R&D, capital expenditures and other growth investments, of which 1 trillion yen will be concentrated in New/Future Potential and Priority businesses. By newly disclosing the revenue results of the medical systems business, bio CDMO business and electronic materials business, each are either New/Future Potential or Growth Driver, we will visualize the progress of growth in each of these businesses.

Revenue and Operating Income Composition

FY2020*1

13%

25%

6%

30%

Revenue

Operating

Income

Composition

Composition*2

Reorganizing into Four Business Segments

Medical Systems

Life Sciences

Healthcare

Bio CDMO

• Life sciences (drug discovery support: iPS cells, cell culture media, reagents)

• Pharmaceuticals

• Consumer healthcare (cosmetics, supplements)

Other Advanced Materials

Graphic Communication

Advanced Materials

Materials

• Industrial products

• Graphic communication

Electronic Materials

• Fine chemicals

• Inkjet

Display Materials

• Recording media

In the Earnings Base businesses, we will focus on profitability and efficiency to maximize cash generation and generate resources for investment in growth. Businesses that we have positioned as Non-Core in terms of strategic fit, growth potential and/or profitability will be examined with a view to either transforming them into Earnings Base businesses through thorough reform, or potentially disposing of them through sale or withdrawal.

Through these measures, we aim to grow Healthcare to become the Group's largest segment, with revenue accounting for 32% across the Group in fiscal 2023 (vs. 25% in fiscal 2020) and operating income of 34% in fiscal 2023 (vs. 30% in fiscal 2020).

36%

26%

37%

27%

Healthcare

Healthcare grows

Materials

into largest segment

Business Innovation

in both revenue and

Imaging

operating income.

FY2023

11%

32%

8%

34%

Business

Office Solutions

Innovation

Business Solutions

Imaging

Consumer Imaging

Professional Imaging

As of fiscal 2021, results are disclosed for four segments (healthcare, materials, business innovation and imaging) and

11 subsegments ( )*

  • Revenue and operating income are disclosed for the four segments, and revenue is disclosed for the 11 subsegments.

Revenue

Operating

Income

Composition

Composition*2

27%

30%

27%

31%

*1 Figures for fiscal 2020 are forecasts as of the time when the medium-term management plan was announced.

*2 Operating income composition data isgroup上高-wide and before consolidation adjustments.

31 FUJIFILM Holdings Corporation

INTEGRATED REPORT 2021 32

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Fujifilm Holdings Corporation published this content on 29 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 November 2021 14:00:08 UTC.


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Sales 2022 2 508 B 21 878 M 21 878 M
Net income 2022 179 B 1 560 M 1 560 M
Net Debt 2022 224 B 1 954 M 1 954 M
P/E ratio 2022 18,6x
Yield 2022 1,31%
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EV / Sales 2023 1,37x
Nbr of Employees 73 275
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Mean consensus BUY
Number of Analysts 14
Last Close Price 8 340,00 JPY
Average target price 10 435,71 JPY
Spread / Average Target 25,1%
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Teiichi Goto President, CEO & Representative Director
Kenji Sukeno Chairman
Takashi Iwasaki Director & Chief Technology Officer
Kunitaro Kitamura Independent Outside Director
Tatsuo Kawada Independent Outside Director
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