April 28, 2006
Fuji Electric Holding Co., Ltd.
Fuji Electric Group Formulates Mid-Term Management Plan (FY2006 to FY2008)
For En-growth of Group Value
Fuji Electric Group has announced today that it has formulated its three-year mid-term management plan (FY2006 to FY2008). This plan represents Fuji's concrete management target and strategies to achieve what it aims for in terms of how Fuji should be like in the future. In FY2006, the first year for this mid-term plan, Fuji will position the goal of "Operating Income to Net Sales Ratio of 5%" as its milestone that should be reached immediately and work hard toward the group's success.
1. Basic Policy
- It is expected that Japanese economy will see a further escape from deflation and a continued modest growth mainly led by domestic demand while there are some concerns over higher interest rate, US economy slowdown and appreciating yen. The world economy is also expected to see a continued growth overall, specifically in China, Fuji's focus market, where a continued high economic growth is predicted although some uncertainties exist.
- In this climate, Fuji Electric Group's challenge is to rapidly respond to changes in demand structure so that it can ensure to embrace the business opportunities created under new business environment and lead to further company growth. To meet this challenge, Fuji will expand and develop its businesses through channeling investment into the fields where Fuji has a strong position, and further pursue more dynamic and flexible management by leveraging characteristics of pure holding company system. The ultimate aim is to become an organic business group comprising foremost specialists in respective industries they operate.
- Concurrently, Fuji also aims to become a corporate group with a high group value in society which will constantly deliver useful products and services for society. In an effort to achieve this objective, Fuji will recognize its social roles and responsibilities as a member of society, and enhance its credibility with the people around the company and society.
2. Management Target through FY2008
| Net Sales | 1,000,000 million or greater |
Ratio of Operating
Income to Net Sales | 7% or greater |
| D/E Ratio (times) | 1.0 or lower |
3. Management Initiatives
| I. | R&D Investment Plan | | 100,000 million (3-year cumulative figure, a 18% increase over the previous plan) |
| II. | Capital Investment Plan | 190,000 million (3-year cumulative figure, a 64% increase over the previous plan) |
| III. | Overseas Business Expansion | Increase proportion of overseas business to 25% or greater in FY2008 from 21% in FY2005 |
| IV. | Human Resource Enhancement | Diversify its workforce to adequately respond to vital changes in labor market |
| V. | Mid-Term Management Target by Segment (FY2008)
| | Target for FY2008 | Actual Result for FY2005 | | Net Sales | Operating Income | Net Sales | Operating Income | | (millions) | (millions) | (ratio) | (millions) | (millions) | (ratio) | | Energy & Electric Systems | 420,000 | 16,500 | 4% | 398,100 | 7,000 | 1.8% | | ED & C·Drive Systems | 200,000 | 14,500 | 7% | 182,500 | 7,900 | 4.3% | | Electronic Devices | 260,000 | 33,000 | 13% | 173,400 | 18,100 | 10.5% | | Retail Systems | 180,000 | 7,500 | 4% | 162,100 | 5,800 | 3.6% | |
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