fuji photo film co., ltd. · fuji photo film co., ltd. january 31, 2006 optimizing business systems...

Earnings of Fiscal 2006 3QEarnings of Fiscal 2006 3QEnded December 31, 2005Ended December 31, 2005

(From April 1, to December 31, 2005)(From April 1, to December 31, 2005)

FORWARD-LOOKING STATEMENTSThis document contains projections of performance and other projections, which are made based on judgments regarding currently available information and which encompass potential risks and uncertainties. Accordingly, please be aware that diverse factors may cause actual results to differ materially from projected results.

FUJI PHOTO FILM CO., LTD.FUJI PHOTO FILM CO., LTD.January 31, 2006January 31, 2006

Optimizing Business Systems for Optimizing Business Systems for Imaging Solutions Segment Imaging Solutions Segment

and Growth Strategies for the Futureand Growth Strategies for the Future

11

Vision 75: Review of the Two YearsVision 75: Review of the Two Years

Principal Activities and Fundamental Strategies

Enhancing Consolidated Management

Enhancing Consolidated Management

Building New Growth Strategies

Building New Growth Strategies

Implementing Comprehensive Structural Reforms at

All Management Levels

Implementing Comprehensive Structural Reforms at

All Management Levels

Increase of investments in high growth business

R&D investments centered on new growth business

Strengthening strategic affiliation through M&A transactions and alliances

Reforming marketing and distribution systems for domestic imaging business

Reorganizing photo processing labs

Reexamining manufacturing systems

Introducing cash management systems

Transition to a holding company structure

Promote process innovationStrengthen bases toward new

growth

22

Unexpected Change in Business EnvironmentUnexpected Change in Business Environment

Changes in Imaging Business EnvironmentChanges in Imaging Business Environment

Trends in global demand for color filmTrends in global demand for color film Trends in demand for digital camerasTrends in demand for digital cameras

Decrease in overall demand

and price of color film

Slowing down in growth and

decrease in price of digital cameras

Unexpected worsening of business environment

0

20

40

60

80

100

120

Ind

exIn

dex

Index: Total demand in 2000 = 100Index: Total demand in 2000 = 100

0

100

200

300

400

500

600

2000 2001 2002 2003 2004 2005

Unit price (Index)

Uni

ts (I

nde

x)

-60

-50

-40

-30

-20

-10

0

Total demand (units)

Total demand (unitprice)

Growth Growth slowing slowing downdown

Unit price decrease: Unit price decrease: --10%/year10%/year

* Index: Total demand in 2000 = 100, total demand price = 0

* Figures do not include digital single-lens reflex cameras.

20002000 20012001 20022002 20032003 20042004 20052005 20062006 2007200720082008

Downtrend continuingDowntrend continuing

* Both graphs are based on the company’s studies.

33

ComparisonComparison with the Vision 75 Planwith the Vision 75 Plan

　

　　

　

　　

Operating income in FY 2006*Operating income in FY 2006*

Comparison of Operating Income by Business Segment Comparison of Operating Income by Business Segment

—— Achievement levels taking Vision 75 FY 2006 Plan as 100 ——

Big gap in imaging segment onlyBig gap in imaging segment only

Note: FY 2006 forecast = 1st half results + 2nd half plan (increase in structural reform costs not included)

* Before allocation of corporate expenses

0

25

50

75

100

Ｖ75計画 2005見通

0

25

50

75

100


0

25

50

75

100


Imaging Imaging

Index

Document Document Information Information

Index Index

Gap: -85%

V 75 Plan V 75 Plan V 75 Plan V 75 Plan V 75 Plan V 75 Plan FY06ForecastFY06Forecast FY06ForecastFY06Forecast 2006 Forecast2006 ForecastFY06ForecastFY06Forecast

**FY2006,ending March 31,2006FY2006,ending March 31,2006

44

Towards New GrowthTowards New Growth

Acceleration of structural reform- Structural reform of photosensitive materials business- Restructuring of electronic imaging business

Acceleration of structural reform- Structural reform of photosensitive materials business- Restructuring of electronic imaging business

Priority commitment of resources to growth business fields- Continuous development in existing growth businesses- Promotion of new businesses

Priority commitment of resources to growth business fields- Continuous development in existing growth businesses- Promotion of new businesses

Positive Positive investment investment

for the futurefor the future

Great Great changes in changes in

business business environmentenvironment

　FY2005–FY2006 FY2008 and beyond

Intensive Intensive implementation implementation

in FY06in FY06--FY07FY07

ImagingImaging

InformationInformation

DocumentDocument

Toward Toward new new growthgrowth

FY2007–FY2008

**FY2005,ended March31,2005FY2005,ended March31,2005

*FY2006~FY2008,ending *FY2006~FY2008,ending March31,2006,~March31,2008March31,2006,~March31,2008

55

Structural Reform of Photosensitive Structural Reform of Photosensitive Materials BusinessMaterials Business

1. 1. Reorganizing of tripartite (Japan, USA, Europe) Reorganizing of tripartite (Japan, USA, Europe) production systemproduction system

- Termination of part of production facilities

- Slimming-down of personnel through reorganization

Global tripartite (Japan, USA, Europe) system

based on promotion of local productivity

Global tripartite (Japan, USA, Europe) system

based on promotion of local productivity

Present Present

Optimization of production capacity on worldwide basis

Cost minimization

Optimization of production capacity on worldwide basis

Cost minimization

Future

66

Structural Reform of Photosensitive Structural Reform of Photosensitive Materials BusinessMaterials Business

(1) Reduction of SG&A through slimming-down of personnel in marketing and distribution

(2) Substantial reduction of R&D investment

(3) Rationalization of photo-processing laboratories

2. 2. Optimization of SG&A and R&D investment, etc.Optimization of SG&A and R&D investment, etc.

77

Structural Reform of Electronic Imaging Structural Reform of Electronic Imaging BusinessBusiness

Strengthen distinctive product lineup centered on high-sensitivity models

Scale down domestic production system and establish mass production system in China

Implement exhaustive cost reduction and reduction of total inventory through strengthening of SCM

Realize a stable profit structure based on launching of distinctive products and thorough promotion of efficiencyin marketing and production

Restructuring of Electronic Imaging BusinessRestructuring of Electronic Imaging Business

88

Expected Cost Reduction Results of Expected Cost Reduction Results of Structural ReformsStructural Reforms

Expected cost reduction

Approx. 50 billion yen/year(against FY 2006)

Slimming-down of staffassociated with photosensitive

materials business

Approximately 5,000 persons

Temporary expenses(FY 2006 – FY 2007 total)

Temporary expenses(FY 2006 – FY 2007 total)

一時費用累計（’05～’06）

110Reduction of assets including production facilities

Slimming-down of

staff

55

Billion yen

165

FY2006 FY2007 Total

80 85 165

Expected results of structural reforms (FY 2008)Expected results of structural reforms (FY 2008)

**FY2006~FY2008:FY2006~FY2008:

ending March31,2006,~March31,2008ending March31,2006,~March31,2008

99

Financial Forecast for FY 2006Financial Forecast for FY 2006 (consolidated)(consolidated)

135135

108108

3.3%3.3% 84.584.5

6.4%6.4% 162.3162.3

6.5%6.5% 164.4164.4

100.0%100.0% 2,527.32,527.3

FY 2005,endedFY 2005,ended

March31,2005March31,2005

ResultsResults

+1+1

+6+6

(65.0)(65.0)

(91.0)(91.0)

(95.0)(95.0)

(50.0)(50.0)

ChangeChange

(A)(A)--(B)(B)

135135

107107

3.1%3.1% 85.085.0

6.1%6.1% 164.0164.0

6.3%6.3% 170.0170.0

100.0%100.0% 2,700.02,700.0

FY 2006FY 2006

Previous Previous forecast (B)forecast (B)

136136

113113

0.8%0.8% 20.020.0

2.8%2.8% 73.073.0

2.8%2.8% 75.0 75.0

100.0%100.0% 2,650.0 2,650.0

FY 2006FY 2006

Revised Revised forecast (A)forecast (A)

ExchangeExchangerates (yen): rates (yen):

US$US$

RevenueRevenue

Operating Operating incomeincome

Net incomeNet income

EuroEuro

Income Income before taxbefore tax

((billions of yen)billions of yen)

Forecast for the fiscal year ending March31, 2006

1010

Priority PoliciesPriority Policies

Concentration of Resources into Growth Business Fields

Concentration of Resources into Concentration of Resources into Growth Business FieldsGrowth Business Fields

Medical Imaging/Life ScienceMedical Imaging/Life Science

DocumentDocument

Graphic ArtsGraphic Arts

Highly Functional MaterialsHighly Functional Materials

■■FlatFlat--panel Display Materialspanel Display Materials

■■Electronic MaterialsElectronic Materials

■■Ink for Inkjet PrintersInk for Inkjet Printers

Optical Devices Optical Devices

1111

Priority Business Fields (1)Priority Business Fields (1)

Medical Imaging/Life Science Medical Imaging/Life Science

XX--Ray System, PACSRay System, PACSBusiness expansion centering on FCRExpansion of network service businesses through enhancement of SYNAPSE functionsReinforcement of sales system for priority areas (Western Europe, China, India, etc.)

Shift from filmShift from film--centered portfolio to centered portfolio to device/networkdevice/network--centered portfoliocentered portfolio

Provision of total solutions for the Provision of total solutions for the lowlow--end marketend market

Reinforcement of distinctiveness of endoscopes for digestive organsReinforcement of overseas branches and new dealers, enhancement of foreign and domestic service systems

Electronic EndoscopeElectronic Endoscope

Sales expansion centering on overseas operations including blood examination and gene isolationProduct supply in new fields

Life ScienceLife Science

Increase of share using TransnasalEndoscopes as leverage

Enhancement of endoscope peripherals

Increase of exporting countries, reinforcement of sales channels, sales expansion to animal market

Creation of clinical diagnosis and health maintenance businesses

1212


DocumentDocument

Achievement of the top share in Achievement of the top share in the color copier markets of Europe, the color copier markets of Europe, North America and Asia/ChinaNorth America and Asia/ChinaEnhancement of overseas OEM business for color LBPsMaintenance and expansion of the customer base in Japan

Office Field Office Field

Winning of after-sales service contracts and annual fees by speeding up the development of our service business

Expansion of overseas business by expanding the product lineContinuance and reinforcement of the promotion of color device in the Japanese marketResponse to more advanced needs of customers: e.g., document control linked document control linked with the core systemwith the core system- Handling of requests for reinforcement

of internal control- Efforts to satisfy needs for distributed

output from core system- Expansion of devices and applications

Production Service FieldProduction Service Field

Expansion through creation of new Expansion through creation of new service business baseservice business base

Growth through digital color Growth through digital color publishing business publishing business

Securing of demand in the variable printing market for iGen3, etc. Expansion of publishing business Expansion of publishing business including upstream printing processes- Reinforcement of color management

system through cooperation between FUJIFILM and FUJI XEROX

1313

　　

Increase of market share taking Increase of market share taking advantage of our topadvantage of our top--quality thermal quality thermal and photopolymer CTPand photopolymer CTP

Cultivation of industrial products/ Cultivation of industrial products/ package printing market with UV ink package printing market with UV ink for highfor high--speed IJ printersspeed IJ printers

Reinforcement of global quadripartite production system for CTP platesFull-fledged operation of processless CTP platesExpansion of ink business for industrial digital devices (inkjet printers) through FUJIFILMSericol

Graphic Arts Graphic Arts

Start of new CTP production line at Holland factoryStart of new CTP production line at Holland factory

Start of production of photopolymer CTP at Holland factoryStart of production of photopolymer CTP at Holland factory

Launch of Suzhou factory (2Launch of Suzhou factory (2ndnd factory in China)factory in China)

Start of production of thermal CTP at China factoryStart of production of thermal CTP at China factoryStart of production of photopolymer CTP at US Start of production of photopolymer CTP at US factoryfactory

Start of production of photopolymer CTP at China factoryStart of production of photopolymer CTP at China factory

Oct 2006Oct 2006

20052005FebFeb

MarMar 20072007

OctOct

Aug Aug

AprilApril 20042004

20042004

20042004

Global quadripartite production system

-- Target share of global market for Target share of global market for CTP plates: 40% CTP plates: 40%

0

100

200

300

400

500

05 06 07 08 09

ＣＴＰ

Conventional

Billion yen Forecast of CTP Market

FY


Ended/ingMarch 31

1414

Priority Business Fields (4)Priority Business Fields (4)--11

Enhancement of TAC film production capacity

Start of operation of FUJIFILM Kyushu

Maintenance and expansion Maintenance and expansion of the structure of highof the structure of high--growth and highgrowth and high--profit profit businesses businesses as our core businesses

Development of high-value added products following TAC film and WV film

For Monitors and Note PCs

Proliferation of WV film as a de facto standard

For LCD TVs

Increase of the amount of WV film Increase of the amount of WV film used in LCD TVsused in LCD TVs

Sales expansion of high-value added film for VA, IPS, and OCB

Sales expansion in color filter fields such as transer

For PDPs

Full-fledged launch with electro-magnetic radiation shielding film

FlatFlat--Panel Display Materials Panel Display Materials

FY0

100

200

300

400

500

05 06 07 08 09

OthersTVMonitor/Note PC

Million m2

Forecast of LCD panel market (by application)

Ended/Ended/ingingMarch 31March 31

1515

Winning of top share in the Winning of top share in the leadingleading--edge positive resist field edge positive resist field (ArF, liquid immersion, etc.)(ArF, liquid immersion, etc.)

Establishment of position in new Establishment of position in new business fields, business fields, such as CMP such as CMP slurry, lowslurry, low--k, and polyimidek, and polyimide


Photo resist for semiconductor manufacturingPhoto resist for semiconductor manufacturingEstablishment of core technology for next-generation photo resist in line with advances in miniaturization and multilayering of semiconductor devicesFull-fledged start of business in new materials field including semiconductor post-processing Establishment of global tripartite production and sales system(In Feb. 2006, Suzhou factory is scheduled to start supplying products in China.)

Electronic Materials Electronic Materials

Resist Ultra low-k, etc.

Abrasive

Entire semiconductor marketEntire semiconductor marketApprox. 25 trillion yenApprox. 25 trillion yen

Semiconductor material market sizeSemiconductor material market size

Materials we offerMaterials we offer

Semiconductor materialsSemiconductor materialsApprox. 2.5 trillion yenApprox. 2.5 trillion yen

050

100150200250300350400

Billionyen

06 07 08 09 10 11FY

Forecast of world demands for semiconductor materialshandled by our company

Other materialsCMP slurryFilm m aterials Photo resist

(ultra-low-k, etc.)

Ending March 31Ending March 31

1616


Ink for Industrial Inkjet PrintersInk for Industrial Inkjet Printers

Ink dyes for Consumer Inkjet PrintersInk dyes for Consumer Inkjet Printers

Commercialization of ink dyes with excellent features such as high image preservation capability

Establishment of leading position in the field of ink dyes for inkjet printers

Reinforcement of global development and production system for ink for consumer inkjet printers through acquisition of Avecia (UK), the world's No. 1 manufacturer in this field

Expansion of ink business through Sericol, the world's top manufacturer of ink for industrial printers

Cultivation of the industrial product/package printing market with UV ink for high-speed IJ printers

Ink for Inkjet PrintersInk for Inkjet Printers

1717


Optical LensOptical Lens

Expansion of optical device operation by strengthening consolidated strategies and optical technologies

Optical Devices Optical Devices

Establishment of Optical Device Division as a consolidated administrative function

Lens for Camera Phones

Reinforcement of distinctiveness from competitors in mega-pixel-class cameras- Aspheric lens- AF/Zoom

High growth and increase of share High growth and increase of share in the mainstream megain the mainstream mega--pixel pixel model market model market

Establishment of position in the lens market for security/ in-vehicle devices

Lens for Security/In-Vehicle Devices

Full-fledged entry into this growing market taking advantage of high specifications, high efficiency, and low price

1818

R&D StrategyR&D Strategy

Advanced Core Technologies Laboratory (artist’s conception)

Opening of the Opening of the ““Advanced Core Technologies LaboratoryAdvanced Core Technologies Laboratory”” (Anticipated date of (Anticipated date of completion: March 2006)completion: March 2006)

Total commitment to development of original

technology

Concentration of R&D Investment in Priority Fields

Company-wide center for advanced interdisciplinary research

Business fields: FPD materials, medical imaging/life science, electronic materials, fine chemicals, etc.

Inspiring creativity through the integration of different fields

Creating of the new value through “Integrating Knowledge and Innovation”

Fusion and integration of the group’s technologies

Fields for Resource ConcentrationFields for Resource Concentration

100

150

200

05 06 07 08 09

Projected R&D Expensebillion yen

(fiscal year ended/ing March 31

1919

Transition to a Holding Company StructureTransition to a Holding Company Structure

　

　　

　

　　

Optimization of the Group as a Whole

FUJI XEROXFUJIFILM

ProductionProduction

Sales and Marketing Sales and Marketing

R&DR&D

ServicesServices

Operating companies

Holding Company

Image of the Organization After Transition

Group Strategy, Corporate Functions, Shared Administration Functions

Group Strategy, Corporate Functions, Shared Administration Functions

Transition ScheduleJune 2006: Approval at regular

shareholders’ meetingOctober 2006: Holding company

structure inaugurated

Purpose of the Transition

Acceleration of Business Operations

Personnel Exchanges and Promotion of Integration

of Shared Functions

Optimization of Resource Allocation

Strengthening of Group Strategic Management

Increasing areas of synergy among group companies

ProductionProduction

Sales and Marketing Sales and Marketing

R&DR&D

ServicesServices

2020

Towards a Towards a ““Second FoundationSecond Foundation””

Transformation of the business Transformation of the business structurestructure across the whole Groupacross the whole Group

- Establishment of stable on-site strength - Efficient allocation of resources- Optimal allocation and strengthening of staff

Radical business model shiftRadical business model shiftRadical business model shift

To create a new business model and To create a new business model and achieve a achieve a ““second foundationsecond foundation””::

Thorough structural reform of Thorough structural reform of imaging fieldimaging field

⇒Existing huge-scale research, production, sales, and laboratory network

Existing huge-scale research, production, sales, and laboratory network

IncompatibleIncompatible

2121

Plan forPlan for Improvement of ProfitabilityImprovement of Profitability

164.4

200.0

0

50

100

150

200

250

300

2005 2006 2007 2008 2009 2010

In billions of yen

Towards new

growth

75.075.0

Implement structural reforms

Operating IncomeOperating Income

280.0~300.0

Year Year ended/ending ended/ending March31March31

FYFY

FUJI PHOTO FILM CO., LTD.IR OFFICE, CORPORATE COMMUNICATIONS DIV.

http://home.fujifilm.com/

fuji photo film co., ltd. · fuji photo film co., ltd. january 31, 2006 optimizing business systems...

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