fujifilm holdings corporation integrated report … holdings corporation integrated report 2017 ......

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About the Fujifilm Group 2Value Creation Process 3

The Fujifilm Group’s Value Creation History 4

Business Portfolio and Competitive Advantages 6

Financial Highlights 8

New CSR Plan / New Medium-Term Management Plan 10New CSR Plan “Sustainable Value Plan 2030” 10

New Medium-Term Management Plan “VISION2019” 12

Management Message 16Message from the CEO 16

Interview with the COO 20

Corporate Governance 24Regarding Inappropriate Accounting of Overseas Sales Subsidiaries of Fuji Xerox Co., Ltd. 24

Status of Corporate Governance 26

Management Structure 32

Message from Outside Directors 34

Business Activities 36Imaging Solutions 37

Information Solutions 39

Document Solutions 43

Sources of Corporate Value 45Technological Strength 46

Corporate Culture / Brand Strength 50

Human Resources 51

Global Network 52

Financial Information / Non-Financial Information 53Financial Highlights 54

Financial Analysis and Review 56

Business-Related and Other Risks 59

Consolidated Financial Statements 60

Non-Financial Information 67

Corporate Data 69

CONTENTS

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URL http://www.fujifilmholdings.com/en/

FUJIFILM Holdings Corporation Corporate Site

This site provides such latest information as the Fujifilm Group’s corporate data and busi-

ness activities, as well as information for shareholders/investors and on CSR activities.

Fuji Xerox Sustainability Report

This report describes various CSR activities to realize a sustainable society of Fuji Xerox and its affiliated companies.

FUJIFILM Holdings Corporation Sustainability Report

This report describes various efforts of the Fujifilm Group to contribute to the sustainable develop-

ment of society.

We disclose the Fujifilm Group’s business and diverse CSR activities to a wide spectrum of stakeholders, including local com-

munities and society, customers, shareholders, investors, business partners and employees.

General DisclaimerThe information contained in this integrated report concerning business performance and results forecasts, excluding state-

ments of objective fact, are based on management’s views that have been made in accordance with information available at

the time of issue. These forward-looking statements involve risks and uncertainties. Actual results may materially differ from

those discussed in the forward-looking statements due to a variety of factors, including trends in economic conditions and mar-

kets in which the Company operates as well as fluctuations in foreign currency exchange rates.

The contents of amendment to earnings releases for prior fiscal years, which were announced in 2017, have reflected on

the numerical data for FY 2011/3 to FY 2016/3. Unless otherwise specified in this integrated report, the information herein is as

of March 31, 2017.

URL http://www.fujifilmholdings.com/en/sustainability/report/download/report2017.html

This integrated report particularly focuses on information that is believed to be highly important for shareholders/investors

among diverse activities disclosed through statutory disclosure reports, the sustainability report and other related materials.

This voluntarily disclosed report describe growth strategies and stories, and it is intended to serve as a very useful tool.

Editorial Policy

Information of Corporate Communication Tools

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Value from InnovationAt Fujifilm, we are continuously innovating —

creating new technologies, products and services

that inspire and excite people everywhere. Our

goal is to empower the potential and expand the

horizons of tomorrow’s businesses and lifestyles.

We will use leading-edge, proprietary technologies to provide

top-quality products and services that contribute to the

advancement of culture, science, technology and industry, as

well as improved health and environmental protection in society.

Our overarching aim is to help enhance the quality of life of

people worldwide.

Corporate Philosophy

Anchored by an open, fair and clear corporate culture and with

leading-edge, proprietary technologies, Fujifilm is determined

to remain a leading company by boldly taking up the challenge

of developing new products and creating new value.

Vision

About the Fujifilm Group

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Customers Shareholders Business partners

Local communitiesand society

Employees

ImagingSolutions

InformationSolutions

DocumentSolutions

P37 P39 P43

Sources of Corporate Value

Proprietary products and services

Sustainable Value Plan 2030

Governance

Technological Strength, Corporate Culture,Brand Strength, Human Resources,

Global Network

Create value from innovation Expectation / needs / trust

Business Activities

Providing photo-related products and services ranging from photo-taking to printing

Engaging in a wide range of activities focusing mainly on B2B

businesses including healthcare and highly functional materials, both of which are priority business fields

Undertaking document-related business activities including the provision of

digital multifunction devices for offices and related services

We aim to achieve sustainable growth and increase the corporate value of the Fujifilm Group while contributing to the sustainable

development of society by conducting sincere and fair business activities guided by the following corporate philosophy and vision common to the Fujifilm Group.

The Fujifilm Group’s Value Creation Process


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The Fujifilm Group was established in 1934 to produce photographic film in Japan. Since its founding, Fujifilm has consis-tently anticipated the future during times of change, has amassed a wide range of technologies, and provided innovative products and services. Since 2000, putting the Company’s future at risk, we undertook drastic business restructuring due to the demand for photographic film, our mainstay product, has declined sharply due to digitization. The key, at that time, was the advanced and various technological capabilities of our photographic business. Fujifilm established businesses with a competitive advantage based on a variety of technologies such as optics, chemicals, and electronics, which are needed to develop and produce photo-related products. The Fujifilm Group, which had overcome a turbulent “second foundation” and gotten back on a growth track, has even more developed products, services, and solutions unique to the Fujifilm Group with the aim of strategic leap forward.

The history of the Fujifilm Group is a history of innovation.

1934 Motion picture film

Plate-making film

1936 Photographic film

X-ray film

1948 Still cameras

1954 Industrial X-ray film

1958 FUJITAC (TAC film)

1959 Videotapes for broadcasting

Groundbreaking product portfolio created by Fujifilm Group


• Forged a robust position as a manufacturer of comprehen-sive photosensitive materials

• Expanded into the lens and optical equipment fields• Diversified business operations into the medical, graphic

systems, magnetic materials, and related fields

Ashigara factory at time of establishment

Engaging in the Domestic Production of Photographic Film / Establishing a Sales Network in Japan

Expanding Business / Improvement of Technologies

1934 – 1950s

1960 – 1970s

0

20

40

60

80

100

’94/3

(Index)

’95/3 ’96/3 ’97/3 ’98/3 ’99/3 ’00/3 ’01/3 ’02/3 ’03/3 ’04/3 ’05/3 ’06/3 ’07/3 ’08/3 ’09/3 ’10/3 ’11/3

Peak

Sharp decline

(FY)

Trends in total world demand for color film and changes in revenue composition Index is based on 100 for FY2001/3

15%

39%

46%

¥1,383.4 billion

¥2,322.2 billion54%46%

Imaging SolutionsDocument

Solutions

FY2001/3

FY2017/3

Imaging Solutions

Information Solutions


• Commenced the development of a global network by establishing local overseas subsidiaries and offices

• Established Fuji Xerox Co., Ltd., as a joint venture with Rank Xerox Ltd. in the United Kingdom, and entered into the copy machine business field

• Pioneered the successful research, development, and commer-cialization of color negative films

1962 Plain paper copier

1965 PS plates

Magnetic recording tape for

computers

1969 Filtration filter

1971 Home videotapes

1975 Full-color copy machine

1976 High-performance color negative film

Fuji Color FII 400High-performance color negative film Fuji Color FII 400

Japan First World First


The Fujifilm Group’s Value Creation History


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Digitization / Accelerating Globalization

Second Foundation

Aiming for Strategic Leap Forward

1980 – 1990s

2000 – 2013

2014 –

• Accelerating the pace of globalization by developing overseas production bases in a bid to forge a widely recognized global presence

• Pioneered efforts to digitize the photography, medical, and graphic systems fields

• Introduced a host of innovative products, including the FCR line of digital X-ray imaging diagnostic systems and digital cameras

1983 Digital X-ray imaging diagnostic system FCR

1986 QuickSnap, a one-time-use recyclable camera

1988 Full digital still camera (development)

1993 High-speed production publisher

1996 Digital minilab

WV film

Computer-to-plate

(CTP) plates

1998 instax mini 10

1999 Medical-use picture archiving and

communications systems SYNAPSEThe world’s first digital X-ray imaging diagnostic system FCR

FUJIFILM Advanced Research Laboratories, based on the concept of “Intellectual Fusion, Innovation and Value Creation”

2003 Double-balloon endoscope

2004 Full digital endoscope

2006 Functional cosmetics

2011 Magnetic recording tape for

computers that utilizes Barium

Ferrite (BaFe) particles

2011 Next-generation inkjet digital printer Jet Press 720

2012 Endoscope with a laser light source system

LASEREO

• Converted Fuji Xerox to a consolidated subsidiary• Implemented business structure transformation in

response to rapid digitization• Established FUJIFILM Advanced Research Laboratories• Transitioned to a holding company structure by establish-

ing FUJIFILM Holdings Corporation• Focused on the healthcare field, including the pharmaceu-

ticals business

Open Innovation Hub, a place for new value co-creation with business partners

2014 Production printer Color 1000i Press

2015 Broadcast zoom lens compatible with 4K cameras

equipped with 2/3-inch sensor

2016 Integrated archive system SYNAPSE VNA

2016 Tablet-type ultrasound image diagnostic equipment

SonoSite iViz

2017 Medium format mirrorless

digital camera, equipped

with a large sized sensor

FUJIFILM GFX 50S

• Formulated “Value from Innovation” as the Company’s new corporate slogan to mark 80th anniversary

• Launched Open Innovation Hubs in Japan, the United States, and Europe

• Announced new CSR plan “Sustainable Value Plan 2030” and new medium-term management plan VISION 2019 in 2017





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Photo imaging

Optical device and electronic imaging

Imaging Solutions

Develops photo-related products and services, ranging from photo-taking to printing

• A wide range of technologies and know-how related to images culti-vated in photographic film develop-ment

• Strong market position as a leading company in the imaging field

• Collective strength capable of pro-viding services from photo-taking to printing

Competitive advantages

Competitive advantages• Superior descriptive capability and

color reproducibility of a digital cam-era based on its unique imaging de-sign technology cultivated in the development of high-performance lenses and photographic film

• Advanced optical technologies and high-precision processing and assem-bly technologies required in lens manufacturing that accommodate the high-definition digital age

Provides products such as the X Series of digital cameras, interchangeable lenses, and TV lenses

Other

ImagingSolutions


¥341.8 billion

¥899.5 billion

DocumentSolutions

¥1,080.9 billion

¥236.8 billion

¥105.0 billion

¥384.0 billion

¥208.9 billion

¥47.6 billion

¥255.8 billion

¥477.0 billion

¥163.2 billion

¥139.6 billion

¥186.8 billion

¥114.3 billion

Business Portfolio and Competitive Advantages

We created our current business portfolio by leveraging the advanced and unique technological capabilities devel-oped through our photographic business and overcoming the risk of disappearing incurred in our core business due to digitization.We are now pursuing a growth strategy centered on the three business fields of healthcare and highly functional ma-terials, included in Information Solutions, and Document Solutions.

Revenue for FY2017/3

* A portable broadcast zoom lens with optical perfor-mance compatible with broadcast 4K cameras equipped with 2/3 inch sensor (as of April 2015 ac-cording to a survey by Fujifilm)

World First*

Broadcast zoom lens compatible with 4K

cameras

¥2,322.2 billion

Photo imaging


Recording media

Graphic systems

Office products

Office printers

Production services

Global services

Healthcare

Highly functional materials

instaxinstant camera

Annual worldwide sales volume

6.6 million units


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Document Solutions

Recording Media Graphic systems

Develops businesses in the fields of medical systems, pharmaceuticals / bio CDMO, regenerative medicine, and life sciences; operates in three fields of prevention, diagnosis, and treatment

Provides display materials, industrial products including non-destructive testing equipment and various types of highly functional films, and electronic materials including semiconductor processing materials

Offer magnetic recording tape for computers with unique technolo-gies such as barium ferrite (BaFe) particles and data archive service

Offer inkjet digital presses, industrial inkjet printheads, plate-making films and computer-to-plate (CTP) plates

Office productsProvides digital multifunction devices and other devices for office use

Office printersProvides printers for office use

Production servicesProvides high-speed, high-quality digital printing systems and associated services

Global servicesSupports finding solutions to customers’ document-related issues through improve-ments to corporate document solutions and operational processes

• Proprietary image processing technologies capable of pro-viding optimal images in diagnosis

• Advanced chemical compounds, design capabilities, and technologies that enable development of pharmaceuticals that respond to unmet medical needs

• High technological strength and productivity for Contract Development and Manufacturing Organization of biophar-maceuticals

• Extensive technologies and patent portfolio related to regenerative medicine, such as iPS cell-related technologies

• Extensive chemical compound library of 200,000 types

• Advanced technologies, such as functional molecules for impart-ing high functionality to film

• Advanced film forming and coating technologies capable of meeting market requirements for thinness and largeness

• Cost competitiveness and stable supply• Rapid and accurate product formulation, development capabili-

ties and global production systems that respond to customer needs

domestic market share

global market share

Japan First


• Excellent customer base leveraging a powerful direct sales structure in Ja-pan and the regions of Asia and Oce-ania

• Diverse product lineups that meet customers’ wide-ranging needs, in-cluding links with various cloud ser-vices

• Consistent service provided globally in cooperation with Xerox Corpora-tion

Sales volume market share in

Asia-Pacific region

Healthcare

Highly functional materials

Medical-Use Picture Archiving and Communications Systems

Approval and launch of regener-ative medicine products

Protective film for polarizers

Image sensor color mosaic

A3 multifunction device

global market share

global market share


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Financial Highlights

Revenue / Operating income / Operating margin

Net income attributable to FUJIFILM Holdings / ROE

Total assets / Shareholders’ equity ratio

-1,000

0

1,000

2,000

3,000

4,000

-100

100

200

300

400

0

(Billions of yen)

172.3

2,322.2

7.4%

2007/3(FY) 2008/3 2009/3 2010/3 2011/3 2012/3 2013/3 2014/3 2015/3 2016/3 2017/3

(Billions of yen) Operating marginRevenue Operating income (right scale)

-50

0

50

100

150131.5

6.5

-4

0

4

8

12(%)ROE (right scale)Net income attributable to FUJIFILM Holdings(Billions of yen)

2007/3 2008/3 2009/3 2010/3 2011/3 2012/3 2013/3 2014/3 2015/3 2016/3 2017/3(FY)

0

1,000

2,000

3,000

4,0003,533.2

57.8

0

20

40

60

80Total assets(Billions of yen) (%)Shareholders’ equity ratio (right scale)

(FY) 2007/3 2008/3 2009/3 2010/3 2011/3 2012/3 2013/3 2014/3 2015/3 2016/3 2017/3

* Numerical data for FY2007/3 through FY2017/3 are posted on page 54 and 55.


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R&D expenses / Ratio of R&D expenses to revenue

Capital expenditures / Depreciation

Cash flows

0

50

100

150

200

160.2

6.9

0

3

6

9

12(Billions of yen) Ratio of R&D expenses to revenue (right scale)

(FY)

R&D expenses (%)

2007/3 2008/3 2009/3 2010/3 2011/3 2012/3 2013/3 2014/3 2015/3 2016/3 2017/3

0

50

100

150

200

(Billions of yen) Capital expenditures Depreciation*

71.858.9

2007/3 2008/3 2009/3 2010/3 2011/3 2012/3 2013/3 2014/3 2015/3 2016/3 2017/3(FY)

-400

-200

0

200

400

172.2

288.6

-116.4

(Billions of yen) Free cash flows*Net cash provided by operating activities Net cash used in investing activities

2007/3 2008/3 2009/3 2010/3 2011/3 2012/3 2013/3 2014/3 2015/3 2016/3 2017/3(FY)

* Free cash flows: Net cash provided by operating activities + Net cash used in investing activities

* These figures only include property, plant and equipment excluding rental equipment in the Document Solutions segment and others.


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FUJIFILM Holdings has been creating new value to resolve social issues through Sustainable Value Plan 2016, a medi-um-term CSR plan for FY2015/3 through FY2017/3. Through the new formulation of long-term goals for FY2031/3 in SVP2030, the Fujifilm Group is aiming to contribute further to the realization of a sustainable society, with increased ef-forts to resolve social issues through its business activities by providing innovative technologies, products and services.

In the global society, a number of long-term goals have been published recently with the aim of resolving social is-sues. The Sustainable Development Goals (SDGs*), which were adopted by the United Nations in September 2015, identified 17 goals for the global society to make efforts to resolve these social issues by 2030. In addition, the global decision was made over the Paris Agreement, which entered into force in November 2016. The agreement aims to strengthen the global response to the threat of climate change to keep a global temperature rise well below 2 de-grees Celsius above pre-industrial levels.

“SVP2030” is a new CSR plan targeting FY2031/3 which aims to contribute to the achievement of goals related to the resolution of social issues identified by international ini-tiatives such as the SDGs and the Paris Agreement. “SVP2030” defines the “environment,” “health,” “daily life” and “working style” as four key areas, which will be ad-dressed from the perspectives of both “resolving social is-sues through business activities” and “considering environmental and social impacts through business process-es.” Furthermore, as a global company, “SVP2030” specifies the stronger CSR foundations, in terms of environmental, ethical and human rights issues affecting the whole supply chain and also refer to the stronger governance required to achieve the further penetration of an open, fair and clear corporate culture.

We have formulated “Sustainable Value Plan 2030 (“SVP2030”),” a new CSR plan specifying targets for the fiscal year end-ing March 2031 (FY2031/3). The Fujifilm Group believes that solving social issues provides opportunities for business growth. By actively creating new value as part of our efforts to address each challenge, we are committed to continuously contributing to the develop-ment of a sustainable society as a key management priority. Such commitment is further reinforced through formulation of SVP2030. In this new CSR plan, we show our strong will to contribute to resolving social issues of the global scale through business activities.

* SDGs are new sustainable development goals adopted by the United Nations General Assembly in September 2015 in order to follow on from the Millennium Development Goals

(MDGs) which were established in 2001. SDGs states “no one will be left behind” as its slogan, and has 17 sustainable development goals and 169 targets for global society to tackle

as social issues by 2030.

In the area of the “environment,” we will contribute to solving environmental issues as well as reducing our own environmental burden. In particular, the plan identifies nu-merical targets for CO2 emissions and water usage to be achieved by FY2031/3. The targets for CO2 emissions are to “achieve a 30% reduction in the volume of CO2 emitted across the entire product lifecycle compared to FY2014/3,” and “contribute to a 50-million-ton reduction in the volume of CO2 emitted in a society by encouraging wider use of the company’s products and services.” This reduction offsets the equivalent volume of CO2 emitted by the company between FY2018/3 and FY2031/3. The Fujifilm Group is committed to reduce water usage of the entire group by 30% in comparison to FY2014/3, keeping overall usage below 35 million tons in FY2031/3. In addition, the Fujifilm Group is aiming to contribute to the processing of 35 million tons of water per year in FY2031/3 through the provision of highly functional materials and services used for water processing. It aims to achieve the environmental contribution that is equal to or greater than the environ-mental impact of the Company’s business activities.

In the area of “health,” the Fujifilm Group is aiming to “cre-ate a healthy society through the process of prevention, diagnosis and treatment in healthcare.” The group’s aims in the area of “daily life” are to “support the tangible and intangible aspects of social infrastructure in people’s lives through various products, services and technologies.” In the area of “working style,” the Fujifilm Group is aiming to “extend in-house work-style reforms to change society so that everyone can be satisfied with his/her job.”

By focusing on these areas, the corporate group aims to re-solve these various social issues through its business activi-ties. The Fujifilm Group will work to contribute to the resolution of social issues and raise the company’s corporate value by promoting activities along with “SVP2030” and cre-ating new value through the development of products, ser-vices and technologies.

New CSR Plan “Sustainable Value Plan 2030”

Contributing to solving social issues through “Sustainable Value Plan 2030”

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New CSR Plan / New Medium-Term Management Plan

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Realization of aSustainable Society

Environment

Health Daily Life

Working Style

Supply Chain

Business Fields

Governance

ImagingSolutions


DocumentSolutions

Corporate CodeCorporate Philosophy / Vision / Code of Conduct

Priority Issues

EnvironmentReduce our own environmental impacts and contribute to the resolution of environmental issues.

1. Address climate change.2. Promote recycling of resources.3. Address energy issues toward a

non-carbon society.4. Ensure product and chemical safety.

Priority Issues

Create a healthy society through the process of prevention, diagnosis and treatment in healthcare.

1. Fulfill unmet medical needs.2. Improve accessibilities to medical services.3. Contribute to identifying diseases at

an early stage.4. Contribute to health promotion and beauty.5. Promote management of health and

productivity.

Health

Priority Issues

Daily LifeSupport the tangible and intangible aspects of social infrastructure in people’s lives through various products, services and technologies.

1. Contribute to creating a safe and secure society.

2. Contribute to enriching humanity and relationships between people.

Priority Issues

Working StyleExtend in-house work style reforms to change society so that everyone can be satisfied with their job.

1. Create an environment that leads to job satisfaction.

2. Develop and utilize diverse human resources.

Priority Issue

Supply Chain

Strengthen CSR foundations across the entire supply chain including factors affecting the environment, ethics and human rights.

Priority Issue

Governance

Improve and maintain governance structures by further penetrating an open, fair and clear corporate culture.

“SVP2030” Philosophy

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(Enhancement of shareholder returns)Improving the ROE Total ¥300 billion

Share buybacks: ¥200 billionDividends: ¥100 billion¥70 in FY2017/3 ¥95 in FY2020/3(dividend increase for 10 consecutive years)

Strategic leap forward Total ¥500 billionInvestment allocation for further accelerating revenues and profits

Next Stage

Improving profitability

ImagingInformation (healthcare)

Information (highly functional materials, etc.)

Document

Accelerating growthInvesting for the future

Strengthening of governance Accelerating global business deployment

Delivering a record profit

Enhancement ofshareholder returns

M&A investment

New Medium-Term Management Plan VISION2019We have drawn up a new medium-term management plan VISION2019, covering the three-year period from the fiscal year ending March 2018 (FY2018/3) to the fiscal year ending March 2020 (FY2020/3). This is a concrete action plan for the next three years to achieve “Sustainable Value Plan 2030.” Through a series of structural reforms, Fujifilm has been able to estab-lish a solid management base that generates profits. By efficiently utilizing these profits, the Company has built a diversified and extensive business portfolio. The VISION2019 aims to further enhance this portfolio by reinforcing each of the business segments and thus achieve sustainable growth.

Performance targets

Revenues

FY2020/3

¥2,600 billion

¥230 billion

¥150 billion

7.3%

100%

8.8%

5.8%

Operating Income / operating margin

Net income attributable to shareholders

ROE

Record- high

Record- high FY2021/3

Achieving ROE of 8.0%


Overview of the medium-term management plan, VISION2019

The VISION2019 maps out its “Imaging,” “Information” and “Document solution” businesses to the following three stages: (1) improving the profitability to generate stable cash-flow, (2) accelerating the growth of main business areas to expand revenues and profits, and (3) developing businesses with high profitability that will constitute the cornerstones of its future business op-erations, thereby further strengthening the business portfolio to achieve a strategic leap forward. Fujifilm will also pursue fur-ther growth by enhancing its overseas sales foundation, established through existing business operations, while accelerating overseas deployment of healthcare products and new highly functional products. With these initiatives, Fujifilm plans to achieve ¥2,600 billion in revenues, a record ¥230 billion in operating income and a record ¥150 billion in net income attributable to shareholders in FY2020/3, which is the final year of this three-year plan. Share-holder returns will be boosted to ¥300 billion in dividends and share buybacks over the three-year period from FY2018/3 to FY2020/3, raising Return on Equity (ROE) to 7.3% by FY2020/3 as a target reflecting organic business growth. A total of ¥500 billion will be set aside as an investment fund for strategic M&A over the three-year period for further growth in revenues and profits, achieving ROE of 8.0% in FY2021/3.

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• With regard to the instax instant camera and film, expand the sales of existing products and square format products.

• Expand printing service solutions with added convenience, e.g., by incorporat-ing Artificial Intelligence (AI), to boost printing demand from smartphones to maintain the upward trend in profits.

Delivering highly competitive products that incorporate proprietary technologies to generate stable profits, while contributing to the development of photographic cultures

The Bio CDMO and Medical systems business will drive sales growth to ensure increased revenues and profits. R&D is accelerated for Pharmaceuticals and Regenerative medicine under controlled profit–loss balance.

• In Bio CDMO business, expand its production capacity through capital investments and technological develop-ment, and boost profitability through scale merit to accel-erate business growth, so as to achieve two-digit sales growth per annum, outstripping the market growth.

• In innovative drug development, target disease areas with high un-met medical needs, such as Alzheimer’s dis-ease and cancer and promote efficient R&D. Further push forward developing our pipeline which includes Alzhei-mer’s disease drug T-817MA.

• Accelerate initiatives for commercial application of formu-lation technology that makes use of our proprietary tech-nologies such as micro-needles and liposomes.

• In digital cameras, work toward capturing No.1 market share in the premium mirrorless camera market, promot-ing the X Series that continues to evolve with premium image quality, fast speed and mobility, alongside the me-dium format GFX Series that uses a large sized sensor, 1.7 times bigger than that of full size, to pursue the pin-nacle of image quality.

• Reinforce the lineup of highly reputable interchangeable lenses to continue to achieve increased revenues and profits in the mirrorless system business as a whole.

• Broaden the lens business by expanding the lineup of 4K broadcast lenses, launched ahead of the rest of the world, as well as the lineup of lenses for the fast-growing new video production market, including online video.

Imaging Solutions

Information Solutions segment

Healthcare

Pharmaceuticals and Bio CDMO*

Optical Device and Electronic Imaging

Photo Imaging Profit Growth Investment

Profit Growth Investment


FUJINON UA107×8.4

instax SQUARE SQ10

FUJIFILM GFX 50S FUJIFILM X-T2


(Billions of yen)

(FY) ’20/3’17/3’14/3

Revenue: Photo ImagingRevenue: Optical Device and Electronic ImagingOperating MarginOperating Income

(Billions of yen)

(FY)

RevenueOperating MarginOperating Income

’20/3’17/3’14/3

* CDMO stands for Contract Development & Manufacturing Organization. CDMO pro-vides clients such as pharmaceutical and biotechnology companies with a wide range of services from cell line development in the early stage of pharmaceutical develop-ment to process development, stability testing, process development and manufac-turing of investigational drugs, and commercial drug manufacturing.

Profit Growth Investment* The three icons—Profit, Growth, and Investment—refer to the stages of each business within its lifecycle. “Profit” is improving the profitability to generate stable

cash-flow, “Growth” is accelerating growth to expand revenues and profits, and “Investment” is investing to develop businesses that will constitute the corner-stones of its future business operations.

Culturing tank for biopharma-ceutical manufacturing

Micro-needles array

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• Accelerate business growth by expanding the lineup of iPS cell-derived differentiated cells in the drug discovery support business, and promoting the sales of autologous cultured epidermis / cartilage in the cell therapy business.

• In cutting-edge regenerative medicine products using iPS cell, accelerate R&D in the areas of eye diseases, heart diseases, neurological disorders and cancer.

• Broaden the contract cell culture business and deploy the culture medium business globally.

• Provide solutions to customers with its far-reaching prod-uct lineup, covering X-ray imaging diagnostic systems, endoscopes, ultrasound units and IVD systems, advanced medical IT systems having a strong competitive edge, and the comprehensive capabilities based on these tech-nologies. Offer products and services that meet the needs of local markets in fast-growing emerging econo-mies’ to achieve sales growth of 7% per annum.

• Promote the medical ICT business that makes maximum use of medical imaging data.

• Reinforce the skin care brand ASTALIFT with the introduc-tion of the top-of-the-range ASTALIFT IN-FOCUS series to attract new customers and increase per-customer spending among existing customers.

• Target the markets of growth potential for lifestyle dis-ease prevention and healthy aging skincare for business expansion with the introduction of “foods with function claims.”

Regenerative Medicine Medical Systems

Life Science

Healthcare

Highly Functional Materials, etc.

We will maintain the competitive edge of existing business operations, and make use of proprietary technologies to introduce highly profitable products that meet local market needs in a timely fashion to ensure expansion of sales and profits.



• Expand the sales of highly functional products that use proprietary technologies, such as the touch panel sensor film EXCLEAR and the precision filtering Micro Filter.

• Enter into the inspection services business for social infra-structures, such as tunnels and bridges, by utilizing our diagnostic imaging technology.

Industrial Products Profit Growth Investment

• Achieve business growth outperforming competitors through expanding the sales of existing products such as photoresists, photolithography peripherals and CMP slur-ries, and expanding the product range by introducing new peripheral materials.

Electronic Materials Profit Growth Investment

• Utilize our thin-film and multi-layer coating technologies to expand the sales of materials for OLED and touch-screen panels, thereby raising the sales ratio of new ma-terials to 30%.

Display Materials Profit Growth Investment


Functional Cosmetic ASTALIFT series

EXCLEAR touch panel sensor film

Medical-use picture archiving and communi-cation system SYNAPSE

Tablet-type ultrasound image diagnostic equipment Sonosite iViz

Endoscope system equipped with a laser light source LASEREO

Autologous cultured epidermis JACE

Autologous cultured cartilage JACC

(FY)

Graphic/Inkjet/Recording Media RevenueHighly Functional Materials RevenueOperating marginOperating income

’20/3’17/3’14/3

(Billions of yen)

14


010_0736501372910.indd 14 2018/01/09 14:59:42

FUJIFILM LTO Ultrium 7 Data Cartridge

In an effort to strengthen business operation, optimize the product lineup with the emphasis on profitability, and enforce thorough cost reduction and cut-backs in fixed costs.Add Group-wide cost reduction measures and streamline operations through integration of the business management divisions.

Document Solutions segment

We will shift operational focus to profitability while maintaining the No.1 market position, so as to strengthen the corporate structure, bringing the ra-tio of operating income to 10% by FY2021/3.

• Strengthen value provided through solutions and ser-vices, and optimize the structure for solution and services delivery.

• Make greater use of ICT to improve competitiveness of Managed Print Services (MPS) and Business Process Out-sourcing (BPO).

• Make active investments to create new value that facili-tates work-style and productivity reforms by way of utiliz-ing offices’ massive Big Data and technologies such as IoT and AI.

Solutions & Services Profit Growth Investment

• Market the chemical compounds from its wide range chemical compound library through Wako Pure Chemical Industries, Ltd.’s extensive sales network across Japan.

• Integrate the two companies’ technologies to develop competitive chemicals and reagents.

• Wako Pure Chemical Industries, Ltd., a core subsidiary of Fujifilm’s fine chemical business, will utilize Fujifilm’s re-sources including the overseas sales networks to acceler-ate the overseas deployment as well as the products in the medical systems and electronic materials business fields, and thus achieve double-digit sales growth in FY2020/3 from the FY2017/3 level.

Fine Chemicals Profit Growth Investment

• Increase the market share in the magnetic tape market by offering greater storage capacity compared with the cur-rent mainstream, LTO6, with Barium Ferrite (BaFe) mag-netic particles using its proprietary technologies.

• Accelerate the overseas introduction of the dternity data archive solution.

• Promote the switchover from hard disks to magnetic tapes as a solution that accommodates the advancement of Big Data.

Recording Media Profit Growth Investment

• Promote the sales expansion of high value-added prod-ucts in the field of CTP plate, including process-less CTP plates with its high environmental performance.

• Promote the company’s industrial printheads and inks, known for advanced image quality and durability, not only in commercial printing but also to explore new fields of growth potential, such as industrial applications and 3D printing.

Graphics and Inkjets Profit Growth Investment

• Link multifunction devices to cloud services to provide new value.

• Develop cost-competitive products that meet market needs.

• Reviewing the profitability model through expanding high-end models and solutions.

Office Products and Printers Profit Growth Investment

• Strengthen inkjet systems and expand printing applica-tions for business growth.

• Tap into the strong customer base to accelerate the de-livery of services covering the entire printing workflow.

Production Services Profit Growth Investment

VersantTM 3100 Press

(Billions of yen)

(FY)

RevenueOperating IncomeOperating Margin

’20/3’17/3’14/3

15


010_0736501372910.indd 15 2018/01/09 14:59:42

Message from the CEO

Contributing to resolving social issues through business activities to achieve a strategic leap forward

Shigetaka Komori, Chairman and

Chief Executive Officer

Management Message

16

010_0736501372910.indd 16 2018/01/09 14:59:42

I believe that the purpose of any company is to help make people’s lives better and enrich society through their technologies and the products and services they provide; that is, to con-tribute to resolving social issues through business.

The Fujifilm Group, as an example, has made a valuable contribution to society for years by providing photographic film, making people happy by helping to preserve the pleasure they experience and brilliant memories they build up in their life. The advance of digital technology caused demand for photographic film to decline drastically, putting the Group’s viability at risk. However, the Group has overcome this difficulty through business restructuring based on technologies it has cultivated. This was made possible by human resources, sound and appropriate decisions by management, and the high levels of technological capabilities developed through the research, development and manufacture of photographic film.

The Group put these capabilities together and tapped into new businesses in various fields, successfully developing a business structure that can stably generate cash flows. Some think that when a technology has had its day, a company dependent on it is no longer needed and is better replaced by a company with new technology. However, I believe that companies can continue to generate new value by combining and putting to use their management re-sources which include excellent human resources, technologies, and corporate culture. In that sense, a company is an extremely rational and efficient organization capable of generating new value. The Group will capture changes in society, create innovations and continue to de-liver new value to society while continuing to grow as a going concern.

Viewing social changes as opportunities for and driving growth of businesses

We help enrich society through our technologies, products, and services

Based on these ideas, the Fujifilm Group formulated “Value from Innovation” as its corporate slogan in 2014. In addition, the Group drew up the Sustainable Value Plan 2016 (SVP2016), its medium-term CSR plan, and the medium-term management plan VISION2016, the action plan detailing concrete measures to achieve SVP2016. The Group has made every effort to achieve the objectives of these plans.

In SVP2016, we made a commitment to implementing CSR activities from the new per-spective of contributing to resolving social issues through its business activities, in addition to the existing policy of being conscious of the environmental and social impact within business processes. Based on this policy, the Group devoted its efforts to contributing to resolving social issues in the priority fields of health and environment through the provision of energy-saving products and services in the healthcare and other businesses.

Under VISION2016 positioning the healthcare, highly functional materials, document business fields as growth drivers, the Group has expanded revenue, market share, and profits using the growth drivers with sales promotions and new product launches, enhanced its busi-ness portfolio and achieved steady growth in each business. As a result, the Group achieved revenue of ¥2,322.2 billion and operating income of ¥172.3 billion for the fiscal year ended March 31, 2017 (FY2017/3), the final year of VISION2016. Excluding the negative impact of the appreciation of the yen (a decrease in revenue of ¥152.7 billion and operating income of ¥33.6 billion), the Group achieved an increase in both revenue and profits, with net income at-tributable to Fujifilm Holdings rising to a record high of ¥131.5 billion and ROE reaching 6.5%, the highest for Fujifilm Holdings. In this manner, the Group has succeeded in attaining solid results during the past three years by simultaneously contributing to resolving social issues and growing its businesses with linking the two plans of SVP2016 and VISION2016.

Management Message

17

010_0736501372910.indd 17 2018/01/09 14:59:42

0

50

100

150

200

250

0.0

3.0

6.0

9.0(Billions of yen) (%)

(Target)Operating incomeOperating margin (right scale)

’13/3 ’14/3 ’15/3 ’16/3 ’17/3 ’20/3

172.3

230.07.4%

8.8%

(FY)0

30

60

90

120

150

0.0

2.0

4.0

6.0

8.0


131.5

150.0

6.5%

7.3%

(Target)Net income attributable to FUJIFILM HoldingsROE (right scale)

’13/3 ’14/3 ’15/3 ’16/3 ’17/3 ’20/3(FY)

Operating income / Operating margin Net income attributable to FUJIFILM Holdings / ROE

Carrying through VISION2019 and achieving a strategic leap forward

The Fujifilm Group drew up SVP2030 and VISION2019 in August 2017 based on the results and experience of the preceding two plans to ensure further growth. SVP2030 is a CSR plan specifying targets for FY2031/3 in accordance with the Sustainable Development Goals (SDGs) adopted by the United Nations in September 2015. In this CSR plan, the Group expressed its renewed strong commitment to contributing to resolving social issues on a global scale through its business activities. The new medium-term management plan VISION2019 is the action plan specifying concrete measures to realize the vision the Group will strive to achieve through SVP2030. Under VISION2019, we will further enhance the business portfolio developed by the Group with the aim of achieving a strategic leap forward.

Specifically, the plan maps the Imaging, Information and Document Solutions businesses to the stages of improving profitability, accelerating growth and investing for the future, and is designed to implement appropriate measures according to each stage in order to further strengthen the profitability of individual businesses. I believe what is critical is to overcome the two challenges of driving strong growth in the healthcare field as a core business by improving the profitability of the pharmaceutical and regenerative medicine businesses and strengthening the document business field amid the changing business environment. In the healthcare field, we will enhance the production capacity for the contract manufacturing of biopharmaceuticals and the development bases for production processes. In addition, the Group will accelerate business growth by stepping up research and development in fields where the Group can capitalize on its technologies, such as research and development of pipeline and drug delivery systems. In the document business, the Group will improve profitability by pursuing thorough cost reduction and reduction of fixed costs to strengthen the business structure, and firmly utilize its offices’ big data to achieve the streamlining of operations and working style, as well as productivity reforms through artificial intelligence (AI) and Internet of things (IoT) to attain an operating income ra-tio of 10% in FY2021/3. Based on the organic business growth, the Group will aim to achieve a record high operating income of ¥230 billion and net income attributable to Fujifilm Holdings of ¥150 billion for FY2020/3, the final year of VISION2019. We will aim for an ROE of 7.3% in FY2020/3 with the target of achieving an ROE of 8.0% in FY2021/3. Meanwhile, a total of ¥500 billion will be set aside as an investment fund for strategic M&A and shareholder returns will be boosted to ¥300 billion. We plan to pay annual cash dividends of ¥95 per share applicable to FY2020/3, making consecutive dividend increase for 10 years. For the Group to carry out these targets, it is necessary for all employees to accept SVP2030 and VISION2019 as their own plans, and carry out the missions assigned to them as members of a truly global company with a more proactive and longer-term perspective.

Management Message

18

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Bringing together the Fujifilm Group’s strengths in diverse fields to create innovation

The Fujifilm Group is a global company with 15 business fields and 277 Group companies around the world with around 79,000 employees. For the Group’s employees in each country and region to face issues in their local areas, explore business opportunities on their own, and deliver appropriate products and services to customers, it is essential that they collaborate with many people and organizations. To enable this, it is critical that the Group create an open, fair, and clear corporate culture which is diverse and accepts different values.

We would like to express our deepest regrets to our shareholders and stakeholders for any inconvenience and concerns caused due to the delay in the announcement of our consolidated financial results for FY2017/3. This was to review the inappropriate accounting conducted by overseas sales subsidiaries of Fuji Xerox which is engaged in the document busi-ness. In order to prevent the recurrence of such an issue, the Group is implementing measures to strengthen governance, such as dispatching management personnel from Fujifilm Holdings to Fuji Xerox, integrating the accounting and auditing departments, and establishing the Committee for Strengthening Governance. Fuji Xerox created the market as a pioneer in the field of office document solutions and, as a leading company in the industry, has outstanding capabilities, such as its excellent approach to customers, technological capability, marketing capability, and strength in proposals. I believe it is important that, through the new manage-ment structure, we will merge Fujifilm’s strengths such as high strategic capability, speed of execution, and fairness with those of Fuji Xerox to make it a better company. We have already launched initiatives to demonstrate the synergy of the two companies in the graphics business and other businesses to make these challenges into opportunity. The Group will combine the strengths of the two companies with an open, fair, and clear corporate culture as the guiding principle, and make all-out efforts for creating new innovations and lead them to the growth of each of its businesses.

As the management and employees will make a united effort toward attaining VISION2019, we request the continued support and understanding of all stakeholders of the Fujifilm Group.

(Plan)(Plan)’13/3’12/3’11/3’10/3 ’14/3 ’15/3 ’16/3 ’17/3 ’18/3 ’20/3

2530

3540

50

6065

7075

95

(FY)

Cash dividends per share (Yen)

Management Message

19

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Interview with the COO

To sum up our achievements under the previous medium-term management plan VISION2016, we accelerated the growth of our growth drivers of the healthcare and highly functional materials businesses by efficiently utilizing the stable profit and cash generated from the business portfolio that was established through our successful restructuring of business structure, and succeeded in improving the profitability of all our businesses. In addition, we have made progress in fulfilling our business portfolio and strengthening the ability to stably generate profits. As a result, I believe we have, for the most part, achieved the targets set out in VISION2016.

Specifically, our main accomplishments are as follows.In the Imaging Solutions segment, the Fujifilm Group achieved significant profit improve-

ments in the photo imaging business, centering around the instax instant photo systems, and the electronic imaging business, for which we have successfully shifted the focus to high-end mirrorless digital camera models which significantly improved profitability. In the optical device business, the Group advanced the development of high value-added products, such as 4K broadcast lenses, and promoted cost reduction through the downsizing of unprofitable businesses, optimization of production systems, and improvement of production processes.

In the healthcare business field of the Information Solutions segment, we achieved steady growth in the four priority fields (endoscopes, ultrasound diagnosis, medical IT, and IVD (In Vitro Diagnostics)) in the medical systems business, and maintained an operating income ratio of 10%. In the pharmaceuticals business, the Group made progress with the development of a pipeline of potential new drugs went as planned, and turned the Bio CDMO (Contract Development & Manufacturing Organization) business into a high growth and high profitability business by apply-ing technologies which it cultivated through photographic film manufacturing. In the regenerative medicine business, we solidified the business foundation by transforming Japan Tissue Engineering Co., Ltd. (J-TEC) into a consolidated subsidiary and acquiring Cellular Dynamics International, Inc. (CDI). In the highly functional materials business field, we acquired major customers by expanding the lineup, mainly of advanced products, in the electronic materials business and maintained high

Toward Achieving “VISION2019,” the New Medium-Term Management Plan

Tell us about the results of the medium-term management plan VISION2016, which has been completed, and the remaining challenges.

Q1

Kenji Sukeno, President and Chief Operating Officer

Management Message

20

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growth in revenues and profits. In the flat panel display materials business, we continued to secure a high level of profits through the stable supply of TAC films, while advancing the development of new materials. In the industrial products business, sales expansion of highly functional products, such as the EXCLEAR sensor film for touch screen panels, contributed to the sales growth of the Group. In the recording media business, Fujifilm introduced large capacity tapes that use barium ferrite (BaFe) particles based on its unique technologies, and successfully drove sales and profit in step with the expansion of the data archive market.

In this manner, the Fujifilm Group strengthened many businesses that comprise its business portfolio. However, reinforcement of the Document Solutions segment remained an issue to be addressed. In the Document Solutions segment, although growth strategies were implemented, the Group was unable to make up for the negative factors that occurred during the VISION2016 period, such as increased costs due to the appreciation of the US dollar, the effects of depreciation of exchange rates of countries in the Asia-Oceania region, and maturing of the printer market. As a result, both sales and profit in this business fell below our targets. In the pharmaceuticals business field, sales of low-molecular antimicrobial drugs, one of the major profit sources, were affected by generic drugs, and therefore profits did not improve.

What the Fujifilm Group will strive to achieve through the new medium-term management plan VISION2019 is to take appropriate measures for these two issues and further expand the re-sults attained through VISION 2016.

The new medium-term management plan VISION2019 is a three-year plan designed to lead the Fujifilm Group to the phase of achieving a strategic leap forward by further enhancing our business portfolio through deepening the profitability improvement in all projects that was achieved with VISION2016, and through well-modulated business resources allocation.

The VISION2019 maps the Imaging, Information, and Document solution businesses to the three stages of improving profitability, accelerating growth, and investing for the future in ac-cordance with the growth stage of each business segment. In addition, the plan clarifies current stage of each business and promotes the generation of stable cash-flow by improving profitability, expanding revenues and profits through acceleration of growth of main business areas, and de-velopment of businesses with high profitability that will constitute the cornerstones of the Group’s future business operations, thereby further strengthening the business portfolio to achieve growth across the Fujifilm Group.

For businesses which are at the stage of “improving profitability,” we will draw up and im-plement far-sighted strategies to achieve cash flow generation through the further improvement of profitability. Specifically, we will improve profitability by taking the following measures. In the photo imaging business, such as color paper, and the graphic systems business, such as com-puter-to-plate (CTP) plates, we will maintain high profitability by further expanding market share and sales of high value-added products, despite a decline in total demand. In the optical devices business, we will promote the sales expansion of highly competitive products that make use of our proprietary technologies, such as 4K broadcast lenses. In the display materials business, we will ensure stable supply of TAC film and other materials. In the office products and office printers busi-ness, we will promote the switchover in product mix from low-end models to high-end models.

For businesses which are at the stage of “accelerating growth,” we will accelerate the maximization of revenue and profits, in addition to the promotion of growth strategies we have implemented to date. Specifically, we will aim to achieve further growth by taking the following measures. In the electronic imaging business, we will continue to expand sales of favorable mirror-less digital cameras. In the medical systems business, we will aim for an annual sales growth of 7% by pursuing a sales expansion strategy based on the far-reaching product lineup unique to Fujifilm, covering X-ray diagnostic imaging systems, medical IT, endoscopes, ultrasound, and IVD systems. In the bio CDMO business, we will aim for an annual sales growth of over 10% by expanding pro-duction capacity through capital investment and production process development. In the inkjet business, we will expand our business by leveraging high-quality and high-durability industrial heads and inks to develop new fields such as industrial applications and 3D printing, which are ex-pected to grow. In the recording media business, we will promote even higher capacity with BaFe particles and aim to raise market share in the magnetic tape market, which is growing in demand

Explain the growth strategies of the new medium-term management plan VISION2019.

Q2

Management Message

21

010_0736501372910.indd 21 2018/01/09 14:59:42

for archiving applications. In the solutions & services business, we will aim to achieve further growth by offering high value-added solutions according to the types of business and operations of cus-tomers and supporting work-style and productivity reforms by way of utilizing offices’ massive Big Data and technologies such as artificial intelligence (AI) and Internet of things (IoT).

For businesses which are at the stage of “investing for the future,” we will identify and concen-trate management resources into areas where we can capitalize on our technologies and strengths in order to drive the growth of those businesses into engines of growth of the Fujifilm Group in the future. Specifically, in the pharmaceuticals business, we will pursue the development of the existing pipeline that targets disease areas with unmet medical needs. In the drug delivery system (DDS) field, we will work to attain the commercial application of formulation technology that makes use of our proprietary technologies, such as micro-needles and liposomes. In the regenerative medi-cine business, we will accelerate our business growth by expanding the lineup of iPS cell-derived differentiation cells in the drug discovery support business, and promoting the sales of autologous cultured epidermis / cartilage in the cell therapy business. In cutting-edge regenerative medicine products using iPS cells, we will accelerate R&D for the areas of eye disease, heart disease, neu-rological disorders and cancer. In addition, we will work on business expansion by expanding the contract cell culture business and deploying the culture medium business globally.

In businesses other than the above-mentioned businesses, we will also take measures accord-ing to the stage of each business, and enhance business capability to further reinforce our business portfolio. Through these measures, we will aim to achieve the targets for revenues and profits for the final year of VISION 2019.

The performance targets of the medium-term management plan VISION2019 are targets for organic business growth and do not take into account business expansion through M&A. We will pursue technological synergies and execute strategic M&A that will make one plus one equal three or four, and aim for revenue and profits that exceed targets.

In drawing up the new medium-term management plan, we discussed which measures need to be taken now based on a simulation of how our businesses should look in three years with an eye on changes in the economic and market environments. We will strengthen collaboration between business divisions and utilize the strengths and assets of each function, such as sales, marketing and technology, thereby leading to the expansion of each business. We will unite efforts toward achieving the targets set out in VISION2019. The Fujifilm Group looks forward to meeting your expectations on growth in the next three years.

Strengthening and developing new businesses, improving management efficiency, and strength-ening the global development activities are important methods for achieving our targets of VISION2019.

From the perspective of strengthening and developing new businesses, an important task in achieving the targets is to turn the pharmaceuticals, bio CDMO and regenerative medicine busi-nesses, which are priority business fields of VISION2019, into profit. In the pharmaceuticals and bio CDMO business, we will make capital investment and drive sales and profit growth, and accelerate progress in the research and development of pharmaceuticals by narrowing down themes to those in fields in which Fujifilm can draw upon its strengths. In the regenerative medicine business, we will expand the lineup of iPS cell-derived differentiated cells in the drug discovery support busi-ness, and promote the sales of autologous cultured epidermis / cartilage manufactured by J-TEC in the cell therapy business. In addition, we will collaborate with regenerative venture companies and research institutions with advanced technologies, such as universities, and government agen-cies, and build the foundation for the regenerative medicine business.

From the perspective of improving management efficiency, we manage with particular em-phasis on numerical targets, and allocate resources for capital investment and R&D expenses to each business based on priorities according to which of the abovementioned three stages it is in. For businesses which are at the stage of “improving profitability,” we will make capital investment only in projects designed to improve profitability. For businesses which are at the stage of “acceler-ating growth” and “investing for the future,” we will proactively make the investments necessary to drive sales and build a business foundation for the future. In this manner, we will allocate resources

Tell us how the three initiatives you have set out upon your appointment as President—to strengthen and develop new businesses, to improve management efficiency, and to strengthen global development activities—are reflected in VISION2019.

Q3

Management Message

Interview with the COO

22

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We express our deepest regrets for that the issue of inappropriate accounting at Fuji Xerox New Zealand and Australia have caused concern and inconvenience to our shareholders and stakehold-ers. This is an issue that the entire Fujifilm Group must deal with, and VISION2019 therefore maps out the strengthening of governance as a key issue to develop the foundation for promoting its business strategy.

The Group established the Committee for Strengthening Governance, where I serve as Chairman, in July. Under the committee, the Company launched five theme-based projects, which are a project for enhanced management of group companies, project for enhanced account-ing, project for enhanced auditing, project for enhanced compliance, and project for enhanced IT governance, and is working on addressing each issue. In line with this policy, the Group has implemented governance enhancement measures. For instance, we implemented compliance re-education for all management-level personnel and employees. In addition, we established the Subsidiaries Administration Division in August, and integrated Fujifilm’s financial accounting func-tions and audit function with those of Fuji Xerox in September.

I had face-to-face discussions with all the management personnel of the Fujifilm Group in August, and the details were communicated to all employees of the Fujifilm Group companies, including overseas subsidiaries. On that occasion, I shared what the inappropriate accounting in-cident had made realize. Wishful thinking that “minor misconduct like this won’t be a problem” can erode the trust of the public and inflict serious damage that could threaten the existence of a company. It takes a long time to build trust but it only takes seconds to destroy it, and it is harder to restore lost trust than to start again from scratch; and it is important to eliminate the communi-cation gap and talk openly among Group companies, superiors and subordinates, organizations, etc. I believe our employees have become aware of the importance of these things.

We will announce to our shareholders and stakeholders the progress of the initiative to strengthen governance through financial results briefing sessions and on other occasions. Anchored by a solid corporate governance system, we will strive to attain the targets of VISION2019.

based on priorities and ensure the efficient use of cash flow across the Fujifilm Group. We will manage capital investment within depreciation in principle, and aim to reduce the ratio of R&D expenses to sales from 6.9% in the FY2017/3 results to 6% or below in FY2020/3, the final year of VISION2019. In each of the businesses and back-office departments, we will continue with mea-sures for improving efficiency, such as review and reduction of various expenses and promotion of shared services. In the pharmaceuticals and the document businesses in particular, we will promote thorough cost reductions and management and reduction of fixed costs while securing capital investment in their growth fields. In addition, we will promote management that places emphasis on speedy decision making and management by encouraging each employee to think about and implement what they should do to deliver innovative results in a short time and improve their work efficiency.

Strengthening global development activities is the key to achieving sales growth through VISION2019. To this end, we will work to expand sales of instax instant photo systems and film in emerging countries, in addition to the United States and Europe, where the product is enjoying strong sales. In the medical systems business, we will strengthen comprehensive solution propos-als centering on medical IT solutions worldwide, and deliver products and services that meet local needs, in particular in emerging markets such as the Middle East and Africa. In the bio CDMO business, we will make capital investment mainly in the United States and the United Kingdom. In addition, we will advance business partnerships with China Resources (Holdings) Company Limited, one of China’s largest business conglomerates, and JSC R-Pharm, one of Russia’s leading pharma-ceuticals companies, to expand business in the vast markets in China and Russia. In addition, we will seek to expand sales of products of Wako Pure Chemical Industries, Ltd., which became our consolidated subsidiary in April, by utilizing Fujifilm’s overseas sales channels. In the Document Solutions segment, we will pursue global business development by maintaining the top position in the growth markets of China and Asia and strengthen collaboration with Xerox Corporation.

What are Fujifilm’s initiatives to strengthen governance under VISION2019?Q4

Management Message

23

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Regarding Inappropriate Accounting of Overseas Sales Subsidiaries of Fuji Xerox Co., Ltd.With respect to inappropriate accounting conducted in the past by overseas sales subsidiaries of Fuji Xerox Co., Ltd. (“FX”), a consolidated subsidiary of FUJIFILM Holdings (“FH”), we deeply apologize to our shareholders, investors, customers and other stakeholders for any inconvenience and concerns caused. This section explains the revealed facts and recurrence-pre-vention measures to be taken by the Fujifilm Group.

Outline Background and Managerial Issues

As the background to the inappropriate accounting and

managerial issues, the Independent Investigation Commit-

tee indicated the following points:

Background to Inappropriate Accounting

• The system of incentives including bonus payments for the managing director and employees at FXNZ, based on the sales target achievement, led to contin-ue the inappropriate accounting practice, recording sales early.

• At FXNZ, there was a concentration of authority with the managing director of FXNZ, and supervision by the board of directors did not function effectively, re-sulting in the lack of transparency in the business management process.

• There were problems including an insufficient subsidi-ary management system at Fuji Xerox Asia Pacific Pte Ltd and the lack of control over the audit system and administration department at FX. (Accordingly, infor-mation was blocked in the process of reporting within FX and appropriate information on the actual situa-tion did not reach the Chairman and President of FX.)

• There were systemic deficiencies in FH monitoring of FX and its subsidiaries, the audit system of the audit department and the information sharing system. (Ac-cordingly, appropriate information on the situation was not reported by FX to FH.)

Managerial Issues

Issues to be addressed at FXNZ• Review of incentives emphasized on sales achieve-

ment• Improve the internal system to correct the reporting

line centralization

Issues to be addressed at FX• Strengthen the system of managing subsidiaries and

affiliates• Strengthen information sharing within FX and improve

transparency of the business management process• Strengthen the supervisory function of the board of

directors and the audit function of the audit & super-visory board members and the audit department

• Strengthen the checking function of the accounting department

• Improve awareness of compliance with laws and regu-lations

Issues to be addressed at FH• Strengthen the function of managing FX

It was identified as being necessary to review certain ac-

counting practices related to certain sales leasing transac-

tions in and prior to FY2016/3 at Fuji Xerox New Zealand

Ltd (“FXNZ”), an overseas sales subsidiary of FX. As an ini-

tial step, FH established an internal investigation commit-

tee to conduct investigations. Furthermore, to enhance the

objectivity of the investigations, we established the Inde-

pendent Investigation Committee, consisting of outside

experts that do not have any financial or other interests in

the Fujifilm Group in April 2017, to clarify all the facts.

In June 2017 the report from the Independent Investi-

gation Committee showed that in addition to FXNZ, Fuji

Xerox Australia Pty. Ltd. (“FXA”) also conduced inappropri-

ate accounting.

The accumulated impact of the inappropriate account-

ing on the “net“ income attributable to FUJIFILM Holdings

through FY2011/3 to FY2016/3 is a loss of ¥28.1 billion.

The results of the investigation by the Independent Investi-

gation committee also raised an issue with regard to FX’s

internal controls. Currently, FH is engaged in initiatives to

prevent recurrence and strengthen governance.

About the Inappropriate Accounting PracticeFXNZ had been selling equipment, by introducing Man-

aged Services Agreements (MSAs) that bundled together

equipment sales and maintenance services. Under MSAs,

sales equivalent to the price of the copying machines are

recorded as a single sale as a capital lease upon installation

of equipment during the first fiscal year, and following that,

the sales price is recovered as a copy service fee deter-

mined by multiplying the actual number of copies by the

copy unit price, which is set according to the monthly tar-

get volume.

In order to treat contracts as capital leases, they must

satisfy certain conditions including possibility of the recov-

ery of a minimum payment of lease fees. In the case of

FXNZ, however, all transactions, including those with con-

ditions that did not satisfy the capital lease conditions,

were recorded as capital leases. Consequently, there were

many transactions in which receivables could not be recov-

ered, and this became common practice. A similar account-

ing practice was also conducted at FXA.

Corporate Governance

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FH has implemented personnel actions in response to the problem. Three directors, one senior vice president and one full-time corporate auditor at FX were subject to man-datory retirement, and one corporate vice president was demoted. Ten officers, namely the president, the other full-time corporate auditor, two corporate auditors at FX and the aforementioned six officers, had their compensation and bonuses reduced by 10-50% for three months. The chairman and president of FH also returned 10% of their compensation over the three-month period.

FH makes progress in strengthening of governance as following.

Strengthening of governance structure of FH

June 2017

Changes to governance structure of FH• Reducing the number of directors from 12 to nine for

greater operational flexibility, promoting active deliber-ation by the board of directors and making quicker management decisions

• Appointing a total of three outside directors to raise the ratio of outside directors on the board to 1/3 to en-sure the appropriateness of decision-making by incor-porating opinions from multiple perspectives

Strengthening of governance and the business management process of group companies

June 2017

Dispatching of management personnel from FH to FX• Dispatch seven officers including the chairman, deputy

president, executive vice president, and senior vice president from FH to FX

July 2017

Establishment of the FH Committee for Strengthening Governance• The committee, which is chaired by FH President, has

set up a comprehensive project system to implement through and continuous governance enhancement. Five projects are underway to address different themes.

We express our deepest regrets regarding inappropriate accounting by overseas sales subsidiaries of FX. Taking these findings seriously, we will make every possible effort to restore the trust of stakeholders under the new management structure with a stronger governance system.

July and August 2017

Strengthening and thorough reinforcement of compliance education• Conducted compliance re-education to directors of all

divisions of FH, Fujifilm Corporation (“FF“), and FX, and presidents of all subsidiaries

• Provide compliance re-education to all employees

August 2017

Establishment of the Subsidiaries• Establish the Administration Division to develop a

mechanism to ensure appropriate information provi-sion within the Fujifilm Group

September 2017

Integration of the financial accounting function• Integrate the accounting function of FF and FX with

the Accounting and Finance Division of FH to strength-en the business management process

• Establishment of the Global Audit Division• Establish the Global Audit Division to strengthen the

audit function through out the group

November 2017

Establishment of the whistleblowing system at FH• Set up the common whistleblowing system so that all

domestic and overseas employees of Fujifilm Group can report incidents directly to FH, to detect early and respond promptly to signs that lead to misconduct or violation of law at the companies and organizations

Main Measures Taken by FH in Response

Projects for enhancing management of group companiesProjects for enhancing accountingProjects for enhancing auditingProjects for enhancing complianceProjects for enhancing IT governance

FH Committee for Strengthening Governance


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The Company aims to achieve sustainable growth and in-crease the corporate value of the Group while contributing to the sustainable development of society by conducting

sincere and fair business activities. The Company has posi-tioned corporate governance as an important management priority to achieve this aim.

Basic Policy of Corporate Governance

The Company has implemented such measures as appoint-ment and addition of outside Directors, revision of the pay-ment of remuneration to Directors and Audit & Supervisory Board Members, formulation of Corporate Governance Guidelines, and evaluation on the effectiveness of the

Board of Directors. In addition, it will promote group-wide measures to strengthen governance in response to the in-appropriate accounting in overseas subsidiaries of Fuji Xerox Co., Ltd. to further strengthen the corporate gover-nance system.

Activities for Strengthening Corporate Governance

Status of Corporate Governance

Past Activities

Year/month Activities for strengthening governance Purpose

FY2007/3

Transitioned to a holdings company structure To strengthen consolidated management of the Fujifilm Group

First appointment of outside Director

To properly supervise and audit performance of duties to en-sure transparency of the management, while promoting active discussion by asking for appropriate advice and necessary ex-planation at the Board of Directors meetings from an objective viewpoint

FY2008/3 Introduction of stock option system To make the Company’s Directors (excluding outside Directors) share the stockholders’ interest in the fluctuation of the stock price of shares of the Company and enhance their motivation and morale to contribute towards increasing the corporate val-ue of the Company

FY2010/3Abolition of retirement benefit program for Directors and Audit & Supervisory Board Members

FY2015/3 Increase in the number of outside Directors to two persons

To further strengthen proper supervision and audit of perfor-mance of duties, while promoting active discussion by asking for appropriate advice and necessary explanation at the Board of Directors meetings from an objective viewpoint

FY2016/3

Formulation of Corporate Governance Guidelines

To present the Company’s basic policy on corporate gover-nance from a wide range of perspectives to ensure account-ability to all stakeholders

Commencement of the evaluation of the ef-fectiveness of the Board of Directors To ensure the effectiveness of the Board of Directors

FY2018/3

Increase in the number of outside Directors to three persons, thereby raising the ratio of outside Directors on the Board of Directors to one-third

To further incorporate stakeholders’ perspectives and sense of value into the managementTo enhance transparency of decision-making of the Board of Directors with advice given based on their expertise and expe-rience


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Corporate governance structure

The Company has positioned the Board of Directors as the organization for determining basic Group management poli-cies and strategies and other important matters relating to business execution as well as supervising the implementa-tion of business affairs. The Company’s Articles of Incorpora-tion stipulate that the Board can consist of up to 12 Direc-tors. Currently, the Board has nine Directors, including three outside Directors. The Board’s regular meetings are held in principle once a month, with extraordinary Board meetings held on an as-required basis. In addition, certain matters are determined on a flexible decision-making basis at the Board of Directors’ meetings by Directors with special authority. To better clarify their missions and responsibilities, the Compa-ny’s Directors are given a one-year term of office.

Details of the Company’s Organizational Structure

Directors and the Board of Directors

13

95 % (including outside Directors)*1

95 % (including outside Directors)*2

Number of Board of Directors meetings held (in FY2017/3)

Average attendance rate of Directors

Average attendance rate of Audit & Supervisory Board members

*1 Average attendance rate of each Director *2 Average attendance rate of each Audit & Supervisory Board member

Raise the ratio of outside Directors on the Board of Directors to one-third to strengthen governance

16

13

Previously From June 29, 2017 onward

Outside Director Outside Director

(As of June 29, 2016)

Corporate organization Company with an Audit & Supervisory Board

Number of Directors (number of outside Directors) 9 (3)

Number of outside Directors deemed to be independent*1 3

Directors’ term of office One year (the same term of office applies to outside Directors)

Incentive compensation to Directors Introduction of a stock option system geared toward in-house Directors

Number of Audit & Supervisory Board members (number of outside Audit & Supervisory Board members) 4 (2)

Number of independent officers*2 5

Adoption of an executive officer system Yes

Independent auditors KPMG AZSA LLC

Introduction of Countermeasures (Takeover Defense Measures) for Large-Scale Purchases of Company Shares None*3

*1 Compliance with the Company’s “Criteria for Independence of Outside Directors and Outside Audit & Supervisory Board Members” *2 Independent officers as stipulated by Tokyo Stock Exchange, Inc.*3 If the Company receives a proposal seeking to acquire a controlling interest, it will strive to help shareholders make a decision by proactively gathering information and

disclosing it in a timely manner, while taking appropriate measures within the scope permitted by relevant laws and regulations, such as the Companies Act and the Fi-nancial Instruments and Exchange Act, to increase corporate value and secure the common interests of shareholders.


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13

98 % (including outside Directors)*

Number of Audit & Supervisory Board meetings held (in FY2017/3)

Average attendance rate of Audit & Supervisory Board members

* Average attendance rate of each Audit & Supervisory Board member

Executive Officer System

The Company has adopted an executive officer system to facilitate agile business execution. Executive officers carry out business affairs in accordance with the basic policies and strategies formulated by the Board of Directors. The Company currently has 13 executive officers, including six concurrently serving as Board members. The executive offi-cers have a one-year term of office, the same as the Com-pany’s Directors.

Management Council

The Management Council makes decisions on the submis-sion of matters to be exclusively deliberated by the Board of Directors. At the same time, the Council deliberates on the measures adopted by executive officers to implement particularly important initiatives in accordance with the ba-sic policies, plans, and strategies formulated by the Board of Directors.

Audit & Supervisory Board and Audit & Supervisory Board Members

The Company has adopted an audit and supervisory board system with an audit and supervisory board, which consists of four members, including two outside Audit & Superviso-ry Board members. Both of Outside Audit & Supervisory Board members, Hisayoshi Kobayakawa and Shiro Uchida are registered Certified Public Accountants and possess considerable knowledge about finance and accounting. As an independent organization with key roles and responsi-bilities in the Company’s corporate governance system to ensure transparent and fair decision making in the business as a whole, Audit & Supervisory Board members audit the entire scope of Directors’ performance of their duties fol-lowing audit policies and an audit plan in conformity with the Audit & Supervisory Board members’ audit standards determined by the Audit & Supervisory Board. At meetings of the Audit & Supervisory Board, which are held in princi-ple once a month, information on audit results is shared among Board members. In addition, all Audit & Superviso-ry Board members attend meetings of the Board of Direc-tors, while the full-time Audit & Supervisory Board members attend every Management Council meeting, reg-ularly exchange opinions with the representative Directors, and audit the entire range of business execution. With the aim of strengthening the audit functions of the Audit & Su-pervisory Board, the Company has established the Audit & Supervisory Board Office and currently appointed six personnel.

Internal Audits

The Company established a Global Internal Audit Division in September 2017, which currently comprises 56 person-nel, as an internal auditing unit that is independent from business operations. Integrating the internal auditing func-tion of the Group companies, the Company has established a global auditing system to strengthen the auditing func-tion of the entire group through enhancing the auditing ca-pability and efficiency by using IT. In addition, the division is in charge of assessing internal control over financial re-porting by the Company and its Group companies in re-sponse to the April 2008 application of the internal control reporting system in Japan. The Company compiles the outcome of the assessment in a “Management’s Report on Internal Control over Financial Reporting.” Moreover, des-ignated staff are appointed to operating companies and audits are conducted across a wide range of areas, includ-ing the environment, quality control, security, labor, export control, and issues relating to the Pharmaceutical Affairs Law of Japan.

Accounting Audits

The Company engages KPMG AZSA LLC as its indepen-dent auditors. KPMG AZSA LLC expresses an audit opinion on the Company’s financial statements from an indepen-dent standpoint.


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Corporate governance structure of FUJIFILM Holdings Corporation and Internal Control System

Shareholders’ Meeting

Board of Directors

Business Execution

Chairman, Representative Director and CEO

Staff of Audit & Supervisory Board Members

FUJIFILM Corporation Fuji Xerox Co., Ltd. Toyama Chemical Co., Ltd.

President, RepresentativeDirector and COO

Management Council

Executive Officers Internal Audit

CSR Committee

M&A Investment Committee

Committee for Strengthening Governance

ITCorporatePlanning

SubsidiariesAdministration

PR / IR CSRLegalGeneral

AdministrationHR

Accountingand Finance

Audit &Supervisory Board

Independent Auditors· Determination of Group

management policies and strategies · Decisions on important matters

relating to business execution · Supervision of business execution


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The Company ensures that the activities and behavior of its officers, and employees are in compliance with laws and regulations and social ethics. Specifically, the Company has formulated the “Fujifilm Group Charter for Corporate Be-havior” and the “Fujifilm Group Code of Conduct,” and es-tablished the CSR Committee and dedicated compliance divisions to maintain and improve compliance. In its approach to risk management, the Company builds appropriate risk management systems at all Group companies. Complementing these systems, in the case of

important risk matters, the CSR Committee conducts re-views and promotes basic policy development and appro-priate measures from a group-wide perspective. Moreover, the Company has established an internal control system based on the “Basic Policy on Establishing a Structure for an Internal Control System” decided by reso-lution of the Board of Directors. Each year, the Company checks the implementation status of the internal control system and reports the result to the Board of Directors.

Approach to Compliance, Risk Management, and Internal Control System

Overview of IR Activities At Fujifilm, top management is actively involved in IR activi-ties and works to strengthen the relationship of trust with shareholders and enhance IR activities. In addition, we are working to reduce the gap between intrinsic corporate value and market ratings by continuously expounding the Compa-ny’s management policy and utilizing management to assist the capital markets in forming their opinions. Specifically, in addition to the quarterly results briefings attended by senior management and executive officers, we actively provide points of contact, by joining IR conferences for the benefit of institutional investors in Japan and overseas, holding busi-ness briefings, and individual meetings. We are thereby working to further enhance communications with our share-holders. For the sake of overseas investors, we post English-lan-guage information in a timely manner on our website and are enhancing our global IR activities, such as through closer communication by establishing our IR bases in North Ameri-ca and Europe. For individual investors, we post content on the website that explains the Group’s businesses in an easily understood manner and hold Company briefings in major cities in Japan.

The Company conducts IR activities in accordance with the

“IR Information Disclosure Policy” can be viewed at the following URL.

http://www.fujifilmholdings.com/en/investors/ policies_and_systems/ir_policy/

Main IR activities (FY2017/3)

Activity Number of times

For institutional investors / analysts

Results briefings 4

Conferences hosted by securities companies 8

Business briefings and factory tours 7

Overseas IR road shows 5

For individual investors

Company briefings 25

Other

The Company discloses the number of individuals to whom remuneration is paid and the total amount of remuneration by Directors as well as Audit & Supervisory Board members. Remuneration and other important matters relating to Direc-tors as well as Audit & Supervisory Board members are de-termined by way of resolution at the Company’s annual general meeting of shareholders. In this manner, steps are taken to determine the total maximum amounts of compen-sation payable to Directors as well as Audit & Supervisory Board members. Remuneration (including bonuses) paid to each Director is determined by a resolution of the Board of Directors. Remuneration (including bonuses) paid to each Audit & Supervisory Board member is determined based on deliberations between Audit & Supervisory Board members. The basic remuneration of Directors as well as Audit & Su-pervisory Board members is paid as a fixed remuneration amount in accordance with individual duties and status, whether full or part time. Directors’ bonuses are determined in accordance with the Company’s business results and indi-vidual Director’s responsibilities and performance. The Company has introduced a stock option system in connection with the payment of remuneration to Directors (excluding outside Directors). The stock option system was introduced as an incentive to further motivate Directors to enhance corporate value. In determining the number of stock options allocated, consideration is given to each Di-rector’s position, responsibilities, authority, and other fac-tors and determined by the Board of Directors in accordance with established rule.

* The following items are also included in the aforementioned amounts of remuneration. 1. Bonuses paid for FY2017/3 Directors: ¥100 million paid to 11 Directors (¥3 million paid to two outside Directors) Audit & Supervisory Board members: ¥4 million paid to three Audit & Supervisory

Board members (¥1 million paid to one outside Audit & Supervisory Board member) 2. Amount of remuneration paid by way of stock options Directors: ¥371 million paid to 10 Directors 3. Number of Directors receiving compensation Includes two Directors who resigned during FY2017/3 4. Number of Audit & Supervisory Board members receiving compensation Includes two Audit & Supervisory Board members who resigned during FY2017/3, ex-

cluding one Audit & Supervisory Board member with no compensation.

Remuneration to Directors and Audit & Supervisory Board Members

Subject of Remuneration Number of People

Remuneration Amount

Directors 14 ¥799 million(Outside Directors) (2) (¥19 million)

Audit & Supervisory Board members 5 ¥55 million(Outside Audit & Supervisory Board members) (2) (¥11 million)

Total 19 ¥854 million(Outside Directors, Audit & Supervisory Board members) (4) (¥31 million)

Amount of remuneration paid to Directors and Audit & Supervisory Board members* (For FY2017/3)


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Reasons for selecting outside Directors and outside Audit & Supervisory Board members

Outside Directors*1Outside Audit & Supervisory Board Members*1

Reasons for SelectionMr. Kobayakawa has ample experience and a wide range of knowledge as a certified public accountant. The Company deems he appropriately executes his duties as an outside Audit & Supervisory Board member from an objective viewpoint based on such experience and knowledge.

Attendance

Meetings of Board of Directors 13 / 13 Meetings of Audit &

Supervisory Board 13 / 13

Hisayoshi Kobayakawa

Reasons for Selection

Mr. Uchida has ample experience and a wide range of knowl-edge as both a certified public accountant and as a corporate manager. The Company deems he appropriately executes his duties as an outside Audit & Supervisory Board member from an objective viewpoint based on such experience and knowledge.

Attendance

Meetings of Board of Directors 8 / 10*2 Meetings of Audit &

Supervisory Board 9 / 10*2

Shiro Uchida

*1 For a brief history of each outside Director and outside Audit & Supervisory Board member, please see page 32 (Management Structure).

*2 Applicable to the Board of Directors meetings and Audit & Supervisory Board meetings held after the election on June 29, 2016.

Reasons for SelectionMr. Kawada has served as representative director of a general textile manufacturer for many years. With his strong leadership, he has achieved transformation of the company’s business mod-el, creation of innovation, and organizational reform. The Com-pany deems that he is capable of executing the duties expected of an outside director in an appropriate and sufficient manner by utilizing his ample experience and wide range of knowledge as a corporate executive to give suggestions and advice on many aspects of the Company’s management.

Tatsuo Kawada Newly elected

Reasons for SelectionMr. Kaiami has served in important positions such as Presiding Justice of the Division of Tokyo High Court and President of To-kyo District Court, and has ample experience and wide range of knowledge accumulated over his many years as a judge. The Company deems that he is capable of executing the duties ex-pected of an outside director in an appropriate and sufficient manner by utilizing this experience and knowledge to give sug-gestions and advice on many aspects of the Company’s man-agement, including from the perspective of compliance and internal control.

Makoto Kaiami Newly elected

Reasons for SelectionMr. Kitamura has served as representative director of financial institutions for many years, demonstrating strong leadership. He has ample experience and wide range of knowledge in the fields of loans, finance, and capital markets. The Company deems that he is capable of executing the duties expected of an outside director in an appropriate and sufficient manner by uti-lizing this experience and knowledge to give suggestions and advice on many aspects of the Company’s management.

Kunitaro Kitamura Newly elected


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Director (Outside)

Tatsuo Kawada

1987 President of SEIREN CO., LTD.2011 Chairman and President of SEIREN CO.,

LTD.2014 Chairman and CEO of SEIREN CO., LTD. (to

present)2017 Director of the Company (to present)

Significant Concurrent Positions • Chairman and CEO of SEIREN CO., LTD.• Outside Director of Hokuriku Electric Power

Company• Member of the Board (external) of Daikin

Industries, Ltd.• Director serving as Audit and Supervisory

Committee member of Hokuhoku Financial Group, Inc.

Director (Outside)

Makoto Kaiami

1978 Assistant Judge of Tokyo District Court2000 Presiding Justice of the Division of Tokyo

District Court2007 Associate Vice-Minister of Justice in charge

of Litigation Affairs, Minister’s Secretariat of Ministry of Justice

2009 Judge of Tokyo High Court President of Wakayama District and Family Court2011 President of Nagano District and Family Court2012 Presiding Justice of the Division of Tokyo

High Court2014 President of Tokyo Family Court2015 President of Tokyo District Court2016 Retired office at mandatory retirement age2017 Registered as Attorney at Law (to present) Joined Sophiacity Law Office as Of counsel (to present) Director of the Company (to present)

Significant Concurrent Positions • Of counsel of Sophiacity Law Office

Director (Outside)

Kunitaro Kitamura

2011 Representative Director and Deputy President of Sumitomo Mitsui Trust Holdings, Inc.

Representative Director and Deputy President of The Chuo Mitsui Trust and Banking Company, Limited (current Sumitomo Mitsui Trust Bank, Limited)

2012 Representative Director and President of Sumitomo Mitsui Trust Holdings, Inc.

Chairman (Representative Director) of Sumitomo Mitsui Trust Bank, Limited

2017 Representative Director of Sumitomo Mitsui Trust Holdings, Inc. (to present)

Chairman (Director) of Sumitomo Mitsui Trust Bank, Limited (to present)

Director of the Company (to present)

Significant Concurrent Positions • Representative Director of Sumitomo Mitsui Trust

Holdings, Inc.• Chairman (Director) of Sumitomo Mitsui Trust

Bank, Limited

Director

Masaru Yoshizawa

1980 Joined the Company 2014 Corporate Vice President of the Company (to

present) 2016 Director of the Company (to present) Director of FUJIFILM Corporation

Significant Concurrent Positions • Director & Executive Vice President of Fuji Xerox

Co., Ltd.

Director

Norio Shibata

1980 Joined the Company 2014 Director of FUJIFILM Corporation (to present)2016 Corporate Vice President of the Company (to

present) Director & Senior Vice President of FUJIFILM

Corporation (to present)

Significant Concurrent Positions • Director & Senior Vice President of FUJIFILM

Corporation

Board of Directors

* Fuji Photo Film Co., Ltd., was renamed FUJIFILM Holdings Corporation in October 2006. The operating company FUJIFILM Corporation took over the businesses of Fuji Photo Film Co., Ltd.

(As of September 30, 2017)

Management Structure

Chairman, Representative Director & CEO

Shigetaka Komori

1963 Joined the Company 2000 President, Representative Director of the

Company 2006 CEO of the Company (to present) 2012 Chairman, Representative Director & CEO of

the Company (to present) Chairman, Representative Director & CEO of

FUJIFILM Corporation (to present)

Significant Concurrent Positions • Chairman, Representative Director & CEO of

FUJIFILM Corporation • Chairman, Representative Director of Fuji Xerox

Co., Ltd.

President, Representative Director & COO

Kenji Sukeno

1977 Joined the Company 2012 Corporate Vice President of the Company Director of FUJIFILM Corporation 2013 Director of the Company 2015 Director & Senior Vice President of FUJIFILM

Corporation 2016 President, Representative Director & COO of

the Company (to present) President, Representative Director & COO of


Significant Concurrent Positions • President, Representative Director & COO of

FUJIFILM Corporation • Director of Fuji Xerox Co., Ltd.• Chairman, Director of Toyama Chemical Co., Ltd.

Director & Chief Technical Officer (CTO)

Yuzo Toda

1973 Joined the Company 2008 Director of FUJIFILM Corporation2009 Director of the Company (to present) 2015 Executive Vice President of FUJIFILM

Corporation 2016 Corporate Vice President of the Company (to

present) Director & Vice President, CTO of FUJIFILM

Corporation (to present) 2017 Director of Anicom Holdings, Inc. (to

present)

Significant Concurrent Positions • Director & Vice President, CTO of FUJIFILM

Corporation • Director of Anicom Holdings, Inc.

Director & Chief Innovation Officer (CIO)

Kouichi Tamai

2003 Joined the Company 2006 Corporate Vice President of the Company (to

present) 2008 Director of FUJIFILM Corporation2010 Director of the Company (to present) 2013 Executive Vice President of FUJIFILM

Corporation 2016 Director & Vice President, CIO of FUJIFILM

Corporation (to present)

Significant Concurrent Positions • Director & Vice President, CIO of FUJIFILM

Corporation • Deputy President, Representative Director of Fuji

Xerox Co., Ltd.

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Audit & Supervisory Board Member

Kazuya Mishima

1978 Joined the Company 2009 General Manager of Legal Group of

Corporate Planning Division of the Company General Manager of Legal Department of

FUJIFILM Corporation 2012 Corporate Vice President of the Company Corporate Vice President of FUJIFILM Corporation 2014 Director & Senior Executive Officer of

FUJIFILM Business Expert Corporation2015 President & Representative Director of

FUJIFILM Business Expert Corporation2017 Audit & Supervisory Board Member of the Company (to present) Audit & Supervisory Board Member of


Significant Concurrent Positions • Audit & Supervisory Board Member of FUJIFILM Corporation• Audit & Supervisory Board Member of Toyama Chemical Co., Ltd.

Audit & Supervisory Board Member

Mamoru Matsushita

1980 Joined the Company 2008 Managing Director of FUJIFILM UK Ltd. 2012 General Manager of Secretary Office of the

Company General Manager of Secretary Office of

FUJIFILM Corporation 2013 President of FUJIFILM Italia S.p.A. 2016 Audit & Supervisory Board Member of the

Company (to present) Audit & Supervisory Board Member of


Significant Concurrent Positions • Audit & Supervisory Board Member of FUJIFILM

Corporation

Audit & Supervisory Board Member (Outside)

Hisayoshi Kobayakawa

1968 Registered as Certified Public Accountant (to present)

1996 Senior Partner of Price Waterhouse (currently PricewaterhouseCoopers Co., Ltd.)

Executive Representative Partner of Aoyama Audit Corporation

2000 Audit & Supervisory Board Member of General Sekiyu K.K. (currently TonenGeneral Sekiyu K.K.)

Full-time Audit & Supervisory Board Member of TonenGeneral Sekiyu K.K.

2007 Audit& Supervisory Board Member of TonenGeneral Sekiyu K.K. Full-time Audit & Supervisory Board Member of TonenGeneral Sekiyu K.K.

2014 Substitute Audit & Supervisory Board Member of the Company

2015 Audit & Supervisory Board Member of the Company (to present)

Audit & Supervisory Board Member (Outside)

Shiro Uchida

1986 Registered as Certified Public Accountant (to present)

2010 CEO of PricewaterhouseCoopers Co., Ltd. 2012 Chairman of PricewaterhouseCoopers Co.,

Ltd. 2015 Chairman, Representative Director of SAP

Japan Co., Ltd. (to present) 2016 Audit& Supervisory Board Member of the

Company (to present)

Significant Concurrent Positions • Chairman, Representative Director of SAP Japan

Co., Ltd. • Outside Director of Nihon Trim Co., Ltd.

Audit & Supervisory Board Members

Executive Officers

Chairman and CEO Shigetaka Komori

President and COO Kenji Sukeno

Corporate Vice President and CIO Kouichi Tamai

Corporate Vice President and CTO Yuzo Toda

Corporate Vice President Norio Shibata

Corporate Vice President Masaru Yoshizawa

Corporate Vice President Hiroshi Kurihara

Corporate Vice President Shigenobu Inenaga

Corporate Vice President Masato Yamamoto

Corporate Vice President Shigeru Sano

Corporate Vice President Masahiro Fukuoka

Corporate Vice President and CDO* Akira Yoda

Corporate Vice President Chisato Yoshizawa

*Chief Digital Officer

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Message from Outside Directors

management from a different viewpoint from inside direc-tors’ and contribute to enhancing the corporate value of the Fujifilm Group by raising issues and giving advice. Ef-fective this fiscal year, the Board is comprised of three out-side Directors, which, I believe, raises expectation for active exchange of opinions based on broader knowledge. By uti-lizing my experience in corporate management I will also contribute to achieving growth of the Fujifilm Group, where every employee has a dream, thereby which can provide society with dreams.

SEIREN CO., LTD., where I currently serve as Chairman and CEO, has supplied Fujifilm with shielding components for photographic film, what it calls teremp (shielding cloth) for film cartridges, which was developed about 30 years ago. With the declining demand for photographic film, the Company’s business with SEIREN is shrinking substantially. However, this appointment as the Company’s outside Di-rector makes me keenly aware of my 30-year relationship with the Fujifilm Group. The Fujifilm Group, a creator of innovative products and services in a wide variety of fields, continues to create value with the use of leading-edge, original technologies, which are undoubtedly its core competence, generating strength that is not seen in other companies. Moreover, strong leadership of the management has been a driving force to build togetherness and forward momentum with the Group’s employees, and achieve innovation in acting on their own to reform the Company. The Fujifilm Group presently has 93 domestic compa-nies and 184 overseas companies as a global company group. As the Fujifilm Group continues to grow up, how Fujifilm will strengthen governance, while drawing on the strength of each company—this will become a more im-portant issue in the future management. Outside directors play a role in supervising the

I worked as a judge for 38 and a half years until I retired from the post of Director General of the Tokyo District Court in October 2016. I have been working as a lawyer since February 2017. Although I have never been involved with corporate management, I am committed to fulfilling my roles and the expectations placed on outside Directors by drawing on my experience as a legal expert. Today, corporations are facing the big challenge of not only improving corporate value in pursuit of a greater busi-ness scale and larger profit, but creating social value that contributes to the world. The Fujifilm Group has been cre-ating new value through innovation in various lives and in-dustrial fields, thereby contributing to society. The Fujifilm Group’s achievement in the medical field to support peo-ple’s health is one of the major accomplishments.

Contribute to growing the business and strengthening governance from the perspective of corporate manager

Three outside Directors, who have been newly elected for FY2018/3,

express their resolutions on the appointment as the Company’s Directors.

Seeing my role as a member of the Group by utilizing my experience as a legal expert

Tatsuo KawadaDirector (Outside)

• Chairman and CEO of SEIREN CO., LTD.

• Outside Director of Hokuriku Electric Power Company

• Member of the Board (external) of Daikin Industries, Ltd.

• Director serving as Audit and Supervisory Committee member of Hokuhoku Financial Group, Inc.

Makoto KaiamiDirector (Outside)

• Of counsel of Sophiacity Law Office


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In terms of compliance that is to be observed as a public institution of society, such issues as inappropriate ac-counting at overseas sales subsidiaries of Fuji Xerox and deficiencies in internal control were found. This finding cre-ates the need to review group-wide operations to improve and strengthen the governance system and fully ensure our members are aware about compliance. I feel that Board of Directors of FUJIFILM Holdings Corporation discusses matters in an open and active man-ner, showing the Company’s willingness to positively receive opinions from outside parties. I see it as my role to raise is-sues and give proper advice to the Board of Directors

My 40-year service in Sumitomo Mitsui Trust Bank gave me opportunities to meet various corporations from the posi-tion of a financial institution. Among them, I have never found a case like that of the Fujifilm Group. Although the Company once faced the situation where its mainstay prod-ucts were at risk, it overcame the difficult period and later developed businesses even greater than before. I believe that this is because Fujifilm Group tackled the challenge of restructuring and reform through concert-ed efforts with the management and employees, realizing its vision through actions full of esprit and vitality. It could not have been achieved without the management’s lead-ership and strong will that each employee had developed voluntarily and independently, with ideas such as “we will do it” and “we want to change like this.” This is very proof of the open, fair, and clear corporate culture of the Fujifilm Group, which has been a source of creation of value from innovation. Corporation management is prone to peer pressure even though discussions are made freely and audaciously. This unconscious vulnerability should be mitigated through proper supervision and advice from the viewpoint of exter-nal parties such as outside directors to ensure management transparency, thereby leading to stronger governance. Every business of the Fujifilm Group supports the in-dustrial community by providing cutting-edge, proprietary

based on my knowledge and experience relating to law, from a position where I can check the management with outside viewpoints, especially as a legal professional. In order for corporations to achieve sound growth, the important point is that each and every employee works passionately and enthusiastically, being aware that their work has been useful for society. The Fujifilm Group pos-sesses such positive corporate culture, enriching soil for value creation. I am committed to fulfilling my role as a member of the Fujifilm Group with the aim of building a company that will achieve sustainable development with society.

technologies and enriches people’s lives. When employees truly feel that business growth and development are direct-ly linked with contributions to society, they will find their ef-forts very rewarding, thereby generating higher motivation. Recently, financial institutions have been expected to fulfill responsibilities to meet consumer needs with a high sense of ethics under the concept of “fiduciary duty.” I be-lieve that such truly customer-oriented viewpoint is also ap-plied to non-financial institutions. I will give my support in corporate management with the consciousness of such viewpoint.

Providing support in corporate management through supervision and advice given based on the experience and knowledge accumulated in a financial institution

Kunitaro KitamuraDirector (Outside)

• Representative Director of Sumitomo Mitsui Trust Holdings, Inc.

• Chairman of Sumitomo Mitsui Trust Bank, Limited


35

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Business Activities

ImagingSolutions


DocumentSolutions


Sustainable Value Plan 2030

Governance

Technological Strength, Corporate Culture,Brand Strength, Human Resources,

Global Network

P37 P39 P43

Providing photo-related products and services ranging from photo-taking to printing

Engaging in a wide range of activities focusing mainly on B2B

businesses including healthcare and highly functional materials, both of which are priority business fields

Undertaking document-related business activities including the provision of

digital multifunction devices for offices and related services

The Fujifilm Group operates businesses in three business

segments: Imaging Solutions, Information Solutions, and

Document Solutions. This section shows a performance

summary and analysis on change in revenue and operating

income for FY2017/3.

Business Activities

Business Activities

36

010_0736501372910.indd 36 2018/01/09 14:59:44

Performance Summary of FY2017/3In the Imaging Solutions segment, consolidated revenue amounted to ¥341.8 billion (down 3.2% from the previous fiscal year), due to the negative impact of the yen’s appre-ciation (¥32.0 billion) and other factors. Consolidated oper-ating income amounted to ¥36.8 billion (up 15.1% from the previous fiscal year), due to the improvement in profitability in each business, though a negative impact from the de-creased sales due to the yen’s appreciation was observed.

Reasons for Change in Revenue from FY2016/3 to FY2017/3Increases• Strong sales were seen for instant photo systems such as

the instax series and instax films, especially in the United States and Europe.

• The Wall Decor and other value-added printing business-es also enjoyed solid sales.

• Favorable sales were seen for mirrorless digital cameras such as FUJIFILM X-T2 and FUJIFILM X-T20 as well as their accompanying interchangeable lenses.

• Strong sales were seen for FUJIFILM GFX 50S, a medium format mirrorless digital camera equipped with a large sized sensor.

Decreases• Sales of camera modules for use in smartphones de-

creased.

Reasons for Change in Operating Income from FY2016/3 to FY2017/3Increases• Sales of instant photo systems were strong• Profitability improved in the electronic imaging field, re-

flecting the further shift to such high-end digital camera models as the X Series and the FUJIFILM GFX 50S

Decreases• Negative effect of the yen’s appreciation

Imaging Solutions

Proportion of revenue Photo Imaging

Provides photo-related products and services, rang-

ing from photo-taking to printing

Optical Device and Electronic Imaging

Provides products such as the X Series of digital

cameras, interchangeable lenses, and TV lenses

(Billions of yen)

FY 2012 2013 2014 2015 2016

Revenue 346.0 373.6 360.3 352.9 341.8

Operating income (loss) (0.8) 3.6 20.3 32.0 36.8

Total assets 327.5 322.3 322.1 314.8 365.9

Depreciation 13.3 13.5 11.1 12.9 11.1

Capital expenditures 9.8 9.3 7.9 10.2 10.3

0

100

200

300

400

341.8

69%

31%

’13/3 ’14/3 ’15/3 ’16/3 ’17/3

Photo imaging Optical device and electronic imaging

(FY)

(Billions of yen)

-10

0

10

20

30

40

-5.0

0.0

5.0

10.0

15.0

20.0

(%)

Operating income (loss) Operating margin (right scale)

36.8

10.8%

(Billions of yen)

’13/3 ’14/3 ’15/3 ’16/3 ’17/3(FY)

Revenue

Operating income (loss) / Operating margin

Business Activities

37

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Principal Products and Services

• Instant photo systems

• Printing materials

Photographic paper and chemicals for color prints

Inkjet paper and ink

Thermal paper and ribbon

• Printer devices

Minilabs (silver type, inkjet type)

Thermal photo printers

• Labs and photo printing services

Value-added printing business such as Photobook

Photo printing services

• Photographing sensitive materials

Color negative films

Reversal films

QuickSnap


• X Series digital cameras

• GFX series medium format mirrorless digital camera

equipped with a large sized sensor

• Interchangeable lenses for digital cameras

• TV lenses, cinema lenses

• Security lenses

• Projector lenses

Performance Highlights and Major Initiatives

• Sold 6.6 million units of the instax instant camera on a global basis.

• Sales of instant photo systems such as the instax series and instax films that

enable users to enjoy output photos on the spot were strong, especially in

the United States and Europe.

• Fujifilm launched instax SHARE SP-2 responding customers’ demand for a

device that can produce instax prints taken and edited by smartphone in

accord with the spread of smartphone. It is popular that it finishes a photo

with a instax-like atmosphere and Fujifilm has succeeded in expanding new

users and developing new sales channel.

• Sales of value-added printing business were strong such as Wall Decor print-

ing services that enable users to enjoy decorating their rooms by displaying

the users’ favorite photos in a panel and a framed canvas, and Photobook

services including Year Album which select and layout photos automatically.

Performance Highlights and Major Initiatives

Electronic imaging

• Strong sales were seen for FUJIFILM X-T2 and FUJIFILM X-A3, which were

released in September 2016, as well as their accompanying interchangeable

lenses.

• Sales increased for FUJIFILM GFX 50S, a medium format mirrorless digital

camera equipped with a large sized sensor, which was released in February

2017, and FUJIFILM X100F and FUJIFILM X-T20, which are the latest mod-

els of the X Series that uses original color reproduction technologies to

achieve premium image quality.

Optical devices

• Sales of camera modules for use in smartphones decreased.

• FUJINON MK18-55 mm T2.9 cinema lenses, which were released in March

2017, are highly regarded in the market for their high optical performance,

extremely lightweight design and excellent cost performance.

Photo Imaging


Revenue YoY 5.1% Down¥236.8 billion

Revenue YoY 1.5% Up¥105.0 billion

Tetsuya Iwasaki

General Manager of Photo Imaging Products Division, FUJIFILM Corporation

For the fiscal year ended March 31, 2017, sales of the instax instant camera increased significantly, thereby contributing to the overall sales of the Imaging Solutions segment. Instax has been popular among young digital-native generations especially in Asia. Fujifilm, thereafter, has continued to re-lease attractive new products that satisfy users’ needs for self-expression. Our products have been accepted instantly by a wide variety of users around the world especially in North America and Eu-rope, thereby enhancing the new enjoyment of photography.

We have also been developing and providing highly convenient printing services by adopting digital marketing and AI (Artificial Intelligence) technology to meet diversifying customers’ needs. In February 2017, we have started operating new services that enable users to automatically create Photobook perfectly suited for a “trip” and “wedding” and have received a high evaluation from customers. While conveying the attractiveness of analog technology, we continue to provide innova-tive products, services and solutions adopting advanced digital technologies in order to contribute to the development of the culture of photography.

Create demand for new photography, imaging and printing services in the age of digital devices and smartphones

Photo Imaging business

instax mini 8+

FUJINON MK18-55mm T2.9

FUJIFILM GFX 50S

FUJIFILM X-T2

Business Activities

38

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Recording MediaHealthcare

Provides products including computer tape and data archive services

Develops businesses in the fields of medical sys-tems, pharmaceuticals, bio CDMO, regenerative medicine, and life sciences; operates in three fields of prevention, diagnosis, and treatment

Graphic SystemsHighly Functional Materials

Provides inkjet digital presses, industrial inkjet prin-theads, plate-making films and computer-to-plate (CTP) plates

Provides display materials, industrial products in-cluding non-destructive testing equipment and various types of highly functional films and elec-tronic materials including semiconductor process-ing materials

(Billions of yen)

FY 2012 2013 2014 2015 2016

Revenue 845.5 919.6 936.2 942.1 899.5

Operating income (loss) 72.8 69.1 87.3 90.7 83.0

Total assets 1,330.3 1,333.1 1,454.1 1,457.6 1,542.4

Depreciation 71.9 68.8 51.2 52.0 49.1


Performance Summary of FY2017/3In the Information Solutions segment, consolidated reve-nue amounted to ¥899.5 billion (down 4.5% from the previ-ous fiscal year) due to the negative impact of the yen’s appreciation (¥63.5 billion) and other factors, while sales increased in the display materials business, electronic ma-terials business and others. Operating income amounted to ¥83.0 billion (down 8.5% from the previous fiscal year), reflecting such factors as the sales decline impacted by the yen’s appreciation.

Reasons for Change in Revenue from FY2016/3 to FY2017/3Increases• In medical systems business, sales in growth fields of

In-vitro Diagnostic (IVD) systems, endoscopes and others were strong.

• In pharmaceuticals business, Bio CDMO performed well.• In display materials business, sales of WV films and films

for VA mode were steady.• In industrial products business, EXCLEAR delivered good

sales results.• In electronic materials business, sales of advanced prod-

ucts related to photolithography materials and others were strong.

• In recording media business, sales of data storage tapes were solid.

• In graphic systems business, sales grew for inkjet digital presses and industrial inkjet printheads.

Decreases• In pharmaceuticals business, sales decreased mainly due

to the influence of generic drugs in the category of small-molecule drugs.

Reasons for Change in Operating Income from FY2016/3 to FY2017/3Increases• Profitability improved in each businessDecreases• The negative impact of the yen’s appreciation

Proportion of revenue

0

250

500

750

1,000

Healthcare Highly functional materials Recording media

Graphic systems

899.5

43%

23%

5%

29%

’13/3 ’14/3 ’15/3 ’16/3 ’17/3(FY)

(Billions of yen)

0

20

40

60

80

100

0.0

5.0

10.0

15.0

20.0

(%)

83.0

9.2%

(Billions of yen)

Operating income Operating margin (right scale)

’13/3 ’14/3 ’15/3 ’16/3 ’17/3(FY)

Operating income / Operating margin

Revenue

Business Activities

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Principal Products and Services• Digital X-ray imaging diagnostic systems:

FCR, DR• Medical-use picture archiving and

communications systems SYNAPSE

• Endoscope systems• Ultrasound diagnostic

equipment• In-vitro diagnostic

(IVD) systems• X-ray films

Medical Systems Performance Highlights and Major Initiatives• In the X-ray imaging diagnostic field, sales of the CALNEO series, a DR cas-

sette digital X-ray imaging diagnostic system, were strong.• In the medical IT field, sales of systems, particularly SYNAPSE increased

steadily.• In the endoscope field, strong sales were seen particularly in LASEREO, the

endoscope system paired with laser light, and in the new series of gastro-scopes.

• In the ultrasound diagnosis field, sales increased steadily in a range of ultra-sound imaging diagnostic devices that were newly launched, such as the compact sized, light weighted and tablet typed Sonosite iviz.

• In the IVD field, a mycoplasma antigen inspection kit FUJI DRI-CHEM IMMU-NO AG Cartridge Myco was launched in October 2016, as the vitro diagnos-tics reagent for use with FUJI DRI-CHEM IMMUNO AG1.

Medical-use picture archiving and communications systems SYNAPSE

Principal Products and Services• Small-molecule

drugs• Contract

development and manufacturing organization of biopharmaceuti-cals

• Radiopharmaceu-ticals

Performance Highlights and Major Initiatives• In March 2017, the Bio CDMO Division was established, the market that is

expected to make strong growth to expand its contract development and manufacturing operations for biopharmaceuticals.

• The Bio CDMO business progressed steadily.• Sales in the small-molecule drugs decreased mainly due to the influence of

generic drugs.• As the nation-wide stockpile in Japan of the anti-influenza drug Avigan Tab-

let 200mg was announced by the Japanese government in March 2017, the supply of the anti-influenza drug has started.

• In the field of new drug development, Fujifilm is promoting the development of pipelines, for example, in the United States in March 2017, initiating Phase II of the clinical investigation of “FF-10501”, an anti cancer drug for refractory myelodysplastic syndromes as a type of hematological malignancies.

Pharmaceuticals, Bio CDMO

OZEX fine granules for children (15%)

Performance Highlights and Major Initiatives• In June 2016, Cellular Dynamics International, Inc. (CDI), which is a leading

company in the development and manufacturing of iPS cells, established a Cooperative Research and Development Agreement, related to the treat-ment of retinal degenerative disease with the National Eye Institute (NEI) in the United States.

• In September 2016, a new company was established in the United States in order to develop cell therapy for the treatment of retinal diseases utilizing iPS cells in cooperation with Dr. David Gamm, a world authority on treatment of retinal diseases.

• In September 2016, CDI was granted a patent in Japan related to the tech-nology required for the safe and efficient generation of iPS cells, following the United States and Australia.


• iPS cells for drug discovery support

• Recombinant peptide• Autologous cultured

epidermis/cartilage

Regenerative Medicine

Autologous cultured epidermis “JACE”

Life Sciences

Functional cosmetics series ASTALIFT

Principal Products and Services• Functional cosmetics• Nutritional supple-

ment products• Hair care

products

Performance Highlights and Major Initiatives• The high-function skin lotion ASTALIFT MOIST LOTION and the whitening

skin lotion ASTALIFT WHITE BRIGHT LOTION were released in September 2016 and March 2017, respectively.

• Sales of new products including skincare products and nutritional supple-ment products were strong.

Healthcare Revenue YoY 4.3% Down¥384.0 billion

Business Activities

40

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Performance Highlights and Major Initiatives• Sales of WV films and films for VA mode and IPS mode were steady.• While maintaining sales of products for LCD TVs, Fujifilm is

working to expand sales of high-end products for use in small and medium-sized displays including OLED related products and actively develop such new business fields as the materials related to touch panels

Principal Products and Services• Non-destructive testing

equipment and materials• Touch panel materials• Solar cell materials• Semiconductor

processing materials

Performance Highlights and Major InitiativesIndustrial Products• Strong sales in new business fields such as the touch-panel sensor film EXCLEAR were seen.• Revenue decreased due to the yen’s appreciation and slower sales in existing business

fields such as industrial-use X-ray films.Electronic Materials• Strong sales were seen for such photolithography materials as advanced photo resists, de-

velopers and treatment agents, CMP slurries, and Image Sensor Color Mosaic.• Fujifilm continues to expand sales to large accounts utilizing the broad product lineup, in-

cluding Ultra Pure Solutions, Inc., a U.S. solvent manufacturer and marketer, which became a consolidated subsidiary in December 2015, and Wako Pure Chemical Industries, Ltd. which became a consolidated subsidiary in April 2017, with the aim of further enhancing business.

Display Materials

Industrial Products, Electronic Materials

Principal Products and Services• FUJITAC protective film for polarizers• WV film for expanding viewing

angles

EXCLEAR touch-panel sensor film

Keiji Mihayashi

Director & Senior Vice President, General Manager of Electronics Materials Division,

FUJIFILM Corporation

FUJITAC protective film for polarizers

In the electronic materials business, we develop, produce, and globally supply materials essential for semiconductor manufacturing, such as photo resists, developers and treatment agents, CMP slurries, and Image Sensor Color Mosaic. By ascertaining needs of not only semiconductor manu-facturers but also peripheral companies such as manufacturing equipment makers, we achieve de-velopment utilizing design and compound synthesis technologies relating to organic compounds, and supplying products in a highly clean production process.

As the IoT and other technological innovation advances, the importance of semiconductors, which underpin such advancement, is rising every day. We will continue to provide high-value-add-ed products quickly and steadily, while precisely foreseeing future needs so as to achieve growth that goes beyond that of the industry.

Speedily and steadily provide high-value-added products that support technological innovation

Electronic materials business

Highly Functional Materials Revenue YoY 3.3% Up¥208.9 billion

Revenue ¥97.8 billion YoY 1.9% Up

Revenue ¥111.1 billion YoY 4.6% Up

Aiichiro Hiruma

General Manager of the Regenerative Medicine Division, FUJIFILM Corporation

Regenerative medicine is the process of using yourself or others’ cells for damaged tissues and or-gans that are difficult to reproduce, to restore the function. There are 3 key components, “cells”, “culture medium / cytokine” and “scaffolds” to realize regenerative medicine. Fujifilm has generat-ed high-quality “scaffolds” by using materials technologies, cultivated in the development and pro-duction of photographic film. We gained capabilities of development, manufacturing and sales in the cellular field through the acquisition of Japan Tissue Engineering Co., Ltd., which is the first Japanese company that de-veloped and commercialized regenerative medicine products, and Cellular Dynamics International, Inc., which is a world leading developer and manufacturer of iPS cells, in 2014 and 2015, respec-tively. Thereafter in 2017, Wako Pure Chemical Industries, Ltd., which is an operator of culture me-dium business, became a consolidated subsidiary, thereby making us hold all the three key components of regenerative medicine in the Fujifilm Group. We will accelerate development by harnessing the synergies within the Group, and drive the industry forward as a leading company in regenerative medicine.

Accelerate the development of regenerative medicine by holding three key components

Regenerative Medicine business

Business Activities

41

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FUJIFILM LTO Ultrium 7 Data Cartridge computer tape with BaFe magnetic particles

Performance Highlights and Major Initiatives• Revenue grew owing to solid performance of data storage computer

tape with unique technologies such as Barium Ferrite (BaFe) particles technology.

• While expanding sales of BaFe products to data archive field in accord with swelling digital data, Fujifilm will steadily respond to customer needs in the big data era by further disseminating its data archive ser-vice dternity.

Principal Products and Services• Magnetic recording tape for

computers• Data archive service

Recording Media

Graphic Systems

To address global warming prevention through business, the Fujifilm Group is developing products and services that are highly effective for

reducing CO2 emissions, aiming to achieve its target of a reduction in CO2 emissions of 20 million tons by FY2021/3 (compared with

FY2006/3).

The introduction of the dternity On-site Archive, an energy-saving data storage system, is one of those examples. This product stores

low-use data in a high-capacity magnetic tape, thereby reducing power consumption and CO2 emissions by roughly 74% compared to all

the storage of data on HDD. The high-capacity magnetic tape uses Barium Ferrite (BaFe) particles developed and commercialized for the

first time by Fujifilm with a dramatic improvement in data tape capacity.

C O L U M N Solving social issues through business

CO2 emissions reduction with energy-saving data storage system

Performance Highlights and Major Initiatives• In January 2017, the Inkjet Business Division was established with the

aim of responding to diverse consumer needs with inkjet technologies and further expanding businesses.

• While sales grew for inkjet digital presses and industrial inkjet print-heads, revenue decreased due to the appreciation of the Japanese yen.

Acuity Select series Industry-use inkjet head (Starfire)

Principal Products and Services• Printing materials, CTP plates• Digital printing equipment• Inkjet digital presses• Industrial inkjet printheads


Revenue YoY 2.1% Up¥47.6 billion

Business Activities

42

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Document Solutions

Proportion of revenue Production servicesOffice products

Provides high-speed, high-quality digital printing systems and associated services

Provides digital multifunction devices and other devices for office use

Global servicesOffice printers

Supports finding solutions to customers’ docu-ment-related issues through improvements to cor-porate document solutions and operational processes

Provides printers for office use

Performance Summary of FY2017/3In the Document Solutions segment, consolidated revenue amounted to ¥1,080.9 billion (down 7.2% from the previ-ous fiscal year), due to the sales decrease in export ship-ments to the United States and Europe centering on the office printer business, the negative impact of the depreci-ation of Asian currencies against the yen (¥57.2 billion) and other factors. Operating income amounted to ¥82.7 billion (down 6.0% from the previous fiscal year), mainly due to the negative impacts from the decline in export shipments to the United States and Europe and the yen’s appreciation despite enhanced efficiency of selling, general and admin-istrative expenses.

Reasons for Change in Revenue from FY2016/3 to FY2017/3Increases• In the office products business, positive sales were seen

for the new ApeosPort-VI C and DocuCentre-VI C series of A3 full-color multifunction devices which can be linked with various cloud services. The number of units sold in Asia and Oceania increased for both monochrome and color multifunction devices.

• In the production services business, the sales of color on-demand publishing systems increased steadily.

• In the global services business, Managed print service business proceeded smoothly both in Japan and the Asia-Oceania region.

Decreases• The sales of office printer declined mainly in exports to

Europe and the United States.• Negative impact of the depreciation of Asia’s local cur-

rencies

Reasons for Change in Operating Income from FY2016/3 to FY2017/3Increase• Enhanced efficiency of selling, general and administrative

expensesDecrease• Drop in exports to Europe and the United States and

negative impact of the yen’s appreciation.

(Billions of yen)

FY 2012 2013 2014 2015 2016

Revenue 1,008.0 1,124.9 1,166.9 1,165.4 1,080.9

Operating income 70.3 87.5 87.6 87.9 82.7

Total assets 1,069.8 1,109.0 1,173.8 1,138.1 1,115.4

Depreciation 54.6 58.4 62.0 58.1 55.3


0

200

400

600

800

1,000

1,200 1,080.9

44%

15%

17%

11%

13%

Office products Production services

Global services

Office printers

Others

’13/3 ’14/3 ’15/3 ’16/3 ’17/3(FY)

(Billions of yen)

0

20

40

60

80

100

0.0

5.0

10.0

15.0

20.0

82.7

7.6%

(%)(Billions of yen)

Operating income Operating margin (right scale)

’13/3 ’14/3 ’15/3 ’16/3 ’17/3(FY)

Operating income / Operating margin

Revenue

Business Activities

43

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Principal Products and Services• On-demand publishing systems• Computer printing systems

Performance Highlights and Major Initiatives• Sales of printing system for mission-critical operations were strong in

Japan.• Sales of production printers Versant™ 3100 Press and Versant 180

Press, which meet various finishing needs for on-demand printing were steady.

Principal Products and Services• Color/monochrome

office printers

Performance Highlights and Major Initiatives• The sales volume of export shipment especially to Europe and the

United States declined.

ApeosPort-VI C7771

DocuPrint CM310 dw

Versant™ 3100 Press

Office Products

Office Printers

Production Services

Principal Products and Services• Managed print services(MPS) • Business process outsourcing

Performance Highlights and Major Initiatives• Sales decreased due to the negative impact of the depreciation of

Asia’s local currencies• The managed print services business proceeded smoothly in both Ja-

pan and the Asia-Oceania region.

Hiroshi KuriharaPresident and Representative Director, Fuji Xerox Co., Ltd.

The phenomenal innovation of communication technologies has led to the development of a world-wide network connection. The further acceleration of ICT and IoT will certainly increase the volume of distributed information. Under such circumstances, Fuji Xerox has been establishing a communication environment that enables business people to simply and safely use the necessary information anytime, anywhere and with anybody in the optimal form with the use of communication technologies and know-how centering on documents. Our focus is to provide our customers with various solutions in di-verse business scenes, including optimization of business flow and strengthening of customer relation-ships in order to improve their businesses. We will continue to offer services that will eventually lead to solving social issues, while enlarging our focus to cover municipalities and local communities.

To help our customers create values in their business

Document Solutions

Global Services

Principal Products and Services• Office-use color/

monochrome digital multifunction devices

Performance Highlights and Major Initiatives• Sales were strong in the Asia-Oceania region, especially in China. Pos-

itive sales were seen for the new ApeosPort VI C / DocuCentre-VI C series of A3 full-color multifunction devices capable of linking with var-ious cloud services, which were released in Japan as well as in the Asia-Oceania region in December 2016.

• Overall sales volume remained unchanged from the previous fiscal year, while sales volume decreased in Japan, reflecting the backlash against the replacement of multi-function devices in major domestic convenience stores in the previous fiscal year and decrease in sales volume centering on monochrome models in export shipments to the United States and Europe.





Business Activities

44

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We believe that our five sources of corporate value—Technological Strength,

Corporate Culture, Brand Strength, Human Resources and Global Network—are

essential components for the Fujifilm Group to meet the expectations, needs

and reliability of our stakeholders through our business activities. This section

shows these five components which support the creation of corporate value.



45

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Competitive Advantages Cultivated in Silver Halide Photographs

Camera

Ensuring high-quality design and manufacture of lenses, hardware, and systemsFujifilm began developing lenses shortly after its establishment, and they have been highly rated under the FUJINON brand. Moreover, Fujifilm possesses unique strengths in camera hardware and system design.

Photographic film

Coating multiple layers of functional materials simultaneously on a thin film baseThe surface of the photographic film is coated with multiple layers of materials that boast a variety of functions. Fujifilm possesses the technology to make an optically warp-free, thin, uniform film base in units of microns. In addition, it is possible to design functional ma-terials at the nanometer level, align and main-tain minute homogeneous particles, and on a base of these, uniformly coat at high speed multiple layers at the same time.

Minilabs / Color paper

Precisely controlling chemical reactions of coated functional substancesIn the developing and printing of photographs, Fujifilm achieves high color reproducibility and image preservability by precisely controlling the chemical reactions of a variety of functional substances coated on photographic film and color paper. Moreover, Fujifilm boasts high-lev-el system design technologies that help build systems for printing equipment including minilabs.

Analog silver halide photographs, a business that the Fujifilm Group has been involved in for many years, consist of various accumulated technologies.

Currently, the ratio of photographic film as a percentage of Companywide sales is just under 1%. However, the technologies, which hold competitive advantages, developed from silver halide photographs are still utilized in many businesses in different forms.

Technological Strength

PhotographingD

evelopment/Printing

Technologies in use

Technologies in use

Technologies in use

Imaging technology

Redox Control Technology

Film Formation Technology

High-precision Forming Technology

High-precision Coating Technology

Functional Molecules Technology

Grain Formation Technology

System Design

Functional Molecules Technology

Functional Polymer Technology

Nano Technology

High-precision Coating Technology

System Design

1


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【Life Sciences】Functional cosmetics

Supplements

【Regenerative medicine】

【Pharmaceuticals】

Recombinant peptide (RCP)

Drug delivery system

Autologous culturedepidermis/cartilage

【Medical systems】

Endoscope systems

Digital X-ray imagingdiagnostic system

Ultrasound diagnostic equipment

Medical-use picture archivingand communications systems

Multi-function devices / Printers

4K HDMI/IP opticaltransmission system

VCSEL

Document

Optical lensesDigital cameras

Digital Imaging

CTP plates

Inkjet digital press

Ink for inkjet printers

Wide-formatUV inkjet systems

Graphic Systems

Healthcare

Highly Functional Materials

Sensor filmfor touch panels

Photo resists

Heat barrier film

Optical film fordisplays

Backsheetsfor solar cell

Semiconductor processing materials

Computer tape

Gas separation membranes

Control of light

Prevention ofpenetration by

gases/liquid

Separationof gas

Recording ofimages/information

Printing ofimages

Printing ofimages

Transfer ofinformation

Display of images

Delivery ofsolids and

liquid

Cultivationof cells

Capturing ofimages

Recording Media

Since its founding, the Fujifilm Group has been accumulating the fundamental technologies that have supported the Company’s business. These technologies include organic and inorganic materials chemistry, optical technologies, and analytical technologies.

Based on these fundamental technologies, we have honed our proprietary core technologies, which are central to continuously building up our competitive advantage. By combining these technologies, we have provided a wide range of products and services which create new value that will open the way to the future.

We will make continuous efforts to create new value by applying these technologies in various industries.

Imagingtechnology

MEMStechnology

FunctionalMolecules

Bioengineering

Nano technology

Film Formationtechnology

High-precisionCoating

technology

FunctionalPolymer

High-precisionForming

technology

System Design

Redox Control technology

Grain Formation technology

Development of Applications of Unique Technologies2

Functional value

Core Technologies

Fundamental Technologies

Bio-chemistry Mechanical Design

Production System

Software Electrical, Electronic

Imaging Optics AnalysisMaterial Chemistry


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010_0736501372910.indd 47 2018/01/09 14:59:47

Linking Technology with Growth

R&D Reforms in Business Restructuring and Activities of New Business Creation

Figure 3: R&D StructureR&D Management Headquarters

FUJIFILM Advanced Research LaboratoriesCreation of new value through “Intellectual Fusion and Innovation”

Corporate Lab.

Seeking leading-edge, proprietary technologies

Divisional Lab.

Seeking the technologiesdirectly connect to business

Frontier Core-technology Lab.

Synthetic Organic Chemistry Lab.

Advanced Marking Research Lab.

Informatics Research Lab.

Analysis Technology Center

Production Engineering & Development Center

Imaging Technology Center

Highly Functional Materials Research Lab.

Pharmaceutical & Healthcare Research Lab.

Regenerative Medicine Research Lab.

Medical Systems R&D Center

Optical Device & Electronic Imaging Products Development Center

Display Materials Research Lab.

Recording Media Research & Development Lab.

Electronic Materials Research Lab.

Figure 1: Key theme selection at time of restructuringKey themes have been selected after taking an inventory of technologies by dividing and organizing new and existing technologies and markets into four quadrants.

0

50

100

150

200

0.0

2.5

5.0

7.5


’17/3’16/3’15/3’09/3

160.2

191.1

6.9

7.8

66.2

8.2

61.5

24.3

(FY)

Figure 2: R&D expenses / Ratio of R&D expenses to revenue

Invest R&D expenses in key growth areas and promote effective R&D

3Aiming to create a new business to replace photographic film, for which the market was rapidly shrinking from its peak in 2000, the Fujifilm Group has promoted R&D re-forms along with business restructuring. In order to build a new growth strategy, we took inventory of our technologies by dividing and organizing new and existing technologies and markets into four quadrants.

Based on the results, we selected priority business fields from three viewpoints: “being able to use our tech-nologies,” “future potential for market growth” and “staying competitive” (Figure 1) and concentrated capital expendi-tures and R&D investment on them. We also continue to in-vest R&D resources in key growth areas (Figure 2).

Regarding the R&D structure, we reorganized one in which laboratories was linked to plants, thereby having the structure remain devided by function. The Company creat-ed a “vertical” structure by establishing Divisional

Laboratories under the business divisions to carry out R&D directly linked to each business. At the same time, it also established a “horizontal” structure to provide, from a Com-panywide perspective, the necessary technologies to each business by creating Corporate Laboratories to research fundamental technologies, such as material chemistry, im-aging, analysis, and production system.

Fujifilm has promoted speedy new product develop-ment and new business creation to drive growth through a structure whereby the R&D Management Headquarters cen-trally manages this vertical and horizontal matrix (Figure 3).

Further, in August 2015, Fujifilm established within the Corporate Planning Division the Innovation & Strategy Plan-ning Division, which consists of management staff responsi-ble for business strategy and technical staff with expertise on the Company’s technology, thereby enhancing swift and effective new business creation.

Three questions to ask when selecting key themes

Is it a growth market?

Do we have the technology?

Can we stay competitive?

• Pharmaceuticals• Functional cosmetics• Ultrasound diagnostic equipment• Material for regenerative medicine

Existing market New market

• PS plates, CTP plates• Photographic film• Compact digital cameras• X-ray film

• Optical film for displays• Sensor films for touch panels• Gas separation membranes• Backsheets for solar cell

New technologiesExisting technologies

• High-quality digital cameras• Medical-use picture archiving and

communications systems• Digital printing devices• Endoscope system with a laser light source

Imaging Solutions


Document Solutions

Corporate

Ratio of R&D expenses to revenue (right scale)* FY2009/3 has been recorded on a gross basis.


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Fujifilm has opened “Open Innovation Hubs” in Japan, the U.S. and Europe as places that allow outside business part-ners to become familiar with Fujifilm’s fundamental/core technologies, which are the source of competitiveness of the Fujifilm Group, as well as materials, products and ser-vices to which these technologies are applied, and to co-create new value. Since the opening, a total of about 9,800 people from 1,900 companies (as of October 31, 2017) have visited the three locations, and collaboration is proceeding in various forms.

Further, Fuji Xerox created the Customer Co-creation Laboratory in its R&D center located in Yokohama Japan with the aim of responding to the rapidly changing busi-ness environment and the increasingly diversified expecta-tions of our customers. The company introduces to customers case examples in which it worked to resolve its business challenges, then works together with customers to solve their business challenges.

In April 2016, Fujifilm established the Informatics Research Laboratory that engages in the R&D on cutting-edge tech-nologies in the field of information sciences including data analysis and software fundamental technologies, with the aim of building a structure that covers advanced ICT such as the IoT (Internet of Things) and AI (Artificial Intelligence). Further, in order to accelerate groupwide ICT use by com-bining technologies accumulated to date with new technol-ogies, the Company established the ICT Strategy Management Office in October 2016. We will apply ICT not only to create new materials and products, and solution services that respond to IoT society, but also to overall cor-porate activities such as effective marketing activities based on accurate demand forecast and formation and ex-ecution of business plans.

Open innovation for new values by collaboration

Reinforcing information fundamental technologies for advanced ICT that accelerates innovation

California, U.S.

Tokyo, Japan

Tilburg, the Netherlands

Location of Open Innovation Hubs


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The Fujifilm Group creates an open, fair and clear corporate culture that allows it to discern objective facts in a sincere and straightforward manner, make rational decisions, and continuously take on challenges with courage in the course of business activities. With this corporate culture, we will further hone our leading-edge, proprietary technologies to remain a vigorous company, consistently creating new value and exercising pioneering leadership.

The FUJIFILM brand has enhanced its value through continuous offer of innovative products and services based on ad-vanced proprietary technologies accumulated in photography. “Improving customer satisfaction” is one of our efforts. For this purpose, we pay special attention to communicating with our customers at customer centers which are our point of con-tact with them. We are also building a system that enables us to correctly grasp customers’ views and link these views to im-provements in work processes and product development.

Corporate Culture

Brand Strength

Respect for Human Rights Occupational Health and Safety / Promotion of Health

Compliance is the core of the Company’s open, fair, and clear corporate culture and respect for basic human rights is the most important aspect of compliance. The Fujifilm Group has clearly stated its commitment to this point in the Fujifilm Group’s Charter for Corporate Behavior and Code of Conduct, asking employees to sign the declaration at the end of the Code. We are aware that observing such principles as prohibition of discrimination and harassment, protection of privacy, respect and protection of basic labor rights are essential to truly enhance productivity. We pro-mote understanding of these concepts by periodically holding training seminars on respect for human rights and eliminating discrimination.

Creating a workplace where employees can work with vigor and in good health, both physically and mentally— this is a basic condition to achieve sustainable growth and devel-opment of the Group. Considering that the securing of em-ployees’ occupational health and safety is the primary issue in our corporate activities, we implement the Occupational Health and Safety Program and prevention measures for workers’ accidents, especially in the production sites.

For health promotion, we established a group-wide health Promotion Council composed of the Fujifilm group. The council has since been working to promote activities focusing on four priority areas: preventing serious life-style-related diseases, quitting smoking, mental illness, and preventing overwork. In a high evaluation of these activi-ties, we were recognized as a “2017 Certified Health and Productivity Management Organization (Large Enterprise Category) -white 500” in FY2017/3.

Efforts to Raise Customer Satisfaction

Fujifilm’s businesses cover a wide range of fields, it re-sponds to customer’s voices in a way that takes into ac-count the characteristics of each product. Customer proposals and requests collected at customer centers are reported to the relevant departments related to the prod-ucts to help to improve its products and services and sup-port the development of new products. For example, the Net Print Service System helps improve FAQs with AI (Arti-ficial Intelligence) features on a website, thereby enabling customers to solve issues alone even during the non-busi-ness hours of customer centers.

At Fuji Xerox, we believe that it is fundamental to place im-portance on interactive communication with the customers to understand their demands and expectations, and sin-cerely accept their views and engage in continual improve-ments. In addition, we have prepared a website that provides employees with information from customers’ viewpoints. The bilateral communication between custom-er contact, including sales, maintenance, etc, and the areas of product development, marketing and quality control that the website allows is expected to foster greater customer understanding.

1. A Trusted Company

2. Social Responsibility

3. Respect for Human Rights

4. Global Environmental Conservation

5. Vibrant Workplaces

Charter for Corporate Behavior Code of Conduct

1. Respect for Basic Human Rights

2. Open, Fair and Clear Corporate Activities

3. Protection/Preservation of Corporate Assets and Information

4. Environmental Conservation and Protection

Fujifilm Group


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In order to create and develop prospective business and accelerate global expansion, it is essential to have skilled human resources. Having recognized that human resources are one of the sources of corporate value, the Fujifilm Group is working on developing an environment where diverse human resources can maximize their abilities, while focusing on the develop-ment of global and executive talented people from a long-term viewpoint.

Human Resources

Development of Global Human Resources

Achieving Diverse Working Styles

Those who think and act on their own in the global and di-versified society, and are actively reforming and expanding our businesses for the next generation—giving top priority to developing such global and executive talented people, the Fujifilm Group is implementing systems to develop hu-man resources based on an international viewpoint across the Group. We also offer the FUJIFILM Way training to fa-miliarize domestic and overseas employees with an over-view of ideal human resources for the Group and working practice.

Fujifilm is implementing measures to foster global hu-man resources based on “scheduled training to develop global skills and mindsets” and “creating the capabilities of

Fujifilm has been implementing Work Style Innovation ac-tivities, enabling diverse employees to utilize their individu-al strengths and demonstrate their own capabilities in an effective way of working that produces results. As a part of these activities, Fujifilm is working on improving its support to employees with responsibilities for childcare and caring for other family members by introducing various programs, such as the Home Working System and the Paid-Leave by the hour system. It also promotes recruitment of employ-ees with disabilities as well as retirees by setting a medium- to long-term expansion goal.

our employees to work globally.” It is building a training system that offers planned practical training for Japanese employees who are appointed to positions overseas, over-seas trainee system and short-term onsite training system that give opportunity to young employees to gain overseas experience, as well as training program for technicians.

At Fuji Xerox, we not only continue to provide global training to the next generation of leaders, but also enhance our program to develop management-level candidates from overseas affiliates through study in Japan at graduate schools or in long-term OJT.

Fuji Xerox has also been promoting a work style with higher productivity (shorter working hours and flexible work-ing systems). It has implemented the Program for Accompa-nying a Spouse’s Transfer and a next-generation women leaders program (development program for selected candi-dates) in view of women’s career advancement. In support of older employees, the Second Life Program has been intro-duced to make use of the abilities of employees after retire-ment, as well as support their livelihood in retirement.

FUJIFILM WAY Training at FUJIFILM Belgium N.V.

Skill exertion of diverse employees

Aiming to become a company where diverse employees can demonstrate their skills

Developing their own strengths and producing results through ef�cient ways of working.

Working style innovation

Enhancement of support systems

Skill exertion of diverse employees

consists of the three pillars:

Enhancement of support systems

Aiming at being a company where diverse employees can demonstrate their skills, build their strengths, and reform our company culture for better productivity based upon ef�cient ways of working.

Working style innovation

Fujifilm’s Training to Develop Global Human Resources (below)

For Japanese employees

For employees of overseas subsidiaries

For employees appointed to overseas positions

Training prior to overseas appointment

Training to develop overseas managers

Overseas onsite training

Short-term onsite training system

Overseas trainee system

Overseas study system

For interested employees Language lessons, distance-learning (languages)

For technical positions MOT (technical management) training

Development of global leadership

FUJIFILM Global Leadership Seminar

FUJIFILM Regional Leadership Seminar

Dissemination of corporate philosophy FUJIFILM WAY Training


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Global NetworkShortly after it was founded, Fujifilm took proactive steps to cultivate overseas markets, setting up the first overseas base in 1937. The Fujifilm Group has grown into a global entity that maintains 277 consolidated subsidiaries and has consolidated overseas revenue accounting for about 59%, or ¥1,359.5 billion, of the total revenue.

In recent years, the Fujifilm Group has positioned such emerging countries as Brazil, Russia, India, and China (BRICs) as well as Turkey, the Middle East, and Southeast Asia as priority markets. In addition to aggressively establishing local subsid-iaries in each market, the Fujifilm Group is strengthening its sales structure.

Europe

Number of Subsidiaries Worldwide

Asia & Oceania

Worldwide Network of Consolidated Subsidiaries

Latin America

North America

Middle East & Africa

*

* As of March 31, 2017, including 91 subsidiaries in Japan.

0

500

1,000

1,500

2,000

2,500(Billions of yen)

Japan

The Americas

Europe

Asia and Others

2013/3 2014/3 2015/3 2016/3 2017/3

2,322.2

962.7

450.4

273.9

635.2

(FY)

Consolidated revenue by geographic region (destination base)

(Except Japan)


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FINANCIAL INFORMATION/NON-FINANCIAL INFORMATION

Financial Information

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Financial Highlights

*1 Operating income (loss) for the fiscal years ended March 31, 2007, 2010, and 2011, presented in the table above are operating income (loss) after the recognition of re-structuring and other charges.

2 Effective from the fiscal year ended March 31, 2010, net income (loss) is stated as net income (loss) attributable to FUJIFILM Holdings. 3 Figures do not include amounts for rental equipment handled by the Document Solutions segment and others. 4 The net income (loss) attributable to FUJIFILM Holdings per share is calculated based on the weighted average number of shares of common stock (excluding treasury

stock) outstanding for the year.5 Cash dividends per share represent the amount declared per share for each period.

2007/3 2008/3 2009/3 2010/3 2011/3 2012/3 2013/3 2014/3 2015/3 2016/3 2017/3 2017/3

Revenue:

Domestic ¥1,303,647 ¥1,259,506 ¥1,134,192 ¥1,059,395 ¥1,024,839 ¥1,001,814 ¥991,426 ¥1,025,256 ¥1,006,533 ¥983,703 ¥962,711 $8,595,634

Overseas 1,478,879 1,587,322 1,300,152 1,122,298 1,182,431 1,179,182 1,208,114 1,392,839 1,456,854 1,476,680 1,359,452 12,137,964

Total 2,782,526 2,846,828 2,434,344 2,181,693 2,207,270 2,180,996 2,199,540 2,418,095 2,463,387 2,460,383 2,322,163 20,733,598

Cost of sales 1,638,337 1,692,758 1,511,242 1,316,835 1,306,338 1,316,237 1,353,835 1,503,046 1,511,744 1,491,758 1,391,519 12,424,277

Operating expenses:

Selling, general and administrative 760,042 759,139 694,740 588,109 572,156 582,114 569,161 621,343 626,947 624,972 598,131 5,340,455

Research and development 177,004 187,589 191,076 175,120 165,306 173,385 168,160 165,245 160,281 163,027 160,232 1,430,643

Operating income before restructuring and other charges 207,143 — — 101,629 163,470 — — — — — — —

Restructuring and other charges 94,081 — — 143,741 31,715 — — — — — — —

Operating income (loss)*1 113,062 207,342 37,286 (42,112) 131,755 109,260 108,384 128,461 164,415 180,626 172,281 1,538,223

Interest and dividend income 11,376 13,462 10,012 6,138 5,148 5,042 4,764 6,219 5,858 6,206 5,404 48,250

Interest expense (6,351) (7,380) (7,037) (4,577) (5,435) (3,991) (4,934) (4,183) (4,569) (4,376) (4,795) (42,812)

Income (loss) before income taxes 103,264 199,342 9,442 (41,999) 115,121 85,849 112,883 144,740 188,966 182,242 194,775 1,739,063

Net income (loss) attributable to FUJIFILM Holdings*2 34,446 104,431 10,524 (38,441) 64,638 42,762 50,847 71,558 110,940 116,402 131,506 1,174,161

Capital expenditures*3 ¥165,159 ¥170,179 ¥112,402 ¥ 77,913 ¥ 89,932 ¥ 90,946 ¥ 76,660 ¥ 67,004 ¥ 56,127 ¥ 74,143 ¥ 71,805 $ 641,116

Depreciation*3 146,325 159,572 149,912 135,103 106,755 96,580 93,549 90,950 65,294 65,831 58,870 525,625

Net cash provided by operating activities 297,276 298,110 209,506 314,826 200,505 137,309 202,099 296,589 267,778 223,479 288,619 2,576,955

Average number of shares outstanding (in thousands) 510,621 508,354 498,837 488,608 486,297 481,699 481,715 481,915 482,050 465,556 443,874

Total assets ¥3,319,102 ¥3,266,384 ¥2,896,637 ¥2,827,428 ¥2,698,004 ¥2,734,328 ¥3,035,901 ¥3,191,847 ¥3,501,950 ¥3,311,970 ¥3,533,189 $31,546,330

Long-term debt 267,965 256,213 253,987 140,269 118,176 20,334 317,592 314,968 313,045 310,388 434,843 3,882,527

Total FUJIFILM Holdings shareholders’ equity 1,976,508 1,922,353 1,756,313 1,746,107 1,711,329 1,708,937 1,850,723 1,990,986 2,195,539 2,014,826 2,043,559 18,246,063

Number of employees 76,358 78,321 76,252 74,216 78,862 81,691 80,322 78,595 79,235 78,150 78,501

Per share of common stock (Yen / U.S. dollars) :

Net income (loss) attributable to FUJIFILM Holdings*2, 4 ¥67.46 ¥205.43 ¥21.10 ¥ (78.67) ¥ 132.92 ¥ 88.77 ¥ 105.55 ¥ 148.49 ¥ 230.14 ¥ 250.03 ¥ 296.27 $ 2.65

Cash dividends*5 25.00 35.00 30.00 25.00 30.00 35.00 40.00 50.00 60.00 65.00 70.00 0.63

FUJIFILM Holdings shareholders’ equity*6 3,867.04 3,811.19 3,594.52 3,573.66 3,552.79 3,547.68 3,840.79 4,130.91 4,552.91 4,472.45 4,668.26 41.68

Stock price at year-end 4,820 3,530 2,125 3,220 2,576 1,941 1,836 2,771 4,277 4,451 4,348 38.82

PBR (price-to-book value ratio) (times)*7 1.25 0.93 0.59 0.90 0.73 0.55 0.48 0.67 0.94 1.00 0.93

PER (price-to-earnings ratio) (times)*7 71.45 17.18 100.71 — 19.38 21.87 17.39 18.66 18.58 17.80 14.67

ROE (return on equity) (%) 1.7 5.4 0.6 (2.2) 3.7 2.5 2.9 3.7 5.3 5.5 6.5

ROA (return on assets) (%) 1.1 3.2 0.3 (1.3) 2.3 1.6 1.8 2.3 3.3 3.4 3.8

Amount of CO2 emissions throughout the entire product lifecycle*8 (unit: 1000t-CO2)

5,356 5,549 4,987 4,434 4,806 5,134 4,843 4,681 4,738 4,468 4,325

Water usage per unit (input) (input amount / revenue) (unit: 1000t / ¥100 million) 2.07 1.98 2.26 2.39 2.40 2.50 2.40 2.04 1.97 1.92 1.92


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Thousands of U.S. dollars*9Millions of yen

2007/3 2008/3 2009/3 2010/3 2011/3 2012/3 2013/3 2014/3 2015/3 2016/3 2017/3 2017/3

Revenue:

Domestic ¥1,303,647 ¥1,259,506 ¥1,134,192 ¥1,059,395 ¥1,024,839 ¥1,001,814 ¥991,426 ¥1,025,256 ¥1,006,533 ¥983,703 ¥962,711 $8,595,634

Overseas 1,478,879 1,587,322 1,300,152 1,122,298 1,182,431 1,179,182 1,208,114 1,392,839 1,456,854 1,476,680 1,359,452 12,137,964

Total 2,782,526 2,846,828 2,434,344 2,181,693 2,207,270 2,180,996 2,199,540 2,418,095 2,463,387 2,460,383 2,322,163 20,733,598

Cost of sales 1,638,337 1,692,758 1,511,242 1,316,835 1,306,338 1,316,237 1,353,835 1,503,046 1,511,744 1,491,758 1,391,519 12,424,277

Operating expenses:

Selling, general and administrative 760,042 759,139 694,740 588,109 572,156 582,114 569,161 621,343 626,947 624,972 598,131 5,340,455

Research and development 177,004 187,589 191,076 175,120 165,306 173,385 168,160 165,245 160,281 163,027 160,232 1,430,643

Operating income before restructuring and other charges 207,143 — — 101,629 163,470 — — — — — — —

Restructuring and other charges 94,081 — — 143,741 31,715 — — — — — — —

Operating income (loss)*1 113,062 207,342 37,286 (42,112) 131,755 109,260 108,384 128,461 164,415 180,626 172,281 1,538,223

Interest and dividend income 11,376 13,462 10,012 6,138 5,148 5,042 4,764 6,219 5,858 6,206 5,404 48,250

Interest expense (6,351) (7,380) (7,037) (4,577) (5,435) (3,991) (4,934) (4,183) (4,569) (4,376) (4,795) (42,812)

Income (loss) before income taxes 103,264 199,342 9,442 (41,999) 115,121 85,849 112,883 144,740 188,966 182,242 194,775 1,739,063

Net income (loss) attributable to FUJIFILM Holdings*2 34,446 104,431 10,524 (38,441) 64,638 42,762 50,847 71,558 110,940 116,402 131,506 1,174,161

Capital expenditures*3 ¥165,159 ¥170,179 ¥112,402 ¥ 77,913 ¥ 89,932 ¥ 90,946 ¥ 76,660 ¥ 67,004 ¥ 56,127 ¥ 74,143 ¥ 71,805 $ 641,116

Depreciation*3 146,325 159,572 149,912 135,103 106,755 96,580 93,549 90,950 65,294 65,831 58,870 525,625

Net cash provided by operating activities 297,276 298,110 209,506 314,826 200,505 137,309 202,099 296,589 267,778 223,479 288,619 2,576,955

Average number of shares outstanding (in thousands) 510,621 508,354 498,837 488,608 486,297 481,699 481,715 481,915 482,050 465,556 443,874

Total assets ¥3,319,102 ¥3,266,384 ¥2,896,637 ¥2,827,428 ¥2,698,004 ¥2,734,328 ¥3,035,901 ¥3,191,847 ¥3,501,950 ¥3,311,970 ¥3,533,189 $31,546,330

Long-term debt 267,965 256,213 253,987 140,269 118,176 20,334 317,592 314,968 313,045 310,388 434,843 3,882,527

Total FUJIFILM Holdings shareholders’ equity 1,976,508 1,922,353 1,756,313 1,746,107 1,711,329 1,708,937 1,850,723 1,990,986 2,195,539 2,014,826 2,043,559 18,246,063

Number of employees 76,358 78,321 76,252 74,216 78,862 81,691 80,322 78,595 79,235 78,150 78,501

Per share of common stock (Yen / U.S. dollars) :

Net income (loss) attributable to FUJIFILM Holdings*2, 4 ¥67.46 ¥205.43 ¥21.10 ¥ (78.67) ¥ 132.92 ¥ 88.77 ¥ 105.55 ¥ 148.49 ¥ 230.14 ¥ 250.03 ¥ 296.27 $ 2.65

Cash dividends*5 25.00 35.00 30.00 25.00 30.00 35.00 40.00 50.00 60.00 65.00 70.00 0.63

FUJIFILM Holdings shareholders’ equity*6 3,867.04 3,811.19 3,594.52 3,573.66 3,552.79 3,547.68 3,840.79 4,130.91 4,552.91 4,472.45 4,668.26 41.68

Stock price at year-end 4,820 3,530 2,125 3,220 2,576 1,941 1,836 2,771 4,277 4,451 4,348 38.82

PBR (price-to-book value ratio) (times)*7 1.25 0.93 0.59 0.90 0.73 0.55 0.48 0.67 0.94 1.00 0.93

PER (price-to-earnings ratio) (times)*7 71.45 17.18 100.71 — 19.38 21.87 17.39 18.66 18.58 17.80 14.67

ROE (return on equity) (%) 1.7 5.4 0.6 (2.2) 3.7 2.5 2.9 3.7 5.3 5.5 6.5

ROA (return on assets) (%) 1.1 3.2 0.3 (1.3) 2.3 1.6 1.8 2.3 3.3 3.4 3.8

Amount of CO2 emissions throughout the entire product lifecycle*8 (unit: 1000t-CO2)

5,356 5,549 4,987 4,434 4,806 5,134 4,843 4,681 4,738 4,468 4,325

Water usage per unit (input) (input amount / revenue) (unit: 1000t / ¥100 million) 2.07 1.98 2.26 2.39 2.40 2.50 2.40 2.04 1.97 1.92 1.92

6 The FUJIFILM Holdings shareholders’ equity per share is calculated based on the number of shares (excluding treasury stock) outstanding at the end of each period. 7 The price-to-book value ratio (PBR) and price-to-earnings ratio (PER) are calculated based on the stock price as of the end of each fiscal year. 8 CO2 emission amounts represent those from not only direct in-house activities but also from the entire product lifecycle (from raw material procurement to product manu-

facturing, shipping, use, and eventual disposal). 9 U.S. dollar amounts presented are translated from yen, for convenience only, at the rate of ¥112=U.S.$1.00, the approximate exchange rate prevailing on March 31, 2017.


55

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Operating Results for the Fiscal Year Ended March 31, 2017

Financial Analysis and Review

0

500

1,000

1,500

2,000

2,500(Billions of yen)

’17/3’16/3’15/3’14/3’13/3

2,322.2

341.8

899.5

1,080.9

(FY)

0

-50

50

100

150

200

250

172.3

36.8

83.0

82.7

-30.2

(Billions of yen)

’17/3’16/3’15/3’14/3’13/3(FY)

Revenue by operating segment*

Operating income by operating segment*

Total assets by operating segment*

* Following organizational changes carried out in the first quarter of FY2014/3, the optical device business was moved from Information Solutions to Imaging Solutions. In accordance with this change, the numer-ical values for FY2013/3 have been restated.

Imaging Solutions


Document Solutions

Corporate expenses and eliminations

0

1,000

2,000

3,000

4,000

3,533.2

365.9

1,542.4

1,115.4

509.5

(Billions of yen)

’17/3’16/3’15/3’14/3’13/3(FY)

Economic Environment Overviewing the global economy during the fiscal year ended March 31, 2017 (April 1, 2016 through March 31, 2017), the general trend of gradual economic recovery persisted. In the United States, personal consumption and inventory investment increased, and the trend of economic recovery persisted. In Europe, the trend of gradual economic recovery lasted in par-allel with a economic recovery in the United Kingdom. China and other Asian countries showed gradual economic recovery. In Japan, the trend of gradual economic recovery persisted with the improvement in the employ-ment and corporate earnings.

The effective currency exchange rates for the U.S. dollar and the euro against the yen during this fiscal year were ¥108 and ¥119, respectively.

Overview of Operating Results Consolidated Operating ResultsIn this economic environment, in order to achieve the medium-term man-agement plan -VISION 2016 (April 1, 2014 through March 31, 2017)- the Fujifilm Group (the Group) has been further expanding sales, market share, and profit centering on the growth

drivers of healthcare, highly functional materials, and document, with sales promotion and new product launches. The Group has also acquired required technologies and assets for the next growth, conducting M&A ag-gressively, focusing on the key business areas. The Group has also acceler-ated the improvement of the profitability, setting

the three key issues of “new businesses contributing to profitability,” “accelerating our global development” and “efficient management.”

In the fiscal year ended March 31, 2017, the Group recorded ¥2,322.2 billion in consolidated revenue (down 5.6% from the previous fiscal year), reflecting such factors as the negative impact of yen appreciation (¥152.7 billion) and sales decline in the document solutions, while sales of such businesses as electric imaging field of the optical device and electronic im-aging business, and electronic materials business increased.

Operating income totaled ¥172.3 billion (down 4.6% from the previous fiscal year).

Operating Results by Segment Imaging Solutions

Revenue declined due to such factors as the negative impact of yen appre-ciation. On a positive note, operating income rose following the sales ex-pansion of instant photo systems and high-end digital cameras, as well as the improvement of profitability in each business. Taking these results into consideration, revenue and operating income improved substantially on an actual business activity basis.

Information SolutionsWhile revenue and operating income decreased reflecting the negative im-pact of yen appreciation, sales expanded in businesses such as display ma-terials and electronic materials. Given these results, revenue and operating income increased on an actual business activity basis.

Document SolutionsRevenue and operating income declined mainly due to the negative impact of depreciation of Asian local currencies against the yen and the sales de-cline in export shipments to the United States and Europe, centered on the office printer business.


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Imaging Solutions Information Solutions Document Solutions

Millions of yen FY2015/3 FY2016/3 FY2017/3 FY2015/3 FY2016/3 FY2017/3 FY2015/3 FY2016/3 FY2017/3

Revenue

External customers ¥360,266 ¥352,922 ¥341,744 ¥936,177 ¥942,100 ¥899,543 ¥1,166,944 ¥1,165,361 ¥1,080,876

Intersegment 2,391 2,910 2,586 2,176 1,830 1,198 10,117 8,567 8,171

Total 362,657 355,832 344,330 938,353 943,930 900,741 1,177,061 1,173,928 1,089,047

Operating income 20,347 32,013 36,847 87,280 90,701 82,969 87,618 87,954 82,683

Operating margin (%) 5.6 9.0 10.7 9.3 9.6 9.2 7.4 7.5 7.6

0

50

100

150

0.0

5.0

10.0

15.0(%)

ROE

131.5

6.5

(Billions of yen)

’17/3’16/3’15/3’14/3’13/3(FY)Net income attributable to FUJIFILM Holdings

0

2

4

6

8

0.0

10.0

20.0

30.0

40.0

7.0

23.6

Payout ratio

(%)(Billions of yen)

’17/3’16/3’15/3’14/3’13/3(FY)Cash dividends per share

Net income attributable to FUJIFILM Holdings / ROE

Cash dividends per share / Payout ratio

Net Income Attributable to FUJIFILM HoldingsConsolidated income before income taxes amounted to ¥194.8 billion (up 6.9% from the previous fiscal year) and consolidated net income attribut-able to FUJIFILM Holdings totaled ¥131.5 billion (up 13.0% from the previ-ous fiscal year) due to the positive impact of gains on sales of investment securities recorded as other income and other factors.

Basic Policy Regarding the Distribution of ProfitsIn addition to reflecting consolidated performance trends, dividend levels are determined based on the consideration of such factors as the level of funds required for M&A transactions, capital investment, and new product development investment needed to support priority business expansion, as well as other measures aimed at boosting the Company’s corporate value. Adequate buybacks are considered and implemented depending on the situation of cash flows and stock prices. In its basic policy regarding the dis-tribution of profits, the Company aims to achieve a dividend payout ratio of 25% or more.

Annual cash dividends applicable to FY2017/3 were ¥70 per share. This amount included an interim cash dividend of ¥35.0 per share, which has already been disbursed.

Outlook for the Fiscal Year Ending March 31, 2018 (As of August 14, 2017)

Regarding consolidated performance in the fiscal year ending March 31, 2018, owing to business growth centered on the three businesses, health-care, highly functional materials and document as priority business fields, improvements of profitability in all businesses and other factors, the Com-pany projects ¥2,460.0 billion in revenue (up 5.9% from the previous fiscal year), operating income of ¥185.0 billion (up 7.4% from the previous fiscal year), income before income taxes of ¥200.0 billion (up 2.7% from the pre-vious fiscal year), and net income attributable to FUJIFILM Holdings of ¥125.0 billion (down 4.9% from the previous fiscal year).

The effect on revenue by making Wako Pure Chemical Industries, Ltd. as a consolidated subsidiary on April 2017 was ¥79.0 billion. In addition, the Company expects a gain on revaluation of the shares of Wako Pure Chemi-cal Industries, Ltd. that are held by FUJIFILM Corporation, amounted ¥20.8 billion, which will be recorded as other income.


57

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Total assets / Shareholders’ equity ratio

Capital expenditures / Depreciation*

Cash flows

* These figures exclude rental equipment in the Document Solutions segment and others.

* Free cash flows: Net cash provided by operating activities + Net cash used in investing activities

Outlook for the fiscal year ending March 31, 2018 (As of August 14, 2017)

Billions of yen FY2017/3 (Actual) FY2018/3 (Forecast) Change (%)

Revenue ¥23,222 ¥24,600 5.9

Operating income 1,723 1,850 7.4

Income before income taxes 1,948 2,000 2.7

Net income attributable to FUJIFILM Holdings 1,315 1,250 (4.9)

Currency exchange rates (U.S. dollar / yen) ¥108 ¥110 2

Currency exchange rates (euro / yen) ¥119 ¥120 1

0

1,000

2,000

3,000

4,000

0.0

20.0

40.0

60.0

80.0(%)

3,533.2

57.8

Shareholders’ equity ratio

(Billions of yen)

’17/3’16/3’15/3’14/3’13/3(FY)Total assets

0

25

50

75

100

58.9

71.8

(Billions of yen)

’17/3’16/3’15/3’14/3’13/3(FY)

Depreciation

Capital expenditures

-300

-200

-100

0

100

200

300 288.6

172.2

-116.4

Net cash provided by operating activities

Net cash used in investing activities

Free cash flows*

(Billions of yen)

’17/3’16/3’15/3’14/3’13/3(FY)

Financial Condition Assets, Liabilities, and Net Assets As of the end of FY2017/3, total assets had increased ¥221.2 billion com-pared with the end of the previous fiscal year, to ¥3,533.2 billion, owing to a rise mainly in cash and cash equivalents. Total liabilities expanded ¥185.1 billion compared with the end of the previous fiscal year, to ¥1,265.1 billion. FUJIFILM Holdings shareholders’ equity grew ¥28.8 bil-lion compared with the end of the previous fiscal year, to ¥2,043.6 billion.

As a result, the current ratio increased 8.1 percentage points, to 299.2%; the debt-equity ratio increased 8.3 percentage points, to 61.9%; and the equity ratio decreased 3.0 percentage points, to 57.8%, com-pared with the end of the previous fiscal year. The Company is confident that it is maintaining a stable level of asset liquidity and a sound capital structure.

Capital Expenditures and Depreciation Capital expenditures amounted to ¥71.8 billion for FY2017/3. The Com-pany’s investment was largely directed toward boosting production capac-ity of high-growth products, streamlining and boosting the efficiency of production facilities, and implementing eco-friendly measures to protect the environment.

By operating segment, capital expenditures stood at ¥10.3 billion in the Imaging Solutions segment, ¥40.1 billion in the Information Solutions segment, and ¥20.0 billion in the Document Solutions segment. Total de-preciation* of property, plant and equipment, excluding rental equipment in the Document Solutions segment and others, decreased ¥7.0 billion year on year, to ¥58.9 billion.

Cash Flow Analysis Net cash provided by operating activities totaled ¥288.6 billion, primarily due to the decline in depreciation and amortization, and notes and ac-counts receivable. Net cash used in investing activities amounted to ¥116.4 billion due to purchases of property, plant and equipment, and other factors. Thus, free cash flows (the sum of cash flows from operating and used in investing activities) resulted in cash inflows of ¥172.2 billion, up ¥106.0 billion from the previous fiscal year. Net cash provided in fi-nancing activities amounted to ¥111.3 billion, due primarily to issuance of corporate bonds and an increase in proceeds from long-term debt.

As a result, cash and cash equivalents as of the end of the fiscal year under review amounted to ¥876.0 billion, up ¥275.1 billion compared with the end of the previous fiscal year.


58

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Business-Related and Other Risks

The following types of risk have the potential to affect the Fujifilm Group’s financial condition and business perfor-mance. The text referring to the future is as of the end of FY2017/3.

(1) Impact of Economic and Exchange Rate Trends on Performance

The Fujifilm Group provides products and services in di-verse markets throughout the world, and the share of con-solidated revenue accounted for by overseas operations was approximately 59% in FY2017/3. There is a possibility that performance will be greatly affected by economic conditions throughout the world, and particularly by cur-rency exchange rates. To reduce the impact of currency exchange rates on performance, Fujifilm undertakes hedging measures, primarily using forward exchange con-tracts for the U.S. dollar and the euro, but currency ex-change fluctuations, depending on their degree, still could have an impact on performance.

(2) Competition in MarketsIn the business fields where the Fujifilm Group operates, the intensification of competition with other companies may lead to declines in the selling prices of products, shorter product lifecycles, and the emergence of alterna-tive products. These phenomena may negatively impact Fujifilm’s sales and, consequently, profit, forcing Fujifilm to increase R&D expenses and impair the goodwill and other intangible assets it holds. In the future, Fujifilm will contin-ually work to develop products incorporating new tech-nologies and to support the sales of such products with marketing activities. The success or failure of these activi-ties is expected to have an influence on performance.

(3) Patents and Other Intellectual PropertyThe Fujifilm Group has diverse patents, expertise, and other intellectual property that enable competitive bene-fits, but such future events as the expiration of patents and emergence of replacement technologies may make it difficult to maintain a competitive edge. In the wide range of business fields with which Fujifilm is associated, there are numerous companies with sophisticated and complex technologies, and the landscape regarding these technol-ogies is evolving rapidly. Developing Fujifilm’s business operations sometimes may require the use of other com-panies’ patents, expertise, and other intellectual property, and when negotiations for the use of such intellectual property are not successful, there is a potential risk that performance will be affected. In addition, Fujifilm is devel-oping its business while constantly taking care not to in-fringe on the intellectual property of other companies, but it must be recognized that in reality it is difficult to com-pletely eliminate the risk of getting involved in litigation. If Fujifilm becomes involved in litigation, not only litiga-tion costs but also possible compensatory payment costs could have an influence on Fujifilm’s performance.

(4) Public RegulationsIn the regions where the Fujifilm Group is developing its business, diverse government regulations exist that apply to Fujifilm’s operations, such as business and investment permits as well as limits and regulations related to imports and exports. Moreover, Fujifilm is subject to commercial,

fair trade, patent, consumer protection, tax, foreign ex-change administration, environmental, pharmaceutical, and other laws and regulations. If Fujifilm were to infringe on any of these laws or regulations, it could be subject to fines. Moreover, it is possible that these laws and regula-tions might be tightened or greatly changed, and in such cases it is impossible to deny the possibility that Fujifilm’s activities could be limited or that Fujifilm might have to bear greater costs to ensure full compliance with the cur-rent and altering regulations. Accordingly, these laws and regulations have the potential to affect Fujifilm’s perfor-mance.

(5) Manufacturing OperationsIn connection with the Fujifilm Group’s manufacturing ac-tivities, natural or human-made disasters, discontinuation by vendors of the manufacture of raw materials and com-ponents, and confusion caused by other factors may pre-vent the Group from delivering its products as well as cause major facility and equipment failure. It is also possi-ble that a rapid rise in the price of raw materials and parts, and other factors, could affect Fujifilm’s perfor-mance. The Fujifilm Group manufactures its products in conformance with rigorous quality control standards, but the possibility of defective products does exist. If Fujifilm were to have to respond to such an event by undertaking product recalls or other actions, Fujifilm’s performance might be affected.

(6) Information SystemsThe Fujifilm Group operates a variety of information sys-tems in the ongoing execution of its operations and busi-ness. In this context, steps are taken to put in place an appropriate information system management framework as well as all relevant security countermeasures. Despite these initiatives, a wide range of factors including in-ter-ruptions in electric power, disasters, and unauthorized access may impair the Group’s information systems or lead to the leakage, modification, or falsification of per-sonal data. If any of these events occurs, Fujifilm’s perfor-mance may be affected.

(7) Large-Scale DisastersThe Fujifilm Group engages in production, sales, and re-lated business activities worldwide. In the event of a large-scale natural disaster including earthquakes, ty-phoons, or floods as well as a fire, terrorist attack, war, or spread of infection such as a new influenza virus, Fujifilm’s business activities, as well as its operating performance, may be affected.

(8) Structural ReformsThe Fujifilm Group will continue implementing effective measures such as reductions in costs and expenses as well as asset compression to improve its management efficien-cy in the future. However, the implementation of structural reforms and related measures may cause the Group to in-cur major contingent expenses associated with organiza-tional and operational changes, and in such cases, Fujifilm’s performance may be affected.


59

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March 31

2016 2017 2017

Assets:

Current assets

Cash and cash equivalents ¥600,897 ¥ 875,958 $ 7,821,054

Marketable securities 28,012 6,044 53,964

Notes and accounts receivable:

Trade and finance 641,837 640,279 5,716,777

Affiliated companies 26,444 19,708 175,964

Allowance for doubtful receivables (24,711) (24,207) (216,134)

Inventories 349,166 339,242 3,028,946

Deferred income taxes 77,828 61,423 548,420

Prepaid expenses and other 66,775 116,353 1,038,866

Total current assets 1,766,248 2,034,800 18,167,857

Investments and long-term receivables

Investments in and advances to affiliated companies 30,265 28,962 258,589

Investment securities 144,472 134,032 1,196,714

Long-term finance and other receivables 148,510 139,124 1,242,179

Allowance for doubtful receivables (3,567) (2,579) (23,027)

Total investments and long-term receivables 319,680 299,539 2,674,455

Property, plant and equipment

Land 91,596 90,772 810,464

Buildings 693,705 697,327 6,226,134

Machinery and equipment 1,632,503 1,619,959 14,463,920

Construction in progress 36,526 31,259 279,098

2,454,330 2,439,317 21,779,616

Less accumulated depreciation (1,921,729) (1,918,703) (17,131,277)

Net property, plant and equipment 532,601 520,614 4,648,339

Other assets

Goodwill, net 506,870 499,833 4,462,795

Other intangible assets, net 86,249 76,448 682,571


Other 91,282 89,950 803,125

Total other assets 693,441 678,236 6,055,679

Total assets ¥ 3,311,970 ¥ 3,533,189 $ 31,546,330

* U.S. dollar amounts presented are translated from yen, for convenience only, at the rate of ¥112=U.S.$1.00, the approximate exchange rate prevailing on March 31, 2017.

Thousands of U.S. dollars*Millions of yen

Consolidated Balance Sheets


60

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March 31

2016 2017 2017

Liabilities:

Current liabilities

Short-term debt ¥ 55,305 ¥ 123,999 $1,107,134

Notes and accounts payable:

Trade 229,893 234,217 2,091,223

Construction 23,421 19,913 177,795

Affiliated companies 3,834 3,733 33,330

Accrued income taxes 18,359 32,005 285,759

Accrued liabilities 183,955 179,055 1,598,705

Other current liabilities 92,041 87,256 779,071

Total current liabilities 606,808 680,178 6,073,017

Long-term liabilities

Long-term debt 310,388 434,843 3,882,527

Accrued pension and severance costs 64,756 39,444 352,179


Other long-term liabilities 61,045 59,930 535,089

Total long-term liabilities 473,165 584,953 5,222,795

Total liabilities 1,079,973 1,265,131 11,295,812

Equity:

FUJIFILM Holdings shareholders’ equity

Common stock 40,363 40,363 360,384

Authorized: 800,000,000 shares

Issued: 514,625,728 shares

Additional paid-in capital 80,507 81,761 730,009

Retained earnings 2,174,965 2,275,626 20,318,089

Accumulated other comprehensive income (loss) (30,780) (54,720) (488,571)

Treasury stock, at cost

(76,869,546 shares in 2017;

64,128,303 shares in 2016) (250,229) (299,471) (2,673,848)

Total FUJIFILM Holdings shareholders’ equity 2,014,826 2,043,559 18,246,063

Noncontrolling interests 217,171 224,499 2,004,455

Total equity 2,231,997 2,268,058 20,250,518

Total liabilities and equity ¥3,311,970 ¥3,533,189 $31,546,330


Thousands of U.S. dollars*Millions of yen


61

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Year ended March 31

2015 2016 2017 2017

Revenue

Sales ¥2,114,065 ¥2,115,363 ¥1,992,022 $17,785,911

Rentals 349,322 345,020 330,141 2,947,687

2,463,387 2,460,383 2,322,163 20,733,598

Cost of sales

Sales 1,367,470 1,347,882 1,249,237 11,153,902

Rentals 144,274 143,876 142,282 1,270,375

1,511,744 1,491,758 1,391,519 12,424,277

Gross profit 951,643 968,625 930,644 8,309,321

Operating expenses

Selling, general and administrative 626,947 624,972 598,131 5,340,455

Research and development 160,281 163,027 160,232 1,430,643

787,228 787,999 758,363 6,771,098

Operating income 164,415 180,626 172,281 1,538,223

Other income (expenses)

Interest and dividend income 5,858 6,206 5,404 48,250

Interest expense (4,569) (4,376) (4,795) (42,812)

Foreign exchange gains (losses), net 2,998 (8,898) (1,280) (11,428)

Gains (losses) on sales of investment securities, net (703) 11,996 22,513 201,009

Other, net 20,967 (3,312) 652 5,821

24,551 1,616 22,494 200,840

Income before income taxes 188,966 182,242 194,775 1,739,063

Income taxes

Current 40,452 40,226 47,056 420,143

Deferred 20,458 8,219 (2,934) (26,196)

60,910 48,445 44,122 393,947

Equity in net earnings (losses) of affiliated companies (1,432) (302) (3,463) (30,920)

Net income 126,624 133,495 147,190 1,314,196

Less: Net income attributable to the noncontrolling interests (15,684) (17,093) (15,684) (140,035)

Net income attributable to FUJIFILM Holdings ¥ 110,940 ¥ 116,402 ¥ 131,506 $1,174,161


U.S. dollars*Yen

Year ended March 31

2015 2016 2017 2017

Amounts per share of common stock

Net income attributable to FUJIFILM Holdings

Basic ¥230.14 ¥250.03 ¥296.27 $2.65

Diluted 229.44 249.20 295.22 2.64

Cash dividends declared 60.00 65.00 70.00 0.63

Consolidated Statements of IncomeThousands of U.S. dollars*Millions of yen


62

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Year ended March 31

2015 2016 2017 2017

Net income ¥126,624 ¥ 133,495 ¥ 147,190 $1,314,196

Other comprehensive income (loss), net of tax

Net unrealized gains (losses) on securities 34,295 (20,124) (8,199) (73,205)

Foreign currency translation adjustments 94,158 (72,886) (28,241) (252,152)

Pension liability adjustments 8,159 (39,873) 11,935 106,563

Net unrealized gains (losses) on derivatives (950) (571) 559 4,991

Other comprehensive income (loss) 135,662 (133,454) (23,946) (213,803)

Comprehensive income 262,286 41 123,244 1,100,393

Less: Comprehensive income attributable to noncontrolling interests (29,671) (1,881) (15,678) (139,982)

Comprehensive income attributable to FUJIFILM Holdings ¥232,615 ¥ (1,840) ¥ 107,566 $960,411


Consolidated Statements of Comprehensive Income Thousands of U.S. dollars*Millions of yen


63

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Common stock

Additional paid-incapital

Retainedearnings

Accumulatedother

comprehensiveincome (loss)

Treasury stock

FUJIFILMHoldings

shareholders’equity

Noncon-trolling

interests

Total equity

Balance as of March 31, 2014 ¥40,363 ¥80,234 ¥2,006,289 ¥ (34,213) ¥(101,687) ¥1,990,986 ¥168,479 ¥2,159,465

Comprehensive income (loss):

Net income — — 110,940 — — 110,940 15,684 126,624Change in net unrealized gains (losses) on securities — — — 33,954 — 33,954 341 34,295

Foreign currency translation adjustments — — — 83,723 — 83,723 10,435 94,158

Pension liability adjustments — — — 4,916 — 4,916 3,243 8,159Change in net unrealized gains (losses) on derivatives — — — (918) — (918) (32) (950)

Net comprehensive income (loss) 232,615 29,671 262,286

Purchases of stock for treasury — — — — (62) (62) — (62)

Sales of stock from treasury — (44) — — 848 804 — 804Dividends paid to FUJIFILM Holdings shareholders — — (28,929) — — (28,929) — (28,929)

Dividends paid to noncontrolling interests — — — — — — (6,600) (6,600)

Issuance of stock acquisition rights — 125 — — — 125 — 125Equity transactions with noncontrolling interests and other — — — — — — 31,088 31,088

Balance as of March 31, 2015 ¥40,363 ¥80,315 ¥2,088,300 ¥ 87,462 ¥(100,901) ¥2,195,539 ¥222,638 ¥2,418,177


Net income — — 116,402 — — 116,402 17,093 133,495Change in net unrealized gains (losses) on securities — — — (19,968) — (19,968) (156) (20,124)

Foreign currency translation adjustments — — — (64,921) — (64,921) (7,965) (72,886)

Pension liability adjustments — — — (32,781) — (32,781) (7,092) (39,873)Change in net unrealized gains (losses) on derivatives — — — (572) — (572) 1 (571)

Net comprehensive income (loss) (1,840) 1,881 41

Purchases of stock for treasury — — — — (150,050) (150,050) — (150,050)

Sales of stock from treasury — 117 — — 722 839 — 839Dividends paid to FUJIFILM Holdings shareholders — — (29,737) — — (29,737) — (29,737)


Issuance of stock acquisition rights — 73 — — — 73 — 73Equity transactions with noncontrolling interests and other — 2 — — — 2 (53) (51)



Net income — — 131,506 — — 131,506 15,684 147,190Change in net unrealized gains (losses) on securities — — — (8,171) — (8,171) (28) (8,199)


Pension liability adjustments — — — 9,261 — 9,261 2,674 11,935Change in net unrealized gains (losses) on derivatives — — — 568 — 568 (9) 559

Net comprehensive income (loss) 107,566 15,678 123,244


Sales of stock from treasury — (146) — — 780 634 — 634Dividends paid to FUJIFILM Holdings shareholders — — (30,845) — — (30,845) — (30,845)


Issuance of stock acquisition rights — 534 — — — 534 — 534Equity transactions with noncontrolling interests and other — 866 — — — 866 (1,979) (1,113)


Consolidated Statements of Changes in Equity

Millions of yen


64

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Common stock

Additional paid-incapital

Retainedearnings

Accumulatedother

comprehensiveincome (loss)

Treasury stock

FUJIFILMHoldings

shareholders’equity

Noncon-trolling

interests

Total equity

Balance as of March 31, 2016 $360,384 $718,813 $19,419,330 $(274,821) $(2,234,188) $17,989,518 $1,939,027 $19,928,545


Net income — — 1,174,161 — — 1,174,161 140,035 1,314,196 Change in net unrealized gains (losses) on securities — — — (72,955) — (72,955) (250) (73,205)


Pension liability adjustments — — — 82,688 — 82,688 23,875 106,563

Change in net unrealized gains (losses) on derivatives — — — 5,071 — 5,071 (80) 4,991

Net comprehensive income (loss) 960,411 139,982 1,100,393


Sales of stock from treasury — (1,304) — — 6,965 5,661 — 5,661 Dividends paid to FUJIFILM Holdings shareholders — — (275,402) — — (275,402) — (275,402)


Issuance of stock acquisition rights — 4,768 — — — 4,768 — 4,768

Equity transactions with noncontrolling interests and other — 7,732 — — — 7,732 (17,670) (9,938)

Balance as of March 31, 2017 $360,384 $730,009 $20,318,089 $(488,571) $(2,673,848) $18,246,063 $2,004,455 $20,250,518

Thousands of U.S. dollars*


65

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Year ended March 31

2015 2016 2017 2017

Operating activities

Net income ¥ 126,624 ¥ 133,495 ¥ 147,190 $1,314,196

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 126,409 124,960 117,635 1,050,313

Gain on remeasurement of previously held equity interests (21,224) — — —

(Gains) losses on sales of investment securities, net 703 (11,996) (22,513) (201,009)

Deferred income taxes 20,458 8,219 (2,934) (26,196)

Equity in net (earnings) losses of affiliated companies, net of dividends received 16,102 2,302 4,546 40,589

Changes in operating assets and liabilities:

Notes and accounts receivable (4,377) (20,061) 3,444 30,750

Inventories 10,931 5,784 4,891 43,670

Notes and accounts payable-trade (20,474) 1,680 5,692 50,821

Accrued income taxes and other liabilities 6,679 (12,057) (5,997) (53,545)

Other 5,947 (8,847) 36,665 327,366

Net cash provided by operating activities 267,778 223,479 288,619 2,576,955

Investing activities

Purchases of property, plant and equipment (56,943) (63,810) (74,647) (666,491)

Purchases of software (26,554) (22,278) (22,318) (199,268)

Proceeds from sales and maturities of marketable and investment securities 37,164 45,254 63,801 569,652

Purchases of marketable and investment securities (37,244) (30,798) (20,055) (179,062)

(Increase) decrease in time deposits, net 1,273 (271) (38,589) (344,545)

Increase in investments in and advances to affiliated companies (6,309) (3,950) (5,527) (49,348)

Acquisitions of businesses and minority interests, net of cash acquired (800) (36,697) (1,334) (11,911)

Other (35,142) (44,770) (17,770) (158,661)

Net cash used in investing activities (124,555) (157,320) (116,439) (1,039,634)

Financing activities

Proceeds from long-term debt 4,530 2,955 226,495 2,022,277

Repayments of long-term debt (8,619) (6,110) (6,777) (60,509)

Increase (decrease) in short-term debt, net (8,332) 20,808 (26,233) (234,223)

Cash dividends paid to shareholders (26,510) (31,974) (30,165) (269,330)

Subsidiaries’ cash dividends paid to noncontrolling interests (6,600) (7,295) (6,371) (56,884)

Net purchases of stock for treasury (62) (150,049) (50,021) (446,616)

Other — — 4,362 38,946

Net cash (used in) provided by financing activities (45,593) (171,665) 111,290 993,661

Effect of exchange rate changes on cash and cash equivalents 24,687 (20,485) (8,409) (75,080)

Net increase (decrease) in cash and cash equivalents 122,317 (125,991) 275,061 2,455,902

Cash and cash equivalents at beginning of year 604,571 726,888 600,897 5,365,152

Cash and cash equivalents at end of year ¥ 726,888 ¥ 600,897 ¥875,958 $7,821,054

Supplemental disclosures of cash flow information

Cash paid for interest ¥ 6,132 ¥ 5,922 ¥5,156 $46,036

Cash paid for income taxes 40,162 45,030 29,741 265,545


Consolidated Statements of Cash FlowsThousands of U.S. dollars*Millions of yen


66

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Notes: 1. Organizations covered in the environmental performance data are, as a general rule, those that are shown in the consolidated financial statements, and are significant in terms of envi-ronmental burden. However, certain sales and manufacturing (assembly) subsidiaries are excluded. Those not shown specifically are included in the tabulation figures above. Moreover, figures for the Group total may not reflect the sum of each subtotal.

2. For the environmental data, there are slight variations in the figures as a result of recalculation of the previous data, reflecting the database change during FY2016/3.

Non-financial InformationEnvironmental Aspects

Anti-Global Warming Countermeasures

Annual changes in CO2 emissions*FY2006/3 2013/3 2014/3 2015/3 2016/3 2017/3

Japan (Manufacturing) 1,084 903 895 872 846 798

Japan (Non-manufacturing) 28 25 30 27 29 31

Overseas (Manufacturing) 345 384 350 347 313 285

Overseas (Non-manufacturing) 30 27 42 42 39 55

Group total 1,487 1,339 1,317 1,288 1,228 1,170

* Calculation method: Calculation of CO2 emissions by energy usage specified in the Act on the Rational Use of Energy. Emission coefficient by electric power utility used for purchased power.

(unit: thousand tons CO2/year)

Reducing Chemical Substance Emissions

Annual changes in atmospheric emissions of VOCs

Reductions in VOCs atmospheric emissions* (Fujifilm non-consolidated)

FY2013/3 2014/3 2015/3 2016/3 2017/3

Japan 7.3 6.6 6.8 6.5 5.9

Overseas 1.3 1.4 1.6 1.8 1.6

Group total 8.6 8.0 8.4 8.3 7.5

Category Name of substance Reduction (tons) Reduction rate in comparison to previous fiscal year (%)

Substances requiring reporting under the PRTR Law

Dichloromethane 17 29

Substances voluntarily controlled by the company

Methyl alcohol 44 20

Ethyl acetate -35 -63

Methyl ethyl ketone 0 0

Acetone 8 29

(unit: hundred tons/year)

* Reduction in volumes in FY2017/3 compared with actual levels in previous year

Pollution Prevention Measures

Annual changes in water contaminant burden and emissions*1

FY2013/3 2014/3 2015/3 2016/3 2017/3

Total amount of COD*2

Japan 85.0 85.2 82.3 82.1 90.2

Overseas 24.4 31.3 57.0 67.3 54.9

Group total 109.4 116.5 139.3 149.4 145.1

Total amount of BOD*3

Japan 43.7 43.5 38.5 37.1 44.4

Overseas 2.9 1.6 10.1 16.6 0.5

Group total 46.6 45.1 48.6 53.7 44.9

Total amount of nitrogen emissions Japan 259.0 246.5 223.3 232.3 170.9

Total amount of phosphorus emissions Japan 2.5 3.4 5.3 4.2 1.4

*1 Effluent release into public water bodies*2 COD (Chemical Oxygen Demand): An indicator of water pollution. COD indicates the amount of oxygen

consumed when water-borne pollutants (primarily organic contaminants) are oxidized upon the introduction of an oxidant.

*3 BOD (Biochemical Oxygen Demand): BOD is a way to measure the degree of water pollution, and indicates how much oxygen in the water is being used by organisms to decompose contaminants by looking at the reduction in oxygen in the water.

(unit: tons/year)

Annual changes in volume of atmospheric emissionFY2013/3 2014/3 2015/3 2016/3 2017/3

SOx emissions

Japan 20 21 22 9 19

Overseas 1 4 6 10 8

Group total 20 25 28 19 27

NOx emissions

Japan 376 416 394 424 369

Overseas 66 74 61 78 96

Group total 442 490 455 502 465

Soot particles emissions

Japan 5.5 4.8 4.2 3.1 2.3

Overseas 0.6 6.9 1.0 4.2 4.1

Group total 6.1 11.7 5.2 7.3 6.4

Atmospheric emissions of specified CFCs*1

CFC-11 0.20 0.00 0.21 0.21 0.00

CFC-12 0.01 0.00 0.01 0.00 0.00

(unit: tons/year)

* Group total; below the limit of detection=0

Annual changes in CO2 emissions across the entire product lifecycle

0

1,000

2,000

3,000

4,000

5,000

6,000

(FY)

(thousand tons CO2/year)DisposalUseTransportationManufacturingProcurementEmission Trading

257

1,112

365

1,487

1,828

226 190709

404

1,317

2,060

188

749

441

-74

1,288

2,146

167 141

700380

1,170

1,934

689414

1,228

1,970 1,634

929

423401138

616464

1,339

2,198

5,049 4,843 4,680 4,739 4,468 4,325 3,525

30% reduction

’06/3(Base year)

’13/3 ’14/3 ’15/3 ’16/3 ’17/3 ’21/3

Target relativeto FY2005

(Target)

Conserving Resources Measures

Annual trend in water usage, recycling, and discharge as waste water

Annual changes in waste generation (*1), recycling & final disposal (*2)

0

10

20

30

40

50

60

70

80

(thousand tons/year) Final waste disposal: OverseasFinal waste disposal: JapanRecycled volume: OverseasRecycled volume: Japan

77.1

2.5 1.0 0.71.1

7.66.8

7.3 7.1

35.0 32.131.5 32.2

32.0 33.0 30.6 26.9

72.970.1 67.3

73.5

10.91.6

30.4

30.6

’14/3 ’15/3 ’16/3 ’17/3’13/3(FY)

*1 Processed by external service providers

*2 Simple incineration or landfill disposal

40

45

50

55

60

0.0

40.0

80.0

120.0

160.0

200.0(million tons/year)

Recycle

Water input Waste water discharge

(%) Usage Group totalDischarge*1 Group totalRecycle rate *2

50.6

52.7

49.448.4

47.4

44.5 44.5

42.0

45.7

49.6

156.6

188.8

151.3

185.0178.1

’13/3(FY) ’14/3 ’15/3 ’16/3 ’17/3

Use

0

5,000

10,000

15,000

20,000

25,000

30,000(TJ)

Overseas, renewable energyOverseas, gas*3

Overseas, heavy oil, etc.*2 Overseas, electric powerJapan, renewable energyJapan, gas*3

Japan, heavy oil, etc.*2

Japan, electric power

2,13212224

65,220

9,509

2,587

6,353

25,953

1,8898533

7

5,606

8,334

2,232

6,353

24,539

1,7807639

65,584

8,391

2,059

6,232

24,168

1,7509533

15,275

8,555

2,038

5,981

23,729

1,7767133

15,567

8,561

1,622

5,768

23,399

’13/3(FY) ’14/3 ’15/3 ’16/3 ’17/3

*1 Per unit calorific value is based on the Energy Conservation Act.*2 Total of heavy oil A, heavy oil C, kerosene, light oil and gasoline*3 Total of natural gas, liquefied natural gas (LNG), city gas, butane and liquefied petroleum gas (LPG)

Annual changes in energy consumption*1

*1 Includes water, rainwater, etc. used in the business activities

*2 Recycle rate including cooling water usage

Non-financial Information

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Status of regular employees Status of regular employees

Employment rate of persons with disabilities (*3) and Re-employment of persons (*4)

Number of employees taking a leave of absence (*6) Number of employees taking a leave of absence (*12)

Attendance rate of Board of Directors (FY2017/3)

Attendance rate of Audit & Supervisory Board members (FY2017/3)

Employment rate of persons with disabilities (*9) and Re-employment of persons (*10)

Number of employees taking a leave of absence (*5)

Number of employees taking a leave of absence (*11)

As of March 31, 2017 As of March 31, 2017

Personnel and Labor


FUJIFILM Fuji Xerox

Average length of employment Turnover rate (*1) Retention rate after 3 years from

reinstatement after childcare leave (*2)

Total: 17.8 yearsMale: 17.7 yearsFemale: 18.2 years

Total: 2.2%Male: 2.3%Female: 1.8%


Average length of employment Turnover rate (*7) Retention rate after 3 years from

reinstatement after childcare leave (*8)

Total: 20.6 yearsMale: 21.3 years Female: 16.9 years

Total: 3.6% Male: 3.7% Female: 3.2%


*1 Turnover rate =Attrition + Retirement + Voluntary + New start for senior employees’ program

Annual average number of employees at FUJIFILM Corporation (non-consolidated)

*2 Retention rate after 3 years from reinstatement after childcare leave =Number of employees as of the end of FY2017/3

among those returning to work after childcare leave in FY2015/3Number of employees reinstated after childcare leave in FY2015/3

*7 Turnover rate =Attrition + Retirement + Transfer + New start for senior employees’ programNumber of employees at Fuji Xerox at the end of the previous fiscal year

(non-consolidated) + number of assigned employees.

*8 Retention rate after 3 years from reinstatement after childcare leave =Number of employees as of the end of FY2017/3 among those

returning to work after childcare leave in FY2015/3Number of employees reinstated after childcare leave in FY2015/3

Name of Directors Attendance rate of Board of Directors

Shigetaka Komori 100% (13/13 times)

Kenji Sukeno 92% (12/13 times)

Kouichi Tamai 100% (13/13 times)

Yuzo Toda 100% (13/13 times)

Toru Takahashi (*1) 100% (13/13 times)

Takatoshi Ishikawa (*1) 100% (13/13 times)

Norio Shibata (*2) 90% (9/10 times)

Go Miyazaki (*1) 85% (11/13 times)

Masaru Yoshizawa (*2) 100% (10/10 times)

Name of Directors Attendance rate of Board of Directors

Tadahito Yamamoto (*1) 100% (13/13 times)

Teisuke Kitayama (outside) (*1) 92% (12/13 times)

Hiroshi Inoue (outside) (*1) 85% (11/13 times)

Name of Audit & Supervisory Board members Attendance rate of Audit & Supervisory Board members

Kazuhito Yamamura (*1) 100% (13/13 times)

Mamoru Matsushita (*2) 100% (10/10 times)

Hisayoshi Kobayakawa (outside) 100% (13/13 times)

Shiro Uchida (outside) (*2) 80% (8/10 times)

FY2013/3 FY2014/3 FY2015/3 FY2016/3 FY2017/3Leave of absence for

nursing care 13

(male 6 / female 7)16




(male 15 / female 11)Leave of absence for

childcare2






medical care71






volunteer work (the number of days spent

on volunteer activities)

1(male 1 / female 0)

—


—


(0)


(1)


(0)

FY2013/3 FY2014/3 FY2015/3 FY2016/3 FY2017/3Leave of absence for

nursing care (*13)27






childcare (*14)197




(male 147 / female 167)373


volunteer work (total number of days spent on volunteer activities) (*15)


(135 days)


(54 days)


(47 days)


(62 days)


(36 days)

0

10

20

30

40

0

1

2

3

29

1.96

2.012.12 2.10

2.24

(Persons) (%)Employment rate of persons with disabilities

’13/3(FY) ’14/3 ’15/3 ’16/3 ’17/3

10

13

19

37

Re-employment

0

200

400

600

0

1

2

3

485

2.08

2.07

2.062.09

2.22

524 506554 554

(Persons) (%)Employment rate of persons with disabilitiesRe-employment

’13/3(FY) ’14/3 ’15/3 ’16/3 ’17/30

20

40

60

2

52

42 43

5349

53 2

4

(Persons)

’13/3(FY) ’14/3 ’15/3 ’16/3 ’17/3

Leave of absence for nursing care ( male/ female)Leave of absence for childcare ( male/ female)

0

20

40

60

80

100

7

5246

5660

84

4 3 4 4

Leave of absence for nursing care ( male/ female)Leave of absence for childcare ( male/ female)

(Persons)

’13/3(FY) ’14/3 ’15/3 ’16/3 ’17/3

*3 Data up to April 30, 2017*4 Number of employees who began

re-employment during the relevant fiscal year (from April 1 to March 31 of the following year)

*6 Number of employees who began a leave of absence during the relevant fiscal year (from April 1 to March 31 of the following year)

*1 Retired on June 30, 2017*2 Appointed on the current post on June 29, 2016

*12 Number of regular employees who took a new leave during the relevant fiscal year (from April 1, 2016 to March 31, 2017).

*13 Number of employees taking leave of nursing care leave under the “accumulated paid leave (nursing care for family members),” “morning nursing care accumulated paid leave,” “afternoon nursing care accumulated paid leave,” “nursing care for family members” and “one-day nursing care leave” programs

*14 Number of employees taking childcare leave under the “accumulated paid leave (child healthcare)” and “child medical care” programs. As a program equivalent to childcare leave, special leave (of 5 days at the most) is granted for caring for the older child at the time of birth of the second child and the number of employees who took such special leave is shown.

*15 Volunteer work leave shows the number of employees who took “accumulated paid leave (volunteer activity)” and the number of days spent on such activities.

*9 Data up to March 31, 2017*10 Data up to March 31, 2017



* The data is only for regular employees (actually, part-time employees are included)

Non-financial Information

68

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Corporate Information (As of March 31, 2017)

Company name FUJIFILM Holdings Corporation

Head office 7-3, Akasaka 9-chome, Minato-ku,Tokyo 107-0052, Japanhttp://www.fujifilmholdings.com/en/

Date of establishment January 20, 1934

Capital ¥40,363 million

Number of employees (Consolidated) 78,501

Number of employees 112

Number of consolidated subsidiaries 277

Stock exchange listingTokyo

Share registrarSumitomo Mitsui Trust Bank, Limited4-1, Marunouchi 1-chome, Chiyoda-ku,Tokyo 100-8233, Japan

Distribution of shareholders and shares

Number of shareholders 123,313

Number of shares outstanding 514,625,728

Stock Information (As of March 31, 2017)

Major shareholders

Name

Percentage of issued shares (%)

The Master Trust Bank of Japan, Ltd. (trust account) 6.1%

Japan Trustee Services Bank, (trust account) 5.7%

Nippon Life Insurance Company 3.4%

Sumitomo Mitsui Banking Corporation 2.0%

Japan Trustee Services Bank, T5 1.5%

Japan Trustee Services Bank, T9 1.5%

Mitsui Sumitomo Insurance Company, Limited 1.4%

STATE STREET BANK WEST CLIENT - TREATY 505234 1.4%

Northern Trust Company. (AVFC) Re U.S. Tax Exempted Pension Funds

1.3%

Daicel Corporation 1.2%

* The Company holds treasury stock accounting for 14.9% of the total issued shares outstanding.

Thousand shares

Common share price (Tokyo Stock Exchange)

Financial institutions

175,539 (34.1%)

Securitiescompanies

11,419 (2.2%)

Treasury stock

76,870 (14.9%)

Foreigncorporations

162,934 (31.7%)

Individuals and others

59,043 (11.5%)Other

corporations

28,821 (5.6%)

0

50,000

100,000

150,000

60

80

100

120

60

80

100

120

Trading volume (Thousand shares)

Trading volume (right scale)

* Share index (2016/3E = 100)

(Index)

FUJIFILM Holdings’ share price TOPIX

,15/4 ,16/4 ,17/3

Corporate Information and Stock Information

Corporate Information

69

005_0736501372910.indd 69 2018/01/09 16:23:05

For further information, please contact:

Corporate Communications Office, Corporate Planning Div.7-3, Akasaka 9-ChomeMinato-ku, Tokyo 107-0052, JapanTel: 81-3-6271-1111URL: http://www.fujifilmholdings.com/ Issued: November 2017

Revised: January 2018

FU

JIFILM

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005_0736501372910.indd 1 2018/01/10 10:47:03

fujifilm holdings corporation integrated report … holdings corporation integrated report 2017 ......

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