Medical Systems News

New Management Structure for Fujifilm

On October 1, the Fujifilm Group will shift to a new group management structure with “Fujifilm Holdings Corporation” (President and CEO: Shigetaka Komori; hereinafter Fujifilm Holdings) at the core. Fujifilm Holdings will provide strategic management of the entire Fujifilm Group including its two major operating companies, “Fujifilm Corporation” (President and CEO: Shigetaka Komori; hereinafter Fujifilm) and “Fuji Xerox Co., Ltd.” (President: Toshio Arima; hereinafter Fuji Xerox).

  • Fuji Photo Film Co., Ltd. will move toward a holding company structure as of October 1 and change its name to “Fujifilm Holdings Corporation.” The current business of Fujifilm will be transferred to the newly created operating company “Fujifilm Corporation.”

The Fujifilm Group is actively implementing a full spectrum of policies and measures based on its midterm management plan, VISION75 (2006), which articulates three fundamental strategies: “Implementing comprehensive structural reforms,” “Building new growth strategies,” and “Enhancing consolidated management.” The drastic structural reforms being implemented in the Imaging Solutions segment since last fiscal year for the purpose of preserving and nurturing the culture of photography have been progressing favorably at a pace that surpasses the original plan, and are gradually leading to improvements in the revenue structure. Aiming toward “building new growth strategies,” Fujifilm Group is now making further headway toward new growth strategies. It annually invests approximately 200 billion yen in R&D, approximately 200 billion yen goes into capital investment, approximately 100 billion yen into M&A and approximately 65 billion yen into environmental investment in such key growth business fields as medical and life sciences, documents, graphic arts, highly-functional materials and optical devices. Furthermore, vigorous implementation of measures for “enhancing consolidated management” has also been undertaken. These measures include consolidation of subsidiaries involved in sales, equipment manufacture and logistics, as well as Sankyo Chemical and Fujinon becoming wholly owned subsidiaries and implementation of the CMS (cash management system) on a consolidated accounting basis. Steps on an even larger scale to dynamically “enhance consolidated management” will be considered for the Fujifilm Group with the transition to the new management structure on October 1.

Fujifilm Holdings will provide 1) ”management strategy functions” which formulate business/ functional strategies for the entire Group, and promote growth strategies and structural reforms with the operating companies, 2) “technical strategy functions” for the management of technology and intellectual strategies to realize a more advanced fusion of various proprietary technologies owned by the Fujifilm Group companies, and 3) “corporate support functions” to promote the enhancement of communications with stakeholders and oversee corporate social responsibility (CSR). Through the implementation of these functions, the Fujifilm Group aims to further advance its business through the pursuit of the overall optimization of the group. Furthermore, to enhance governance of the group management, Fujifilm Holdings will deliberate on critical agendas for the operating companies from a standpoint that is concerned with optimization for the entire group. A “CSR Committee” will also be established to make decisions on group policies, thereby raising the synergistic effect between the CSR activities of Fujifilm and Fuji Xerox, which are being aggressively implemented by both companies. With Fujifilm Holdings at its core, the Fujifilm group will work to maximize the synergistic effect by “increasing areas of synergy among group companies,” “realizing lean and solid management organization” and “"cultivation and effective utilization of personnel" thus enhancing strategic management for the entire group.

  1. Increasing areas of synergy among group companies By combining and fusing the strengths and potential of Fujifilm and Fuji Xerox in various areas, including R&D, production, sales and after-sales services, both companies will be able to promote high value-added solutions that range from materials and devices to systems and networks. In the area of printing, the leading position of Fuji Xerox in the “print on demand” business will be further strengthened through the incorporation of image processing technologies that include color management technologies, and the sales capabilities of Fujifilm.
  2. Realizing lean and solid management organization Streamlining and prioritization of Selling, General and Administrative (SG&A) and R&D expenses along with manufacturing costs will be conducted from the perspective of optimization for the entire group. The SG&A expense rate, which is 27.5% of the revenues projected for FY2006 will be targeted for reduction to percentages in the low twenties by FY2009. For areas such as accounting, personnel, general affairs, procurement, IT and other common functions, a shared services company will be established to strengthen and enhance back office sections throughout the entire group as well as to achieve low cost operations.
  3. Cultivation and effective utilization of personnel The sharing of information regarding personnel - and in particular key personnel - will be promoted within the group. Organizations and mechanisms to optimize the nurturing and allocation of these personnel will also be created.

With the positive impact of structural reforms, further expansion of businesses in the Information Solutions segment and rapid growth in the Document Solutions segment, as well as the consolidated power of the group through the new management structure, the Fujifilm Group anticipates a V-shaped recovery for FY2007. It aims to achieve a record-high operating profit of 200 billion yen in fiscal 2007. Furthermore, it aims to achieve revenue of over 3,150 billion and an operating profit of over 250 billion yen by fiscal 2009, which marks the year for the completion of the midterm management plan and the 75th anniversary of the founding of the company.

Forward-Looking Statements

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

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