Medium-Term Management Plan
2023–2025 Medium-Term Management Plan: Overview of the plan
The objective of the Fujitsu Group’s new Medium-Term Management Plan (new medium-term plan), starting in fiscal 2023, is to establish a business model for sustainable growth and improved profitability that will position us to achieve our vision for 2030 and beyond. The plan has three themes: transform our business model and portfolio, ensure reliable support for the modernization of customers’ IT assets, and improve the profitability of our international business. We have set four key strategies to secure the successful promotion of these three themes. The business model and portfolio strategy is based on the growth of the service domain, centered on the Fujitsu Uvance business. Through the customer success/regional strategy, we will establish greater support structures for global customers with Japan-originated businesses, expand our consulting capability, build a structure to support customer modernization, significantly improve profitability in Regions (International), and further evolve our strategic alliance partnerships. The technology strategy is based on developing five core technologies, including and centered on AI, and utilize them to improve value to our stakeholders, including to society. Our people strategy includes globally unifying standard roles and developing our workforce portfolio aligned to our business growth needs. Additionally, we continue improving productivity and strengthening our management foundation across the business. We will diligently execute these four key strategies to maximize the value we provide to stakeholders and achieve continued sustainable growth.
2023–2025 Medium-Term Management Plan: Financial and non-financial indicators
Our financial targets for fiscal 2025, the final year of this medium-term plan, are revenue of ¥4.2 trillion, adjusted operating profit of ¥500.0 billion, and an adjusted operating profit margin of 12%. Centering on Service Solutions, we aim to boost profitability, driven by growth from Fujitsu Uvance. Furthermore, by improving working capital efficiency to strengthen our cash flow generation capabilities, by fiscal 2025 we aim to expand core free cash flow (FCF) to ¥300.0 billion, around twice the fiscal 2022 level. Also, by this date, we intend to achieve a compound annual growth rate (CAGR) in earnings per share (EPS) of between 14% and 16% by optimally allocating the increased cash flow. We will progressively implement our financial strategy to achieve sustainable improvements in corporate value.
To measure and substantiate our materiality contribution to customers and society, and augment our foundation for sustainable growth, we have set non-financial key performance indicators (KPIs) for fiscal 2023 to fiscal 2025 in four areas: the environment, customers, productivity, and people. We also have initiatives underway targeted to achieve these goals. We are continuing to improve Customer NPS and employee engagement, which were management targets under our previous medium-term plan. In addition, we have added greenhouse gas (GHG) emissions as an indicator for the environment, operating profit per employee as a productivity measure, and percentage of female managers globally as one of our diversity indicators. We further conduct quantitative analysis to understand how these non-financial initiatives contribute to our financial performance and enhance our corporate value.
2023–2025 Medium-Term Management Plan: Key strategies
Business model and portfolio strategy
Business segment changes
From fiscal 2023, we have separated Technology Solutions into Service Solutions and Hardware Solutions. This change improves business portfolio management with clear visibility of growth areas and results from investments.
Grow Service Solutions
In Service Solutions, a growth area, we will expand highly profitable on-cloud digital services centered on Fujitsu Uvance. We will drive modernization—working with our customers to modernize their business and improve productivity, shifting traditional on-premises services to being cloud-based.
Develop long-term customer engagement
We will work with customers to jointly address challenges, continuously provide optimal solutions at each stage of their business model, and provide long-term support for modernization with a shift to the cloud.
Customer success/regional strategy
We will increase the number of employees with consulting skills (technical and business) to 10,000, which will be achieved through a number of activities including reskilling.
Realize customers’ optimal modernization
We will help customers optimize their assets and achieve digital and sustainability transformations (DX/SX) by utilizing our long-standing engineering capabilities, establishing dedicated specialized modernization teams, and leveraging our global delivery system.
International focus on services
We will grow the ratio of service revenue from Fujitsu Uvance in the international business from 20% in fiscal 2022 to 45% in fiscal 2025.
Further develop strategic alliances
We will cultivate and expand strategic partner alliance relationships to enhance the level of value we bring to our global stakeholders.
Further stabilizing our customers’ businesses
Information security and system quality are of utmost importance in earning society’s trust, and core to Our Purpose. We will implement further measures to strengthen our management structure and approaches, measure effectiveness, and drive continued improvements.
Enhance value through technology
Fujitsu Uvance leverages five Key Technologies: Computing, Network, AI, Data & Security, and Converging Technologies. We are concentrating research and development in these areas, and by accelerating our standing in these five technologies, centered on AI, we will continue to create added value in our business.
Business utilization of technologies (enhance value delivered)
We are increasing our efforts to transform how our technical innovations bring enhanced added value for customers and society. By applying our core technologies to applications and services in Fujitsu Uvance’s Vertical domain, we will work with and offer our customers integrated solutions that propel the adoption of technology in society.
Business-aligned workforce portfolio
We will create a business-aligned workplace portfolio and promote employee development programs across the Company. We will define and unify job roles globally and expand our talent pool in growth areas through reskilling and upskilling.
Increase value to customers by strengthening our management foundation
We will continue driving existing initiatives under the previous medium-term plan to upgrade and strengthen our management foundation and increase productivity. We will leverage from, share, and apply valuable experience and expertise from these initiatives in improved human capital management and data-driven management (for example, OneFujitsu) to aid our customers with their transformations, which will also help promote DX across society.