Published on: Monday, August 14, 2023

Fujifilm results for Q1- June 30, 2023

FUJIFILM has released the financial results for the first quarter, ending June 30, 2023.

In the first quarter, revenue increased by 5.6% year-over-year to JPY660.8 billion, mainly due to strong sales in the Medical Systems and Imaging businesses and the impact of exchange rates. Thanks to revenue growth in the Imaging segment, operating income amounted to JPY52.2 billion, increased by 5.4% year-over-year, despite the sluggish semiconductor market for the Electronics Materials business. Net income attributable to FUJIFILM Holdings increased by 31.5% year-over-year to JPY54.4 billion due to valuation gains on marketable and investment securities.

Full-year consolidated forecast for the fiscal year ending March 2024 remains unchanged from the previous forecast, with revenue of JPY2,950.0 billion, operating income of JPY290.0 billion, and net income attributable to FUJIFILM Holdings of JPY225.0 billion, aimed to achieve its record highs. The annual dividend forecast for the fiscal year is JPY150 per share, including the 90th-anniversary commemorative dividend of JPY10, marking the 14th consecutive annual dividend increase.

“In the first quarter, the Medical Systems and Imaging businesses contributed to an increase in both revenue and profit,” says Teiichi Goto, president and chief executive officer, representative director, FUJIFILM Holdings Corporation. “In particular, revenue of the Imaging segment increased significantly by 30% year-over-year, and its operating income more than doubled. This demonstrates our ability to continue providing valuable products and services, including the INSTAX series, to the world. We stay committed to our plan to achieve record results in revenue, operating profit, and net income for this fiscal year.”

Highlights by business segments

Healthcare:

Revenue increased 13.1% year-on-year JPY206.8 billion due to higher contributions from all sub-segments while operating income decreased 9.1% year-on-year to JPY10.3 billion due to inventory write-downs in the Bio CDMO and LS Solutions businesses.

In the Medical Systems business, revenue was driven higher by steady sales of endoscopes and medical IT systems. In the endoscopy field, sales of new products performed well in Japan, and overall sales grew mainly in Europe and China. In the Medical IT business, sales of systems and services, particularly the Picture Archiving and Communication System (PACS) SYNAPSE and the 3D image analysis system SYNAPSE VINCENT, were strong.

In the Bio CDMO business, revenue increased mainly due to the solid performance of contract manufacturing of antibody drugs, mainly at the Denmark site. Meanwhile, slow orders for gene therapy and other drugs reflecting a problematicfundraising climate for biotech venture customers led to write- downs on components and consumables nearing the end of their shelf life.

In the LS Solutions business, revenue was driven higher by steady shipment increase in the life sciences field, reflecting the easing of the tight supply- demand situation for raw materials to be used in cell culture media for biopharmaceutical production.

In the life sciences field, write- downs were recorded on some raw materials for use in cell culture media for coronavirus vaccines, which had been secured in response to a longer procurement lead time during the COVID-19 pandemic, as their shelf life dates were approaching.

Materials:

Revenue decreased 10.4% year over year to JPY154.6 billion, and operating income decreased 58.1% year over year to JPY9.3 billion, mainly due to a slowdown in the semiconductor market and lower printing demand in the Graphic Communication business.

In the Electronic Materials business, revenue decreased, hit by a slowdown in the semiconductor market. Various procedures are underway to complete the acquisition of the semiconductor process chemical business of Entegris, Inc. by the end of the current fiscal year.

Revenue from the Display Materials business declined due to production adjustments across the entire supply chain in reaction to extraordinary demand during the COVID-19 pandemic and also due to weak demand for consumer devices.

In the Graphic Communication business, revenue in the printing plates field declined mainly due to lower demand for printed materials, mainly in Japan, Europe, and the U.S.

In the Inkjet business, revenue fell as sales of inkjet printheads to the ceramic market were driven down by slow demand in Europe and China.

Business Innovation:

Overall revenue grew by 3.2% year- over-year to JPY194.2 billion due to an increase in revenue from the Business Solution business, and operating income grew by 18.7% year- over-year to JPY16.9

billion.

In the Office Solutions business, revenue declined as the expansion of new OEMs, worldwide price revisions, and other factors were not enough to offset lower exports to Europe and the U.S.

In July 2023, FUJIFILM Business Innovation announced an expansion of production capacity for Super EA-Eco Toner, which features industry-leading low-temperature fusing performance. A new manufacturing process that reduces carbon dioxide emissions will also be introduced to contribute to a decarbonized society through product supply.

In the Business Solutions business, revenue was driven upward by sales increase to domestic municipalities and the contribution of sales from the Australian IT service company MicroChannel Services (now named FUJIFILM MicroChannel Services Pty Ltd), acquired in the fiscal year ended March 2023.

In June 2023, FUJIFILM Business Innovation started offering the Integrated Damage Survey System and the House Damage Assessment Application to help speed up the issuance of disaster victim certificates by municipalities in Japan. In addition, as a solution and service provider to realize CHX (Customer Happy Experience) through customers’ DX activities, the company launched IT Expert Services, which is a one-stop IT support service tailored to user needs, spanning from visualization and operation/management of IT assets to environmental improvement support.

Imaging:

Revenue rose by 27.6% year- over-year to JPY105.2 billion, and operating income increased by 2.2 times year- over-year to JPY23.3 billion due to strong sales of instant photo systems and digital cameras.

In the Consumer Imaging business, revenue was boosted by strong sales of instant photo systems,

color photographic paper, dry minilabs, and their materials. Sales performed well for the latest entry- level model INSTAX mini-12, the hybrid instant camera INSTAX mini Evo incorporating digital technology, and the smartphone printer INSTAX mini-Link 2.

The INSTAX SQUARE SQ40, a SQUARE format instant camera launched in June 2023, has also been well received.

In the Professional Imaging business, revenue increased significantly due mainly to strong sales of X- H2, X-H2S, and X-T5, which were launched in the previous fiscal year.

The X-S20, an all-in- one compact and lightweight model released in June 2023, has been well received in the market with its high- capacity battery, high-performance AF, and video recording functions.

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