CEO Message

During the fiscal year ended March 31, 2009—particularly from the fall of 2008—the global real economy deteriorated at a worse-than-expected pace and scale. Behind this deterioration was financial credit insecurity caused by the bankruptcy of major financial institutions in the United States, which consequently led to the negative spiral of demand contraction, inventory and production adjustments and weakened consumer sentiment. In addition to these harsh operating environments, FUJIFILM Holdings Corporation (“Fujifilm” or “the Company”) has faced other severe conditions, including the yen's sharp appreciation and the slowdown in the economies of newly industrialized countries (NICs). As a result, on a consolidated basis, Fujifilm posted ¥2,434.3 billion in revenue, down 14.5% from the previous fiscal year, while recording ¥37.3 billion in operating income, down 82.0% year on year. Income before income taxes amounted to ¥9.4 billion, down 95.3%, and net income totaled ¥10.5 billion, down 89.9%. The decrease in consolidated revenue was attributable to such factors as a sharp appreciation of the yen and a persistent downward trend in the Imaging Solution's sales. Having also caused the revenue decline were the Information Solutions segment, which is centered on the flat panel display (FPD) materials business that had shown steady growth, and the Document Solutions segment, both of which experienced a substantial decline in revenue due to stagnant demand on a worldwide scale. The Company's earnings similarly suffered significant falls, adversely affected by decreased revenue, the yen's appreciation and the posting of structural reform expenses totaling ¥33.5 billion.

In accordance with the fundamental strategies under its VISION75 Management Plan, Fujifilm implemented structural reforms, mainly in the Imaging Solutions segment. More specifically, the Company defined priority business fields with high growth potential and selectively allocated its management resources in these fields, thereby considerably expanding related businesses. These measures enabled us to post record-high revenue and operating income in the fiscal year ended March 31, 2008. However, sudden changes in operating conditions attributable to the current global financial crisis have negatively affected the Company's entire operation, and our performance abruptly deteriorated.

Although harsh economic environments are slated to persist for the time being, Fujifilm is committed to quickly reestablishing a slim, efficient and robust corporate constitution that is capable of securing profitability and realizing sustainable growth even under the severe economic conditions that we are now facing. As the first and foremost step toward creating a robust corporate constitution, the Company will pursue more aggressive cost and expense reductions by intensively and decisively implementing structural reforms from the current fiscal year, ending March 31, 2010. Such cost reduction efforts will allow no sanctuary-it will cover all Group operations and organizations. Also, the Company will earnestly reformulate its growth strategies. Based on such strategies, the Company will continue to concentrate its management resources in the five priority business fields of “medical systems/life sciences,” “graphic arts,” “document solutions,” “optical devices” and “highly functional materials,” while promoting the expansion of sales and market share in NICs.

In the past, Fujifilm has faced a number of crises, including the so-called “silver shock” in 1980 and the rapid advance in digital technologies in and after 2000. The Company has overcome these crises through the combined wisdom of the entire Fujifilm Group. All Fujifilm Group employees are more determined than ever to decisively implement structural reforms and promote growth strategies. Working as a single, well-coordinated entity, the Company will overcome the current economic crisis that plagues the world.

I would like to thank our stakeholders for their unwavering support and understanding as we accelerate toward realizing Fujifilm's sustainable growth.