Our raison d’être is to resolve social issues through our business and thus bring smiles to people’s faces.
The Fujifilm Group celebrated its 90th anniversary on January 20, 2024. Since its founding as Fuji Photo Film in 1934, the Company has expanded its photography business, pursued global growth and transformed its business structure while evolving into a company committed to addressing social challenges. Over the past 90 years, we brought photographic film production to Japan and consistently upheld our ambition to promote and advance photographic culture. It has been a history of challenges and efforts, during which we have overcome various difficulties and continued to explore new possibilities with passion.
Our business domains have also expanded. The Group now consists of more than 270 companies, with approximately 73,000 employees actively working across the globe. We have employees with varying talents from different countries and cultures who continue working for us with pride. To inspire and unify them in shaping the future of the Fujifilm Group, we recognized the need for one core idea as the foundation that defines a shared direction for all our businesses to strive toward. With this in mind, we formulated our new Group Purpose—“Giving our world more smiles”—to mark our 90th anniversary.
In developing this Purpose, our executives, including myself, along with employees from both domestic and overseas operations of the Group, engaged in discussions for more than a year. Through these discussions, we realized that the Purpose—Giving our world more smiles—was already a concept deeply embedded in the history, culture in the and hearts of the people in the Group. Accordingly, the Purpose felt both refreshingly new and yet very familiar at the same time to me. Looking back, the reason I decided to join Fujifilm almost 40 years ago was because I believed that, through my work at the Company, I could help “bring happiness to people around the world.” Photographs capture moments of emotion and happiness, and my motivation when I first joined the Company was the belief that encouraging more people to take photos would help spread happiness around the world. Reflecting on this, the word “smiles” in our Purpose stirred a sense of excitement within me. The more I reflect on it, the more I see the deep connections between the Fujifilm Group’s business and its Purpose.
Our Purpose embodies our belief that “smiles” exist beyond corporate contributions to society and solutions to social issues, and that these “smiles” are the raison d’être of the Fujifilm Group. In our Bio CDMO business, for example, we adopted the vision, “Partners for Life.” Driven by the aspirations of our employees, this vision enables us to deliver biopharmaceuticals, produced on behalf of pharmaceutical companies, to the patients who need them. By ensuring the stable supply of cutting-edge biopharmaceuticals, we help address critical social issues and, as a result, increase the number of people’s “smiles.” “Smiles” represent the future vision we aim to create through all of the Fujifilm Group’s businesses.
To share the Purpose, which we announced on January 20, 2024, with our employees and embody it through our business activities, I visited nine domestic sites and eight countries overseas by the end of August. During these visits, I held town hall meetings and panel discussions. Through my dialogue with employees, I could sense that each individual was connecting the Purpose to their own aspirations, thinking, “This is what I want to achieve.”
In addition to myself, other executives are engaging in communications with employees about the Purpose at both domestic and overseas locations. We are also arranging creative dialogue sessions at various sites to foster discussions on the front lines. Through these activities, I sense that the Purpose is gradually taking root, and that employees of the Fujifilm Group are giving it extra energy.
This panel discussion, held in Germany, was attended by around 100 employees in the audience and about 1,000 online.
Best-ever performance with contributions from each and every employee
Fiscal 2023 was the final year of VISION2023, our medium-term management plan. During the period of the plan, the Fujifilm Group made growth investments of around \1.24 trillion, primarily focused on the growth areas of Healthcare and Advanced Materials (now Electronics). In fiscal 2023, we posted consolidated revenue of \2,960.9 billion and operating income of \276.7 billion—both record-high figures—thus laying a solid foundation for our next phase of growth. This was the result of our ability to achieve sustained growth, even amid rapidly changing external conditions, following the transformation of our business portfolio.
Looking back from the perspective of our business portfolio, we were able to build a solid business foundation for the future by making aggressive growth investments in the Healthcare and Electronic Materials (now Semiconductor Materials) segments. We also put our Imaging segment on a growth trajectory to significantly expand earnings. Regarding M&As, we acquired the diagnostic imaging business of Hitachi, Ltd. in 2021 and the semiconductor process chemical business of U.S.-based Entegris, Inc. in 2023. By combining the strengths of these acquisitions with our own technologies and assets, we are working to further enhance Group synergies. Looking back, the announcement of my appointment as President in March 2021 coincided with the announcement of the successful acquisition of Hitachi’s diagnostic imaging business. I still vividly remember my renewed determination to be proactive in creating new value and becoming a force for good in society.
On the other hand, we were unable to achieve our targets for capital efficiency indicators, such as CCC, ROIC and ROE, which we set to strengthen our ability to generate cash. We recognize this as a challenge going forward. The main factors were additional large-scale capital investments we made in growth areas, particularly in Bio CDMO, as well as the impact of COVID-19, during which we prioritized the stable supply of products and built up inventories as a result. Going forward, we will work to enhance our resilience to flexibly and swiftly address market conditions and other external factors while improving the profitability of each business.
Become a global top-tier business group by prioritizing profitability and capital efficiency
In response to the challenges identified during the period of VISION2023, the Fujifilm Group announced a new medium-term management plan, VISION2030, in April 2024. VISION2030 is an action plan designed to achieve the goals of our long-term CSR plan, Sustainable Value Plan 2030, which sets targets for fiscal 2030. By practicing management that prioritizes profitability and capital efficiency, we aim to further enhance the corporate value of the Fujifilm Group. Our goal is to evolve into a global top-tier business group that brings value (“more smiles”) to our various stakeholders. To achieve this, we will continue planting the seeds of growth, nurturing them to fruition and harvesting the results while pursuing both economic and social value. Through this cycle, we aim to evolve into a more profitable company. To further strengthen our earnings power, we have designated the three-year period from fiscal 2024 to 2026 (April 2024 to March 2027) as a critical phase during which each business division will implement specific initiatives and strategies.
Strengthen our business portfolio through investments in “New/Future Potential” and “Growth Driver” businesses and structural reorganization
To continue creating value for our various stakeholders, we will further strengthen our business portfolio. In June 2024, we integrated three businesses of the Electronics segment—Display Materials, Industrial Products and Fine Chemicals—into a new entity called the Advanced Functional Materials Division. At the same time, we merged our Display Materials Research Laboratories and Highly Functional Materials Research Laboratories to establish the Advanced Functional Materials Development Center. Through this structural reorganization, we will leverage the diverse products, business models, customer bases and talent of the three businesses to maximize the profitability of the Electronics segment and accelerate the creation of new businesses.
We will also continue making proactive investments in potential high-growth areas, such as Bio CDMO and Semiconductor Materials. In April 2024, we announced a large-scale investment of approximately \180 billion to expand the facilities at our Bio CDMO site currently under construction in North Carolina, U.S.
When considering such large investments, we must make serious decisions made with an eye to future profitability. If we determine that we are not the best owner of a particular business, our policy is to sell that business based on objective assessments. For example, we decided to sell Japan Tissue Engineering, which provides regenerative medicine products, and the radiopharmaceutical business, as well as the business related to electronic medical records and medical-receipt systems that was part of the diagnostic imaging business acquired from Hitachi, Ltd.
Leveraging the Group’s integrated strengths to drive further business growth in Business Innovation
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- Our booth at drupa 2024 was our largest ever.
As part of the business portfolio restructuring, we integrated the Graphic Communications business into the Business Innovation segment. Through this restructuring, the Business Innovation segment will leverage the Group’s integrated strengths to drive further business growth.
These strengths include our solid global customer base in printing plate materials and our streamlined production system achieved through the consolidation of production lines, as well as the increased value we provide to customers by combining our xerography and inkjet technologies.
A new starting point for growth was drupa 2024, the world’s largest printing and media industry trade show, held in Düsseldorf, Germany. It served as a big stage for us to show the world that we offer the largest and most comprehensive product lineup, ranging from analog and digital printing solutions to supporting customers in their digital transformation (DX) efforts.
During my visit to the event, I confirmed that new business opportunities are emerging in such areas as digital printing, packaging and signage and that the Graphic Communications business has ample room for growth. In fact, our participation in the event produced significant outcomes as we made numerous business deals thanks to the market’s high assessment of the Group’s integrated capabilities and strong environmental performance. In addition, we received a series of inquiries from distributors eager to handle our products. We will continue leading the transformation of the international printing industry, delivering value to many customers.
Improve capital efficiency and ensure solid investment returns Focus on R&D management
Currently, we are in an investment phase, focusing on Bio CDMO and other growth businesses, and we are expanding capital investment accordingly. However, looking ahead, we recognize that improving capital efficiency and strengthening shareholder returns are key priorities First, as outlined in VISION2030, we are committed to generating positive free cash flow by fiscal 2026. By becoming free cash flow positive, we will acquire greater management flexibility, and a wider range of options for shareholder returns, including share buybacks, will become available in fiscal 2027 and thereafter. We will also reap the benefits of our growth investments while improving profitability and capital efficiency.
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- Small meeting with sell-side analysts
Meanwhile, transforming our approach to R&D management is also essential to improving profitability. Accordingly, we will strengthen R&D in areas peripheral to our core businesses while carefully selecting themes for basic research and turning them into viable business opportunities.
Since the announcement of VISION2030, we have actively organized large meetings, small meetings and one-on-one discussions with investors to ensure they fully understand the direction we are aiming for as a company. To more clearly communicate our efforts to achieve VISION2030 and our value creation path, we will continue enhancing disclosures and enriching our dialogue with stakeholders.
Demonstrating our ongoing commitment to trust, embraced since our founding, from a sustainability perspective
Clean water and air are essential to manufacturing photographic film, the Fujifilm Group’s founding business.
Due to the nature of photographic film, which cannot be tested before use, customers essentially purchase “trust” in the product. As a result, we have kept a deeply embedded commitment to environmental protection, stakeholder trust and communication with local communities, as well as a strong approach to sustainability, since our founding.
We will continue challenging ourselves to become a company that creates positive change in society and helps realize a sustainable future.
Addressing environmental issues is a prerequisite for participating in global business
With the belief that addressing environmental issues is a prerequisite for participating in global business, the Fujifilm Group considers environmental protection to be one of its most pressing issues. We achieved our target of reducing greenhouse gas emissions in fiscal 2023 by 11% compared with fiscal 2019.
To celebrate our 90th anniversary, moreover, we decided to donate a total of \1 billion to the Fujifilm Green Fund (FGF), a public charitable trust dedicated to environmental protection. We established the FGF in 1984 to mark our 50th anniversary. It was the first public trust created by a private company in Japan with a focus on nature conservation. Through the FGF, we have supported activities and research that contribute to biodiversity protection, such as planting forests for the future, over the past 40 years, so establishing the FGF has proven to be a valuable decision. Our mission is to continue this work for the long term. In September 2023, meanwhile, the Group expressed its support for the framework proposed by the Taskforce on Nature-related Financial Disclosures (TNFD), and in June 2024 we were registered as an official TNFD Adopter. TNFD is a global initiative that provides guidelines for companies to assess and report on nature-related risks and opportunities in their businesses.
In May 2024, we opened the Circular Manufacturing Center at FUJIFILM Manufacturing Europe B.V. in the Netherlands. At the new facility, we launched an initiative to collect used toner cartridges from multifunction devices sold in Europe and recycle them into new toner cartridges. As a key part of our effort to create a circular economy*, this initiative leverages the resource recycling system technologies and manufacturing expertise that the Business Innovation segment has been building since the 1990s.
* Circular economy: An economic model aimed at minimizing resource input and consumption while maximizing the use of existing stock to create added value
NURA health screening centers: Creating social impact on a global scale
As part of our focus on health as a material issue, we are committed to improving healthcare access in emerging countries. To this end, we are expanding our health screening service business through NURA health screening centers aimed at the early detection of cancer and lifestylerelated diseases. NURA centers provide a health screening service using the Fujifilm Group’s state-of-the-art medical equipment and diagnostic imaging AI technology to assist doctors in their diagnoses. This allows doctors to complete the entire examination in around 120 minutes and explain the results to the patient on the spot.
We opened the first center in Bengaluru, India, in 2021, and we now have four centers in India, two in Mongolia and one in Vietnam, serving more than 50,000 individuals as of August 2024. Among those screened, approximately 5% were found to have potential signs of myocardial infarction, and around 1% showed signs of possible cancer.
To spread the culture of health screenings, which is common in Japan, to various countries, we opened a second NURA center in Mongolia on August 1, 2024, in partnership with the Tavan Bogd Group, a Mongolian conglomerate. I also attended the opening ceremony and was honored to receive the “Nairamdal (Friendship) Medal” from President Ukhnaagiin Khürelsükh of Mongolia in recognition of our contribution to improving the quality of healthcare in Mongolia, including the provision of high-quality health screening services. We at the Fujifilm Group are pleased to have contributed to the health of so many people. In the NURA business, we aim to expand to 100 locations globally, primarily in emerging countries, by fiscal 2030, with the goal of helping people maintain and improve their health more effectively.
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- At the Mongolian Parliament building, together with Mr. Gombojav Zandanshatar (right), the Mongolian President’s Chief of Staff
Promoting management-linked DX to transform our business model
Seeking to incorporate DX into its business operations, the Fujifilm Group adopted a key management strategy to flexibly and rapidly utilize the latest digital technologies, such as generative AI, to transform its business models. We are accelerating DX initiatives across various business divisions, including Medical Systems and Semiconductor Materials, with the goal of having more products and services become foundations that support a sustainable society by fiscal 2030. In addition to enhancing the added value of our products and services and innovating business processes through DX, we are actively investing in talent development to ensure that individual employees can leverage digital technologies to improve their productivity. In recognition of these efforts, we were selected as one of the Noteworthy DX Companies 2024 by Japan’s Ministry of Economy, Trade and Industry.
DE&I: Foundation that supports the growth of the Fujifilm Group
The growth of the Fujifilm Group is driven by the aspirations of each and every employee. With approximately 73,000 employees around the world, it is important that we create an environment where they can appreciate each other’s diversity and demonstrate their strengths. To this end, in October 2023 we established the DE&I Promotion Committee, with myself as the chairperson, and formulated a DE&I vision under the theme of “Appreciating diverse stories.” We believe that respecting each employee’s individuality, values and experiences, while empowering everyone to live their life story to the fullest, will help us realize our Group Purpose. As part of this effort, we launched a self-development assistance program called +STORY, which encourages each employee to view change as an opportunity for growth and continuously take on new challenges. The program provides support for employee development from multiple angles.
We believe that the Fujifilm Group’s growth coincides with the smiles of its employees and their families. Based on this belief, we have been hosting Family Days at various locations. To celebrate our 90th anniversary, we also organized exclusive events for employees and their families, including a private party at Tokyo Disneyland, to foster stronger communications.
For the company to grow, it is also important for employees to be healthy both physically and mentally. With this in mind, in 2019 we established the Fujifilm Group Health Management Declaration and have been actively investing in the health and well-being of our employees. In April 2022, we opened the Fujifilm Group Health Insurance Association’s FUJIFILM Mediterrace Yokohama, a health screening center for Fujifilm Group employees. The center uses state-of-the-art medical equipment and AI-based medical IT systems offered by our Medical Systems business to provide high-quality health screening and physical examinations for our employees. In fiscal 2023, we expanded the center’s capacity and established a Group policy focusing on endoscopic examinations for stomach cancer screenings. These efforts are aimed at improving employees’ health and raising awareness about the importance of their well-being. As a result of these efforts, FUJIFILM Holdings was selected as a Health and Productivity Stock for the fourth consecutive year.
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- At a Family Day event at its Tokyo Midtown Head Office, the Group presented a picture-story show and answered questions from the children of employees.
Ongoing pursuit of challenges to “Giving our world more smiles”
FUJIFILM Holdings was selected for inclusion in SX (Sustainability Transformation) Brands 2024 in a program run jointly by the Ministry of Economy, Trade and Industry and the Tokyo Stock Exchange. This was in recognition of our efforts to promote corporate and social sustainability through our business while enhancing our ability to generate growth capital and increase corporate value. We also attribute it to the Group’s business transformation trajectory and actions targeting sustainable growth. We will continue taking on the challenge of transforming our business ahead of changes in social needs and values in our quest to be a company that delivers value to society at all times.
To achieve this, I will spearhead efforts to identify and realize the aspirations of each employee. By harnessing diverse ideas and a collective passion to see things through, I will transform this into a powerful force that drives the entire Group forward.
In the process, I believe that we will provide benefits to many stakeholders, giving our world more smiles, and create a sustainable future.
