Now and Future of Fujitsu Three Highlights of Fujitsu Integrated Report 2024

Contents

• Point 1: Accelerating the 2023-2025 Medium-Term Management Plan and defining the vision
• Point 2: Linking four focus areas for sustainable growth
• Point 3: Enhancing corporate value by linking sustainability management and business
• Communicating with all stakeholders

Point 1: Accelerating the 2023-2025 Medium-Term Management Plan and defining the vision

Our vision for 2030 is to "Being a technology company that realizes net positive through digital services." The 2023-2025 Medium-Term Management Plan (hereinafter, "Medium-Term Plan")-which we formulated by back casting toward the realization of this vision-has passed the halfway point and good results are coming out. We would like to cover the progress of major measures in the four key strategies (see figure 1) and the goals for the final phase of the Medium-Term Plan.

Figure 1: 2023¬-2025 Medium-Term Plan Key Strategies

(1) Business model and portfolio strategy

Fujitsu Uvance business, which will be the key strategy of our business portfolio in the future, boosted in the first year of the Medium-Term Plan, achieving revenue of 367.9 billion yen as of the end of fiscal 2023, an 84% increase from the previous year. Offerings, which were developed based on hypothesis testing with various customers and is a driver of business expansion Fujitsu, counted 37 types. In the second half of the Medium-Term Plan, we plan to expand our revenue to 700 billion yen in fiscal 2025, primarily by applying these offerings (see figure 2).

Figure 2: Status of Fujitsu Uvance

(2) Customer success/regional strategy

We are strengthening our consulting business along with strengthening our global customer engagement, beginning in Japan. In February 2024, we launched the consulting business brand Uvance Wayfinders and established 13 key consulting areas (practices). We are expanding our consulting workforce, aiming to have 10,000 consultants by 2025.

(3) Technology Strategy

We have implemented five Key Technologies, including AI, into Fujitsu Uvance. By doing so, we are strengthening our competitiveness as a technology company and taking on the challenge of creating new value by leveraging technology. In particular, with regard to AI, which is evolving swiftly, we have formulated the Fujitsu AI Strategy*1 that integrates cutting-edge AI technologies with Fujitsu Uvance offerings to promote agile and flexible implementation.

(4) People strategy

We are promoting establishment of a global workforce portfolio that is connected to our business needs and working to improve productivity through digital transformation (DX). In our human resource strategy, we have revised the compensation system and increased compensation levels for all employees in Japan with an eye on enhancing medium- to long-term competitiveness. We will continue to foster people as the main driver of our business and strengthen our human resources in our key areas.

Point 2: Linking four focus areas for sustainable growth

Aiming for our vision in 2030 and onward, we will expand our services centered on Fujitsu Uvance, while strengthening following three areas: (1) strengthening of consulting capabilities that enhance competitiveness, (2) implementing AI strategies, and (3) modernization and delivery transformation that support our customers' DX as well as sustainability transformation (SX) (see figure 3). We introduce an overview of each focus area and our growth strategies by sharing messages from the four vice presidents in charge of these four areas, including Fujitsu Uvance.

Figure 3: Four Focus Areas

(1) Strengthening of consulting capabilities

In order to become a technology company that brings positive impact to society, consulting approach that can comprehensively understand and address issues is required.

The backdrop to this is the drastic changes occurring in society and the business environment. Issues faced by the companies are becoming increasingly complex and diverse because of the industrial structure changes and cross-industry solutions are required. On the other hand, cutting-edge technologies such as AI and quantum computing are affecting various industries, and innovative business models that leverage technology are also needed. To address this situation, we aim to provide services with higher value by combining our consulting services with the knowledge and expertise we have cultivated over the years.

Uvance Wayfinders has approaches to the issues from business and technology sides and supports the formation of ecosystems and the co-creation of new digital services. We also effectively introduce Fujitsu Uvance and modernization, which are our strengths, to help resolve social issues and customers' business challenges.

(2) Growth scenario for Fujitsu Uvance

Fujitsu Uvance is a service that focuses on cross-industry offerings to help customers resolve business and social issues. Although the service contents are diverse, the value we provide supports both profitability and sustainability as a business and eventually leads to transformation of management and business.

Fujitsu Uvance is another challenge that needs changes in our business model even for us, whose business has been centered on tailor-made system integration (SI). The value of offerings has the competitive advantage of this new business model.

Solutions are developed through repeated hypothesis testing with various customers in offerings, and the solutions are shared with other customers. Best practices can be implemented in a relatively short period of time because offerings are standardized services. In addition, the scope of implementation can be expanded while confirming effectiveness in a short cycle.

(3) Technology leadership underpinned by a pioneering AI strategy

We are focusing our resources to research, develop, commercialize, and implement advanced technologies in five Key Technology areas: AI, computing, data & security, networking, and converging technologies that combine digital technologies and humanities. In particular, the use of generative AI in business is expanding rapidly, and we see it as a key driver of innovation. For this reason, in our Fujitsu AI Strategy announced in February 2024, we stated that we aim to become a global top player that leads the use of generative AI in enterprises.

We provide high value-added services as part of our Fujitsu Uvance offerings, using cutting-edge AI technologies in seven areas, including Fujitsu's proprietary generative AI technology and AI trust technology that verifies and improves the fairness of AI models. In July 2024, as a part of our effort to lead the use of generative AI in the enterprises, we released the Generative AI Framework for Enterprise, that automatically generates specialized generative AI to meet enterprise needs and facilitates the utilization of vast amounts of enterprise data.

(4) Modernization and delivery transformation that support our customers' DX

Modernization entails the upgrading of "legacy" systems, which were developed with older technology and optimized for individual companies or operations, to the latest technologies. It is not just about upgrading the system but it is also an effort to enable data-driven management and realize DX and SX. In 2022, we established the Modernization Knowledge Center that consolidates knowledge, best practices, and talent related to modernization. We are promoting the standardization of services and the verification, preparation, and delivery of tools and services for strategic partners.

We are transforming our service delivery, which encompasses system building, operation, and maintenance, with the aim of improving productivity, quality, and security. For the purpose of providing high-quality services globally and quickly, we have promoted the standardization and automation of processes and tasks and expanded the use of our Global Delivery Centers (GDCs). We plan to increase the delivery system that involves the GDCs and Japan Global Gateway (JGG) to 40,000 people by fiscal 2025.

Point 3: Enhancing corporate value by linking sustainability management and business

Fujitsu clearly states its intent to positively impact customers and society through its business. Toward this goal, Fujitsu's sustainability management has moved on to the practical stage. In other words, we have entered a phase to link the impact of our business activities to our market value-to enhance our corporate value.

Integrating the knowledge and expertise on ESG we have accumulated through our sustainability management into Fujitsu Uvance and other businesses is deeply related to the realization of net positive. We introduce supply chain transformation as an example of how we are progressing SX in working together with our customers.

PACT Program successfully visualized CO₂ emissions throughout the supply chain*2

As a member of the Partnership for Carbon Transparency*4 (PACT), which is sponsored by the World Business Council for Sustainable Development*3 (WBCSD), Fujitsu participated in the PACT Implementation Program. This is the world's first social implementation program for linking product carbon footprint (PCF) information as intercompany data. As a result, we have succeeded in making CO₂ emissions visible throughout actual supply chains.

In this program, the ESG Management Platform/Fujitsu Track and Trust and other solutions were used to calculate the CO₂ emissions of PCF and link actual data. We also identified issues in the real supply chain, such as improving supplier engagement and building ecosystems, through PCF data links using actual supplier data.

We are currently sharing information with our suppliers on GHG reduction target and measures (data linkage and calculation of PCF) based on our experience in the PACT program. We are also working on concrete action plans and reforms with the goal of achieving our goal of net zero emissions throughout the value chain by fiscal 2040.

*2　[Press Release] Fujitsu pioneering supply chain CO2 visualization with successful participation in WBCSD PACT Implementation program
*3　WBCSD：World Business Council for Sustainable Development
*4　PACT：Partnership for Carbon Transparency

Communicating with all stakeholders

The Fujitsu Integrated Report is a medium that uses data to tell a story about our business performance, management and business strategies, and goals based on Our Purpose. Using this report, we are deepening communication with institutional investors and other stakeholders.

This year, the report was used to communicate with younger generations, including university students. Feedback from students' perspectives is scheduled. We encourage you to read the report and give us your comments and questions.

Information session for university students held in November 2024