Fujifilm Announces the Financial Results for the Third Quarter Ended December 31, 2023

TOKYO, February 8, 2024 – FUJIFILM Holdings Corporation (President and CEO, Representative Director: Teiichi Goto) announced today the financial results for the third quarter, which ended December 31, 2023.

In the first nine months of the fiscal year ending March 2024, revenue increased by 2.9% year-over-year to JPY2,155.4 billion, mainly due to strong sales in the Medical Systems and Imaging businesses and the impact of exchange rates. Thanks to revenue growth and the impact of exchange rate, operating income amounted to JPY204.9 billion, increased by 1.1% year-over-year, despite the sluggish semiconductor market for the Electronics Materials business. Net income attributable to FUJIFILM Holdings increased by 13.0% year-over-year to JPY173.8 billion due to higher operating income and valuation gains on marketable and investment securities. In light of the strong performance of the Imaging segment and the current economic environment, including the semiconductor market, full-year consolidated forecast for the fiscal year ending March 2024 remains unchanged from the previous forecast with some adjustments between the businesses, at 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 addition, a 3-for-1 split of the Company’s common stock is scheduled to take effect on April 1, 2024.

“In the third quarter of fiscal year 2023, we again achieved remarkable milestones with our highest ever sales, operating income and net income, primarily driven by the exceptional performance of the Medical Systems and Imaging businesses,” says Teiichi Goto, president and chief executive officer, representative director, FUJIFILM Holdings Corporation. “Our proactive measures in the Electronic Materials business, such as the strategic acquisition of Entegris, Inc.’s semiconductor process chemicals business, the startup of the semiconductor materials site in Kumamoto, and further capital investment, demonstrate our anticipation of market recovery in the coming fiscal year from April 2024 and beyond. We are confident that we can maintain this positive momentum, achieve record sales and profits in the fiscal year 2023, and carry this positive energy into the next fiscal year, the first year of our new medium term management plan.”

• Revenue increased 7.6% year-over-year to JPY690.7 billion due to higher contributions from all sub-segments, while operating income decreased 3.2% year-over-year to JPY60.3 billion mainly attributed to the absence of the income of cancellation charge in the previous fiscal year in the Bio CDMO business, in addition 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, CT, MRI and other products. Endoscope sales increased primarily in Japan, Europe and China, while CT and MRI sales were driven by higher sales in Central and South America, the Middle East and India.
• In the Bio CDMO business, revenue increased due to the solid performance in contract manufacturing of antibody drugs, mainly at the Denmark site, where productivity also improved. Meanwhile, slow orders for gene therapy and other drugs reflecting difficult fundraising climate for biotech venture customers led to inventory write-downs in the third quarter on components and consumables nearing the end of their shelf life.
• In the LS Solutions business, revenue was driven higher mainly by shipment increase, reflecting the easing of the tight supply-demand situation for raw materials to be used in biopharmaceutical cell culture media and steady sales of cells used to support drug discovery. Write-downs were recorded in the third quarter on some raw materials of cell culture media and other products for coronavirus vaccine, which had been secured in response to a longer procurement lead time during the COVID-19 pandemic, as their shelf life dates were approaching.
   

• Revenue decreased 3.9% year-over-year to JPY494.7 billion and operating income decreased 45.8% year-over-year to JPY31.4 billion, mainly hit by the slowdown in the semiconductor market and lower sales for inkjet printheads. 
• In the Electronic Materials business, despite the stagnant semiconductor market conditions, revenue remained flat year-over-year due to contributions from the semiconductor process chemicals business acquired from Entegris, Inc, in October 2023.
• In the Display Materials business, revenue increased as panel makers' operations recovered from the previous year, when production adjustments were made throughout the supply chain. 
• In the Graphic Communication business, revenue decreased mainly due to lower demand for printed materials in the printing plates fields, especially in Europe and the U.S. In the Inkjet business, revenue fell as sales of inkjet printheads for the ceramic market were driven lower due to sluggish demand in the Chinese real estate markets.

• Overall revenue decreased by 2.1% year-over-year to JPY601.4 billion, but operating income increased by 5.5% year-over-year to JPY50.4 billion, due to the effect of worldwide sales price revisions and other favorable factors.
• In the Office Solutions business, revenue decreased as the expansion of new OEMs, worldwide price revisions and other factors were not enough to offset lower exports of devices and consumables to Europe and the U.S. In December 2023, the Apeos series digital multifunction devices/printers received the highest rating of AAAis for two consecutive years in the information security rating program, which indicates compliance with the NIST SP800-171/172 security standard in the U.S.
• In the Business Solutions business, revenue rose mainly due to sales increase to municipalities in Japan and higher sales of solutions related to digital transformation (DX).
• In April 2024, FUJIFILM Business Innovation will establish FUJIFILM Cloud Corp., a joint venture with Serverworks Co., Ltd., and start its operations in Japan. FUJIFILM Cloud Corp. will provide installation support as well as operation and maintenance of cloud services, including Microsoft Azure and Amazon Web Services (AWS), primarily for small and midsize businesses.

• Strong sales of instant photo systems and digital cameras boosted revenue by 13.8% year-over-year to JPY368.6 billion and operating income by 41.7% year-over-year to JPY88.9 billion.
• In the consumer imaging field, steady sales of the INSTAX instant photo systems drove revenue higher. In addition to the existing product lineup, sales of INSTAX mini Evo, INSTAX Pal, a palm-sized camera launched in October 2023, and other high value-added products fared well.
• In the Professional Imaging business, revenue rose due to strong sales of X-S20 launched in June 2023 and GFX100 II launched in September 2023, in addition to brisk sales of X-H2, X-H2S and X-T5 released in the previous fiscal year. In October 2023, we started offering the Tunnel inspection DX solution that improves tunnel inspection efficiency by using the latest optical technology, image processing technology and AI.

For more details, please visit the Investor Relations section of Fujifilm website

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