Fuji Electric Report2017Brand Statement

Through our pursuit of innovation in electric and thermal energy technology,
we develop products that maximize energy efficiency andlead to a responsible and sustainable society.

Corporate Philosophy
Corporate
MissionSloganWe, Fuji Electric, pledge as responsible corporate citizens in a global society tostrengthen our trust with communities, customers and partners.
Our mission is to:		• Contribute to prosperity		• Encourage creativity		• Seek harmony with the environment

To be enthusiastic, ambitious and sensitive.

Management Policies
1 Through our innovation in energy and environment technology, we contribute to the creationof responsible and sustainable societies.
2 Achieve further growth through our global business expansion.
3 Maximize our strengths as a team, respecting employees’ diverse ambition.

Fuji Electric Code of Conduct
The Code of Conduct outlines principles to guide and unify the conduct of Fuji Electric and its employees, by articulating the values
we share in the pursuit of our corporate principles.

Fuji Electric and its employees, from a global perspective always strives to meet our corporate mission of“We, Fuji Electric, pledge as responsible corporate citizens in a global society to strengthen our trust with
communities, customers and partners.”
1 Respect and value our customers

4 Respect and value our shareholders and investors

2 R espect and value all people

5 R espect and value interaction with society

3 Respect and value the global environment

6 Respect, value and conform with all applicable laws

and regulations

01 Fuji Electric Report 2017

Contents

01

Fuji Electric’s Energy andEnvironment Businesses

03

Consolidated Financial Highlights

05

President’s Message
Business Report

11

Management Plan for Fiscal 2017
—By Segment—Overseas Operations

15
17
22

Research and Development /Intellectual Property

23

Manufacturing / Procurement

25

CSR Activities

27

Environment

29

Social (Human Resources)

35

Social (Contributions to Communities) 38
39

Compliance41

Risk Management

42

List of Officers

44

Corporate Data

45

Global Network

47

Detailed information is available on
our website:
http://www.fujielectric.com/

Corporate Information

Corporate
Information

Corporate Governance

CSR Activities

Review of Operations in Fiscal 2016
—By Segment

The Fuji Electric Report is published tohelp shareholders, investors, and otherstakeholders gain deeper insight into
the Company’s management activities.
The report provides wide-ranging
coverage of key points regarding ourmanagement policies and strategies,
as well as our business results, financial
position, and our environmental andsocial initiatives for the realizationof sustainable societies.

Business Report

CSR Activities

07

Objectives of This Report
President’s Message

Corporate Philosophy /Management Policies /Fuji Electric Code of Conduct

 bout Fuji ElectricAInvestor Relations (IR)Corporate Social Responsibility(CSR)
Research & Development

Fuji Electric Report 201702

Fuji Electric’s Energy andEnvironment Businesses
With energy and environment technology as its core technology, Fuji Electric contributes to the creationof responsible and sustainable societies through its four business segments: Power Electronics Systems,
Power and New Energy, Electronic Devices, and Food and Beverage Distribution.

Power Electronics Systems
Energy Solutions

Stable and Optimal Energy Supply

Fuji Electric supports electricity infrastructure with proventechnologies to ensure that energy can be supplied in a stable, reliable, and optimal manner.

Factory energy management systems(FEMS)

Uninterruptible power systems

Substation equipment

Magnetic switches

Increased Productivity andEnergy Savings

Industry Solutions

Fuji Electric combines its power electronics products withmeasuring instruments and the Internet of Things (IoT) andfacilitates the advance of plant automation and visualization to increase productivity and save energy.

Inverters and servo systems

03 Fuji Electric Report 2017

Industrial drive systems

Gas analyzers

Passenger door systems

Power and New Energy

Supply of Clean Energy

Fuji Electric’s sophisticated plant engineering capabilities helps meet the growing demand for electricity byproviding an array of highly efficient power plant equipment that supplies environmentally friendly clean energy.

Steam turbines

Geothermal power generation

Solar power generation systems

Fuel cells

Key Devices for Power Control
and Conversion

Electronic Devices

Across the industrial and automotive fields, Fuji Electric contributes to high levels of efficiency and energy
savings by supplying power semiconductors, which are key devices in power electronics.

IGBT modules

SiC modules

Food and Beverage Distribution

Automotive IGBTs

Power MOSFETs

Safety and Security of FoodIn the food distribution field, Fuji Electric helps to ensure the safety and security of food by combining core heating and cooling technologies with mechatronic technologies and the IoT to provide ideal products and solutions.

Can and PET bottle vending machines

Vending machines for food and othergoods (models for China and other
Asian markets)

Freezers and refrigerated showcases

Automatic change dispensers

Fuji Electric Report 201704

Consolidated Financial Highlights

Fiscal year

Operating Results
Net sales		Japan		Overseas
Operating income
Net income attributable to owners of parent
R&D and Capital Investment
R&D expenditures
Plant and equipment investment*2
Depreciation and amortization*3
Cash Flows
Cash flows from operating activities
Cash flows from investing activities
Free cash flow
Cash flows from financing activities
Financial Position
Total assets
Total net assets
Shareholders’ equity
Net Interest-bearing debt
Interest-bearing debt
Financial Indicators
Ratio of operating income to net sales (%)
ROE (Return on equity) (%)
ROA (Return on assets) (%)
Equity ratio (%)
Net debt-equity ratio (times)*4
Debt-equity ratio (times)*5
Per Share Data
Net income
Net assets
Cash dividends
OthersEmployees
		Japan		Overseas

2009

2010

2011

691,223
513,616
177,607924
6,757

689,065
510,843
178,221
11,917
15,104

703,534
525,096
178,437
19,252
11,801

24,296
19,124
26,05332,56827,22327,94532,24724,98929,755

11,923(528)
11,395(62,575)

53,85384,241138,094(93,468)

28,314(13,489)
14,825(32,593)

908,938
196,134
178,866
322,507359,790805,797
174,935
155,355
192,222274,019792,848
183,217
163,576
191,603
255,865

0.1
4.4
0.7
19.7
1.8
2.0

1.7
9.0
1.8
19.3
1.2
1.8

2.7
7.4
1.5
20.6
1.2
1.6

9.46
250.281.50

21.14
217.404.00

16.52
228.91
4.00

23,524
18,692
4,832

24,56218,002
6,560

24,973
17,9337,040*1 The U.S. dollar amounts represent the arithmetic results of translating yen into dollars at ¥112 = U.S. $1, the approximate exchange rate at March 31, 2017.
*2 Plant and equipment investment is the total of investment in tangible fixed assets, including acquisition amounts for lease contracts.
*3 Depreciation and amortization expense is the total of the depreciation of tangible fixed assets and amortization of intangible assets.
*4 Net debt-equity ratio: Net interest-bearing debt (interest-bearing debt – cash and cash equivalents) / Net assets*5 Debt-equity ratio: Interest-bearing debt / Net assets

Business Performance Trends(Billions of yen)

Net Sales
Operating Income
Net Income
Attributable to Ownersof Parent
Operating Margin

691.2

689.1

703.5

745.8

837.8

813.6

810.7

759.9

(5.5%)(5.3%)

45.0

44.7
41.0

(4.8%)(4.4%)(2.9%)(2.7%)(1.7%)(0.1%)

0.9

6.8

15.1
11.9

19.3
11.8

33.1
26.4
22.0

39.3
28.0

30.6

19.6

Financial Indicators

2009

2010

2011

2012

2013

2014

2015

2016

Equity Ratio

20%

19%

21%

25%

28%

32%

27%

33%

ROE

4%

9%

7%

15%

9%

11%

12%

16%

05 Fuji Electric Report 2017

(FY)

(Millions of yen)(Thousands of
U.S. dollars*1)

2012

2013

2014

2015

2016

2016

745,781
567,314
178,466
21,992
26,368759,911582,223
177,688
33,136
19,582810,678605,763
204,915
39,31627,978813,550
597,757
215,793
45,00630,644

837,765
632,723
205,042
44,70940,9787,480,051
5,649,317
1,830,734
399,195
365,884

31,16031,771
31,05432,02926,91630,84935,02329,041
33,61535,94927,65029,72334,91027,14929,445

311,703
242,409
262,91055,342(24,286)
31,055(56,827)

53,651(9,649)44,002(50,570)

51,459(22,750)
28,708(33,827)

48,450(19,410)29,040(31,567)

58,185
9,748
67,934(56,082)

519,51187,045606,555(500,747)

765,563
215,672
194,572
187,029
226,717810,774
251,225
227,181
166,092
199,504

904,522319,636
290,339
159,330
191,225845,378
260,980
230,399
153,905
184,744886,663
323,863291,216
109,330
151,216

7,916,638
2,891,636
2,600,141
976,162
1,350,150

2.9
14.7
3.4
25.4
1.0
1.2

4.4
9.3
2.5
28.0
0.7
0.9

4.8
10.8
3.3
32.1
0.5
0.7

5.5
11.8
3.5
27.3
0.7
0.8

5.3
15.7
4.7
32.8
0.4
0.5

—
—
—
—
—
—

36.90
272.295.00

27.41
317.96
7.00

39.16
406.399.00

42.90
322.52
10.00

57.36
407.6811.00

24,956
18,271
6,685

25,52418,022
7,502

25,74017,814
7,926

26,50817,635
8,873

26,503
17,716
8,787

(Yen)

(U.S. dollars*1)

0.512
3.640
0.098

(Headcount)

Dividend Policy
Fuji Electric’s basic policy is to pay a stable, continuous
dividend, while allocating profits earned from businessactivities to shareholders’ equity to maintain and strengthen
the management base, and maintaining sufficient internal
reserves for research and development, capital investment,
and human resource development from a medium-to-longterm perspective.
For fiscal 2016, we paid a full-year dividend of ¥11 per share,comprising an interim dividend of ¥5 and a year-end dividendof ¥6.

———Cash Dividends per Share(Yen)

11.0

12
10.0
9.0
9
7.0
5.0

6

3

0

4.0

4.0

2010

2011

1.5

2009

2012

2013

2014

2015

2016

(FY)

Fuji Electric Report 201706

President’s Message

We aim to achieve further
growth centered on powerelectronics operations.

On behalf of Fuji Electric, I would like to express our sincere
gratitude to our stakeholders for their continued support andcommitment to the Company.
At Fuji Electric, our corporate philosophy represents our pledge
as responsible corporate citizens in a global society to strengthen
our trusting relationships with stakeholders and fulfill our mission
with sincerity. Based on this philosophy, we pursue a management policy stating that, through our innovation in energy andenvironment technology, we are contributing to the creationof responsible and sustainable societies.
Today, energy and environmental issues have become pressing
matters which need to be addressed on a global scale.
Recognizing this fact, we strive to achieve both economic
growth and a reduced environmental footprint by utilizing theenergy and environment technologies we have cultivated overthe more than 90 years since our founding, and to contribute tosociety through our manufacturing capabilities that draw on thesetechnologies. At the same time, the Company is managed withconsideration of the effects of all of its business activities onsociety and the environment.

Review of Fiscal 2016
Moving Forward with Further Renovation of Fuji Electric
In April 2016, Fuji Electric unveiled its FY2018 Medium-Term
Management Plan, Renovation 2018, which targets net salesof ¥900.0 billion and an operating margin of more than 6%
in fiscal 2018. The previous medium-term management plan
ended with some issues left unresolved, namely a failure to growsales in line with targets and a need to boost the profitabilityof power electronics operations. The new plan thus positions its
three years as a time for “renovation,” during which we will patch
the holes in the “innovation” pursued under the previous plan.
We have been moving forward with the further renovationof Fuji Electric, positioning efforts to advance growth strategies
and bolster profitability as core measures.

07 Fuji Electric Report 2017

Priority Measures of FY2018 Medium-Term
Management Plan
Implement growth strategies• Reform operating processes in social infrastructure,­industrial infrastructure, and power electronics businesses• Continue expansion of overseas operations throughadditional M&As
• Create high-value-added products that meetcustomer demand
Improve Profitability• Boost profitability of power electronics operations• Re-energize “Pro-7 Activities”

Breaking Records for Net Income Attributableto Owners of Parent
In fiscal 2016, the first year of the new plan, net sales rose ¥24.2
billion year on year, to ¥837.8 billion, but operating income
decreased ¥0.3 billion, to ¥44.7 billion. Net income attributableto owners of parent, meanwhile, increased by ¥10.3 billion,
breaking previous records at ¥41.0 billion as a result of therecording of gain on sales of investment securities. We also
saw massive improvements in financial indicators with an equity
ratio of 33% and return on equity of 16%.
(Billions of yen)

Net Sales

FY2015 Result

FY2016 Result

813.6

837.8

Operating Income

45.0

44.7

Operating Margin

5.5%

5.3%

Net Income Attributable to
Owners of Parent

30.6

41.0

Equity Ratio

27%

33%

ROE

12%

16%

Net Debt-Equity Ratio

Establishing a Foundation for Growth throughSteadfast Efforts
If Fuji Electric is to continue growing into the future, it will be crucial
for us to expand overseas operations while also reinforcing operations in Japan. In deciding our approach to this undertaking,we first chose to analyze the Company’s technological, manufacturing, and sales capabilities to determine what we were lacking
and in what areas we needed improvement. A series of discussions was held among members selected from our employee
base as well as among executive officers. Based on these
discussions, we began preparations to renovate our operations

by consolidating and rearranging the organizations of our social
engineering systems, industrial infrastructure, and power electronics businesses.
At the same time, we continued to capitalize on the benefitsof mergers and acquisitions conducted to date. For example,
the expertise of our thermal power generation plant after-sales
companies is now being applied outside of North America.
In addition, we have made progress in the localization of theengineering and manufacturing functions of the industrial infrastructure and power electronics businesses in Asia.
Also, we commenced operation of an inverter assembly factoryin India while starting construction of our second factory in Dalianin order to double our vending machine production capacity
in China. In this manner, we have been carrying out upfront
investments for increasing local production and local consumption.
Steps were also taken to bolster profitability through means
such as promoting in-house production, automation, and standardization at factories to reduce costs. In our power electronics
operations specifically, we sought to boost profitability byreorganizing the Suzuka Factory and Kobe Factory, our global
mother factories. At the Suzuka Factory, we pursued increased
productivity in manufacturing mass-production models of components and other products. At the Kobe Factory, we installeda system allowing for all steps of manufacturing systems products
to be conducted within the factory.

President’s Message

In addition, Fuji Electric decided to sell a portion of its holdingin FUJITSU LIMITED in order to further stabilize its financial position. The alliance formed through this cross holding has been
important to ensuring consistently effective operation of theCompany in the past. Today, however, both parties have cometo focus on different business fields, leading us to reconsider
the necessity of this tie-up from the perspectives of capitalefficiency and shareholder value. It was deemed possible to alter
this relationship based on the operating environments and market
climates of both FUJITSU and Fuji Electric, and a portion of theholding was sold accordingly. The capital generated throughthis sale will be directed toward mergers and acquisitions andother measures for expanding overseas operations.

Four-Business Group Structure Launched in Fiscal 2017
Establishing the Power Electronics Systems
Business Group—Expanding Overseas Operations with Competitive
Components and Systems
April 2017 saw the birth of the Power Electronics Systems
Business Group. This new group accounts for roughly 60%of the Company’s total net sales and thus embodies the comprehensive strength of Fuji Electric. Through this business group,
we plan to reinforce our customer-oriented solutions businessthat combines components and systems. Looking ahead, we
will provide a brand of solutions unique to Fuji Electric that combines our strengths to resolve the issues faced by customers.
These strengths include power electronics equipment, measuring
instruments, and control systems with power semiconductors
at their core; engineering and after-sales services nurtured atcustomer facilities; and manufacturing and energy-saving
expertise perfected at Fuji Electric’s 38 factories in Japan andoverseas. We will not just cater to customers in Japan; we will
also seek to expand our systems operations in Asian and otheroverseas markets in which we can expect growth in industrial
and social infrastructure demand.
Also new is the Power and New Energy Business Group.
In this business group, sales organizations have been mergedwith operating organizations, as was done previously in the
Fiscal 2016
Power and Social
Infrastructure
Industrial
Infrastructure

existing Electronic Devices Business Group and Food andBeverage Distribution Business Group.

Targeting Record Highs for Operating Income andOperating Margin
In fiscal 2017, the second year of the three-year FY2018
Medium-Term Management Plan, we will target net salesof ¥850.0 billion together with record highs for operating income
and operating margin of ¥48.0 billion and 5.6%, respectively.
Fuji Electric is working to bolster profitability even as itincreases shareholders’ equity by targeting an equity ratio of 35%
together with return on equity of 10%. The cash flows generated
through our business will be used to conduct proactive growthinvestment for expanding operations from a medium-to-long-term
perspective. In regard to shareholder returns, it is our policy toissue stable, continuous dividend payments in line with income
growth. We plan to enhance returns in the near future by aiming
for a dividend payout ratio of approximately 30%.
(Billions of yen)

837.8(5.3%)

44.7
41.0

Fiscal 2017
Power
Electronics
Systems

Energy Solutions

900.0 Net Sales

850.0(5.6%)

48.0
29.0(6.0%) Operating Margin

54.0 Operating Income
34.0 Net Income

Attributable to
Owners of Parent

Industry Solutions

Power Electronics

Power and New Energy

Electronic Devices

Electronic Devices

Food and Beverage
Distribution

Food and Beverage Distribution

Financial Indicators

2016
Result20172018 Medium-Term
Management Plan Management Plan

Equity Ratio

33%

35%

32%

ROE

16%

10%

12%

(FY)

Fuji Electric Report 201708

Accelerating Creation of High-Value-Added Products
and Augmenting Manufacturing Capabilities
Fuji Electric is shifting toward a development framework thatentails technology marketing, advanced research, and basic
research being conducted by the Corporate R&D Headquarters
while the business groups are responsible for the developmentof products for their respective businesses. Within this newframework, our development ventures are focusing on startingup businesses utilizing the Internet of Things, or IoT, developing
platforms, and realizing practical application of next-generation
SiC power semiconductor modules. Simultaneously, we areenhancing our network of R&D bases to accelerate the creationof high-value-added products that win customer favor. In fiscal
2015, we built an R&D center in the Matsumoto Factory as well
as a building at the Tokyo Factory for conducting corporate
R&D and measurement and control equipment R&D activities.
Furthermore, we completed the Power Electronics TechnicalCenter at the Suzuka Factory in fiscal 2016 and then assembled a team of power electronics researchers and engineers at
this center.
Meanwhile, we sought to augment our manufacturing capabilities. Adopting a local production and consumption perspective,
we reinforced capabilities at our global mother factories in Japan
while coordinating with overseas production sites, such as thosein China and other parts of Asia, in our ongoing drive to improvevalue and productivity through in-house production and automation. Also, at our Mie Factory and Otawara Factory, we aredeveloping new manufacturing technologies aimed at reducing
the costs associated with IoT. Our efforts to utilize IoT to automate and protect facilities and realize autonomous production
will be extended to other bases going forward. In addition, thesecond vending machine factory being constructed in Dalian,
China, will be equipped with production technologies andstate-of-the-art automation equipment from the Mie Factory.
Combined with the existing first Dalian factory, this new factory
will help double our production capacity in China, to 100,000
units per year, thereby contributing to the expansion of ouroperations in this country.

Re-energizing Pro-7 Activities
Fuji Electric’s Pro-7 Activities entail all employees at the Group
reviewing the way they work from the ground up in order toimprove work quality and efficiency and thereby bolster profitability. These activities were kicked off in fiscal 2012 and havebeen ongoing for the past five years. As a result, the principlesof the Pro-7 Activities have become entrenched within the
Company, firmly rooting a new awareness of costs and work
quality in the minds of all employees. In fiscal 2017, we will
respond to the call for workstyle reforms by once again gettingback to the basics of our work, reviewing how we work, preparematerials, and conduct meetings. I am confident that these
efforts will be valuable to the Company and to all of its employees.
We will also seek to re-invigorate the Pro-7 Activities by stepping
up initiatives at overseas bases.

09 Fuji Electric Report 2017

Addressing ESG Issues toAchieve Sustainable Growth
At the core of Fuji Electric’s corporate philosophy is the importance of building trusting relationships with stakeholders andbecoming a company that is sensitive toward both people andthe environment as a responsible member of society. Exercising
this philosophy is how Fuji Electric fulfills its corporate social
responsibilities. Moreover, the Company participates in the
United Nations Global Compact, and it has incorporated theCompact’s Ten Principles, which pertain to the four areasof human rights, labor, environment, and anti-corruption, into its
Code of Conduct to adhere to these principles. Through our
involvement in the Global Compact, we will seek to fulfill our social
responsibilities on a global scale. We are also endeavoring tocontribute to the accomplishment of the 17 Sustainable
Development Goals contained in Transforming our world: the2030 Agenda for Sustainable Development, which was adopted
at a United Nations summit held in September 2015. We areapproaching this goal from the perspective of environmental,social, and governance, or ESG, issues.

Contributing to Environmental Preservation by
Supplying Products and Technologies
Global warming and other environment issues are pressing
matters that could materially impact the future of humanity.
Based on this realization, we have formulated Environmental
Vision 2020, which is centered on the three specified material
issues of stopping global warming, creating a recycling-oriented
society, and meeting our corporate social responsibilities.
Guided by this vision, we will strive to contribute to environmental
preservation by supplying products and technologies that utilize
the energy and environment technologies in which Fuji Electric
specializes while at the same time working to reduce the environmental footprint of our own production activities. These goals
will be pursued through a concerted Group effort that includes
overseas subsidiaries.

Being “Enthusiastic, Ambitious, and Sensitive”
to Realize Continuous, Global Growth

If Fuji Electric is to continue growing on a global scale, it will bevital for the Company to be able to combine the capabilities
of a diverse range of human resources in order to maximize its
strengths as a team. We are thus systematically accelerating
the development of future leaders and globally competent humanresources with a view to 10 and 20 years down the line. We arealso advancing a planned expansion of the number of female
managers by redoubling career development support for female
employees so that such employees can feel motivated andempowered in their work. These efforts have led to Fuji Electric’s
inclusion in the Nadeshiko Brand selection of companies that
display excellence in empowering their female employees for two
consecutive years. At the same time, effort is being devoted
to developing a more accommodating workplace environment
in order to support employees in achieving a good work-lifebalance. It can be anticipated that the number of employees
needing to care for children or other family members will risegoing forward. Fuji Electric is enhancing the support available
for such employees by introducing Flexible Location working
systems that enable employees to work in satellite or home offices.

In fiscal 2023, Fuji Electric will celebrate its centennial anniversary.
We aim to achieve net sales of ¥1 trillion and an operating marginof 7% leading up to this momentous occasion.
Fuji Electric’s corporate philosophy contains the slogan of“enthusiastic, ambitious, and sensitive.” I find myself discussing
this slogan with employees on various occasions. In this slogan,“enthusiasm” means the desire to contribute to society by creating new technologies and products. “Ambition” means setting
lofty goals and working to achieve them no matter what challenges may be faced. “Sensitive” means valuing customers,
allies, and employees as well as the families that support eachof these individuals. This slogan truly represents Fuji Electric’s
corporate DNA.
Our goal is to ensure our prosperity as a company, returns to
our shareholders, and the happiness of our employees and theirfamilies, while contributing to the achievement of a sustainable
society. In closing, we would like to ask for the continued supportof all our stakeholders.

President’s Message

Cultivating Diverse Human Resources and Developinga Supportive Workplace Environment

July 2017

Michihiro Kitazawa

Implementing Rigorous Groupwide GovernanceCorporate governance is growing ever more important. Fuji Electric
is strengthening its corporate governance by increasing management transparency and enhancing the oversight function
at both the Company and its subsidiaries. Furthermore, theCompany is appropriately addressing the requirements of Japan’s
Corporate Governance Code while practicing proactive engagement with shareholders and other investors.

President and Representative Director

FY2018~FY2023(100th anniversary of foundation)

FY2017FY2016

1

Net Sales: ¥ trillion

Renovation
Operation process reform

Operating Margin:

7%

 trengthen power electrics
S
systems business

Further enhance manufacturing capabilities
Re-energize “Pro-7 Activities”

Contribute to realization of sustainable society

Fuji Electric Report 201710

Review of Operations in Fiscal 2016

Consolidated Performance in Fiscal 2016
Net sales increased ¥24.2 billion year on year, to ¥837.8 billion. Unfavorable foreignexchange rates placed downward pressure on sales, but the benefits of higher
demand in the Power and Social Infrastructure and Industrial Infrastructure segments
were most significant.
Operating income decreased ¥0.3 billion year on year, to ¥44.7 billion, as the impacts
of upfront investments in Power Electronics and foreign exchange rate fluctuations
outweighed the benefits of cost reduction efforts.
Net income attributable to owners of parent climbed ¥10.3 billion, reaching a newrecord high of ¥41.0 billion due to the recording of gain on sales of a portion of theCompany’s holding in FUJITSU LIMITED.
Substantial year-on-year improvements were seen in financial indicators with anequity ratio of 33% and return on equity of 16%.

(Billions of yen)

45.0

		

2016
Results

Equity Ratio

27%

33%

ROE

12%

16%

Net Sales
Operating Income
Net Income Attributable Owners of Parent
Operating Margin

Net Sales (Japan and Overseas)
Ratio ofoverseas sales

24%

837.8

215.8

205.0

Overseas

597.8

632.7

Japan

2015
Results

2016
Results(FY)

Operating Income(Billions of yen)

(Billions of yen)

Ratio ofoverseas sales

17%

175.5

11%

194.8

ChangeChange

+19.3

+2.2

11.9
9.7

2016
Results(FY)

2015
Results

2016
Results(FY)Substation equipment, industrial power supply facilities Industrial drive systems, plant control
systems, data centers, industrial energy management systems Measuring instruments andsensors, radiation monitoring systems, electrical and air-conditioning equipment construction

Net sales increased due in part to higher demand for substationequipment and industrial power supply facilities in Japan. Other
contributors included strong energy saving and replacement
demand among steel and chemical plants and other customers
in the materials industry as well as increased sales in new solutions businesses targeting data centers.
Operating income rose due to the benefits of higher demand
for substation equipment, industrial power supply facilities, andproducts for data centers as well as cost reductions.

Net Sales

Operating Income(Billions of yen)

(Billions of yen)

Ratio ofoverseas sales

14%

199.4

13%

209.1

ChangeChange

+9.7

+3.4

14.6
11.2

2015
Results

11 Fuji Electric Report 2017

27%

813.6

Net Sales

2015
Results

Business Areas(FY) hermal, geothermal, and hydro power generation facilities;T
solar power generation systems; fuel cells; nuclear power-related equipment
Energy management systems, smart meters
Information systems

Net sales increased following higher demand for replacing aging
hydro power generation facilities and increasing the output
of other existing hydro power facilities as well as a rise in demand
for smart meters, which was a result of power companies
switching over to such meters in conjunction with the deregulationof the electricity retail market. As another factor, sales of information systems for the public sector and the academic sector
were up.
Operating income rose together with sales volumes of hydropower generation facilities and smart meters.

Industrial Infrastructure

30.6

2015
Results

Financial Indicators

Domestic net sales increased ¥35.0 billion year on year, to ¥632.7 billion. This
increase was a result of a rise in plant sales and higher smart meter demand in thePower and Social Infrastructure segment and robust replacement demand in the
Industrial Infrastructure segment.
Overseas net sales decreased ¥10.8 billion, to ¥205.0 billion. Major factors resulting
in this decrease included declines in the earnings of overseas subsidiaries whentranslated to yen amounts and lower plant sales in the Power and Social Infrastructure
segment.
Business Areas(5.3%)
44.7 41.0(Billions of yen)

Domestic and Overseas Net Sales

Power and Social
Infrastructure

837.8

813.6
(5.5%)

2016
Results(FY)

2015
Results

2016
Results(FY)Capital Expenditure

Capital Expenditure

Investments were conducted in boosting production capacities based on the policyof local design, local production, and local consumption; commencing mass-productionof next-generation power semiconductors in the Electronic Devices segment; andenhancing facilities at the global mother factory for the Power Electronics segment
in Japan with a view to sales growth. In addition, we started construction of a newfactory to expand vending machine production capacity in China.

(Billions of yen)
ChangeR&D Expenditure
Fuji Electric advanced development of competitive components and solutions thatcreate value for customers. We also developed equipment and platform technologies
that utilize the Internet of Things (IoT).*1 In the Power Electronics segment, development ventures targeted the creation of new products for expanding plant systems
operations. Meanwhile, the development of next-generation power semiconductorsthat contribute to the realization of more energy-efficient and compact equipment
was pursued in the Electronic Devices segment.

27.7

27.1

2015
Results

2016
Results

–0.5

(FY)

R&D Expenditure*2(Billions of yen)
Change34.9

2015
Results

2016
Results–1.0
Business Report

35.9*1 Internet of Things: Framework for fundamentally revolutionizing business and our daily lives by connecting
various objects through networks and enabling them to achieve optimal, autonomous control of one another

Capital Investment
Equipment for increasing production of smart meters
Portable machining equipment for providing on-site repair
services at thermal power plants
Research and Development
Improvement of efficiency and compatibility with hightemperatures for thermal and geothermal power turbines, etc.

TOPICS

Capital Expenditure

R&D Expenditure*2(Billions of yen)

(Billions of yen)
Change

2.2

2.0

2015
Results

2016
Results

–0.2

(FY)

Change

3.6

3.3

2015
Results

2016
Results

–0.3

(FY)

 upplied Binary Geothermal Power Generation
S
System among Largest Generation Capacity in Japan

Aiming to contribute to the supply of electricity generated from renewable sources, Fuji
Electric took part in a project for building a binary geothermal power generation systemthat uses lower-temperature hot water. The Company was contacted to perform
engineering, procurement, manufacturing, and construction for this project. The systemthat was delivered boasts a generation capacity of 5,050 kW, among the largest in Japan.

Capital Investment
Production equipment for substation equipment and measuring
instruments
Research and Development
Gas-insulated switchgears for power plants and substationsin Asia and the Near and Middle East
Ultrahigh efficiency indirect external air conditioning equipmentthat contributes to data center energy savings
56 kW F-COOL NEO (40% higher cooling capacity than previous offerings)
TOPICS(FY)

Takigami Binary Geothermal Power
Plant of Idemitsu Oita Geothermal
Co., Ltd. (left) and turbine (right)

Capital Expenditure

R&D Expenditure*2(Billions of yen)

(Billions of yen)
Change

0

2.1

2.1

2015
Results

2016
Results

(FY)

4.3

4.2

2015
Results

2016
Results

Change–0.1(FY)

Delivered Large-Scale Data Center Project

Demand for data centers is rising rapidly amid the spread of cloud systems.
Fuji Electric received an order for a large-scale data center project thatentailed an EPC (Engineering, Procurement and Construction) base contractand delivered it.

Shirakawa Data Centerof Yahoo Japan Corporation
and IDC Frontier Inc.

*2 Figures for R&D expenditure above have been divided by segment based on theme and may therefore differ from the figures contained in the consolidated financial reportfor the fiscal year ended March 31, 2017.
Fuji Electric Report 201712

Review of Operations in Fiscal 2016 (By Segment)

Power Electronics

Business Areas  Inverters, servos, motors, railcar systems
 Uninterruptible power systems, power conditioning systems, switchboards Power distribution and control equipment

Although sales of servos and other products rose on the backof robust automation demand in China, overall net sales were
down. Factors behind this decrease included a decline in largescale overseas orders for electrical equipment for railcars, lower
demand for power conditioning systems for megasolar power
generation systems in Japan, and the impacts of unfavorable
foreign exchange rates.
Operating income decreased due to lower sales, upfront
investments in overseas production bases, and the aforementioned unfavorable foreign exchange rates.

Net Sales

32%

34%

208.8

205.9

Change

–2.9

–0.8

9.4

2016
Results(FY)

2015
Results

8.6

2016
Results

Net Sales

Operating Income(Billions of yen)

(Billions of yen)

Ratio ofoverseas sales

63%

61%

120.2

118.5

(FY)

ChangeChange

–1.7

–1.7

9.8

2015
Results

2016
Results(FY)

2015
Results

8.0

2016
Results(FY)

Business Areas  Vending machines for beverage and food / goods
 Store equipment, currency handling equipment

There was a rise in demand for store equipment for convenience
stores, but net sales decreased as a result of lower vending
machine shipment volumes stemming from reduced demandin Japan and the revision of market development plans in China.
Lower sales of vending machines in Japan and China coupledwith a less favorable sales mix for store equipment led to a decline
in operating income.

Net Sales

Operating Income(Billions of yen)

(Billions of yen)

Ratio ofoverseas sales

11%

8%

110.0

109.6

ChangeChange

–0.5

–2.0

8.0

2015
Results

13 Fuji Electric Report 2017

ChangeBusiness Areas  Power semiconductors, photoconductors
 Magnetic disks

Net sales were down, despite higher demand for power semiconductors in the industrial, automotive, and consumer fields,
as a result of reduced demand for magnetic disks stemmingfrom the deterioration of market conditions as well as unfavorable
foreign exchange rates.
The lower magnetic disk sales and adverse foreign exchange
rates also caused operating income to decline.

Food and Beverage
Distribution(Billions of yen)

Ratio ofoverseas sales

2015
Results

Electronic Devices

Operating Income(Billions of yen)

2016
Results(FY)

2015
Results

6.0

2016
Results(FY)Capital Investment
Reorganization of products manufactured and rationalizationof the in-house production systems at global mother factories
in Japan (Suzuka Factory and Kobe Factory) to increase productcompetitivenessConstruction of Power Electronics Technical Center (Suzuka
Factory) that consolidates development and design functions
Research and Development
New ALPHA7 series servo systems for industrial machinerythat contribute to control with industry-leading levels of speed
and precision
TOPICS

Capital Expenditure

R&D Expenditure*1(Billions of yen)

(Billions of yen)
Change8.1

2015
Results

9.4

2016
Results

+1.3

(FY)

Change11.6

2015
Results

8.9

–2.7

2016
Results(FY)

Launched New Product into Overseas Market

We introduced a new uninterruptible power system (UPS) for the North American
data center market, where demand is anticipated to grow. This product isequipped with Fuji Electric’s silicon carbide (SiC) power semiconductors,
enabling it to realize power conversion efficiency at industry-leading levels.
Business Report

UPS for the North American
marketCapital Investment
Equipment for mass-production of 7th-generation IGBT chips at
the Yamanashi Factory
Equipment for increasing production at back-end processbases in Japan and overseas
Research and Development
Direct liquid-cooling power modules for electric and hybrid
electric vehicles(50% more compact and 60% lighter than previous offerings)
TOPICS

Capital Expenditure

R&D Expenditure*1(Billions of yen)

(Billions of yen)
Change7.4

2015
Results

8.9

2016
Results

+1.5

(FY)

2015
Results

12.8

+2.5

2016
Results(FY)

Expansion of Power Semiconductor Series for
Industrial and New Energy Fields

Fuji Electric expanded its series of 7th-generation IGBT module power semiconductors, which deliver increased energy savings and contribute to more compact
equipment and subsequent space savings. Applications for these products include
numerical control machinery and other production equipment as well as power
convertors for wind and solar power generation systems in the new energy field.

Capital Investment
Construction of second Dalian factory to expand vending
machine business in China
Research and Development
Freezer showcases for stores(30% less electricity consumption than previous offerings),
other showcases

7th-generation IGBT module

Capital Expenditure

R&D Expenditure*1(Billions of yen)

(Billions of yen)
Change3.7

2016
Results

Change

+1.7

–0.5

3.0

2.0
2015
Results

TOPICS

Change

10.3

(FY)

2015
Results

2.5

2016
Results(FY)

Contributions to Labor Savings at Stores

Labor shortfalls are stimulating increases in demand for labor savings andautomation at convenience and other stores. Fuji Electric catered to thisdemand by expanding its lineup of vending machines that can sell goods
24 hours a day and by delivering automatic change dispensers for selfcheckout registers.

Vending machine for foods andother goods (left) and automaticchange dispensers (right)*1 Figures for R&D expenditure above have been divided by segment based on theme and may therefore differ from the figures contained in the consolidated financial reportfor the fiscal year ended March 31, 2017.

Fuji Electric Report 201714

Management Plan for Fiscal 2017

Issues to be Addressed in Fiscal 2017
For fiscal 2017, Fuji Electric has set forth a policy of working toconstruct growth foundations through business model renovation,
and we plan to advance initiatives to strengthen the powerelectronics systems business, further enhance manufacturing
capabilities, and re-energize Pro-7 Activities.

Issues to be Addressed in Fiscal 2017
Construct growth foundations through business model renovation
 trengthen the power electronics
S
systems businessFurther enhance manufacturing
capabilities
Re-energize Pro-7 Activities

Implement growthstrategies
Improve profitability

Strengthen the Power Electronics Systems
Business

Further Enhance Manufacturing Capabilities

Fuji Electric aims to expand its overseas systems operations
by creating competitive components. We are implementing thefollowing initiatives through a cross-business structure encompassing development, engineering, production, and after-sales
services to ensure that this policy can be implemented effectively.
As part of our efforts on this front, we will create differentiatedproducts through marketing practices based on actual market
needs and move ahead with the standardization of systems
and the development of systems packages for specific target
industries. Fuji Electric will also optimize its global supply chain
by stepping up coordination among production bases in Japanand overseas. In addition, we will consolidate after-sales service
divisions and provide one-stop service based on the customer’s
perspective to improve customer satisfaction.

Based on its policies of promoting local production and consumption, Fuji Electric plans to enhance its global mother factories
in Japan and pursue coordination with overseas production
bases to reinforce its systems for responding to diverse market
needs in Japan and overseas.
Furthermore, we will expand in-house production to improvevalue and productivity while utilizing IoT to reduce costs.

Re-energize Pro-7 Activities
Fuji Electric’s Pro-7 Activities is a program that entails a ground-up
review of all costs associated with business activities as well as
efforts to radically improve operational quality in order to prevent
waste and losses. In fiscal 2017, these activities will be reenergized through accelerated implementation at overseas basesby which we aim to enhance earnings systems.

New Business Segments
Effective April 1, 2017, the Company underwent a reorganization
resulting in the current structure of four business groups comprising five segments.
As part of this move, the power electronics systems business
was created through the reorganization of the prior Power andSocial Infrastructure segment’s social engineering systems business as well as the industrial infrastructure business and the powerelectronics business. In this new business, we provide two typesof solutions. Energy solutions contribute to the consistent supply,

Previous Segments(~March 31, 2017)
Business Segments

New Business Segments(April 1, 2017~)
Business Segments

Power and Social
Infrastructure

Industrial
Infrastructure

optimization, and stabilization of energy for customers. Industry
solutions contribute to improved productivity and energy savings
with factory automation and monitoring. In this area, we seek
to combine components and systems so that the resulting
systems can be utilized to expand overseas operations.
In addition, the newly established Power and New Energy
segment will be responsible for the supply of clean and ecofriendly power.

Subsegments

Value Provided

Energy Solutions

 nergy managementESubstation systems
Power supply systems
ED&C components

Consistent supply,
optimization, andstabilization of energy

Industry Solutions

 actory automationFProcess automation
Environmental and social solutions
Installation
IT solutions

Automation, productivity
improvement, andenergy savings

Power Electronics
Systems

Power Electronics
Power and New Energy

Clean and eco-friendly
powerElectronic Devices

Electronic Devices

Efficiency improvement
and energy savings

Food and Beverage
Distribution

Food and Beverage Distribution

15 Fuji Electric Report 2017

 ending machines
VStore distribution

Food safety and security,labor savings

Fiscal 2017 Targets
Net sales are projected to increase ¥12.2 billion year on year, to¥850.0 billion, as the benefits of progress in growth strategies
and higher domestic and overseas demand will outweigh thenegative impacts of foreign exchange influences.
In addition, we will target a record high for operating incomeof ¥48.0 billion, an increase of ¥3.3 billion year on year. This
accomplishment is to be achieved through higher sales as wellas through cost reductions stemming from enhancements to
manufacturing capabilities.
Net income attributable to owners of parent is forecast to
decline ¥12.0 billion year on year due to the absence of thegain on sales of investment securities recorded in fiscal 2016.
Meanwhile, we are anticipating an equity ratio of 35% andreturn on equity of 10%.

(Billions of yen)

Change

850.0

837.8
(5.3%)
44.7
41.0

Net Sales(5.6%)

Operating Margin

48.0

Operating Income +3.3

29.0

2016
Results

2017
Management Plan

Equity Ratio

33%

35%

ROE

16%

10%

Financial Indicators+12.2

Net income
Attributable to
Owners of Parent –12.0(FY)

Projected Foreign Exchange Rates in Fiscal 2017
US$1 = ¥105, €1 = ¥115, RMB 1 = ¥15.7

Net Sales (Japan and Overseas)

Domestic net sales of ¥637.0 billion, an increase of ¥4.3 billion
year on year, are projected to be achieved through higher sales
from plant projects in the Industry Solutions and Power and
New Energy segments.
Although foreign exchange rates will place downward pressureon earnings of overseas subsidiaries when translated to yen,overseas net sales are forecast to increase ¥8.0 billion, to ¥213.0
billion. This increase will be a product of a rise in sales of substation systems in the Energy Solutions segment and of vending
machines in the Food and Beverage Distribution segment.

(Billions of yen)

Capital Expenditures

Capital Expenditures

The policy of local design, local production, and local consumption pursued in fiscal 2016 will be maintained in fiscal 2017.
Investment targets will include production equipment compatible
with SiC power semiconductors and other new product developments in the Electronic Devices segment and production
equipment for boosting vending machine production capacity
in China in the Food and Beverage Distribution segment.
Furthermore, investments will be conducted to facilitate
Companywide efforts to utilize IoT for automating production
equipment and tracking production data in order to improve
product competitiveness.

(Billions of yen)

R&D Expenditures

R&D Expenditures

R&D ventures for creating competitive, value-added products
will be accelerated.
Specifically, we will focus on the development of differentiatedequipment and platform technologies to give rise to solutions
that create value for customers by utilizing new power electronics
systems products and IoT.
In the Electronic Devices segment, which accounts forapproximately 40% of R&D expenditures, our focus will be thepower semiconductors that are the source of Fuji Electric’s
competitive edge.

Business Report

Domestic and Overseas Net Sales

Ratio ofoverseas sales

24%

25%

837.8

850.0

Change

205.0

213.0

Overseas+8.0

632.7

637.0

Japan+4.3

2016
Results

2017
Management
Plan

(FY)

Change

+4.7

27.1

2016
Results

31.8

2017
Management
Plan

(FY)

(Billions of yen)
Change

+0.1

34.9

35.0

2016
Results

2017
Management
Plan

(FY)

Fuji Electric Report 201716

Management Plan for Fiscal 2017 (By Segment)

Power Electronics Systems—Energy Solutions and Industry Solutions
Fuji Electric provides energy solutions, which contribute to the consistent supply, optimization, and stabilizationof energy, as well as industry solutions, which contribute to improved productivity and energy savings via factory
automation and monitoring.
Business Areas

Energy Solutions

 nergy management
E
Factory energy management systems,
power distribution, smart meters
Transmission and distribution
Substation equipment,
industrial power supply facilities
Power supplies
Datacenters, uninterruptible power systems,
power conditioning systems,
switchboards
ED&C components
Power distribution and control equipment

Industry Solutions

Substation equipment

Data center actory automation
F
Inverters, motors,
factory automation components and systems
Process automation
Drive control systems,
measurement and control systems
Environmental and social systems
Distribution systems,
plant factories, measuring instruments andsensors, radiation monitoring systems,
transportation systems
Equipment construction
Electrical and air-conditioning
equipment installation
IT solutions
Information systems

Servo system

Plant monitoring andcontrol system

Power Electronics Systems Business Policies
Create competitive components
Enhance systems using competitive components
Expand overseas businesses by leveraging systems
With a focus on power semiconductors and sensors, Fuji Electric
will create competitive components, including power electronics,
measuring instruments, and control equipment. These components will be utilized to form high-value-added systems, which
we will bundle with engineering and after-sales services andprovide to customers to resolve the issues they face.
In addition, we will reinforce our engineering systems centeredon overseas subsidiaries acquired through M&A activities toexpand systems operations in Asia, North America, and otherregions.

Power /
Telecommunications

Materials /Assembly

Energy Solutions

Distribution /Transportation

Industry Solutions
IoT / Systems

Control equipment
Power electronics
Power semiconductors

Measuring instruments

ED&C components

Sensors

Business Linked Through Cross-Business Structure
We are implementing business policies through a new cross-business structure for development, engineering, production, andafter-sales services.

Development
Fuji Electric will create differentiated products through marketing
practices based on actual market needs. To this end, development will be accelerated for power electronics equipped with
SiC power semiconductors as well as for systems that combine
sensors, control equipment, and IoT technologies. We will also
standardize designs and expand use of shared parts to shorten
development lead times and reduce costs.

Production
Fuji Electric will optimize its global supply chain by stepping up
coordination between global mother factories in Japan andoverseas production bases. In addition, productivity improvements
and cost reductions will be pursued through business-widesystem quality management, expanded in-house production
and standardization, and automation.

17 Fuji Electric Report 2017

Engineering
Fuji Electric will provide visualization of plant system costs.
At the same time, we will bolster system proposal capabilities
through reductions in costs and lead times achieved by standardizing systems and developing systems packages for specifictarget industries with a focus on differentiated products.

After-Sales Services
Fuji Electric will seek to increase customer satisfaction by consolidating after-sales service divisions to provide one-stop service
based on the customer’s perspective. We will also enhance facility
maintenance proposals in Japan and reinforce overseas after-sales
business foundations as we strive to grow our service sales
on a global basis.

Energy Solutions
Priority Measures for Fiscal 2017
Strengthen the Transmission and Distribution
Business
Fuji Electric will devote efforts to incorporating domestic
replacement demand for substation equipment while enhancing
manufacturing and engineering capabilities in Asia.

Reinforce the Data Center Business

Capture Domestic Construction Demand in ED&C
Components BusinessOut of consideration for the strong domestic construction
demand, Fuji Electric will seek to increase sales of ED&C
components by redoubling efforts to take advantage of demand
from distribution panel manufacturers as well as from machine
tool and other machinery manufacturers.

Operating Income(Billions of yen)
Ratio ofoverseas sales(Billions of yen)

25%

27%

218.7

219.3

2016
Results

ChangeChange

+0.6

+0.3

2017
Management
Plan

(FY)

Capital Expenditures

13.7

14.0

2016
Results

2017
Management
Plan

(FY)

R&D Expenditures*(Billions of yen)

(Billions of yen)
ChangeChange

0

6.0

6.0

2016
Results

2017
Management
Plan

–0.7

6.1

(FY)

2016
Results

5.4

2017
Management
Plan

Business Report

Fuji Electric aims to reinforce its data center business, which is
expected to see demand growth in Asia and North America. To
support this business, we will develop system packages bundling
uninterruptible power systems (UPSs) with indirect external
air-conditioning and other equipment. We will also promotesales of UPSs equipped with SiC power semiconductors as
differentiated products in the domestic and overseas markets.

Net Sales(FY)

Capital Investment
Production facilities for smart meters and ED&C components,
etc.
Research and Development
Development of low-cost smart meters and electricity storage
systems, expansion of series of SiC-equipped UPSs, etc.

Industry Solutions
Priority Measures for Fiscal 2017
Expand the Factory Automation Systems BusinessLooking to capture factory automation demand centered on
assembly processing plants in China and Japan, Fuji Electric
will expand its factory automation systems business throughcombinations of servo systems, programmable logic controllers,and other equipment.

Strengthen the Process Automation Business
Our process automation business targets steel and chemicalplants as well as other customers in the materials industry.
In this business, Fuji Electric will boost productivity in domestic
manufacturing industries and take advantage of replacement
demand for energy-saving equipment, among others. At the sametime, the Company will strengthen its overseas operations byleveraging engineering companies in Vietnam and India.

Increase Distribution Field Sales
Fuji Electric will seek to expand sales in the distribution field,
which is growing in Japan, by deploying systems solutions thatincorporate IT facility monitoring and other functions into distribution control and cold chain systems.
* Figures for R&D expenditures above have been divided by segment based ontheme and may therefore differ from the figures contained in the consolidated
financial report for the fiscal year ended March 31, 2017.

Net Sales

Operating Income(Billions of yen)

(Billions of yen)

Ratio ofoverseas sales

15%

15%

286.0

294.7

ChangeChange

+8.7

+2.0

15.9

13.9

2016
Results

2017
Management
Plan

(FY)

Capital Expenditures

2016
Results

2017
Management
Plan

R&D Expenditures*(Billions of yen)

(Billions of yen)
Change

–1.5

6.3

2016
Results(FY)

Change

8.7

9.9

+1.2

4.8

2017
Management
Plan

(FY)

2016
Results

2017
Management
Plan

(FY)

Capital Investment
Rationalization of facilities at power electronics systems factories
and introduction of production equipment for new products, etc.
Research and Development
SiC applied power electronics equipment, factory automation
systems, motion and servo equipment, field equipment andsystems compatible with IoT, etc.
Fuji Electric Report 201718

Management Plan for Fiscal 2017 (By Segment)

Power and New Energy
Fuji Electric’s sophisticated plant engineering capabilities meet the growing demand for electricity by providing
high-efficiency thermal power generation plants as well as eco-friendly geothermal, hydro, solar, and wind power
generation equipment and fuel cells.
Business Areas

Thermal Power

Renewable and New Energy

Nuclear PowerRelated Equipment(Fuel handling equipment andwaste treatment equipment)

Geothermal power Hydro power
generation plants generation facilities

Solar power
Wind power
Fuel cells
generation systems generation systems

Priority Measures for Fiscal 2017
Fuji Electric will target consistent, ongoing business growth bycatering to rising demand for renewable energy and other formsof power and by expanding after-sales businesses.

Expand Orders for Thermal Power Generation
PlantsIn the midst of the progressive deregulation of the electricity
retail market in Japan, Fuji Electric will work to continue receiving
thermal power-related orders from power producers while
approaching new customers. At the same time, we will expand
orders in Asia and the Near and Middle East.
Thorough management of project progress will also be practiced while reducing costs.

Net Sales

Operating Income(Billions of yen)

(Billions of yen)

Ratio ofoverseas sales

22%

22%

93.8

100.5

Secure Stable Earnings by Expanding After-Sales
Businesses
Fuji Electric will establish new bases in the Middle East anddevelop a global network linking Japan, Taiwan, the Americas,
and Indonesia with the aim of expanding its thermal and geothermal power after-sales businesses. At the same time, increased
sales will be targeted at RTS Holdings, Inc., a U.S. company
that was acquired and subsequently converted into a subsidiaryin fiscal 2015, while also deploying this company’s expertiseat other overseas after-sales service bases. We thereby aim
to increase the service provision capabilities of these bases.

19 Fuji Electric Report 2017

Change

+6.7

–1.0

7.5

2016
Results

2017
Management
Plan

(FY)

Capital Expenditures

1.2

2016
Results

2016
Results

6.5

2017Management
Plan

(FY)

R&D Expenditures*(Billions of yen)

(Billions of yen)

Grow Renewable Energy Orders
The Company will strive to continue receiving geothermal
power-related orders in Asia while growing orders in the African
and Central and South American markets. In Japan, sales
promotions for binary geothermal power generation systems
will be advanced while leveraging our past delivery track record.
In the solar power field, we will target an ongoing flow of orders
for large-scale engineering, procurement, and construction projects in Japan while simultaneously entering into the Asian market.

ChangeChangeChange

+0.3

+0.4

1.5

2017
Management
Plan

1.6

(FY)

2016
Results

2.0

2017Management
Plan

(FY)

* Figures for R&D expenditures above have been divided by segment based ontheme and may therefore differ from the figures contained in the consolidated
financial report for the fiscal year ended March 31, 2017.

Capital Investment
Rationalization of production facilities at the Kawasaki Factory,
enhancement of equipment at RTS, etc.
Research and Development
Improvement of thermal power turbine efficiency, developmentof new power conditioning sub-system models for solar power
generation systems, development of next-generation fuel cells,etc.

Electronic Devices
Across the industrial, automotive, and consumer fields, Fuji Electric contributes to high power conversion
efficiency and energy savings by supplying power semiconductors, which are key devices in power electronics.

Business Areas

Industrial Field

Automotive Field

Consumer Field and Others

Application
Inverters

Automobiles

Numerical control Power conditioning
machinerysub-systems

Servers

Flat-screen TVs

Power control ICs

Power MOSFETs

Products
SiC modules

Automotive IGBTs

Pressure sensors

Business Report

IGBT modules

Priority Measures for Fiscal 2017
In its power semiconductor business, Fuji Electric will accelerate
the development of high-value-added products in the industrial
and automotive fields to create a highly profitable operating
structure and grow sales. We will also seek increased productivity
by investing in equipment for manufacturing new products andbolstering 8-inch wafer production capacity.
Our focus in the magnetic disk business will be to securestable sales volumes and maintain profitability.

toward large-diameter wafer fabrication in front-end processes
to increase productivity.
Net Sales

Operating Income(Billions of yen)

(Billions of yen)

Ratio ofoverseas sales

6.1%

5.9%

118.5

112.7

ChangeChange

–5.8

+0.3

8.0

8.3

2016
Results

2017
Management
Plan

Increase Sales of Power Semiconductors for the
Industrial Field
A major focus will be promoting sales of 7th-generation IGBT
modules that realize greater energy savings while enabling
equipment to be made more compact and light requirements.
Specific applications targeted with these modules will be numerical control machinery and robots, which are performing wellamid the trend toward factory automation and adoption of IoTtechnologies, and air-conditioning equipment, which is witnessing
growing demand centered on China.

Step Up Power Semiconductor Product Development
Currently, there is demand for the components used in electricvehicles to be made lighter and more compact in order toincrease driving performance and reduce environmental impacts.
Fuji Electric will respond to this trend by utilizing its cutting-edge
chip, package, and cooling technologies to develop IGBT modules
boasting the industry’s top levels of output electric power density.
Through these efforts, we aim to realize future sales growth.
Furthermore, we will expand our series of SiC products, which
contribute to higher levels of power conversion efficiency andmore compact equipment, for a wide range of fields, including
the industrial equipment, railway, and automotive fields.
Development ventures for enhancing performance will also be
accelerated.

Bolster 8-Inch Power Semiconductor Wafer
Production Capacity
We will bolster the 8-inch wafer production capacities of the
Matsumoto Factory and the Yamanashi Factory while shifting

2016
Results

2017
Management
Plan

Semiconductor

(FY)

(FY)

Magnetic disc

Capital Expenditures

R&D Expenditures*(Billions of yen)

(Billions of yen)
ChangeChange

+3.3

12.2

–0.1

12.8

12.7

2016
Results

2017
Management
Plan

8.9

2016
Results

2017
Management
Plan

(FY)

(FY)

* Figures for R&D expenditures above have been divided by segment based ontheme and may therefore differ from the figures contained in the consolidated
financial report for the fiscal year ended March 31, 2017.

Capital Investment
Production equipment for 7th-generation IGBT modules and
SiC products, 8-inch wafer production capacity increases,
expansion of automotive module production equipment, doubling of air conditioner intelligent power module production
capacity, etc.
Research and Development
SiC devices and modules, 7th-generation IGBT module productdevelopment, automotive devices and modules, etc.
Fuji Electric Report 201720

Management Plan for Fiscal 2017 (By Segment)

Food and Beverage Distribution
In the food and beverage distribution field, Fuji Electric helps to ensure the safety and security of food and beverage products by combining its core heating and cooling technologies with mechatronic and IoT technologies
to provide ideal products and solutions.
Business Areas

Vending Machines

Can and PET bottle vending
machines

Store Distribution

Vending machines for food andother goods (models for China
and other Asian markets)

Showcases

Automatic change dispensers Eco-friendly stores

Priority Measures for Fiscal 2017
In the vending machine business, we will maintain our leading
share in the domestic market while expanding operations in thegrowing Chinese and Southeast Asian markets.
Meanwhile, we will step up the development and proposalof new products that provide energy-saving and laborsaving
benefits to convenience stores and that address operating
environment changes in the store distribution business.

Maintain Top Share of Domestic Vending MachineMarketWe aim to maintain the current level of domestic sales in thevending machine business, despite the contraction of theJapanese market. To accomplish this goal, we will respond to
customer needs by developing new vending machine models
that can be operated with increased efficiency. These vending
machines will, for example, use IoT technologies to realize laborsavings, formulate sales projections, or offer remote malfunction
monitoring functions.
We will seek to maintain consistent levels of production toincrease productivity as we also reduce costs and regionalize
operating structures.

Contribute to Development of Appealing Stores
Fuji Electric is bolstering its efforts to develop and propose new
vending machine models that address the laborsaving needs ofthe domestic convenience store market as well as the changing
customer demographics and tastes seen therein.
Net Sales

21 Fuji Electric Report 2017

(Billions of yen)

Ratio ofoverseas sales

8%

13%

ChangeChange

+8.8

+2.0

118.4

109.6

8.0

6.0

2016
Results

2017
Management
Plan

(FY)

2016
Results

2017
Management
Plan

Capital Expenditures

R&D Expenditures*(Billions of yen)

(Billions of yen)

Enhance Vending Machine Business Structures in
China and Southeast Asia
Vending machine demand in China and Southeast Asia is
expected to grow together with automation and cashless
payment needs. We are thus working to enhance our businessstructures in these areas. For example, the completion of thesecond vending machine factory in Dalian, China will enable us
to produce 100,000 units a year in this country. Development,
sales, and after-sales services systems in China will also be
strengthened. In Southeast Asia, we are making efforts to meetthe needs for replacing second-hand vending machines withbrand new ones mainly in Thailand and to expand our lineup
of models. In addition, we are actively managing operator companies, which use vending machines as a venue to sell the items
contained therein. The Company is thereby working to create
new markets.

Operating Income(Billions of yen)

(FY)

ChangeChange

+2.8

–0.1

6.5
3.7

2016
Results

2017
Management
Plan

(FY)

2.5

2.4

2016
Results

2017
Management
Plan

(FY)

* Figures for R&D expenditures above have been divided by segment based ontheme and may therefore differ from the figures contained in the consolidated
financial report for the fiscal year ended March 31, 2017.

Capital Investments
Construction of second Dalian factory, expansion of in-house
store equipment production, etc.
Research and Development
Development of fundamental technologies that contribute tolabor savings and new models of vending machines for the
Chinese and Asian markets, etc.

Management Plan for Fiscal 2017 (Overseas Operations)

Overseas Operations
Fuji Electric is applying its policy of local design, local production, and local consumption to building overseas operation foundations.
As part of this undertaking, we are developing sales, engineering, and production bases in China, other parts of Asia, the Americas,
and Europe. As of March 31, 2017, we had 51 overseas sales and engineering bases and 19 overseas production bases locatedaround the world. We are also focused on acquiring human resources and sales channels overseas. The Company conducted eight
M&A transactions over the period from April 1, 2013, to March 31, 2016, and Fuji Electric currently has 45 consolidated subsidiaries
outside of Japan.
Going forward, we will continue to enhance our manufacturing and engineering systems in growing markets, such as India andother parts of Asia.

China

 trengthen and expand systems businesses that targetS
factories and plants and utilize acquired bases in Vietnam
and India (Energy Solutions, Industry Solutions)Grow market by expanding lineup of new vending
machine products and managing operator companies
in Thailand (Food and Beverage Distribution)

 xpand operations targeting data centers
E(Energy Solutions)
Strengthen factory automation systems businessin conjunction with growing factory automation investment(Industry Solutions)Increase vending machine production capacity andenhance sales and after-sales service bases(Food and Beverage Distribution)

Net Sales in Asia (Excluding China)

Net Sales in China(Billions of yen)

(Billions of yen)

106.1

108.4

2016
Results

2017
Management
Plan

Change+2.3(FY)

Business Report

Asia

Change

67.5

71.3

2016
Results

2017
Management
Plan

+3.8

(FY)

Expansion of Overseas Network(March 31, 2013 March 31, 2017)
Consolidated subsidiaries: 22

45

Sales and engineering bases: 47
Production bases: 1451

19

EuropeAmericas olster sales through promoting coordinated inverters
Band servos operations (Industry Solutions)Promote fuel cells sales through collaboration withGerman fire prevention equipment manufacturers(Power and New Energy)

 xpand thermal and geothermal power after-salesEbusinesses (Power and New Energy)
Promote sales of UPSs for data centers(Energy Solutions)Grow railcar business (Industry Solutions)

Net Sales in Europe

Net Sales in the Americas(Billions of yen)

(Billions of yen)
Change

16.6

16.0

2016
Results

2017
Management
Plan

–0.6

(FY)

Change14.8

2016
Results

17.3

2017Management
Plan

+2.5

(FY)

Fuji Electric Report 201722

Research and Development / Intellectual Property

Research and Development
Fuji Electric is focused on research and development activities for creating competitive components and systems
centered on power semiconductor technologies and power electronics technologies as well as activities for developing
solutions that produce value for customers by combining fundamental technologies.
The Company has designed its R&D system to accelerate R&D activities by delegating product development functions
to the respective business groups while the corporate R&D group handles technology marketing, advanced research,and basic research.

R&D Policies
 reate competitive components and systems utilizing cutting-edge technologies
CDevelop competitive product technologies utilizing technology marketingRealize new innovation by combining Fuji Electric’s fundamental technologies with
open innovations

Initiatives in Fiscal 2016
Creation of Competitive Components and Systems
Motion Control System

Trench Gate SiC-MOSFET

Fuji Electric has succeeded in developing a new motion controller and servo system that enables faster and more accurate
positioning of precision processing and other equipment. The
motion control system comprised of these two new products
realizes fast and precise device control and features safetyfunctions for guaranteeing safer operation.

Fuji Electric was involved in the development of a trench gate
SiC-MOSFET.*1 This device boasts a resistance level that isamong the lowest in the world (1200 V, 3.5 mΩ cm2), meaningthat it can contribute to loss reductions of more than 70% incomparison to Fuji Electric’s Si devices when incorporated into
an inverter. We intend to utilize this device in all SiC modules
going forward.
*1 Created through joint research with Tsukuba
Power-Electronics Constellations, which wasestablished by the National Institute ofAdvanced Industrial Science and Technology

New motion controller, SPH3000D

New servo system, ALPHA7

Trench gate SiC-MOSFET

Development of Product Technologies Utilizing Technology Marketing
Diagnosis Functions for Steel Rolling Facilities
Customers can incur losses if the operation of facilities is halted.
Fuji Electric is currently developing abnormality diagnosis functions for steel rolling facilities with the aim of helping minimize
these losses. Installing these diagnosis functions into facilities’
drive control equipment will allow for facility data to be collected
and diagnosed so that facility
abnormalities can be predicted
before they occur. In the future,
we will look to install such diagnosis functions into cloud-based
systems*2 in order to deliver thisservice to as many customers
Steel rolling facilities
as possible.
*2 Server systems that collect data
via networks and analyze this data

23 Fuji Electric Report 2017

Note: The facilities in the photographabove are not equipped with Fuji
Electric’s diagnosis functions.

Digital Signage Vending Machines
Together with JR East Water Business Co., Ltd., Fuji Electric
developed a digital signage vending machine to provide newand valuable experiences through vending machines. Equippedwith the Company’s payment interface,*3 this vending machine makes
purchasing drinks more convenient
by making pre-payment or regularpurchases possible via a smartphone
application.
*3 Program that links digital signage applications
to vending machine software

New digital signage
vending machineRealization of New Innovation
Fuji Electric is advancing joint research with Japanese universities
and research institutions based on comprehensive partnershipagreements. In addition, we have endowed laboratories at the

University of Tsukuba and the University of Yamanashi and are
advancing efforts in research and the development of humanresources in the fields of power devices and power electronics.

Future Initiatives
Focuses of Fuji Electric’s R&D activities going forward will include SiC power semiconductors, automotive power semiconductors,
SiC-equipped power electronics products, and other components with unrivaled levels of competitiveness. We also develop factory
automation and process automation systems and IoT solutions that are synergetic with these components while fostering humanresources through the process of tackling new challenges.

Intellectual Property
Business Report

Positioning intellectual property (IP) rights as one of the most important management resources, Fuji Electric is
working to implement IP strategies that are aligned with its business and R&D strategies to contribute to thestrengthening and expansion of its globalization-compatible business.

IP Policies
Strengthen IP activities that extend back into the stages of business planning and R&D
Investigate and respond to overseas IP systems and their current statuses and reinforce IP activities at overseas bases
Promote international standardization activities

Initiatives in Fiscal 2016
IP Activities in the Initial Stages of BusinessWe endeavored to formulate IP strategies from the businessand R&D theme planning stage. After confirming business andR&D directives, these strategies were drafted based on patent
analysis and surveys. We also took steps to develop patentportfolios that ensure a strong advantage in business activities.

Main Fields for Patent Applications
 atents relating to increasing the efficiency and energy savings of powerPelectronics products
 atents pertaining to power semiconductors, such as those forP
SiC-related technologies
 atents relating to vending machines and other areas of the food andPbeverage distribution field

Global IP Activities
Fuji Electric continues to investigate overseas IP systems andimplement measures against counterfeit products to minimize
business risks related to IP.
In fiscal 2016, our local IP division in China led efforts toenhance patent survey and application functions and to implement countermeasures against counterfeit products. In addition,
more stringent measures were implemented for reducing IP risks
in conjunction with the growth of the vending machine business.

As part of its contributions to international standardization
movements, with the aim of ramping up acquisition of certification under the standards of the International ElectrotechnicalCommission (IEC), Fuji Electric registered the Fukiage Factory
as a factory certified by the
IEC System of Conformity
Assessment Schemes forElectrotechnical Equipment
and Components (IECEE). As
a result, it is now possible toconduct certification tests at
IP risk seminar in China
this factory.

Fuji Electric Report 201724

Manufacturing / Procurement

Manufacturing
Based on its policies of promoting local design, local production, and local consumption, Fuji Electric employs aframework in which production bases in Japan act as mother factories for global manufacturing operations and coordinate with overseas bases in China and other Asian countries. We also strive to transmit the manufacturing DNA that
we have continued to pass down since Fuji Electric’s inception while tackling new manufacturing challenges utilizing
IoT, improving productivity, and seeking to provide products and services of the highest caliber.

Manufacturing Policies
Innovate production with IoT and M2M*
Promotion of global supply chain reformEnhance on-site production capabilities, production technology capabilities, and humanresource development* Machine to Machine: System for realizing automated and optimal control by having machines exchange information without
human involvement

Initiatives in Fiscal 2016
Cost Reductions through Manufacturing IoT
The basic concept of manufacturing IoT has been realized ascost reductions. Based on this concept, we identified model
factories at which we worked toward improvements in productivity and quality, safe and secure labor savings, and energy
conservation. In addition, we promoted use of Fuji Electric’s IoT
products while seeking to develop new products. Going forward,these activities will be extended to other factories and proposed
to customers to contribute to their businesses.

Basic Concept of Manufacturing IoTImprovements in
productivity and quality

Energy conservation

Safe andsecure labor savings

Design and production platforms
Value provision

Cost reduction realized

Strengthening of Production Technology Capabilities
In fiscal 2016, we undertook a reorganization of the models
manufactured at the Suzuka Factory and the Kobe Factory,
which are both mother factories for global manufacturing activities in the power electronics systems business. This move wasdesigned to promote in-house production and automation.
Production of components was consolidated into the Suzuka
Factory to facilitate efficient manufacturing and the creationof competitive components. Meanwhile, the manufacturingof system products was delegated to the Kobe Factory,

establishing a system in which
all processes, from sheet metal
processing to shipment, arehandled within the factory. As aresult, we are now poised toprovide more flexible responses
to customer needs.

Kobe Factory at which all processes
from sheet metal processing toshipment are handled

TOPICSThe Otawara Factory, which mainly produces molded-casecircuit breakers, and the Mie Factory, which produces vending machines and freezers and refrigerated showcases, havebeen designated as model factories at which we will advance
manufacturing IoT initiatives. At these factories, we are tracking
production, facility operation status, and energy usage metrics in real-time and promoting cost reduction by identifying
and analyzing bottleneck processes and automating thecreation of processed data.

25 Fuji Electric Report 2017

Real-time monitoring ofproduction information

Monitor tracking metrics

Enhancement of Human Resource Development
Global mother factories in Japan are working to accumulatetechnologies and expertise. Moreover, by encouraging our
employees to participate in the National Skills Competition and
the Skill Grand Prix,* we are eager to nurture ambitious employeeswith superior abilities in production engineering and technologythat can take on high-level challenges. At the same time, we are
actively transmitting the manufacturing DNA cultivated in Japan tooverseas operating bases in order to ensure that we can provide
the same levels of quality and service anywhere in the world.

* Held jointly by the Ministry of Health,Labour and Welfare, the Japan Vocational
Ability Development Association, and
ZENGIREN, this competition lets seasoned
engineers put their skills to the test to
determine who is the best in Japan. Withno age restriction, the level of competitionin this event is higher than in the National
Skills Competition, which is generally
only open to people ages 23 and under.

Transfer of skills in Suzuka factory

Future Initiatives
In the future, Fuji Electric will pursue production innovations based on the concept of completely localized production along with cost
reduction utilizing IoT in order to boost product competitiveness. In fiscal 2017, production activities will commence at the second
vending machine factory in Dalian, China. Also, measures for automating testing and inspection processes, utilizing AI for autonomous production, and reducing cost with IoT will be implemented under the guidance of global mother factories in Japan.
Business Report

Procurement
To increase profitability and reduce risks, Fuji Electric has built a global-scale procurement system and is promoting
CSR-oriented procurement activities as it strives to keep down all costs of materials used in products as well as
indirect materials.

Procurement Policies
 romote Strategic Procurement in coordination with Design and development departments
P
Heighten indirect material cost reductions and achieve reductions on a global scaleEnhance global procurement capabilities and cultivate purchasing personnel
Promote CSR in Procurement

Initiatives in Fiscal 2016

Procurement training at a production basein China

Strengthening of Cost Reduction Measures for Direct and Indirect Materials
In fiscal 2016, the scope of Strategic Procurement (Early
Procurement Involvement) activities, which procurement
department become involved from the early stages of R&D to
reduce costs, was expanded to include suppliers. This moveenabled us to realize cost reductions through improved productivity and other means by promoting coordination between
procurement departments, design departments, and suppliers.

Enhancement of Global Procurement Capabilities
In order to enhance global procurement capabilities, we madean effort to educate purchasing personnel working at production
bases located in China and the ASEAN region regarding compliance, procurement risks, and negotiation techniques. In addition,

we stepped up coordination with global mother factories
in Japan and sharing of supplier and parts information on a
Company-wide basis while approaching new local suppliers,
successfully furthering growth through these efforts.

Future Initiatives
Moving forward, we will continue to enhance global procurement capabilities while developing procurement information databasesthat can be accessed from any base around the world in order to facilitate business growth.

Fuji Electric Report 201726

CSR Activities

Fuji Electric’s CSR is summed up precisely in its corporate philosophy and management policies. These principles entail contributing
to the resolution of social issues through our energy- and environment-related businesses, effectively managing our business in a waythat maximizes the positive impact of overall corporate activities on society and the environment while working to prevent or alleviate
any negative impact.
We hope that through our promotion of CSR practices, we can continue to build strong relationships of trust with all of our stakeholders.

CSR Policies
To promote CSR on a global basis, we have also established and are implementing the Fuji Electric Code of Conduct, a guideline for all
employees that encourages them to share the principles of the corporate philosophy and management policies and act accordingly.

Fuji Electric Code of Conduct

Fuji Electric and its employees, from a global perspective always strives to meet our
corporate mission of “We, Fuji Electric, pledge as responsible corporate citizens
in a global society to strengthen our trust with communities, customers and partners.”

1

2

3

Respect and value
our customers

Respect and value
all people

Respect and value theglobal environment

4

5

6

Respect and value
our shareholders
and investors

Respect and valueinteraction with society

Respect, value andconform with allapplicable laws
and regulations

Sustainability Initiatives
Fuji Electric has declared its support for the United Nations
Global Compact.
Through its business, Fuji Electric endeavors to contribute to
the achievement of the Sustainable Development Goals, which
consist of 17 goals and 169 targets that were adopted by the
UN General Assembly in September 2015, and is thereby striving
to help realize a sustainable society.

More detailed information on Fuji Electric’s various CSR activities can be found on the Company’s corporate website.
http://www.fujielectric.com/company/csr/

27 Fuji Electric Report 2017

ESG Initiatives
Fuji Electric acts from a perspective focusing on environmental, social, and governance (ESG) issues with the aim of realizing ongoing
improvements in corporate value. Accordingly, the Company has defined key ESG issues, which it is actively working to address.

Key ESG Issues
ESG Areas

Key Issues

Prevention of global
warming
Environment

P29–P34

Promote 3Rs in relation to products and production activities

Human rights

 ntrench awareness of Policy for Human Rights of theE
Employees among all employees
Conduct ongoing human rights training

Safe and healthy
workplaces

 onduct ongoing occupational health and safety training toCprevent occupational accidents
Carry out safety patrols to prevent serious accidents andfrequently occurring accidents

Diversity

 mploy a diverse range of human resourcesEReform awareness of management and female employees

Work-life balanceDevelop comfortable workplace environments

Human resources
development

 ultivate globally competent employees regardless of workClocations and nationalities

Community outreach ontribute to communities through activities for protecting theCnatural environment and promoting youth development

P38

Compliance stablish compliance promotion systems and effectivelyE
implement the Fuji Electric Compliance Program
Cultivate mind-set of strict compliance among employees

P41

Risk management

Identify projected risks, set priorities, and formulate
countermeasures for high-priority risks
Establish and continually improve BCPs for head office andproduction bases

P42–P43

Governance

P35

P36–P37

CSR Activities

Contributions
to communities

Reduce society’s CO2 emissions through provision ofenergy-saving products
Reduce CO2 emissions during production

Creation of a recyclingoriented society

Humanresources
SocialAssociatedPages

Priority Measures

External Recognition
Domestic and overseas socially responsible investment (SRI) rating institutions have selected Fuji Electric as a component of
the following SRI indexes out of recognition of its being a company with outstanding CSR performance.

Dow Jones Sustainability Indices

FTSE4Good Index Series

Ethibel Sustainability Index (ESI)

Morningstar Socially Responsible Investment Index

Fuji Electric Report 201728

Environment

Efforts to protect the global environment are a key management issue for Fuji
Electric, and, following the establishment of our Basic Environmental Protection
Policy, we continue to promote environmental management with the goalof contributing to global environmental protection through our business activities.
In fiscal 2016, the Energy Conservation Center, Japan awarded Fuji Electricwith the highest honor of its FY2016 Energy Conservation Grand Prize: theGrand Prize of Minister of Economy, Trade and Industry. This award was received
out of recognition of the energy conservation and risk management measures
implemented by using a factory energy management system at the Yamanashi
Factory, measures that were part of our Companywide Smart Factory Initiative.
The technologies used at this factory will be deployed both inside and outsideof the Company going forward.

Yamanashi Factory at which Smart Factory
Initiative is being advanced

Basic Environmental Protection Policy
1 Offering products and technologies that contribute to global

environmental protection
2 Reduction of environmental burden throughout product life
cycles3 Reduction of environmental burden in business activities
4 Compliance with laws, regulations, and standards

5 Establishment of environment management systems andcontinuous improvements of the systems
6 Improvement of employees’ environmental awareness andsocial contribution
7 Promotion of communication

Environmental Vision 2020
In 2009, Fuji Electric formulated
Environmental Vision 2020 to guide its
medium-to-long-term environmental
activities.
This vision is centered on three specified material issues of stopping global
warming, creating a recycling-oriented
society, and meeting our corporate social
responsibilities. In addition to reducing
the environmental footprint of our own
production activities, we seek to help
achieve sustainable societies by providing
products and technologies that leverage
our strengths in electrical and thermalenergy technologies.

1. Stop Global Warming• Reduce CO2 emissions during production by 20% (compared with fiscal
2006 levels).
• Raise the energy efficiency of products,
reducing CO2 emissions by 30 million
tons through energy-conserving andenergy creating products.

Environmental Vision 2020
2. Create a RecyclingOriented Society

3. Meet Our Corporate Social
Responsibilities• Increase our number of eco-products
by promoting the 3Rs (reuse, reduce,
recycle) in our products.
•A chieve zero emissions at operationalsites by reducing waste and the useof energy and chemical substances.

• Strive to enhance environmental
awareness through environmental
citizen movements, activities toprotect the natural environment,
and environmental education.

Rolling Updates to Environmental Targets
To achieve the goals of Environmental Vision 2020, Fuji Electrichas formulated an Environmental Management Three-Year
Rolling Plan, designed to promote ongoing efforts.
In this initiative, we verify each year that the environmental
management strategy is addressing societal changes and establish detailed targets in various areas, such as the enhancementof environmental management governance, measures to prevent
global warming, and measures to address the use of chemical
substances.
At the same time, we monitor progress toward targets andcircumstances regarding additional items in order to adjust targets
and action plans to ensure we have set the right course for the
next three years.
In fiscal 2016, the target of reducing society’s CO2 emissions byexpanding sales of energy-saving and energy-creating products,

29 Fuji Electric Report 2017a key indicator for stopping global warming, was raised fromthe previous 17 million tons to 30 million tons.

Three-Year
Rolling Plan

Environmental
Vision 2020

FiscalFiscal2018
Fiscal2017
activities
2016
activities
activities

Mapping of the Interplay between Business Activities and Environmental Impact
Fuji Electric is constantly working toward more efficient use of resources and energy and the reduction of waste throughout all of its
business activities, particularly those related to design, manufacturing, and disposal. We are also proactive in our efforts to be moreenvironmentally conscious across the entire product and service life cycle.


Scope of data collection: Bases worldwide

INPUT

OUTPUT

Energy Consumption (Electricity)(1,000kWh)

500,000

451,020 438,260
423,250 413,950

Fuel usage and emissions
volumes increased due tohigher production volumes atfactories and the move toward
in-house production. However,we were able to decreaseelectricity purchase volumes
through energy conservation
measures.

400,000
300,000
200,000
100,000

CO2 Emissions(1,000t-CO2)

400
331

327

323

325

2013

2014

2015

2016

300
0

2013

2014

2015

2016

(FY)
200

Energy Consumption (Fuel)
(TJ)

2,500
2,031

2,014

2,081

100

2,201

2,000

0

(FY)

1,500
1,000

0

2013

2014

2015

2016

(FY)

Wastewater Emissions*2

Water Consumption(1,000t)(1,000t)

15,00013,34813,44012,957

15,00013,165

10,000We have sustained a longterm reduction trend in water
usage volumes as a resultof water recycling initiatives.

5,000

0

CSR Activities

Business
Activities

500

2013

2014

2015

2016

11,362

11,50011,421

11,410

2013

2014

2015

2016

10,000

5,000

0

(FY)

(FY)

PRTR*1-Designated Substances Handled

Emissions of PRTR-Designated Substances

(t)

(t)

4,000

2,000
3,029

3,222

3,000

2,621

2,847

Increased production volumes
led to higher usage of PRTRdesignated substances, but
we prevented emissions ofthese substances from risingthrough elimination andtreatment.

2,000

1,000

0

2013

2014

2015

2016

(FY)

1,516
1,500

1,433

1,397

2014

2015

1,262

1,000

500

0

2013

2016

(FY)

*1 Pollutant Release and Transfer Register Law*2 Wastewater emissions refer to volume of water discharged into rivers and other natural environments.
Fuji Electric Report 201730

Environment

Efforts to Stop Global Warming
Fuji Electric endeavors to help stop global warming by reducing CO2 emissions around the world through the supply of energysaving and energy-creating products and services and through energy conservation activities at factories and offices.
Priority Area

2020 Target

Reasoning Behind Target

Reduction ofsociety’s CO2
emissionsthrough products

Reduce society’s CO2
emissions by 30 million
tons*3 through the
expansion of sales ofenergy-saving andenergy-creatingproducts

In light of the increase in the number of energy-saving and energy-creating products
as well as the new inclusion of biomass, inverter, and other products in the scope of
calculation for this goal, the Company’s reduction target for 2020 was raised from 17
million tons to 30 million tons. This new reduction target is 100 times greater than the2020 emissions reduction target of 300,000 tons for Kanagawa Prefecture, whichranked 9th in total emissions from specified business operators under the Act on
Promotion of Global Warming Countermeasures*4 by prefecture in 2013, with total
applicable emissions of 29.5 million tons.

Reduction of CO2
emission during
production

Reduce global CO2
emissions by 20% anddomestic CO2 emissions
by 40% in comparison
to fiscal 2006 levels

At the 2009 G8 Summit in L’Aquila, Italy, an official declaration was made in supportof the goals of realizing a 50% reduction in greenhouse gas emissions on a global
basis by 2050 and an 80% reduction in developed countries by 2050. Achieving
these targets will require annual reductions of 1.56% (for the global target) and 3.59%(for the target for developed countries). The 2020 targets set in the Environmental
Vision 2020 in fiscal 2016 call for reductions that are in line with those required by theG8 long-term target for global emissions reductions as shown in the graph below.

*3 Calculated by converting, into CO2 emission volumes, the energy-creating and energy-saving benefits that would be realized by products sold after fiscal 2009 (that have
not reached the end of their usable life) if they have been operational for one year
*4 Law Concerning the Promotion of the Measures to Cope with Global Warming

Relationship between G8 Greenhouse Gases Emission Reduction Targets andFuji Electric’s CO2 Emission Reduction Targets

–20%

–50%

–1.56%/year
–40%
–80%
–3.59%/year

2006

2020
Fuji Electric’s reduction targets

Fuji Electric’s CO2 emissions (global)
Fuji Electric’s CO2 emissions (domestic)
G8 greenhouse gas reduction targets (global)
G8 greenhouse gas reduction targets (developed countries)

31 Fuji Electric Report 2017

2050
G8 reduction targets(FY)

Reduction of Society’s CO2 Emissions through Products
Target18,780,000 t-CO2

Reduced CO2 Emissions through Products*5

Achievement(1,000t-CO2)

22,300,000 t-CO

2

30,00030,00022,300Fuji Electric aims to contribute to reductions in CO2 emissions
across society through increased supply of renewable energy
generation equipment as well as through innovations in electricaland thermal energy technologies.
In fiscal 2016, the contribution to CO2 emission reductions
from products was 22,300,000 t-CO2, up 6,320,000 t-CO2 year
on year and higher than the target of 18,780,000 t-CO2. This
accomplishment was a result of increased sales of inverters
and power conditioning systems (PCSs) for stabilizing electricity
supplies from wind power systems as well as increased shipments of geothermal and hydro power and other renewableenergy ­generation equipment. This amount of 22,300,000 t-CO2
is equivalent to 68.6 times the Company’s total CO2 emissionsof 325,000 t-CO2.

20,00010,00015,98018,780

540
1,960

8,820

7,960

5,940
7,540

0

690
2,420

2015

11,22020162020 (Target)

Power Electronics Systems
Power and New Energy
Electronic Devices
Food and Beverage Distribution(FY)

Target*5 Amount of CO2 reduction based on one year of operation of products shipped
for each fiscal year after fiscal 2009.
Calculated making reference to the quantification method of GHG emission
reductions stipulated in the Electrical and Electronics industries’ “Action Plan forCommitment to a Low-Carbon Society.”

CO2 Emissions Reduction Contributions by Business and Major Contributing Products
Power Electronics Systems 50%

Energy-saving products in thisbusiness include vending machines,
showcases, and currency handlingequipment. Although the contributions to CO2 emissions reductions
are small on the Group scale, ourcutting-edge vending machines
use 73% less electricity than models
from 2006.

This business contributes toreductions in CO2 emissions withenergy-saving products including
inverters, servo systems, uninterruptible power systems (UPSs),
PCSs, compact power supplies,
ED&C components, high-efficiency
motors and transformers, andmeasurement instruments.

Electronic Devices 11%
In this business, contributions to
CO2 emissions reductions are
made by supplying low-loss components, such as IGBT modules,
intelligent power modules, SiC
diodes, and switching integrated
circuits and elements. Amongthese, switching integrated circuits
helps reduce idle electricity consumption by electric appliances.

FY2016 reduction ofsociety’s CO2 emissions

22,300,000 t-CO2

CSR Activities

Food and Beverage Distribution 3%

Power and New Energy 36%
Contributions to reducing CO2
emissions in this business are madethrough renewable energy generation equipment (geothermal, hydro,
photovoltaic, wind, biomass) as wellas through high-efficiency thermal
power generation systems and fuelcells. In fiscal 2016, there was aparticularly large increase in shipments of geothermal and hydropower renewable energy generation equipment.

Fuji Electric Report 201732

Environment

Reduction of CO2 Emissions during Production
Target335,000 t-CO2

Global CO2 Emissions

Achievement(1,000t-CO2)

325,000 t-CO

400

2

300

Fuji Electric strives to limit energy costs and reduce CO2 emissions through energy conservation activities.
CO2 emissions from production activities in fiscal 2016
increased above the level of 323,000 t-CO2 from fiscal 2015.
This increase was a result of the rise in production at Company
factories that stemmed from efforts to bring manufacturing operations back to Japan and promote in-house production. However,at 325,000 t-CO2, total emissions in fiscal 2016 were still lower
than the target of 335,000 t-CO2, an accomplishment owed toinitiatives including implementing top level energy-saving building
management practices, upgrading air-conditioning equipment
and LED lighting, and consolidating clean rooms. Looking ahead,
Fuji Electric will advance further energy conservation activities
to move toward the achievement of its 2020 targets.
Furthermore, third-party verification was received for CO2
emissions data from six major factories in Japan and overseas
with the aim of increasing the reliability of this data. Adding to
the two domestic factories (Tokyo and Fukiage) already requiring
third-party verification under emissions trading systems, we now
receive verification for 75% of the Company’s total CO2 emissions (based on fiscal 2015 figures).

335 325

323
126

127

197

198

305

200
100
0
In Japan

2015
Overseas

20162020 (Target)

Global target

Case Example: Energy Savings through the Smart Factory Initiative
Fuji Electric is advancing the Smart Factory Initiative at theMie Factory, a principal factory in the Food and Beverage
Distribution segment.
This initiative involves pursuing “smarter” operation throughthe improvement of efficiency of inverter-equipped production
and drive facilities, the supply of clean energy via solar power
generation and fuel cell systems, and the utilization of a factory
energy management system that ensures optimal energy usage
throughout the entire factory. In fiscal 2016, these efforts contributed to a 28% reduction in energy consumption from fiscal
2010 levels.
In addition, given the recent increase in energy used in lighting
and air-conditioning equipment, we have installed a system forcollecting data via internal LAN networks through points established to measure factory lighting and temperature. Utilizing thissystem, we are monitoring the environment within factory buildings while controlling energy. The collected data is made available
for viewing by employees on a specialized website to facilitate
educational activities.
In the future, recorded data will be used to realize automatedcontrol in order to create systems that improve workplaceenvironments while conserving energy.

Energy data tracking monitor (energy consumption by area)

Energy data tracking monitor (total electricity consumption)

33 Fuji Electric Report 2017

(FY)

(Mie Factory)Initiatives to Create a Recycling-Oriented Society
By promoting initiatives focusing on the 3Rs (reuse, reduce, recycle) as part of its business activities, Fuji Electric is working to realize
zero waste emissions at its operating sites and thereby contribute to the creation of a recycling-oriented society.
Priority Area

Efficient use
of waterresources

Waste
reduction2020 Target

Reasoning Behind Target

Reduce water usage by
20% in Japan
Reduce water usage by
25% overseas

The domestic water usage reduction target for fiscal 2020 has been increased to 20%
from the prior target of 10% in comparison to the fiscal 2010 level. As for overseas water
usage, previously the only target was reducing water consumption per unit of production
by 25% from fiscal 2011 in fiscal 2020. However, as these yen-basis production volumes
can vary greatly due to foreign exchange rate movements, we established the new targetof achieving a 25% reduction in water usage volume from fiscal 2011 in fiscal 2020.

Achieve zero waste
emissions

The Company will strive to achieve zero waste emissions by recycling industrial wastefrom production processes and reducing the amount of waste sent to landfills.

Efficient Use of Water Resources
Water Usage Volumes
TargetIn Japan

Water Usage Volumes (Global)(1,000t)

Achievement
7,645,000 tons

Overseas  6,309,000 tons

20,000In Japan

6,721,000 tons

15,00012,957

13,955

13,165

12,436

Overseas

6,444,000 tons

6,160

6,721

5,000

6,797

6,444

0
In Japan

2015
Overseas

20162020 (Target)(FY)

Global target
CSR Activities

In view of the problem of global water resource depletion, Fuji
Electric is advancing measures to comply with wastewater
quality requirements, reduce wastewater, and achieve more
efficient use of water resources.
In fiscal 2016, domestic and overseas water recycling initiatives led to a reduction of 1,117,000 tons in water usage. Total
water usage was 13,165,000 tons, even less than the target of
13,955,000 tons.

10,000Waste Reduction
Ratio of Waste Sent to Landfills
TargetAmount and Ratio of Waste Sent to Landfills in Japan(t)(%)

Achievement

In Japan : Less than 0.5%

In Japan

Overseas: Less than 15%

Overseas

0.24 %
14.3 %In an effort to curb waste and promote resource recycling, Fuji
Electric has established a goal of zero waste emissions—a ratioof waste sent to landfills to total waste of no more than 1%.
This goal is being pursued by making products more compact
and lighter weight, employing designs that do not use regulated
substances, and implementing quality control measures at the
manufacturing stage to lower the number of defective products
created.
In Japan, Fuji Electric has achieved its goal of zero waste
emissions every year since fiscal 2004. In fiscal 2016, we once
again achieved our target of reducing the ratio of waste sent tolandfills to below 0.5% with a ratio of 0.24%.
Overseas, a change to production processes implemented infiscal 2015 resulted in us no longer being able to recycle certain
sludge, and the ratio of waste sent to landfills consequently
increased to 17.29% in this year. Through internal efforts, wewere able to reduce this ratio to 14.31% in fiscal 2016. We plan
to begin recycling sludge in cement in fiscal 2018.

100
80

1.0

61

59

60
40

0.28

FY2020 target for
ratio of waste sent 0.8
to landfills of lessthan 0.5%
0.6

52
0.26

0.4

0.24

20
0

0.2
2014

2015

Amount of waste sent to landfills (left)

2016

(FY)

0.0

Ratio of waste sent to landfills (right)

Amount and Ratio of Waste Sent to Landfills Overseas(t)(%)

2,000

1,766

40

1,750

1,500

30

1,049
1,000

20

8.57

17.29

14.31

500
0

2014

2015

Amount of waste sent to landfills (left)

2016

FY2020 target for
ratio of waste sent
to landfills of less 10
than 3%(FY)

0Ratio of waste sent to landfills (right)
Fuji Electric Report 201734

Social (Human Resources)

Fuji Electric focuses on creating workplace environments in which humanrights are respected and occupational health and safety are assured. In addition,
we acknowledge that diversity is important to the Company’s global growth.
We therefore aim to incorporate an array of values and perspectives so we
can strengthen our competitiveness. Furthermore, recognizing that humanresources are the prime driver of our competitive edge and placing diversity
as a top priority in our personnel strategy, we will actively cultivate each of
our people to fully harness their potential.

Safety patrol

Respect for Human Rights
The Fuji Electric Code of Conduct states that we should “Respect and value all people.” This statement makes clear Fuji Electric’s
commitment to respecting the basic human rights of everyone at the Group as well as those of all the people it interacts with.
In addition, the Policy for Human Rights of the Employees, which expands upon the human rights-related policies of the Fuji Electric
Code of Conduct, is being implemented throughout the Group to ensure human rights are respected.

Training and Education
Recognizing workplaces that respect human rights and are freeof discrimination and harassment as the basis for all businessactivities, we continued to implement e-learning programs on
harassment for all domestic employees that have not yet
undergone this training.
In training for management-level employees, we held group
discussions that used case studies to promote understanding
with regard to human rights risks from the perspective of humanrights needing to be considered during the course of businessactivities.

Numbers of Employees Undergoing Human Rights Training(FY2016)
Level-specific training(new employees, supervisors, managers)

574

Harassment training (e-learning)

3,639

Training held by human rights organizations and municipal
government agencies

43

Occupational Health and Safety
Fuji Electric’s basic philosophy is that of the “health and safety of workers takes precedence over everything else,” positioning occupational health and safety as a top priority for the Company. In line with this philosophy, we actively communicate the principles of
our Health and Safety Basic Policy both inside and outside of the Company.

Ongoing Health and Safety Education and Workplace Safety Patrols
The Company plans and implements occupational health andsafety education programs that utilize a practical curriculum
throughout each fiscal year. In fiscal 2016, in addition to theregular occupational health and safety education program, aseminar on transportation-related issues was held for managers
and drivers, and an aggregate total of 2,956 individuals participated in this seminar. Furthermore, we provided opportunities foroccupational health and safety representatives from different
fields to inspect each other’s factories while also actively conducting safety patrols at domestic and overseas construction
sites as well as at overseas bases in China, Southeast Asia, andother areas. As a result, the number of occupational accidents
decreased for the second consecutive year.

Frequency Ratio of Occupational Accidents (in Japan)
2.0

1.59

1.58

1.66

1.61

1.63 All industries

0.41

0.41

0.54

Electric
machinery/equipment
manufacturing0.51 industry

0.12

0.08

0.08 Fuji Electric

0

0.21
2012

0.12
2013

2014

2015

2016

Number ofoccupational
accidents

45

27

33

30

24

1.0

0.39

(FY)

Health Management and Mental Healthcare
At Fuji Electric, 100% of employees undergo legally mandated
regular health examinations. In addition, we provide examinations using state-of-the-art tests and procedures and offer

35 Fuji Electric Report 2017

health guidance to those employees for which health concerns
have been pointed out. In this manner, the Company seeks tohelp employees prevent lifestyle diseases.

Promotion of Diversity
Expanding our business on a global scale will require that we bolster our competitiveness by building a team that is diverse not onlyin terms of nationalities and genders but also in terms of sensibilities by incorporating individuals with differing beliefs and mannersof thinking. For this reason, promoting diversity has been made a top priority in our personnel strategy.

Hiring of Local Employees Overseas
As the Company globalizes its operations to grow and expand
its business, Fuji Electric is cultivating locally hired employees
and promoting them to management positions so that they can
support operations at overseas bases. Local hires fill top management positions at Fuji Electric Corp. of America and Fuji
Electric India Private Ltd., and we are currently increasing thenumber of local hires in management positions in China andother parts of Asia. These practices help us develop businesses
that are closely tailored to thecountries and regions in which
we operate.
Locally hired staff at Fuji Electric India
Private Ltd.

Employment of People with Disabilities
Major Initiatives
 ngoing expansion of the scope of duties that can be performed byOpeople with disabilities
Training for supporting independence

Ratio of Employees with Disabilities to Total Employees(People)(%)

400

200

0

298

314

2.02

2.07

2013

2014

Number of employees with disabilities

Empowerment of Female Employees
The Company deployed aproject for promoting hiringof women with educational
backgrounds in science andengineering and also offeredinternships to help it securesuch employees.
In addition, we supported
the career development of
Meeting held as part of the mentor
system for women employees
female employees by holding
meetings with new and midlevel female employees that were potential management candidates and determining who among these would be applicablefor additional career development support.
Going forward, we will formulate career development plans for
all applicable individuals to help them move ahead in their careers.

Inclusion in the Nadeshiko Brand
for Two Consecutive Years
In 2017, Fuji Electric was selected forinclusion in the Nadeshiko Brand forthe second consecutive year.
Conducted jointly by METI and theTokyo Stock Exchange, this program
recognizes companies that exhibit excellence in empowering
female employees and that are pursuing medium-to-long-term
improvements in corporate value.

360

370

2.24

2.43

2.51

2015

2016

2017 (Year)

333

4

2

0
CSR Activities

The Company encourages
lifetime employment for people
with disabilities. We therefore
promote hiring and ongoing
employment of people withdisabilities. In fiscal 2016, we
commenced hiring of people
with disabilities at the
Yamanashi Factory and other- Forklift operation
wise continued to expand thescope of duties that can be performed by such individuals
in manufacturing, back-office, and other divisions of operatingsites across Japan. As a result, 11 people with disabilities were
hired (eight new graduates, three mid-career hires).

Employment rate

Major Initiatives
 roject for promoting hiring of women with educational backgrounds in sciencePand engineering led by a team of female employees with similar backgrounds
 entor system in which more experienced female employees mentorM
newer employees
Enhanced and systematic cultivation of female managers
 evel-specific educational programs (new employees, mid-career hires,L
newly appointed supervisors, newly appointed managers)

Female Employees and Managers

Number of full-time employees

FY2015FY2016FY2017

FY2020Target14,26014,057

13,907—

Number of female employees

1,764

1,737

1,725

—

Ratio of female employees
Number of newly hired
female employees*
Ratio of female employees among
newly hired employees
Number of female employees inmanagement positions*
Ratio of female employees inmanagement positions
Number of female employees insupervisory positions*

12.4%

12.4%

12.4%

—

36

31

31

—

23.4%

16.9%

14.2%

20%

46

48

48

—

1.7%

1.9%

1.9%

3.0%

172

192

215

300

Data collected from: Fuji Electric, Fuji Electric FA Components & Systems, Fuji
Office & Life Service, Fuji Electric IT Center, Fuji Electric Finance and Accounting
Support, Fuji Architect and Engineering, Fuji Electric Frontier
Number of newly hired female employees refers to graduates from universities ortechnical colleges; Number of female employees in management positions refers to
employees of manager rank or above; Number of female employees in supervisory
positions refers to employees of assistant manager class or above*	Companies hiring new female employees: Fuji Electric and Fuji Electric FA
Components & Systems

Fuji Electric Report 201736

Socail (Human Resources)

Promotion of Work-Life Balance
We are strengthening initiatives to help employees achieve work-life balance by creating workplace environments that are more
conducive to the efforts of diverse employees and that enable people to fulfill their potential. We encourage a workstyle of focusing
on one’s job while at work and resting properly outside of work. Accordingly, we have defined workstyle reforms and support forwork-life balance as priority issues, and we are seeking to address these issues by improving upon systems and the corporate
culture while promoting collaboration between labor and management.

Workstyle Reforms and Work-Life Balance Support
In fiscal 2016, the Company analyzed workstyles on the workplace and individual levels with the aim of addressing the issue
of excessive work hours. Follow-up activities were conducted
on a monthly basis after analyzing issues to ensure overtime
work was handled appropriately. We have also introduced thefollowing new systems for enabling employees to exercise
flexibility in their work hours and location.
· Location Flexible working systems (enable work in satellite orhome offices)· Rehiring request registration system

Platinum “Kurumin” Certification
Fuji Electric has acquired Platinum“Kurumin” certification from the Ministry of
Health, Labour and Welfare. This certification
is bestowed upon companies that alreadypossess standard “Kurumin” certification,
have since made progress in introducing
and promoting use of work-life balancesystems, and are implementing superior initiatives.

Major Initiatives
 cceleration of initiatives for reforming workstyles and promoting leaveA
acquisition
 ncouragement of male employees to take leave for childbirth by spousesEand establishment of consultation venues at bases
 air work training for employees returning to work after childcare leave andP
their supervisors evel-specific educational programs (new employees, mid-career hires,L
newly appointed supervisors, newly appointed managers)

Paid Vacation Days Acquired Annually and Average Overtime
Work Hours in Japan
FY2014FY2015

Paid vacation days acquired annually

13.9

13.8

FY2016

14.3

Average overtime work hours

23.08

23.11

22.07

Numbers of Employees Using Childcare and Long-Term Care
Support Systems in Japan
FY2012 FY2013 FY2014 FY2015 FY2016

FY2020(Target)Childcare leave(of which, male)

111
(1)

123
(3)

105
(3)

105
(2)

117
(9)

–

Shortened hours forchildcare (of which, male)

173
(0)

183
(1)

189
(2)

211
(1)

219
(1)

–

Long-term care leave(of which, male)

2
(1)

3
(2)

4
(2)

3
(1)

7
(3)

–

Leave for childbirth by
spouse (% of total
applicable employees)

–

173
168
189
–
141
(54.0%) (57.9%) (59.8%) (66.1%) (90.0%)

Data collected from: Fuji Electric, Fuji Electric FA Components & Systems, Fuji
Office & Life Service, Fuji Electric IT Center, Fuji Electric Finance and Accounting
Support, Fuji Architect and Engineering, Fuji Electric Frontier

Human Resource Development
Fuji Electric views the development of employee skills as a top priority for management. Training at Fuji Electric is intended to give
form to the corporate philosophy and management policies and to cultivate professionals that can contribute to increased global
competitiveness. We are thus proactive in offering education and training opportunities for employees.

Training and Education Systems
A wide range of education and training opportunities are provided
to employees. In addition to on-the-job training at workplaces
and the unique education programs of specific business divisions and bases, we also offer level-based programs on across-Company basis and for specialized fields. In fiscal 2016,
we took steps to cultivate globally competent employees in orderto further the growth of overseas operations. Promising young
employees working in the fields of engineering, sales, andproduction with the potential to become central figures in the
future were selected from among the domestic employee base.
These individuals were dispatched to bases in Europe, the UnitedStates, or Asia for one-year stays during which they acquired
overseas operating skills. Furthermore, those employees to besent overseas from Japan for the first time were given preparatory
training. This training focused on the importance of appreciating
and cooperating with others regardless of cultural differences aswell as on compliance issues.

37 Fuji Electric Report 2017

Major Initiatives
 evel-specific trainingL(when receiving promotions or joining the Company, during 3rd year, etc.)
Selective training (future management candidates)
Specialized field training (engineering, business skills, etc.)Preparatory training for overseas dispatch

Numbers of Employees Undergoing Training (Fiscal 2016)
Level-specific training
Selective training
Specialized field training
Preparatory training for overseas dispatch

929
27
3,482
73

Social (Contributions to Communities)

Striving to further strengthen its bonds of trust with society,Fuji Electric uses the human resources and technologies
nurtured through the Company’s business activities tocontribute to the resolution of social issues faced aroundthe world. We are advancing various activities in accordance with this basic stance.

Picture books donatedthrough Christmas project for
supporting children in regions
impacted by the Great East
Japan Earthquake (a total of
430 books were donated)

Basic Policy Concerning Local Community
Contribution Activities

Local Community Contribution Activity
Priority Fields

1 Meet the expectations of each era and region using the

1 Protecting the natural environment

human resources and technologies nurtured through theCompany’s business activities
2 As a basic principle, engage in activities in areas where theCompany maintains business operations
3 Coordinate efforts on a global scale to ensure the largest
possible number of employees participate in the Company’s
local community contribution activities

2 Promoting youth development
3 Communicating with local communities
4 Supporting Disaster Recovery and Reconstruction Efforts

Case Example: Protecting the Natural Environment—Community Outreach through Dam Building(Fuji Electric Manufacturing (Thailand) Co., Ltd.)

Protecting Aquatic Organisms by Slowing River Flow

Employees helping build dams

Case Example: Promoting Youth Development—Science Classes

CSR Activities

Roughly 100 employees joined members of the local community
in building dams in the Nakhon Nayok province of Thailand.
The dams built will slow the flow of rivers when water levels riseduring the rainy season while maintaining consistent water levels
and enabling accumulated water to flow smoothly downstream.
As such, the dams will help protect the habitats of the aquaticorganisms living in the rivers.

Dam building project(Otawara Factory)

Promoting Skillful Use of Energy
Sciences classes were held on the theme of energy and theenvironment for around 70 sixth graders at elementary schools
in Otawara City, Tochigi Prefecture. Using water to represent
energy and waterwheels to represent motors, students learned
the importance of designing products with high levels of performance and of proper product usage. This lesson thus taught
students that energy savings can be realized by skillfully using
high-performance products.

Experiment in which students tried tospin waterwheels with as little water
as possible

Case Example: Communicating with Local Communities—Visit to Special Needs Childcare Centers

Water model experiment kit(Fuji SMBE Pte. Ltd.)

Sharing a Joyous Time with Children with Disabilities
As one facet of our community outreach activities, a total of 25
volunteers, consisting of employees and their families, visited afacility for children with physical and mental disabilities in Johor
State, Malaysia. These employees came bearing donations ofrice, cooking oil, detergent, toilet paper, and other daily necessities as well as presents that they had prepared personally.
These gifts were handed directly to the children. A joyous time
was had by all during a performance in which employees sangand danced together with the children.

Donated items

Song being performed with children

Fuji Electric Report 201738

Corporate GovernanceFuji Electric is reinforcing its corporate governance toward the betterment of the management transparency andthe oversight function. Furthermore, the Company has prepared its response measures to Japan’s Corporate
Governance Code, which was instituted by the Tokyo Stock Exchange in June 2015. These measures have been
compiled into the Company’s Corporate Governance Report.

Corporate Governance Framework
Fuji Electric’s corporate governance framework consists of a
Board of Directors, which performs the functions of management supervision and making important decisions, and Auditors
and the Board of Auditors, which are in charge of the management audit function.
Comprising eight Directors (including three Outside Directors)

and five Auditors (including three Outside Auditors), the governance framework is designed to reinforce the Company’s
management supervision and audit functions. To this end,
the system actively calls on Outside Officers.
Fuji Electric uses the executive officer system to strengthenbusiness execution functions.

Corporate Governance Framework
Directors and Board of Directors

General Meeting of Shareholders
Appointment

Board ofDirectors

Appointment

Audit

Board ofAuditors

Oversight
ReportAppointment

Cooperation

Accounting
Auditor

Audit

Auditors and Board of Auditors

Executive Committee
President

Executive Officers
Deliberation
Standing Auditors
ReportInternal Auditing
DivisionsControl

Oversight
Report

The Board of Directors conducts decision making
and oversight of the management of Fuji Electricand the execution of its important business.
Fuji Electric proactively appoints Outside Directors
with a view to strengthening the management
supervisory function from an objective perspective and maintaining the validity and proprietyof business decisions.

Committees(Fuji Electric Compliance
Promotion Committee, etc.)

Subsidiaries

The Board of Auditors inspects Fuji Electric’s
management and business execution. In addition to our proactive appointment of Outside
Auditors, auditing functions are enhanced byhaving Standing Auditors attend the Executive
Committee.

President, Executive Officers, andExecutive Committee
The president has ultimate responsibility forexecution of business and makes decisions on
matters of business execution other than those
decided upon by the Board of Directors. The
Executive Committee is composed of Executive
Officers and Standing Auditors and functions as
a consulting system for the president. It fulfills
such functions as deliberation of important mattersand makes reports to enable monitoring of thestatus of management. Executive Officers control
the execution of the business of which they arein charge.

Outside Officers
Outside Officers fulfill the role of providing management supervision and management audits from an objective perspective.
At the same time, they offer useful advice and instructions fromvarious perspectives on all areas of Fuji Electric’s management,
helping to ensure the appropriateness of management decisions.
After their appointment, Outside Officers participate in internal
technology presentations and business site inspections to deepen
their understanding of Fuji Electric’s management.
In fiscal 2016, business site inspections took place at threelocations: the Suzuka Factory, Kawasaki Factory, and Mie Factory.
During these inspections, Outside Officers were given explanations

39 Fuji Electric Report 2017of the factories after which they toured the actual production floors
and engaged in discussions with factory managers.
In fiscal 2016, the rates
of attendance of Outside
Officers at meetings of theBoard of Directors (whichwere held 13 times) andmeetings of the Board ofAuditors (which were held
10 times) were 98% andInspection taking place at
the Suzuka Factory
95%, respectively.

Outside Directors (Attendance at Board of Directors)*1
Toshihito Tamba(10/10)Mr. Tamba offers useful advice and opinions on
all areas of Fuji Electric’s management basedon his professional standpoint and considerable
insight as a manager of listed companies.

Mr. Tachikawa offers useful advice and opinions
Naoomi Tachikawa on all areas of Fuji Electric’s management basedon his professional standpoint and considerable(10/10)insight as a manager of listed companies.

Yoshitsugu Hayashi(Appointed in June 2017)

Mr. Hayashi is expected to offer useful advice
and opinions on all areas of Fuji Electric’s
management based on his professional
standpoint and considerable insight as anenvironmental engineer.

Outside Auditors(Attendance at Board of Directors / Board of Auditors)*1
Yoshiki Sato
(10/13 / 8/10)

Akiko Kimura(13/13 / 10/10)

Tetsuo Hiramatsu(10/10 / 7/7)

Mr. Sato offers useful advice and opinions
concerning the business management ofFuji Electric in general, based on his extensive
experience and considerable insight as amanager at financial institutions.
Ms. Kimura offers useful advice and opinions
concerning the business management ofFuji Electric in general, based on her expert
knowledge as an attorney.
Mr. Hiramatsu offers useful advice and opinions
on all areas of Fuji Electric’s management
based on his professional standpoint andconsiderable insight as an individual withexperience managing financial institutions.

Executive Remuneration
Fuji Electric has established a remuneration system and remuneration levels for Directors and Auditors that are deemed
appropriate for their respective duties and in accordance withthe shareholders’ mandate, giving due consideration to the aimsof securing and maintaining competent personnel and providing
incentives for the improvement of business performance.

Standing Directors
As Standing Directors are charged with the responsibility of
improving consolidated operating performance for each fiscal
year and realizing improvements in corporate value over the
medium-to-long-term, their remuneration is structured andmanaged in two categories: base remuneration and performancelinked remuneration.

Base Remuneration
Base remuneration is a predetermined amount that is paid
to executives according to their position. A portion of the baseremuneration is contributed to the Director shareholding association to share the economic interests of shareholders and as
an incentive to make management aware of share value.

Performance-Linked Remuneration

Outside Directors and Auditors
Remuneration for Outside Directors and Auditors is paid as apredetermined amount according to their rank, as Outside
Directors and Auditors are charged with the duty of supervisingor auditing the execution of duties across Fuji Electric. Outside
Directors and Auditors may acquire stock in the Company attheir own discretion.
Total Amount of Remuneration Paid to Directors and Auditors(Fiscal 2016)
Number of
Recipients

Amount of Payment(Millions of yen)

Directors [of which, Outside Directors]

13 [5]

269 [22]

Auditors [of which, Outside Auditors]

7 [4]

80 [22]

Notes: 1. The amount paid to Directors does not include performance-linked
remuneration for fiscal 2016
		 2. In addition to the above, ¥86 million was paid as performance-linked
remuneration for fiscal 2015 to Standing Directors (six recipients).
		 3. In addition to the above payment, the Company paid ¥17 million toemployees who concurrently assumed the office of Director (2 employees)
as salary for employees.

Internal Control System
The Fuji Electric Board of Directors determines basic policies
concerning the establishment of an internal control system as
stipulated in the Companies Act of Japan, and the Company
discloses those policies. In conjunction with the revision to theCompanies Act, in fiscal 2016, Fuji Electric began disclosing
information on the implementation of its internal control system,
thereby taking steps to respond promptly and accurately to thedemands placed upon the Company by society. Such information
included descriptions of provisions for ensuring that Directors
and employees perform their duties in a matter that is compliant
with laws and the articles of incorporation.

CSR Activities*1 Ratios below the names represent the number of meetings of the Board of
Directors and the Board of Auditors over the period from April 1, 2016, to March
31, 2017, attended by that officer.
Notification has been submitted that these Outside Officers are Independent
Directors / Auditors as required by financial instruments exchanges.

shall be within 1.0% of consolidated net income for the fiscal
year prior to the date of payment in order to make the link withconsolidated results for each fiscal year more transparent.

Interactions with Investors
The Company takes proactive steps to interact with shareholders
and other investors. The feedback gained through these interactions is relayed to the Board of Directors, Executive Officers, andrelevant divisions so that this information may be shared andreflected in corporate activities as necessary.
Activities for Interacting with Investors (Fiscal 2016)
Private shareholders andinvestors

 actory tours for shareholders: 4
F(participants: 365)
Company briefings for private shareholders: 7(participants: 237)

Analysts andinstitutional
investors

Financial results briefings: 4
Management plan briefing: 1
Business strategy briefing: 1 (Total participants in 6
briefings: 467)
Small meetings*2: 2 (participants: 12)
Factory tour: 1 (participants: 17)*2 Meetings held with a small number of analysts and other

Performance-linked remuneration is paid only in instancesin which dividends are paid to all shareholders from retained
earnings. The total amount of executive performance remuneration

Fuji Electric Report 201740

Compliance

We employ thorough measures to ensure compliance with laws and corporate ethics and always act with a highdegree of social conscience to achieve sustained corporate growth.

Basic Compliance Policy
The Fuji Electric Code of Conduct states that we shall “Respect, value and conform with all applicable laws and regulations,” andhas been incorporated into our basic policy. Based upon this policy, we have established and have been implementing the Fuji Electric
Compliance Regulations, which is a concrete guideline for compliance, and the Fuji Electric Compliance Program, which brings
together four aspects of domestic and overseas compliance.*1*1 (1) Establishment, revision, abolition and dissemination of internal rules; (2) Constant monitoring of status of compliance with laws and internal rules; (3) Auditing of status ofcompliance with laws and internal rules; and (4) Compliance education regarding laws and internal rules

Fuji Electric Compliance Regulations
Board of Directors
President and Chairman of the Board of Directors (Executive Committee)

Fuji Electric
Compliance
ProgramFuji Electric
Compliance Promotion Committee*2

Business Ethics Whistle-Blowing Systems• Business Ethics Helpline(reports from employees)• Partner Hotline(reports from materials suppliers)

Note: Hotline contact points are in-house points ofcontact and external lawyers*2 Meets twice each fiscal year to deliberate on compliance execution and planning with the goal of achieving full compliance with laws and social norms globally

Compliance Promotion Structure
The Fuji Electric Compliance Promotion Committee, which isheaded by a representative director and composed of the managers responsible for regulating laws and/or acts, with outside
experts (attorneys) as observers, has jurisdiction over compliance of Fuji Electric.

 lobal Promotion of the Fuji ElectricG
Compliance ProgramFuji Electric is enhancing the compliance of its overseas operations. At all overseas sites, in addition to globally common items
that apply such as the prohibition of human rights violations andunfair dealings, including bribery and corruption, the Fuji Electric
Compliance Program reflects the laws and regulations of eachregion where we conduct business. We practice compliancethrough the actions of all our subsidiaries in Japan and overseas
on the basis of this program.

Operation of Whistle-Blowing Systems in Japanand Overseas
To prevent infractions of laws, regulations, and internal rules
and ensure early detection, Fuji Electric has introduced theBusiness Ethics Helpline System. Under this system, employees
in Japan and overseas can report violations or suspected violations of laws, regulations or internal rules to Fuji Electric’s
president via the department responsible for compliance or
through an external lawyer.
We also operate a Partner Hotline System, which handles
notifications from our suppliers about Fuji Electric’s materials
procurement operations. Building more highly reliable trading
relationships with our suppliers is part of fulfilling our social
responsibility.

Conducting Compliance Training
Fuji Electric has created a compliance training program forofficers and employees of the Company and its subsidiaries
that addresses matters they comply with and/or encounter inthe course of their business activities. This compliance training
has two main thrusts: level-specific and job-specific courses.

Level-Specific Training
Level-specific training is tailored to newly appointed executivesof consolidated subsidiaries in Japan, newly appointed managers,
and new employees. Training lasts a half to one full day, withsessions focusing on the Fuji Electric compliance frameworkand the Fuji Electric Compliance Program.
Level-Specific Training Attended (Fiscal 2016)
Newly appointed executives

22

Newly appointed managers

153

New employees

186

Job-Specific Training
Divisions responsible for legal affairs conduct job-specific training that features items for consideration in practical businesssituations. In fiscal 2016, classroom-based training was conducted mainly for the sales and administrative unit personnel(2,372 in total) of domestic and overseas companies coveringa variety of themes, including
antimonopoly laws. Furthermore,
we conducted e-learning
programs for employees at allbases, including those overseas.
Sales unit training

41 Fuji Electric Report 2017

Risk Management

Fuji Electric is strengthening its risk management to maximize corporate value and minimize the potential losses
that could result from various risks.

Basic Policy on Risk Management
Based on the Fuji Electric Risk Management Regulations, which were formulated in May 2006, the Company manages risk in a coordinated, systematic manner.
We will appropriately manage to counteract all risks that could affect the Company’s management, while working to prevent risks
from materializing (crisis situations) and reduce losses. In doing so, we will maximize Fuji Electric’s corporate value and minimize theimpact on management in the event that risks materialize.
Note: For details about risk, please refer to the Company’s Annual Business Report under Business Risks

Types of Risk and Risk Management System
To strengthen risk management, Fuji Electric revised the typesof risks it manages and its risk management system in fiscal 2015.
The Company now focuses on the two risk categories of externalrisks and business risks, with business risks divided into thesubcategories of strategic risks, operational risks, and sharedrisks, and conducts risk management optimized for each category.
For risks that are common to the whole of Fuji Electric, suchas external risks and shared risks, the Headquarters Corporate
Division determines the policies for countermeasures, preparesappropriate manuals, disseminates the necessary information
to manage the risks, conducts education, and takes othermeasures. Business divisions and affiliate companies develop
risk management systems as part of their business responsibilities, through which they implement risk countermeasures forstrategic risks, operational risks, and other risks that cover theentirety of their business activities. When business plans areformulated for each fiscal year, business risks are analyzed andfactored in to the plans.

Risk Classification System
Business Risks

External Risks
Strategy Risks

Operational Risks

Common Risks

Management strategy
Corporate restructuring
Partnering and withdrawalothers

Orders, sales
Development, design
Procurement, manufacturing
ServiceothersFinance and accounting
Information systems
Legal and ethicalEnvironment
othersCSR Activities conomic trends
E
Attacks from outside
Natural disasters andaccidentsothers• Risks related to business activities: Managed by business divisions and affiliate companies• Risks common to all of Fuji Electric: Managed by the Headquarters Corporate Division

Information Security Measures
Development of Security Policy and Regulations
To protect personal and confidential information properly, Fuji
Electric has formulated and implemented a policy and regulations on information security, and institutes training programsfor employees each year, and other measures to strengthen
information security and prevent information leaks.
For overseas bases, each affiliate company has also drafted
security regulations, based on our information security policy
and regulations, and taking into account individual countries’
laws and regulations. We stepped up our initiatives to educate
employees about information security, distributing an information
security handbook to employees at subsidiaries and ensuringthat all employees are aware of the issues. We conducted
overseas information security audits at 17 companies in fiscal
2016. Going forward, we will make ongoing improvements
throughout Fuji Electric, including overseas bases.

 hird-Party Certification Related to Information
T
Security
Companies that handle customers’ confidential and personal
information, and who require a high level of information security
management, acquire outside certification. As of April 1, 2017,
five of our operations (at three companies) have acquired ISMS
certification. Also, three companies—Fuji Electric Co., Ltd.,
Fuji Electric Information Technology Center Co., Ltd., andFuji Electric IT Solutions Co., Ltd.—have acquired Privacy
Mark certification.

Privacy Mark (JIPDEC)

Fuji Electric Report 201742

Risk Management

Measures to Prevent Infringement of Intellectual Property Rights
As part of our intellectual property activities, we employ a system tomonitor other companies’ patents on a daily basis to prevent
any inadvertent infringement of patents held by third parties.
To prevent infringement, we also conduct compliance program training.
With respect to our own patents, we actively acquire patentrights to protect our business. We also take measures against
counterfeit products and take other steps to reduce risks related
to intellectual property.
Note: Please see page 24 for further information about Fuji Electric’s activities in
intellectual property.

Measure to Strengthen Business Continuity Capabilities
Fuji Electric aims to ensure that it can continue its core operations even if an unexpected event such as a natural disaster or
accident occurs, continuing to uphold its social responsibilities
as a company and providing a stable supply of high performance,high-quality products and services required by our customers.
To this end, we are promoting the following initiatives.

In addition, the Company has acquired resilience certification
under the program established by the Cabinet Secretariat’s
National Resilience Promotion Office in 2016 to certify companies
and organizations that actively seek to ensure business continuity.
We will continue to promote wider awareness of the BCP
at domestic and overseas subsidiaries while making ongoing
improvements to enhance our ability to ensure business continuity.

Hazard Risk

Regulations on fire
safety and disaster
preparedness

Regulations related tobusiness continuity
management (BCM)

Set out measures to reduce
damage to buildings andfacilities and to prepare supplies
to preserve human life andprevent secondary disasters

Set out organization and procedures to ensure the Company
can fulfill its responsibility tosupply customers

Business Continuity
Plan (BCP)
Cooperation

Fire Safety and Disaster-Preparedness Plan

Fire Safety and Disaster-Preparedness Initiatives
Based on our Disaster Prevention and Procedural Manual, we
have created a disaster-preparedness headquarters system.
Meanwhile, at operational sites and affiliates, we have put in placethorough measures to ensure that structures and facilities areearthquake resistant, stockpile emergency goods, and conduct
regular drills, among other measures.

Business Continuity Initiatives
In addition to disaster-preparedness initiatives, Fuji Electric has
formulated a business continuity plan (BCP) covering the head
office, which acts as a command center during disasters, andits factories, which have a large number of key management
resources that are required for supplying products, such as
production facilities.
In fiscal 2016, we once again expanded the range of products
covered under the BCP. In addition, we conducted major disaster simulation drills based on earthquake scenarios targetingbusiness division managers and other business supervisors aswell as base managers. In addition, domestic factory managers
underwent public relations drills while all employees took partin safety confirmation drills. Through these efforts, we sought toimprove our ability to respond to natural disasters.

43 Fuji Electric Report 2017

Major disaster simulation drill participated inby business supervisors

Resilience Certification Mark

Procurement Risk Reduction
To reduce procurement risks, we have established a procurement BCP based on the following measures:
1) building a supplier damage information collection system;2) securing multiple suppliers for key components;3) establishing alternate sites to carry out procurement
operations.
In fiscal 2016, we continued working to secure multiple suppliers for key components while taking steps to reinforce our
supplier damage information collection system, which extends
to overseas bases.
Looking ahead, we will expand the scope of the procurement
BCP to the procurement divisions of subsidiaries in and outsideof Japan and strengthen the plan to effectively reduce procurement risks globally.

IT Risk Reduction
We have formulated an IT-BCP comprising initiatives for restarting
and recovering the IT systems we need to continue operations
and administration in case of disaster, accident and so on,
within the required time.
In fiscal 2016, Fuji Electric and its domestic affiliates implemented simulation drills for bolstering their ability to restore IT
systems should their operation be halted due to some disaster.
The outcomes of these drills were utilized to improve and ramp
up system preservation measures.
In the future, we will extend these measures to overseas
subsidiaries.

List of Officers (As of July 1, 2017)

Directors

Michihiro Kitazawa

Kenzo Sugai

Toshihito Tamba

Naoomi Tachikawa

Yoshitsugu Hayashi

President and Chairman of theBoard of Directors

Representative Director

Outside Director

Outside Director

Outside Director

Chairman & Co-CEO,Representative Director, Tokyo
Century Corporation

Senior Adviser, TOTOKUELECTRIC CO., LTD.

Professor, Institute of Scienceand Technology Research,
Chubu University

Michio Abe

Junichi Arai

Masatsugu Tomotaka

Director

Director

Director

Yoshio Okuno

Junichi Matsumoto

Yoshiki Sato

Akiko Kimura

Tetsuo Hiramatsu

Standing Auditor

Standing Auditor

Outside Auditor

Outside Auditor

Outside Auditor

Chairman and Representative
Director, Asahi Mutual Life
Insurance Company

Of Counsel, Anderson Mori &Tomotsune

President, NIPPONTOCHI-TATEMONO Co., Ltd.

Auditors

Executive Officers (As of July 1, 2017)
Michihiro Kitazawa

General Management

Executive Vice President

Kenzo Sugai

Assistant to the President, Corporate General Manager, Sales Group

Executive Officers

Michio Abe

Corporate General Manager, Production & Procurement Group

Kuniaki Yanagisawa

Corporate General Manager, Electronic Devices Business Group

Junichi Arai

Corporate General Manager, Corporate Management Planning Headquarters, General Manager,
Export Administration Office, In charge of compliance management and crisis management

Masatsugu Tomotaka

Corporate General Manager, Power Electronics Systems Business Group

Takeshi Kadoshima

General Manager, Human Resources and General Affairs Office

Masahiro Fujiwara

Corporate General Manager, Power and New Energy Business Group

Kenji Goto

Deputy Corporate General Manager, Sales Group

Yasuhiro Takahashi

Corporate General Manager, Food and Beverage Distribution Business Group

Susumu Shinmura

Deputy Corporate General Manager, Sales Group; General Manager, Kansai Branch

Masahiro Morimoto

President & Representative Director, Fuji Electric FA Components & Systems Co., Ltd.

Toru Housen

Deputy Corporate General Manager, Electronic Devices Business Group

Shiro Kondo

Corporate General Manager, Corporate R&D Headquarters

Managing Executive Officers

Executive Officers

Corporate Information

President

Note: Please refer to our website for each officer’s brief history.

Fuji Electric Report 201744

Corporate Data

Company Information (As of March 31, 2017)
Company Name
Established
Head Office
Head Office Business Address
Capital Stock
Employees (Consolidated)
Net Sales (Consolidated)
Stock Code

FUJI ELECTRIC CO., LTD.
August 29, 1923
1-1, Tanabeshinden, Kawasaki-ku, Kawasaki-shi 210-9530, Japan
Gate City Ohsaki, East Tower, 11-2, Osaki 1-chome, Shinagawa-ku, Tokyo 141-0032, Japan¥47.6 billion
26,503 (Domestic 17,716, Overseas 8,787)¥837.8 billion (Year ended March 31, 2017)
6504

Stock Information (As of March 31, 2017)
Issued and Outstanding Shares 746,484,957
Number of Shareholders
36,913Major Shareholders
Number of shares(1,000s)

Shareholders’ names

Voting rights(%)

FUJITSU LIMITED

74,333

10.41

The Master Trust Bank of Japan, Ltd. (Trust Account)

47,456

6.64

Japan Trustee Services Bank, Ltd. (Trust Account)

46,726

6.54

Mizuho Bank, Ltd.

22,254

3.12

Asahi Mutual Life Insurance Company

19,775

2.77

FANUC CORPORATION

13,421

1.88

Japan Trustee Services Bank, Ltd. (Trust Account 5)

11,0701.55

FURUKAWA CO., LTD.

11,025

1.54

Furukawa Electric Co., Ltd.

8,738

1.22

JP MORGAN CHASE BANK 380634

8,571

1.20

Notes: 1. Treasury stock of 32,158,991 shares is excluded from the above list of top 10 shareholders.
		 2. The ratio of shareholding is calculated by deducting the number of treasury stock from the total number of shares
outstanding based on the provisions of the Ordinance for Enforcement of the Companies Act.

Share Distribution by Shareholder Type
Number ofshareholders

Type

Holding(%)

Number of shares

Financial institutions / securities firms

117

275,152,680

36.86

Other domestic corporations

457

125,810,276

16.85

Foreign corporations

535

224,226,344

30.04

Individuals and others

35,804

121,295,657

16.25

Total

36,913

746,484,957

100.00Note: “Individuals and others” includes treasury stock.

Share Price and Trading Volume Fluctuations (Tokyo Stock Exchange)
(Yen)
700
600
500
400

(Millions of shares)
150
100
50
0

4

5

6

7

8
2016

Share Price

Trading Volume

45 Fuji Electric Report 2017

9

10

11

12

1

2
2017

3

(Month)Consolidated Subsidiaries and Equity-Method Affiliates (As of July 1, 2017)
Consolidated Subsidiaries (Domestic): 23
Fuji Electric FA Components & Systems Co., Ltd.

Shinshu Fuji Electric Co., Ltd.

Fuji Furukawa Engineering & Construction Co., Ltd.*1

Hoei Plastics Co., Ltd.

Fuji Electric IT Solutions Co., Ltd.

Mie Fuji Co., Ltd.

Hoei Denki Co., Ltd.

Fuji Electric Retail Service Co., Ltd.

Hokkaido Fuji Electric Co., Ltd.

Fuji Electric F-Tech Co., Ltd.

Fuji Electric Meter Co., Ltd.

Fuji Electric Finance and Accounting Support Co., Ltd.

Fuji IT Co., Ltd.

Fuji Electric Information Technology Center Co., Ltd.

Ibaraki Fuji Co., Ltd.

Fuji Office and Life Service Co., Ltd.

Hakko Electronics Co., Ltd.

Fuji Festec Co., Ltd.

Fuji Electric FA Service Co., Ltd.

Fuji Electric Technica Co., Ltd.

Fuji Electric Power Semiconductor Co., Ltd.

Chichibu Fuji Co., Ltd.

Fuji Electric Tsugaru Semiconductor Co., Ltd.
*1 Fuji Furukawa Engineering & Construction Co., Ltd., is listed on the second section of the Tokyo Stock Exchange.

Equity-Method Affiliates (Domestic): 3
METAWATER Co., Ltd.*2

Fuji Furmanite Co., Ltd.

METAWATER SERVICE Co., Ltd.
*2 METAWATER Co., Ltd., is listed on the first section of the Tokyo Stock Exchange.

Consolidated Subsidiaries (Overseas): 47
Fuji Electric Dalian Co., Ltd.

Fuji SMBE Pte. Ltd.

Fuji Electric Motor (Dalian) Co., Ltd.

Fuji Electric (Thailand) Co., Ltd.

Dalian Fuji Bingshan Vending Machine Co., Ltd.

Fuji Electric Manufacturing (Thailand) Co., Ltd.

Dalian Fuji Bingshan Vending Machine Sales Co., Ltd.

Fuji Tusco Co., Ltd.

Fuji Electric (Hangzhou) Software Co., Ltd.

PT Fuji Electric Indonesia

Fuji Electric FA (Asia) Co., Ltd.

Fuji Electric India Private Ltd.

Fuji Electric Hong Kong Co., Ltd.

Fuji Electric Philippines, Inc.

Hoei Hong Kong Co., Ltd.

Fuji Electric (Malaysia) Sdn. Bhd.

Fuji Electric Taiwan Co., Ltd.

Fuji Electric (China) Co., Ltd.

Fuji Electric Korea Co., Ltd.

Shanghai Electric Fuji Electric Power Technology (Wuxi) Co., Ltd.

Fuji Electric Corp. of America

Wuxi Fuji Electric FA Co., Ltd.

Fuji Electric Europe GmbHFuji Electric (Changshu) Co., Ltd.

Fuji Electric France S.A.S.

Fuji Electric (Zhuhai) Co., Ltd.

Reliable Turbine Services LLC

Fuji Electric (Shenzhen) Co., Ltd.

Fuji SEMEC Inc.



Corporate Information

Fuji Electric Asia Pacific Pte. Ltd.

Including the 30 above-listed companies, 47 companies.

Equity-Method Affiliate (Overseas): 1
FUJI FURUKAWA E&C (Thailand) Co., Ltd.

Fuji Electric Report 201746

Global Network(As of July 2017)* Having manufacturing capabilities♳ Hokkaido Division♴ Hokkaido Fuji Electric Co., Ltd.

■■

㉒ Hokuriku Division㉓ Hakko Electronics Co., Ltd.*■♵ Tohoku Division♶ Fuji Electric Tsugaru Semiconductor Co., Ltd.*■㉙ Kansai Division㉚ Hoei Denki Co., Ltd.
㉛ Kobe Factory*

■■

■

■
■
■

Chugoku Division■■
Kyushu Division

■

■

■

■
■
■
■

■ ■
■

Shikoku Division

■
■■■
■■

⓰ Chubu Division⓱ Fuji Electric FA Service Co., Ltd.
⓲ Mie Factory*⓳ Suzuka Factory*⓴ Mie Fuji Co., Ltd.*㉑ Hoei Plastics Co., Ltd.

Okinawa
Okinawa Division■

47 Fuji Electric Report 2017㉔ Matsumoto Factory*㉕ Yamanashi Factory*㉖ Fuji Electric Meter Co., Ltd.*㉗ Fuji Electric Power Semiconductor Co., Ltd.*㉘ Shinshu Fuji Electric Co., Ltd.*

■■

■
■

■
⓭ Higashikanto Department⓮ Kitakanto Department⓯ Fuji Furukawa Engineering& Construction Co., Ltd.

♷ Kawasaki Factory*♸ Chiba Factory*♹ Fukiage Factory*⓼ Otawara Factory*⓽ Chichibu Fuji Co., Ltd.*⓾ Ibaraki Fuji Co., Ltd.*⓫ Facility Technology Center⓬ Fuji Electric F-Tech Co., Ltd.*Tokyo
Head Office
Tokyo Factory*
Fuji Electric FA Components & Systems Co., Ltd.
Fuji Electric Technica Co., Ltd.
Fuji Electric Finance and Accounting Support Co., Ltd.
Fuji Office & Life Service Co., Ltd.
Fuji IT Co., Ltd.
Fuji Electric IT Center Co., Ltd.
Fuji Electric IT Solutions Co., Ltd.
Fuji Festec Co., Ltd.
Fuji Electric Retail Service Co., Ltd.

■Europe

Americas♳ Fuji Electric Europe GmbH*❷ Switzerland Branch❸ U.K. Branch❹ France Branch❺ Italy Branch❻ Spain Branch♹ Fuji N2telligence GmbH
⓼ Fuji Electric France S.A.S.*⓽ Fuji Electric Corp. of America❿ Virginia Factory*⓫ Chicago Branch⓬ Santa Ana Branch⓭ Fremont Branch⓮ Reliable Turbine Services LLC⓯ Fuji SEMEC Inc.*⓰ Fuji Electric Brazil-Equipamentos de Energia Ltda.

❸
●

■■
●
❷
■●
❹ ●
❺
❻
●

■

■

●
●

■

●
⓳
⓲
●
■
⓴ ●
●

■
■
■■
■
■

●

■

■

■■
■ ■

●●

South Asia / Middle East
⓱ Fuji Electric India Private Ltd.
⓲ India Factory*⓳ Ahmedabad Branch⓴ Pune Branch㉑ Chandigarh Branch㉒ Delhi Branch㉓ Hyderabad Branch㉔ Bangalore Branch㉕ Chennai Branch㉖ Kolkata Branch㉗ Fuji Gemco Private Limited*㉘ Middle East Branch㉙ Fuji Electric (Thailand) Co., Ltd.
㉚ Fuji Electric Manufacturing(Thailand) Co., Ltd.*㉛ Fuji Tusco Co., Ltd.*㉜ Fuji Electric (Malaysia) Sdn. Bhd.*㉝ Fuji Electric Asia Pacific Pte. Ltd.
㉞ Fuji SMBE Pte. Ltd.*㉟ PT Fuji Electric Indonesia㊱ Fuji Electric Vietnam Co., Ltd.
㊲ Fuji CAC Joint Stock Company㊳ Fuji Electric Philippines, Inc.*㊴ Fuji Electric Co., Ltd.
(Myanmar Branch Office)㊵ Rep. Office of Fuji Electric Co., Ltd.
(in Cambodia)㊶ Fuji Electric Co., Ltd. Construction
Representative Office Indonesia

Corporate Information

Southeast Asia■■⓫●■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■
⓭
●
❿
●
■
■❶
⓬
●
■
■
■
■
■
■
■
■
■
■
■
■
■
■
■
■
■
■
■
■
■
■
■
●
■
■
■
■■
■
●
■
■■
■
■
■
■
■
■
■
●
■
■■
■
■
■
■
■
■
■■■China■■■■■■■Asia■■■■■■/ East㊷ Fuji Electric (Zhuhai) Co., Ltd.*㊸ Fuji Electric (Shenzhen) Co., Ltd.*㊹ Fuji Electric FA (Asia) Co., Ltd.
㊺ Fuji Electric Hong Kong Co., Ltd.
㊻ Hoei Hong Kong Co., Ltd.
㊼ Fuji Electric (Changshu) Co., Ltd.*㊽ Wuxi Fuji Electric FA Co., Ltd.*㊾ Fuji Electric (Hangzhou) Software Co., Ltd.
㊿ Fuji Electric (China) Co., Ltd.
 West China Branch South China Branch
 North China Branch Shanghai Electric Fuji Electric Power Technology(Wuxi) Co., Ltd.*
Fuji Electric Dalian Co., Ltd.* Fuji Electric Motor (Dalian) Co., Ltd.* Dalian Fuji Bingshan Vending Machine Co., Ltd.* Dalian Fuji Bingshan Vending Machine Sales Co., Ltd.
 Fuji Electric Taiwan Co., Ltd.
 Fuji Electric Korea Co., Ltd.
 Beijing Rep. OfficeFuji Electric Report 201748

External Evaluation 
Fuji Electric has been selected as a component of the following
socially responsible investment (SRI) indexes, as a company withoutstanding CSR performance.

We have received the following awards and certification inrecognition of our outstanding initiatives to promote diversity.

Care for the Environment 

Gate City Ohsaki, East Tower,
11-2, Osaki 1-chome, Shinagawa-ku, Tokyo 141-0032, Japan
Contacts: Public and Investor Relations Dept.
TEL: +81-3-5435-7111 http://www.fujielectric.com/

00A9-E-0102 Printed in Japan 2017.8