Business Report
Percentage of net sales by segment (As of March 2015)
Services and Others

5.7 % 53.5 Billion yen

Telecommunications

16.4 %

155.2 Billion yen

Metals

14.2 %
133.7 Billion yen

Total

867.8

Energy andIndustrial Products(note 1)

Billion yen

Electronics andAutomotive Systems

31.1 %

293.2 Billion yen

32.7 %
308.2 Billion yen(note 1) Figures excludes intersegment transactions■ Net sales(Billion yen)

FY 2010

FY 2011

FY 2012FY 2013

FY 2014

Telecommunications

149.3

144.5

146.1

153.9

155.2

Energy and Industrial Products

253.0

272.2

265.7

298.9293.2

Electronics and Automotive Systems

209.6

212.0

243.7

291.0

308.2

Metals

152.9

141.6

129.4

130.7

133.7

Light Metals (note 2)

209.0

195.6

185.0

96.6

0

Services and Others

37.6

36.5

37.0

44.1

53.5

Eliminations

-85.8

-83.6

-82.3

-83.4

-76.0

Total

925.8

918.8

924.7

931.8

867.8

FY 2010

FY 2011

FY 2012FY 2013

FY 2014■ Operating income(Billion yen)

Telecommunications

9.6

4.1

1.9

7.8

5.7

Energy and Industrial Products

0.9

-0.8

2.0

1.7

4.3

Electronics and Automotive Systems

7.8

5.1

9.3

14.012.9

Metals

3.2

-0

-1.3

-3.1

-4.9

Light Metals (note 2)

11.5

5.7

4.4

4.40

Services and Others

2.3

1.7

1.5

0.4

-0.1

Eliminations

-0.1

0.2

-0

0.2

0.1

Total

35.1

15.9

17.8

25.5

17.9

FY 2011

FY 2012FY 2013

FY 2014■ Operating income (Ratio to net sales)
FY 2010
Telecommunications

6.4%

2.8%

1.3%

5.1%

3.6%

Energy and Industrial Products

0.3%

-0.3%

0.7%

0.6%

1.5%

Electronics and Automotive Systems

3.7%

2.4%

3.8%

4.8%

4.2%

Metals

2.1%

0.0%

-1.0%

-2.3%

-3.7%

Light Metals (note 2)

5.5%

2.9%

2.4%

4.6%

-Services and Others

6.2%

4.7%

4.1%

0.9%

-0.2%

Total

3.8%

1.7%

1.9%

2.7%

2.1%

(note 2) Light Metals: Transferred to “profit/loss in equity method affiliates” under nonoperating income from the second half of FY2013 as aresult of the inauguration of UACJ in October 2013.

14

FURUKAWA ELECTRIC GROUP SUSTAINABILITY REPORT 2015

Business Report

Telecommunications
Optical Communication is an Advanced Technology that Meets the Needs of the Communication
Age. Furukawa Electric Provides Diversified Support for Information-oriented Society.
Currently, the Internet Links the entire world, allowing
information from overseas to be obtained in real time,
not only in offices but also at home.
In this advanced information-oriented society, optical

Fiscal 2014 Main Topics
Apr.

Started demonstration tests on passive sensors
for disaster mitigation

communication systems are a key technology for(collaboration with NTT Data Chugoku and Nippon

enabling people to access important information easily.

COMSYS, Chugoku Branch)

Furukawa Electric is firmly supporting an ideal base forDeveloped and began to test new disastermitigating system that measures river water levels
and rain levels with sensors that use opticalfibers.
Cost is reduced to about 1/5 compared withexisting electrical sensor systems.

communication by providing various technologies andproducts that realize the “FTTH” project, in which
optical fiber networks are provided to homes.

■ Fiscal 2014 Settlement of Accounts

Kagamino Town Hall

Optical rain gauge

Consolidated sales
155.2 billion yen (0.9% up year-on-year)
Monitoring device

Consolidated operational profit
5.7 billion yen (27.6% down year-on-year)◆ Trends in overseas business and high-performance
products remain generally favorable•R enewed demand for optical fiber cables in North Americaand Europe• Earnings
recovery in optical fiber exports due toweakening yen• Mobile
phone related construction in Thailand continues
to be lively• Growingsales of digital coherent products, the next
generation in optical communications

Optical water-level gauge

Measure and monitor
data collected by
optical rain gauges &optical water-level gaugesAug.

Established supplierof LAN solutions
products in Mexico-C ontributing to demandfor communications
infrastructure in Latin
America -◆ Tougher domestic competition in optical cables◆ Sluggish demand for network related products

Optical fiber cablemanufacturer started
operation in Colombia(Billions of yen)(Billions of yen)

144.5
144.5

146.1
146.1

153.9
153.9

MexicoMexico City

Cali

Colombia
Sao Paulo
Curitiba (Head plant)

BrazilBuenos Aires-C ontributing to communications infrastructure inAndes and Central America -200
200

149.3
149.3

Measures water levels
in real time

Argentina■ Net sales

150150Measures rainfall
in real time

Optical fibernetwork

155.2155.2*Also see Special Feature 2 “Efforts of FISA, Our
South American Hub”

1001005050002010
2010

2011
20112012
20122013
2013

2014
2014

(FY)
(FY)

1010

9.6
9.6
7.8
7.8

88

5.7
5.7

66

4.1
4.1

44

1.9
1.9

2
200

Started production of small ITLA for ultrafast
400Gbps optical digital coherent transmission-L ess than half the size of existing type, reducedpower consumption -■ Operating income(Billions of yen)(Billions of yen)

Sep.

2010
2010

2011
2011

2012
2012

2013
2013

2014
2014

(FY)
(FY)

FURUKAWA ELECTRIC GROUP SUSTAINABILITY REPORT 201515

Business Report

Energy and Industrial Products
Using Total Technologies to Construct Advanced Power Networks while Meeting
the Needs for Energy Saving and Environmental Preservation.
Few things are as essential for our daily lives andindustries as electric power. Furukawa Electric has been
meeting the increasing electric power demand through“power transmission systems” and “power distribution

Fiscal 2014 Main Topics
Jun.

Package order for large-scale OPGW (opticalfiber composite overhead ground wire) project in
Newfoundland, CanadaAug.

Completion of ultra-high voltage riser cableinstallation for experimental studies of thefloating ocean wind farm for Fukushimacables”. We are also actively responding to thedemands of the times for resource saving andenvironmental preservation. Furukawa Electric iscontributing to society by providing various leadingedge technologies such as superconductors and solar
generation systems, which are the focus of wide spreadattention as energy sources for the next generation.

■ Fiscal 2014 Settlement of Accounts
Consolidated sales
293.2 billion yen (1.9% down year-on-year)
Consolidated operational profit
4.3 billion yen (158.2% up year-on-year)◆F avorable sales of tape for manufacturing
semiconductors◆P ower cable business subsidiary in China received
increased orders for domestic use and for export. Profits
also improved in response to structural reforms■ Net sales*Also see Special Feature 1 “Renewable Energies”(Billions of yen)(Billions of yen)

300
300
250
250

253.0
253.0

272.2
272.2

265.7
265.7

298.9
298.9

293.2
293.2

Feb.

200
200
150
150
100
100
50
50002010
2010

2011
2011

2012
2012

2013
2013

2014
2014

(FY)
(FY)

■ Operating income(Billions of yen)(Billions of yen)

55

4.3
4.3

4433
22
1
1

2
2
0.9
0.9

00-10-10162010
2010

1.7
1.7

-0.8
-0.8
2011
2011

2012
2012

2013
2013

2014
2014

(FY)
(FY)

FURUKAWA ELECTRIC GROUP SUSTAINABILITY REPORT 2015

Reorganization and reinforcement of overseas
power cable business
Basic agreement with Fujikura Ltd. and Viscas
Corporation to take over the underground power
cable and submarine power cable business from theoverseas operations of Viscas (investment ratio: 50%
Furukawa Electric, 50% Fujikura)

Business ReportElectronics and Automotive Systems
Themes Are Safety, Comfort, and Harmony with Environments. Furukawa Electric isChallenging Transportation Possibilities Using Total Technologies.
In the field of transportation including automobiles,trains, ships, airplanes, and H II rockets, Furukawa
Electric combines its proprietary material, electronics,and mechatronics technologies to develop various
p ro d u c t s f o r m i n g c o m f o r t a b l e t r a n s p o r t a t i o nenvironments.

Fiscal 2014 Main Topics
Jun.

Established wire harness plant in Wuhan, ChinaJul.

Company controlling SE Asia launched inBangkok, Thailand

In particular, in the field of automobiles, we offer
various electronic components and aluminum body

Established supplier of connectors for airbags inBrazilmaterials including wire harnesses. Furthermore, we arechallenging advanced technologies such as ITS* )systems and has established a firm status as an
indispensable supplier for the automobile industry.
*) ITS: Intelligent Transport Systems■ Fiscal 2014 Settlement of Accounts
Consolidated sales
308.2 billion yen (5.9% up year-on-year)
Consolidated operational profit
12.9 billion yen (7.7% down year-on-year)◆G rowing sales of aluminum substrate materials for harddisks and heat exchanger parts for electronic devices
and rail cars
◆ In automotive components business, increased cost of
reimporting products from overseas plants due to impact
of weakening yen

SRC

Dec.

Jointly established lead storage battery plant inIndonesia

Jan.

Established supplier and developer of blanks foraluminum memory disks, basic agreement withUACJ (April 1, 2015)◆R ising price of lead, a principle raw material of automobile
batteries, pushing down profits■ Net sales(Billions of yen)

350

291.0

300
250

308.2

243.7
209.6

212.0
Inside an HDD (Disk is shown circled in red)200
150
1005002010

2011

2012

2013

2014

(FY)

■ Operating income(Billions of yen)

14.0

15

12.9

1299.37.8
5.1

6302010

2011

2012

2013

2014

(FY)

FURUKAWA ELECTRIC GROUP SUSTAINABILITY REPORT 201517

Business ReportMetals
Constant Challenges to Material Renovation and Development of New Materials are
Facilitating Unlimited Extension of Applications in Every Industry.

Over 130 years since its establishment, Furukawa
Electric has been constantly offering advancedmaterials ranging from copper and aluminum materials
to wires and cables, as well as various related materials.

Fiscal 2014 Main Topics
Oct.

Constant challenges to material innovation are

Received order for superconducting cables for
ITER (International Thermonuclear ExperimentalReactor)

facilitating creation of materials with new potentiality andunlimited extension of applications from familiar products
to the high technology field. These materials dramaticallychange our lives and the foundation of the industries.

■ Fiscal 2014 Settlement of Accounts
Consolidated sales
133.7 billion yen (2.3% up year-on-year)(Provided by ITER organization)
Top: Superconducting
material
Bottom: Cross-section ofsuperconducting cable

Consolidated operational profit-4.9 billion yen (¥1.9 billion worse year-on-year)◆ Improved productivity at Taiwan subsidiary in copper foilbusiness◆ At domestic copper foil plant, declining operations incopper foil for automobile lithium ion batteries due tosluggish demand for electric vehicles◆ Worsening profits in copper strip products due to impactof partial shutdown of operations at Nikko Works■ Net sales

Jan.

Restarted full production of copper strip products
at Nikko Works
Furukawa Electric’s Nikko Works suffereddamage, including a collapsed roof at partof its production plant, due to record
snowfalls in Nikko, Tochigi Prefecture inFebruary 2014. A partial shutdown of its
copper strip product operations wasunavoidable.
In spite of the heavy damage, they wereable to restart full operations within just 10.5
months thanks to the support and efforts ofvarious related parties.

(Billions of yen)

200

152.9
150

141.6

129.4

130.7

133.7

100

Copper strip products

5002010

201120122013

2014(FY)■ Operating income(Billions of yen)

43

3.2

2
1

00-1

-1.3-2-3

New raw strip plant-3.1-4-5-4.9
2010

18

2011

2012

2013

2014

(FY)

FURUKAWA ELECTRIC GROUP SUSTAINABILITY REPORT 2015

Lead frames for electronic
devices

Business Report

R&D
Furukawa Electric Group will Mobilize the Group’s Abilities and Contribute to Society with
its Material Technology Based Around the Theme of “Using Technology Acquired Throughour Material Capabilities to Help Realize a Society that is Comfortable for Living.”
Our R&D division, to activate our development capabilities, will concentrate and integrate various technologies now
scattered among different departments and subsidiaries and affiliates. By using our research laboratories in the UnitedStates and European Union as a foothold, we will promote the internationalization of our research and development
projects.
In addition to such activities, we will aggressively promote Open Innovation by cooperation not only with universities
and public research institutes, but also with industrial companies.

■ New R&D organization on Nov.16, 2014C
 hange from classification by products to classification by research stages (basic research / development of essentialtechnologies / product development

New materials and new technologies
Advanced Technologies
R&D Laboratories (Yokohama)Core technologies
Highfrequency
electronics

Research on advanced technologies
Carry out research on advanced technologies with great
hidden potential even if there are risks involved, and prepare
for future growth in new business domains.

Laser
OpticsLaboratories for Fusion of Core Technologies (Yokohama)

Research on fusion of technologies
Create new value through the fusion of coretechnologies.
Apply technologies with distinctive
characteristics to a wide variety of businesses,
without being limited by current business areas.

Polymers

Automotivetechnologies

MetalsInfrastructure technologies

Automotive Products & Electronics Laboratories(Hiratsuka / Nikko / Shiga)

Telecommunications & Energy Laboratories(Chiba / Hiratsuka)

Research on focused businesses
Focus on research and development in current target areas (automotive / infrastructure)

OFS laboratories (USA: optical fibers)
FETI (Hungary: analysis)
SuperPower Inc. (USA: superconductivity)

FURUKAWA ELECTRIC GROUP SUSTAINABILITY REPORT 201519