Information Solutions

Consolidated revenue in this segment climbed 17.0% over the previous fiscal year to ¥1,026.1 billion. One reason was healthy growth in sales in certain business fields, including medical systems as well as graphic arts, and FPD materials. The addition of sales from newly consolidated subsidiaries also bolstered the top line. The segment recorded a 20.4% rise in operating income to ¥95.2 billion despite booking structural reform charges of ¥17.3 billion. Excluding these charges, pro forma operating income jumped 28.2%, or ¥24.7 billion, to ¥112.5 billion.

In the medical systems business we are conducting operations on a global scale in the field of medical image diagnostics. Flagship products are our FCR (Fuji Computed Radiography) digital X-ray imaging and diagnostic systems, which led the world when they were developed in 1981, and SYNAPSE, a medical-use picture archiving and communications system (PACS) for managing images from various modalities in radiology departments over a network. In this market, the development of medical networks, particularly in Japan, the U.S. and Europe, is driving increasing digitization of testing and diagnostic information.

In the year ended March 31, 2007, we recorded continued robust growth in sales of FCR, dry films and other equipment and materials. A highlight of the fiscal year under review came in July 2006 when our FCR mammography system, which is effective in the early detection of breast cancer, became the first CR system in the world to receive premarket approval (PMA) from the U.S. Food and Drug Administration. The start of sales in the U.S. following this approval contributed to the higher FCR sales. SYNAPSE also saw higher sales, mainly in Japan, the U.S. and Europe. In digital endoscopes, we leveraged distinctive products such as the Transnasal Endoscope, which substantially alleviates pain through insertion via the nose, to boost our market share. This translated into a marked increase in sales of digital endoscopes.
In October 2006, Daiichi Radioisotope Laboratories, Ltd. became a consolidated subsidiary. The inclusion of sales from this company, which was renamed FUJIFILM RI Pharma Co., Ltd. in April 2007, helped boost sales substantially in the business as a whole in the fiscal year ended March 31, 2007.

Demand is rising rapidly for computer-to-plate (CTP) systems for the creation of printing plates as digitization of printing work advances. These systems allow digital text and image data to be transferred directly to printing plates, eliminating the film processing stage. CTPs are now used for around 65% in Japan and for more than 70% of printing in North America and Europe. Competition is intensifying in this field.
In the fiscal year ended March 31, 2007, we stepped up efforts to increase production capacity at our four bases in the U.S., the Netherlands, China and Japan and to strengthen the marketing of CTP plates. In addition, we launched the processless thermal plates worldwide. A response to strong requests from the market, this next-generation CTP system does not require a developer and developing chemicals, meaning that it has a small environmental footprint. Consequently, overall revenue in the graphic arts business increased due to a sharp rise in sales of CTP plates in Europe, Oceania and India, though the growing use of CTP systems brought down demand for graphic arts films.

Higher capacity and higher transfer rates of data storage tapes, which are used to back up and archive data, are increasingly in demand as the volume of data handled by companies and government departments increases rapidly in line with the uptake of broadband.
Despite continuing fierce price competition in mid-range data storage tapes, sales increased during the year ended March 31, 2007, centered on mainstay LTO Ultrium 3 data cartridges. In the high-end enterprise-use field, there was a steady increase in sales of data cartridge products used for the IBM TotalStorage® Enterprise Tape Drive 3592. Further sales growth is being driven by the start of shipments of the world's first 700GB IBM System Storage 3592 Extended Data High-capacity Tape Cartridge for enterprise-grade systems and the FUJIFILM DLTtape® S4 Cartridge for the mid-range field.

In the Information Solutions segment, guided by our VISION75 (2007) medium-term management plan, we will roll out initiatives in every business field so as to better ensure growth over the medium and long term. This will include increasing investments in plant and equipment, conducting more M&As and investing more in R&D. These investments will be centered on high-growth business fields such as the FPD materials business.
In the medical systems business, we plan to ensure our competitiveness by expanding sales of total systems including imagers, centering on FCR, which has a top market share. At the same time, we will expand business for medical-use picture archiving and communications systems, as we work to engineer a portfolio shift from one led by film to one in which equipment and systems are the earnings drivers. FUJINON Corporation, which supplies digital endoscopes, is also endeavoring to expand sales through an alliance with Given Imaging Ltd. This alliance will enable FUJINON to add Given Imaging's capsule endoscope to its product lineup as well as generate synergies with FUJINON's unique Double-balloon Endoscope System.

In the graphic arts business, we aim to be the No.1 CTP plates supplier with a worldwide market share of 40% by continuing to expand sales, especially of CTP-related products.
Meanwhile, we plan to make the FPD materials business a fulcrum of the company. We will do this by leveraging the strength inherent in possessing production technology for core material FUJITAC as well as organic synthesis and precision coating technologies. We will also make substantial capital investments in this business, constantly improve the performance of materials, and develop and commercialize value-added materials to the same end. In the recording media business, we will use our proprietary NANOCUBIC technology to develop tape cartridges that achieve even higher storage capacity. In April 2007, for example, we launched the fourth-generation LTO-standard products of LTO Ultrium 4 data cartridges. These new data cartridges have double the storage capacity of the previous generation. We will continue to provide products meeting customers need at a high level.