"One head better than two" at Fujitsu Siemens

(By Richard Holway) On 22nd Oct 08 I profiled Richard Christou who had been appointed Corporate First Senior Vice President of Fujitsu with responsibility for all operations outside Japan. I commented that, with c60,000 people and upwards of Euro18b revenues it was “a mighty big job”. Indeed, one of the biggest held globally by a Brit.

Well, today that job got a lot bigger as Fujitsu has bought out Siemens’ 50% stake in Fujitsu Siemens (FSC) – a JV which started in 1999. Richard personally sponsored this deal and will be its Chairman. Fujitsu is paying Euro450m for the operation which has revenues of cEuro6.6b – a PSR which I guess speaks volumes and is much to do with FSC making an operating profit of just Euro79m in FY07 and a projected loss of cEuro100m in the current year.

FSC is the biggest maker of personal computers in Europe and employs about 10,500 people worldwide, a majority of them in Germany. FSC generates c 28% of its revenues from PCs for corporate users and 24% from servers. About 19% comes from consumer PCs – a sector which has been somewhat troubled of late. Indeed, there are media reports that Fujitsu will pull out of consumer PCs post the deal. About 17% of revenues comes from services. At Euro1.1b, that’s a pretty tasty services revenue in its own right.

The JV was due to end in 2009 anyway so it is timely that its future has now been sorted. The converse of the old adage “two heads are better than one” clearly applies in this case. Having one owner/shareholder with just one clear line of responsibility will surely better enable the challenges to be faced.

I’m meeting with Richard Christou next week and will discuss further how the operation will fit in with the rest of Fujitsu’s operations outside Japan (most particularly Fujitsu Services) when the deal is completed in April 09.