Financial Section



Five-Year Summary
Financial Review:
Sales
Profits
Financial Position
Financial Overview of the ICL Group

Five-Year Summary



Yen
(millions) U.S. dollars
(except per share data and number of employees) (thousands)
______________________________________________________ _____________
Years ended March 31

1991

1992

1993

1994

1995

1995

Net sales 2,971,462 3,441,947 3,461,928 3,139,330 3,257,706 36,603,438
Operating income 214,195 136,849 64,169 103,357 165,875 1,863,764
Income (loss) before taxes 153,573 41,541 (9,758) 26,227 85,371 959,225
Net income (loss) 82,673 12,210 (32,602) (37,672) 45,020 505,843







Total assets 3,737,170 3,991,543 3,775,831 3,594,743 3,713,816 41,728,270
Shareholders' equity 1,159,299 1,165,053 1,101,209 1,057,907 1,100,315 12,363,090







Amounts per share of common stock:





Net income (loss)
45.7 6.7 (18.0) (20.8) 24.8 0.279
Cash dividents
10.0 10.0 8.0 8.0 10.0 0.112
Shareholders' equity
639.8 642.7 607.2 582.4 605.6 6.804







R&D expenditure 329,823 391,885 386,890 329,916 323,900 3,639,326
Capital expenditure 315,109 350,692 184,639 184,634 234,841 2,638,663







Number of employees 145,872 155,779 161,974 163,990 164,364







Net sales by main product:





Computers & information





processing systems
2,055,609 2,510,731 2,506,193 2,140,548 2,169,753 24,379,247
Communication systems
441,962 444,901 473,428 487,942 500,664 5,625,438
Electronic devices
348,870 348,519 350,971 394,552 460,340 5,172,360
Other operations
125,021 137,796 131,336 116,288 126,949 1,426,393
Total 2,971,462 3,441,947 3,461,928 3,139,330 3,257,706 36,603,438







Net sales by customers' geographic location:




Japan
2,233,493 2,415,151 2,312,524 2,213,694 2,283,353 25,655,652
Asia & Oceania
112,792 129,799 169,140 184,766 201,295 2,261,742
The Americas
337,010 333,226 353,753 261,273 280,114 3,147,348
Europe
276,240 543,653 604,603 459,170 470,985 5,291,966
Africa & the Middle East
11,927 20,118 21,908 20,427 21,959 246,730
Total 2,971,462 3,441,947 3,461,928 3,139,330 3,257,706 36,603,438

Notes:
1. See Note 1 of Notes to Consolidated Financial Statements in respect to the calculation of net income (loss) per share.
2. The U.S. dollar amounts above have been translated from yen, for convenience only, at the rate of 89 Yen = US$1.

Financial Review



During fiscal 1994, ended March 31, 1995, although Japan suffered from adverse economic conditions influenced by the appreciation of the yen and a slumping stock market, favorable trends continued in the U.S. and in Asian nations, while Europe also moved towards a recovery.
In the information and communication markets, the Group benefited from a moderate recovery in investment in Japan. Continued trends toward open systems and rightsizing spurred the demand for personal computers and workstations among corporate users, and there was also a strong demand for PCs from individual consumers. The demand for semiconductors, especially memory products, maintained its high level, particularly in overseas markets.
Under these conditions, the Group promoted its solutions business by focusing on open systems, software and services. The Group also continued its efforts to streamline management and promote globalization.

Sales

Consolidated net sales for fiscal 1994 were 3,257 billion Yen ($36,603 million), up 3.8% from the previous fiscal year's 3,139 billion Yen. The prime contributing factors to the improvement were the increase in domestic sales and the growth in overseas sales of semiconductors. Consolidated domestic sales for fiscal 1994 were up 3.1% to 2,283 billion Yen ($25,655 million) and overseas sales increased 5.3% to 974 billion Yen ($10,947 million) despite the negative impact of the stronger yen on the translation of sales of overseas subsidiaries.
Computers and information processing systems sales increased this year by 1.4% to 2,169 billion Yen ($24,379 million). In Japan, sales of mainframes were driven by a moderate recovery in investment in computerization, and by a strong demand for personal computers from individual consumers. Sales of the FMV Series of personal computers grew significantly, both for corporate and personal use. In the European market, the ICL Group showed stable sales for fiscal 1994. However, the appreciation of the yen, which averaged 8% higher against the dollar and 5% higher against the pound over corresponding rates for the previous year, had a negative impact, estimated at 29 billion Yen ($326 million), on the translation into yen of the sales of computers and information processing systems by overseas subsidiaries.
Sales of communications systems increased 2.6% to 500 billion Yen ($5,625 million). Expanded demand for mobile telephones resulted in increased sales of mobile communications systems, and sales of high-speed transmission equipment for VANs and corporate network information systems also grew in Japan. On the other hand, overseas sales declined reflecting the more intense competition in the Chinese communications market.
Sales of electronic devices rose 16.7% to 460 billion Yen ($5,172 million). This increase was primarily attributable to 4-Mbit DRAMs, microcontrollers and gate arrays, supported by the consistent growth in the U.S. personal computer market as well as the rapidly expanding demand for personal computers and workstations in Japan.

Profits

Operating income in fiscal 1994 grew 60.5% to 165 billion Yen ($1,863 million), up from 103 billion Yen recorded in the previous year. This was achieved by improvements in sales, continued Group-wide cost reduction efforts and enhanced operational efficiency. Cost of sales amounted to 2,117 billion Yen ($23,795 million), an increase of 3.0% compared to 2,056 billion Yen in fiscal 1993. On the other hand, selling general and administrative expenses decreased 0.6% to 974 billion Yen ($10,944 million) from 979 billion Yen in fiscal 1993. This decrease was driven by a continuing program of restructuring and rationalizing management throughout the Group in order to increase management efficiency.
R&D expenditure for fiscal 1994 totaled 323 billion Yen ($3,639 million), down 1.8% from 329 billion Yen in fiscal 1993. As a percentage of net sales, R&D expenditure decreased 0.6% to 9.9%. This decrease is the result of concentrating resources in areas showing the most promise such as multimedia-related technologies.
Income before income taxes expanded 225.5% to 85 billion Yen ($959 million) compared to 26 billion Yen in fiscal 1993 and net income rebounded significantly to 45 billion Yen ($505 million) up from the 37 billion Yen net loss recorded in fiscal 1993. This is primarily attributable to the recovery of Amdahl Corp., which is consolidated on an equity basis, along with the achivement in cost reduction and enhanced operational efficiency throughout the Group.
As a result, net income per share of common stock of 24.8 Yen ($0.279) was recorded, a significant improvement from the net loss of 20.8 Yen per share of common stock in fiscal 1993.

Financial Position

At the fiscal year-end, the Group's assets amounted to 3,713 billion Yen ($41,728 million), a 3.3% increase over the 3,594 billion Yen of fiscal 1993.
Capital expenditure in fiscal 1994 rose to 234 billlion Yen ($2,638 million), an increase of 27.2% in comparison with the 184 billion Yen spent in fiscal 1993. We endeavored to make effective use of our existing resources, while actively promoting investment in facilities for semiconductors, for which continued strong demand is predicted.
Shareholders' equity totaled 1,100 billion Yen ($12,363 million) in fiscal 1994. The ratio of shareholders' equity to total assets was 29.6%, a 0.2% increase from that of fiscal 1993. Shareholders' equity per share of common stock was 605.6 Yen ($6.804), which represented a growth of 4.0% over fiscal 1993.



Financial Overview of the ICL Group

ICL's sales in the fiscal year ended December 31, 1994 were 2,655 million Pounds, a 1.2% increase over the previous year. ICL secured major contracts in each of its main businesses as an information technology company, despite the difficult year for most economies of Western Europe.
Within industry systems, one of ICL's main business streams, ICL concentrated on selected markets, with particular emphasis on financial services, retail and large complex system integration projects. Its financial services business continued to strengthen its position in world markets. Enterprises is now established as a leading European-based provider of total business solutions and grew 30% in the year. The services business continued to grow, capitalizing on the increased demand for multi-vendor maintenance and out-sourcing and further enhanced ICL's position as one of Europe's top service vendors. The out-sourcing business alone grew 28%.
ICL continued to maximize the value from its own substantial investment in R&D, totaling some 173 million Pounds, by collaborating with other companies. ICL and Fujitsu continue to seek opportunities to expand their businesses, particularly in the field of client-server computing.

ICL Group (Summary of Performance)

Stg. Pds (millions)
Years ended December 31 1993 1994
. Net sales 2,623 2,655
. Income before income taxes 23 28
. Net income for the year 1 17
. R&D expenditure 209 173



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