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Hello. I'm Takeshi Isobe, Chief Financial Officer of Fujitsu Limited. I'd like to thank you for joining us today. This presentation will cover our financial results for the third quarter of fiscal 2021.
Revenue for the third quarter of fiscal year 2021 was JPY 880.5 billion, down 1% from the prior year. Although there was a recovery trend in demand, it varied by industry and customers, and the speed of the recovery was modest due to the continued impact of component supply delays caused by shortages in semiconductors. Operating profit was JPY 65.1 billion, down JPY 28.3 billion from the prior year. These results were significantly impacted gains on the sale recorded last year for the mobile phone retail store business.
As in the first half, we continue to make steady growth investments for the future. Profit for the period was JPY 71.3 billion, up JPY 4 billion from the prior year. A decline in tax expenses relating to the reorganization of our business in North America meant that we were ultimately able to increase our profit for the period.
Page 5. Please look at the column with the bold outline. Revenue was JPY 880.5 billion, down JPY 13.8 billion from the prior year. I will comment now on our results, excluding the impact of special items and restructuring. Revenue for Technology Solutions declined due to the impact of component supply delays, and revenue for Ubiquitous Solutions was lower in comparison with the previous year when revenues were boosted by the sudden demand for equipping home offices for remote working and by the GIGASchool program. On the other hand, in this year's third quarter, there was strong demand for electronic components in Device Solutions, resulting in a significant increase in that segment's revenue but it was not enough to fully offset the declines in the other 2 segments.
Operating profit was JPY 65.1 billion, and the operating profit margin was 7.4%. Compared to the previous year, operating profit declined by JPY 28.3 billion. The decline can largely be attributed to the gain recorded last year on the sale of a business. In a moment, I will break down the contributing factors behind these increases and decreases in a waterfall chart.
At the very bottom, profit for the period was JPY 71.3 billion. As I mentioned earlier, the restructuring of our business in North America was accompanied by a decrease in our tax burden of around JPY 28 billion, resulting in a JPY 4 billion increase in our profit for the period.
Page 6. I will briefly comment on the cumulative financial results for the first 9 months of fiscal 2021. Please look at the column with the bold outline. Revenue was JPY 2,543.5 billion, up JPY 17.3 billion from the previous year. Excluding the negative impact of business restructuring, revenue rose by 2% to JPY 50.1 billion. In Technology Solutions, there was an increase in revenue from 5G base stations as well as the positive foreign exchange impact of a weaker yen, which combined to offset the negative impact of supply chain disruptions, resulting in a slight increase in revenue from the prior year. In Ubiquitous Solutions, revenue declined relative to the prior year when it was boosted by factors including the demand for home office equipment for remote working. In Device Solutions, revenue grew sharply due to the continued strong performance in electronic components.
Operating profit was JPY 146.6 billion, down JPY 9 billion from the prior year. The negative impact of restructuring and special items was JPY 7.6 billion, primarily stemming from the high operating profit from the prior year when a gain on the sale of a business was recorded. Excluding that, the level of results was roughly consistent with the prior year. In a moment, I will illustrate the changes with a waterfall chart. At the very bottom, profit for the period was JPY 124.2 billion, up JPY 9.8 billion from the prior year.
Page 7. I will now comment on the factors that caused increases or decreases in operating profit in the third quarter compared to the prior year. On the far left, operating profit for the third quarter of fiscal 2020 was JPY 93.4 billion. I will use this as the starting point for explaining increases or decreases from the prior year. The first downward arrow shows the combined negative impact of JPY 19.1 billion from special items and business restructuring. First, the gain recorded last year on the sale of the mobile phone retail store business was JPY 25.4 billion. Next, there was a gain of JPY 5.8 billion recorded on the sale of some product-related operating companies in Europe in this fiscal year's third quarter. The remaining arrows show increases or decreases in operating profit, excluding the impact of restructuring and special items.
Within the dotted line box, the first upward arrow shows a positive impact of JPY 3.4 billion from higher revenue. This is the increase in operating profit from higher revenue in Device Solutions. The next upward arrow shows a positive impact of JPY 5.4 billion from improvements in profitability. There was an improvement in the gross profit margin of 0.5 percentage points. The third arrow pointing downward shows a negative impact of JPY 6.1 billion from higher operating expenses. This amount includes an increase in expenses of JPY 8 billion attributable to growth investments. The last downward arrow shows a negative impact of JPY 11.9 billion stemming from supply chain disruptions. In addition to the decline in unit sales of JPY 24.8 billion from sales that had to be postponed, the supply chain disruptions also resulted in higher costs. Adding everything together, operating profit for the third quarter was JPY 65.1 billion.
Page 8. I will now comment on the factors that caused increases or decreases in cumulative operating profit for the first 9 months of fiscal 2021 compared to the prior year. The order of the arrows in terms of the categories of increases and decreases is the same as in the previous chart for the third quarter. The first downward arrow on the far left shows a negative impact of JPY 7.6 billion from restructuring and special items, including negative comparisons with the prior year when significant special gains were recorded.
Please look at the 4 arrows inside the dotted line box that show increases and decreases, excluding the impact of restructuring and special items. The combined total from the 2 upward arrows showing the impact of higher revenues on profits and the improvement in profitability amounts to a positive impact of JPY 45 billion, which mostly offsets the negative impact of higher operating expenses, primarily stemming from an increase in growth investments and the negative impact of delays in component supplies. Excluding the impact of restructuring and special items, the level of operating profit was almost the same as in the prior year.
Page 9. I will now give some supplemental information on the arrows inside the dotted line from the waterfall chart regarding changes in revenue from the prior year, excluding the impact of restructuring and special items. Revenue in Technology Solutions declined by JPY 24.7 billion from the prior year. This amount includes a negative impact of JPY 24.8 billion from delays in component supplies. Revenue from Solutions/Services declined by JPY 20.5 billion. Services revenue, including from systems development, remained robust.
On the other hand, there was a sharp decline in revenue from business that is integrated with hardware. The trend in revenues from local government customers, educational institutions and medium-sized businesses was weak, and delays in the supply of components also had a negative impact.
In System Platforms, revenue declined by JPY 17.4 billion. The impact of the global chip shortage led to a decrease in revenue by JPY 11.8 billion, primarily in system products. Aside from that, revenue from system products also declined from the prior year when there were large-scale public sector projects. In network products, revenue increased despite the negative impact from global chip shortages due to relatively strong demand from our business in North America, primarily 5G base stations.
In international regions excluding Japan, revenue increased by JPY 2.8 billion. The impact of the global chip shortage led to a decrease in revenue from product sales in Europe by JPY 10 billion. On the other hand, in addition to higher revenue from the services business in Central and Eastern Europe as well as in North America, there was a positive foreign exchange impact from the weaker yen, resulting in an overall increase in revenue.
In Ubiquitous Solutions, revenue declined in comparison with the prior year when there was strong demand for remote working solutions as well as revenue from the GIGASchool project. In Device Solutions, in line with the increase in demand for semiconductors, revenue from electronic components was very strong.
Page 10. This slide shows the status of orders in Japan. I will comment on each industry segment separately according to the current business climate. First is the enterprise segment. Orders for the third quarter were up 1% from the previous year, while cumulative orders for the first 9 months were down by 2%. Orders were strong in both the second and third quarters in system integration and services. Product-related orders are recovering somewhat despite the impact of the global chip shortage. Many of our customers are also facing impacts from the pandemic and supply chain issues. And depending on the company, the willingness to spend on IT investments may vary.
Next is finance and retail. Orders increased by 5% in the third quarter and rose 2% for the first 9 months. In the third quarter, we won several orders for mission-critical system upgrades from insurance company and securities company customers. For the first 9 months as well, system integration and services orders sharply increased.
Next is the Japan region. Orders fell by 11% in the third quarter and declined by 2% for the first 9 months. This segment primarily consists of government ministries and agencies and telecom carriers. Orders from government ministries and agencies in the third quarter were essentially unchanged from the prior year and were slightly lower than for the first 9 months of the prior year. The increase in system integration and services orders during the third quarter of fiscal 2021 covered the drop-off in product-related orders from the prior year's large-scale orders but did not quite cover the difference in terms of cumulative orders for the first 9 months of the fiscal year. Orders from telecom carriers fell sharply in the third quarter. For the first 9 months, orders were slightly below the level of the previous year. The decline in third quarter orders from telecom carriers is a decline from the high level of orders in the prior year and was as anticipated beforehand.
Next is Fujitsu Japan. Orders in the third quarter declined by 12% and declined by 9% for the first 9 months. Orders from local governments were weak both in the third quarter and for the first 9 months. In addition to the fact that these customers continue to face challenges relating to COVID-19, the movement towards system standardization has not yet begun in earnest. Orders from the health care segment were essentially unchanged from the prior year, both in the third quarter and for the first 9 months. Progress is being made in recovering projects that had been postponed, and the number of projects in the pipeline is also improving. Orders from educational institutions have been weak. The drop-off in orders from last year's GIGASchool project has had a significant impact. Orders from small- and medium-sized enterprises have also been weak. Customers are impacted by component supply shortages as well as a surge in resource prices, and the recovery in demand has been slow.
Please look at the totals in the bottom section. Overall orders in the third quarter declined by 5%. Figures in brackets show the totals in each product category. System integration and services orders increased by 6% in the third quarter. Spending on investments in digital transformation and to generate efficiencies is recovering among large-scale users with strong management platforms, including large-scale manufacturing and financial services customers. On the other hand, orders for servers and network equipment in the third quarter declined by 30% due to component supply disruptions and the strong impact of the drop-off in orders from high levels in the prior year.
Page 11. This shows the status of the improvement in our gross margin. Excluding the impact of restructuring and special items, our gross margin increased by 0.5% to 30.1% from the previous year. Cumulative results for the first 9 months improved by 0.8%. In the third quarter, for electronic components, the increase in demand drove significant improvements in operational capacity utilization.
Next is operating expenses. There was an increase of JPY 6.1 billion from the prior year. This includes the impact of an expansion in growth investments of JPY 8 billion. Including capitalized investments, growth investments in the third quarter were JPY 21 billion and were JPY 57 billion for the first 9 months of the fiscal year. That represents an expansion of JPY 28 billion over the prior year. The breakdown is JPY 40 billion in operating expenses and JPY 17 billion in capitalized investments.
Growth investments fall into the 2 categories of value creation and internal transformation. Value creation investments to date for this fiscal year have been JPY 22 billion, primarily consisting of investments in the Japan Global Gateway and the development of global offerings. Investments in internal transformation were JPY 34 billion, primarily consisting of investments in Fujitsu's internal digital transformation and include investments in borderless office leading to work style change and in One Fujitsu.
Page 12. Next, I will comment on the global chip shortage. Problems in procuring components persisted in the third quarter, resulting in a negative impact in the third quarter of JPY 24.8 billion on revenue and JPY 11.9 billion on operating profit. We're pursuing multiple avenues in parallel to procure components including design changes to pivot to substitute components, but the supply/demand imbalance continued and deals in which sales were postponed reoccurred in the third quarter.
In addition to this decline in unit sales, we also continued to be impacted by higher costs, including price surges for components and the added cost of shipping via airfreight. For the first 9 months of the fiscal year, this led to a decline in operating profit by JPY 19 billion, which was higher than we had anticipated as of the end of the first half.
Page 14. I will now comment on our results by segment, primarily in relation to last year's results. First is Technology Solutions. Revenue was JPY 738.1 billion, down 3.6% from last year. Operating profit was JPY 40.2 billion, down JPY 13.2 billion from last year. I'll explain the factors behind these results in each subsegment.
Page 15, Solutions/Services. Revenue was JPY 437.5 billion, down 4.5% from the prior year. The Services business continued its strong sales from the first half, but there were significant drop in business with integrated hardware. Sales were particularly soft for educational institutions, local governments and SMEs, in addition to the impact of the component supply delays. Operating profit was JPY 38.2 billion, down JPY 4.3 billion from the previous year. While improvements in profitability and efficiency with ordinary expenses continued, operating profit fell due to the impact of lower revenue and higher growth investments.
Page 16, System Platforms. Revenue was JPY 144.2 billion, down 10.8% from the prior year. Revenue in system products declined 18.5%. In addition to component supply delays, revenue was also impacted by a major public sector business deal last year that did not recur this year. Revenue in network products increased by 5.3%. The increase in sales in North America drove the overall result. Operating profit was JPY 5.8 billion, down JPY 5.6 billion from the prior year. This was due to the significant negative impact of the component supply delays.
Page 17, international regions excluding Japan. Revenue was JPY 192.3 billion , in line with the previous year. The impact of component supply issues lowered revenue by JPY 10.1 billion, primarily in product sales in Europe. Overall, revenue was in line with the previous year, in part due to the positive foreign exchange effects of the continued weak yen. Operating profit was JPY 11.6 billion, an improvement of JPY 3 billion from the prior year. The major reason for the increase in profits is gains from the sales of businesses in Europe implemented in this period.
Page 18. This shows the shared expenses of Technology Solutions. These expenses reduced operating profit by JPY 15.4 billion, an increase in expenses of JPY 6.2 billion compared to the prior year. Growth investments were JPY 7 billion, an increase of JPY 5 billion from the previous year. This includes investments aimed at our internal transformation, including Internal DX and transformations in the ways we work.
Page 19. This shows revenue results in the 2 areas of value creation in Technology Solutions For Growth and For Stability. Third quarter revenue in the For Growth area was JPY 242.7 billion, an increase of 3% from the previous year. On the other hand, revenue from the For Stability area was JPY 495.4 billion, down 6% from the prior year. Under the For Growth area, Solutions/Services saw demand for DX and increases in efficiency from our customers slowly recover. The total for the first 9 months is down 1%, primarily due to the impact of significant revenue from Fugaku recorded last year that did not recur this year, but we have held the decline to a level in line with the previous year. On the other hand, For Stability has fallen significantly from the prior year due to the impact of component supply delays.
Page 20, Ubiquitous Solutions. Revenue was JPY 60.8 billion, down 24.2% from the prior year. Revenue declined as both the strong demand for remote working solutions and the GIGASchool project from last year did not recur this year. Operating profit was JPY 0.6 billion. Profits from the sale of businesses recorded last year did not recur this year and led to a decrease in operating profit of JPY 25.4 billion. Beyond that, operating profit was also impacted by lower revenue.
Page 21, Device Solutions. Revenue was JPY 101.7 billion, up 34.8% from the prior year. Revenue increased significantly, supported by strong demand. Operating profit was JPY 24.2 billion, an increase of JPY 14 billion from the prior year. In addition to the effects of higher revenue, profitability also continued to increase significantly due to operational improvements that continued from the first half.
Page 22. This is cash flow. Cash flows from operating activities were JPY 194.4 billion, in line with the previous year. Cash flows from investing activities were a net outflow of JPY 85 billion, an increase in outflows of JPY 43.7 billion from the previous year. The major reason for this is the impact of income from the sale of businesses last year that did not recur this year. This fiscal year, investments were made in electronic components and in our office environments. Free cash flow was JPY 109.3 billion. While treasury stock purchases are included in cash flows from financing activities of the JPY 50 billion in treasury stock purchases planned for this fiscal year, JPY 41.7 billion of purchases have been completed.
This is not part of the slide deck, but I would like to comment briefly on the difference between third quarter results and internal forecasts. Our consolidated total operating profit is more or less in line with our forecast, but there are some increases and decreases in the different segments that I would like to comment on. Performance in Technology Solutions remains below our forecast by about JPY 10 billion. The impact of component supply delays expanding further than predicted accounts for about JPY 6 billion. Due to a delay in the recovery of orders from local governments, educational institutions and SMBs, the impact on profits of not meeting revenue targets accounts for the other JPY 4 billion. On the other hand, in Device Solutions, the continued weak yen, in addition to improvements in operations, resulted in an improvement of about JPY 10 billion.
Page 25. These are the result forecasts for fiscal 2021. Please look at the upper portion of the table with a bold outline. There has been no change to any of our forecast of revenue of JPY 3,630 billion, operating profit of JPY 275 billion and profit for the year of JPY 205 billion.
Page 26 shows the breakdown by segment. We have revised our segment by segment forecast. For Technology Solutions, we forecast revenue of JPY 3,100 billion and operating profit of JPY 205 billion. We have revised revenue downwards by JPY 50 billion and operating profit downwards by JPY 15 billion from our previous forecast. For Ubiquitous Solutions, we forecast revenue of JPY 230 billion and operating profit of JPY 5 billion, unchanged from our previous forecast. For Device Solutions, we forecast revenue of JPY 380 billion and operating profit of JPY 65 billion. We have revised revenue upwards by JPY 30 billion and operating profit upwards by JPY 15 billion from our previous forecast.
There are 2 reasons for the changes to Technology Solutions. One, component supply delays have expanded further than initially predicted, and we have accordingly reduced our forecast for revenue by JPY 10 billion and operating profit by JPY 7 billion. We are taking countermeasures aimed at making up the difference, but improvements in supply and demand are slow in coming, so we assume that the downward trend may continue.
Two, the impact of a delayed recovery in demand, particularly from local governments, educational institutions and SMEs. We've reduced our forecast for revenue by JPY 40 billion and operating profit by JPY 8 billion. This revision was made in light of the current low level of incoming orders in the third quarter. These revisions are all to Solutions/Services.
On the other hand, in Device Solutions, we increased our forecast to incorporate the fact that strong sales of electronic components will continue into the fourth quarter as well.
This concludes my presentation. Thank you again for joining us today.