Foreword

Message from Nick Kugenthiran,
our Managing Director

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10/11 has been a year of challenge, change, recognition and growth for Fuji Xerox Australia.

With a positive approach to growing our business and a solid foundation of annuity revenue streams, we have produced a strong business result for the year. Through bold investments in our core business and strategic acquisitions, we have laid foundations for future growth and demonstrated greater confidence than many other businesses outside the mining sector.

The investment in our business was rewarded by growth in all existing lines of service; we achieved organic revenue growth of 8.2 percent, which increases to 16 percent on consolidation of acquisitions. Through the acquisition of Triangle Corporation and Upstream Print Solutions, we can not only better serve our target markets, but have grown our customer base and market share substantially.

I am pleased to report our biggest ever services deal was concluded in 10/11 with Fairfax Community Newspapers. This will provide managed print services to 197 sites over a 66 month period. 11/12 started in similar vein with Fuji Xerox Australia’s inclusion on the government’s major office machines panel to supply solutions to all federal agencies countrywide. We also won a major contract to provide managed print services to New South Wales Department of Education (DET) schools, making them potentially our single biggest customer.

With our continued growth and the changing needs of our customers and markets, the limitations of our current processes and business systems are becoming apparent. To this end, we launched Project Shakespeare in 10/11. This project is aimed at identifying the business processes and underpinning systems we need in the future, as well as developing a roadmap to help us achieve a ‘To Be’ state. Project Shakespeare is also an excellent example of how our people can work together as ‘oneFXA’ on cross divisional collaborations. OneFXA is about each individual, manager, leader or team thinking, feeling and acting in the best interest of the customer, internally or externally. I am keen that we foster cross divisional cooperation — working in common alignment is how we will achieve our company goals of employer of choice, partner of choice and create the market for integrated document services.

Our employee engagement score for 10/11 is 57 percent, which is a 2 percent increase from our previous score of 55 percent. It is encouraging to see the gains we are making in improving our people’s experience at work. We are also making significant progress in workplace wellbeing.

10/11 saw a robust review of health and safety management, facilitated by the establishment of a national team. While some fundamentals and priority areas were addressed, there still remains significant work to be done to address our rate of lost time injuries, which increased to 38 in the year under review. Strong leadership, safe behaviour and continuous risk reviews will drive our safety performance and help embed a safety culture within our organisation.

Efforts to reduce our environmental impact continued in 10/11. I am very encouraged to see the massive reduction in waste to landfill from our business operations. A 41 percent decrease was achieved largely through the implementation of a national pallets recycling scheme at our warehouses. While we have laid some important groundwork by establishing a carbon reduction fund and a carbon review committee, I am disappointed we did not reduce our carbon emissions in the year under review. The global climate change imperative demands we do more to reduce emissions and I will take a personal interest in how we approach this in the coming year, from our business operations right through to the carbon intense aspects of our international supply chain.

Winning the prominent ‘large
organisations — leading in
sustainability’
category at the 2010
Banksia environmental awards capped
a remarkable year, and was well-deserved
recognition for decade-long operation of our
Eco Manufacturing Centre.

In many ways our reach and role extends beyond Australia. We have made our mark as one of the most innovative and successful Fuji Xerox operating companies in the Asia Pacific region. Our development of a 50-strong local office innovation group will lead us to be the first Fuji Xerox company to launch industry-leading predictive energy optimisation technology, which I saw firsthand when I visited one of our eleven research centres worldwide. In 11/12 we will also be the first to establish a Fuji Xerox sustainability consulting practice, so that we can act as a trusted advisor to our customers on sustainable print and communications.

Our commitment to sustainability was also recognised externally in 10/11 through several prominent state government environment awards including the NSW Green Globes and the VIC Premier’s Awards. Our sustainability report — our flagship document — took out best report at The Australasian Reporting Awards and was also judged best runner-up by the Association of Chartered Certified Accountants.

Winning the prominent ‘large organisations — leading in sustainability’ category at the 2010 Banksia environmental awards capped a remarkable year, and was well-deserved recognition for decade-long operation of our Eco Manufacturing Centre. In 11/12 the centre will relocate to Rosehill in Sydney and will occupy a heritage listed building facade, which will be fitted with the latest in office and warehouse design, meeting the requirements of a 5 Star Green Star rated facility.

Sustainability awards were not the only cause for celebration: in 2010 we marked our 50th anniversary giving each employee in every state an opportunity to attend an event to honour this milestone. A national event was held at Luna Park in Sydney, with 560 employees enjoying an afternoon of music, dancing and live entertainment. We have grown from producing 2.5 million copies in 1962 to producing over 13 billion prints on our equipment in 10/11. This growth is even more impressive considering we are encouraging many of our users to digitise their documents and use paper responsibly.

11/12 began with natural disasters affecting many parts of the Fuji Xerox world. Our people’s spirit of resilience and generosity came to the fore with employees rallying to help each other and local communities recover from the impact of Cyclone Yasi in Queensland. Fund raising activities for those affected by the New Zealand earthquake took place nationwide. Our Brisbane offices, still recovering from the aftermath of their own natural disaster, donned All Blacks jerseys (and the State General Manager, a tuxedo) and did the Haka!

We also reached out to support our colleagues in Japan in their time of crisis. Our parent company has offered its employees as volunteers to support the organisations helping people in the afflicted areas, and is also supplying multifunction devices and production printers. In a time when digital communication has been heavily disrupted, this is allowing non-profit organisations to print essential community information such as operation manuals for evacuation centres and flyers for temporary housing. While the supply of parts to our manufacturing operations has been affected, we are striving to minimise the disturbance this has to our supply chain and our customers’ operations.

Since the close of the year under review we have ceased procurement with a paper supplier, which did not share our sustainability commitment. Over the past eighteen months we have been concerned with APRIL’s logging practices in Indonesia. We have been encouraging APRIL to adopt Forest Stewardship Council (FSC) certification and we have been working with ENGOs on the ground to monitor APRIL’s progress.

As we continue our transition from a product- focused sales company to a customer-led services and solutions business, our president, Tadahito Yamamoto has described Fuji Xerox Australia as having achieved an almost perfect balance between the office, graphic communications and service markets.

"Fuji Xerox Australia's leadership in sustainability sets a benchmark across the Asia Pacific region," he says. "With an environmentally progressive market, Australia's experience in listening and responding to customer sustainability needs is providing important insights from which all Fuji Xerox can benefit from."

However, over recent months we have become very concerned with the lack of progress. Our concerns were grave enough for us to take steps in June 2011 to review our relationship with APRIL. Due to these concerns and further issues bought to our attention we have made the decision to cease all procurement with APRIL. As part of our ongoing transparency and commitment to sustainable practises, Fuji Xerox is developing a robust transition plan to alternate suppliers that meet our standards.

I would like to take this opportunity to thank our people once more for their personal contribution to our achievements. By living the oneFXA value system, we will continue to grow and build a sustainable organisation for the future, creating value for our customers, giving back to our communities and leaving a better environment for future generations.

Nick Kugenthiran Managing Director