Good morning, everyone. I am Kitazawa, President of Fuji Electric. Thank you very much for participating in our financial results briefing despite your busy schedule and such bad weather. I really appreciate your attendance today. As you know, we announced our consolidated financial results for fiscal year 2018 yesterday, and we could mark a record high for two consecutive fiscal years at JPY 60 billion. What I am more pleased about is something different. Last fiscal year was the final year of our medium-term management plan, Renovation 2018, and we could achieve all goals set in the plan, such as sales, profits, and other management indicators for the first time in the history of Fuji Electric. As a president, I expect this will develop more confidence of our employees. I'd like to express my appreciation for your support during fiscal year 2018.
We have come to the end of April, and we are expecting uncertain market in fiscal year 2019. Trade war between U.S. and China has started gradually affecting the business. In our case, business was favorable in the first half of previous fiscal year, but in the second half, especially from January onwards, we started to feel something was going wrong. In that sense, setting goals for fiscal year 2019 is not easy. Mr. Arai is going to explain numbers later, but we expect that first half results of fiscal year 2019 will not improve much and remain flat from the second half of fiscal year 2018 without much improvement. Based on this assumption, we plan decreased revenue and profits year-on-year for the first half of fiscal year 2019.
It is expected that market situation will improve in the second half, as Mr. Nagamori of Nidec Corporation also expressed as his opinion. We anticipate our second-half results will improve year-on-year, and full-year results of fiscal year 2019 will be better than the previous fiscal year. Going forward, there will be many challenges in management, but we are determined to manage business properly by closely looking at latest market situations. I suppose I mentioned this before, but in this fiscal year 2019, we are developing a new medium-term management plan. For the first time, the plan will be made as a five-year plan, and the final year of the plan will be fiscal year 2023, which coincides with the 100th anniversary of Fuji Electric. We plan to make an official announcement of the plan before the shareholders meeting in June.
Development of this medium-term management plan is our biggest task in the first half. In addition to financial goals, it is crucial to decide the right direction toward 2023. Sales goals are already set in our initiative Dream One, and the entire company is striving for achieving at least JPY 1 trillion for net sales and 8% for operating margin. These are our basic assumption, and we see more important thing is to clarify how we can achieve these goals, or which areas we should grow and which areas are less significant. It is not realistic to focus on everything, so we will identify those things in this fiscal year 2019. It is a five-year plan, but the final year is the year to deliver results. In reality, preparation should be completed in four years. We intend to make progress in the plan as fast as possible.
There are various ideas about managing the business at Fuji Electric, but one point we are already clear about is that the core businesses to grow Fuji Electric are Power Electronic Systems and Power Semiconductors. I do not mean other businesses are not important or they are performing poorly. Rather, considering our growth, market demand, and requirement, we believe our contribution to the society can be achieved through Power Electronic Systems and Power Semiconductors. They are linked to energy saving and environment, and will make a new Fuji Electric with focus on these areas. In that sense, what we are concerned most about is Power and New Energy, for which I expect your questions later. This business has been the central business of Fuji Electric. However, considering recent campaign for total ban on thermal power plants, we can hardly expect new initiatives by government, including METI and Ministry of the Environment.
Under such a circumstance, to be honest, we can only expect business in Asian countries, if that is possible. In that sense, it is critical to make a right decision on how to lead this Power and New Energy business. In other words, we will be aggressive in Power Electronic Systems and Power Semiconductors and have to restructure Power and New Energy business. I'd like to explain more about it on a separate occasion, but I stop here for today. Mr. Arai will take over for explaining financial results.
Thank you very much once again for your participation today. Good morning, everyone. I am Junichi Arai, Corporate Management Planning Headquarters. I'm going to explain about consolidated financial results for fiscal year 2018 and management plan for fiscal year 2019. Let me start with consolidated financial results for fiscal year 2018.
As Mr. Kitazawa mentioned, we could increase net sales and operating income in fiscal year 2018 from the previous year. These results were higher than the original plan and the January forecast. This slide shows comparison against fiscal year 2017 results. Net sales were JPY 914.9 billion, up JPY 21.5 billion year-on-year. This number includes exchange rate effect of minus JPY 100 million, so net sales increase in real terms was JPY 21.6 billion. Operating income improved by JPY 4 billion to JPY 60 billion with foreign exchange effect of JPY 1.3 billion. The rise in fixed cost was JPY 1.8 billion, such as labor cost and capital cost, and others were JPY 800 million. The total negative factors was minus JPY 3.8 billion. However, JPY 7.8 billion was recognized from positive factors like increased sales and production volume. This resulted in operating income growth of JPY 4 billion. Operating margin was up 0.3 point to 6.6%.
Ordinary income was JPY 63.5 billion, up JPY 7.4 billion year-on-year. Non-operating income increased by JPY 3.4 billion, with JPY 2.2 billion improvement in foreign exchange income or loss, JPY 900 million increase in net interest expense such as dividends, and JPY 400 million increase in others related to equity method affiliates. Extraordinary income or loss decreased JPY 2 billion year-on-year to minus JPY 1.2 billion. This is mainly due to JPY 2.2 billion recognized for impairment loss from an old building and structures. As a result, net income attributable to owners of parent grew JPY 2.5 billion to JPY 40.3 billion. As Mr. Kitazawa mentioned earlier, we could post record highs for operating income and ordinary income, and net income stood at JPY 40.3 billion. Net income recorded in fiscal year 2016 was JPY 41 billion, but this number included gain on sales of securities of JPY 13 billion.
We consider the net income recognized in this fiscal year was also a record high in real terms. We could achieve all goals of medium-term management plan for the first time. In the previous medium-term management plan ended in fiscal year 2015, we could achieve its goal of operating income, we couldn't do so for net sales. This is the first time we could achieve all goals since we started to develop a medium-term management plan. Net sales increased JPY 14.9 billion. Operating income was up JPY 6 billion, operating margin was improved by 0.6 points, net income attributable to owners of parent grew JPY 6.3 billion. We could achieve all targets of PL items. In terms of financial indicators, net D/E ratio was improved by 0.3 points to 0.4 times. Equity ratio was improved as well by 5 points to 37%.
ROA was 4% and ROE was 12%, both were in line with the plan. Let me explain the year-on-year comparison of net sales and operating income by segment. In Power Electronic Systems, both Energy Solutions and Industry Solutions increased both net sales and operating income, Electronic Devices improved net sales and operating income as well. Food and Beverage Distribution decreased net sales and operating income year-on-year. Power and New Energy grew its net sales. There was a cost increase of slightly over JPY 2 billion in a large project in fiscal year 2018, this resulted in an operating income decrease of JPY 800 million year-on-year. Energy Solutions and Industry Solutions in Power Electronic Systems and Electronic Devices, which are the segments we focus for growth, ended with higher sales and operating income year-on-year. Let me explain more specifics for each segment.
In Energy Solutions, net sales grew JPY 7.2 billion to JPY 224.8 billion, operating income was up JPY 2.8 billion to JPY 16.9 billion. It has three business areas. In Energy Management, net sales decreased as a repercussion of a large-scale project during the previous fiscal year and declined the demand for smart meters, operating results were improved due to the benefits of cost reduction efforts. Power Supply and Facility Systems increased net sales and operating results due to an increase in large-scale orders in Japan. ED&C components increased in net sales and operating results because of strong demand from domestic distribution panel manufacturers. Next segment is Industry Solutions. Net sales were up JPY 1 billion to JPY 321.9 billion, operating income improved by JPY 500 million to JPY 19.4 billion. It has five business areas.
Factory Automation, a strong driver in our business, increased in net sales and operating results due to increased domestic demand, mainly for low voltage inverters, motors, and Factory Automation systems, despite bearish trends in overseas markets during the second half of the fiscal year under review. Process Automation decreased in net sales and operating results year-on-year due to the absence of a large-scale order recorded in the previous fiscal year. Social Solutions decreased in net sales and operating results year-on-year as a result of lower demand for electrical equipment for rail cars. Equipment Construction increased net sales and operating results following an increase in orders for construction of electrical equipment such as factory power distribution equipment.
This applies to IT Solutions as well. This business recorded increase in net sales and operating results due to quite favorable performance in the academic sector and the public sector. Next one is Power and New Energy. Net sales increased by JPY 10.1 billion to JPY 107 billion. Operating income declined by JPY 800 million to JPY 4.8 billion. Thermal power system sales decreased and renewable energy system sales increased mainly for solar power generation systems. In total, this segment recognized increased sales and decreased profit. Decrease in operating income was because of cost increase associated with a large project. Still, the segment recorded a surplus in operating income. Regarding Electronic Devices, net sales increased by JPY 10.5 billion to JPY 137.3 billion, and operating income grew by JPY 1.9 billion to JPY 15.6 billion. Sluggish demand was seen in the industrial power semiconductor market in the second half. However, products for automotive applications recorded strong performance.
In this segment, both semiconductors and magnetic disks increased net sales and operating income year-on-year. As shown in the table, full year sales for semiconductors increased from JPY 107.5 billion to JPY 111.8 billion year-on-year, and magnetic disks increased from JPY 19.4 billion to JPY 25.5 billion as well. Sales increase was recognized also on quarter-on-quarter basis. The table on the right shows distribution of semiconductor sales by field, which are often asked in questions. In fiscal year 2018, industrial semiconductors accounted for about 70% and automobiles were about 30%, with declining industrial discrete devices and shifting to automobiles. Food and Beverage Distribution recognized decrease in net sales by JPY 4.1 billion to JPY 113.6 billion, and operating income declined by JPY 500 million to JPY 5.8 billion. Vending machines increased its net sales and operating results due to steady demand from domestic customers.
Store Distribution regrettably decreased net sales and operating results because of a decline in demand for store equipment for convenience stores year-on-year. Next slide shows domestic and overseas net sales by region for fiscal year 2018. In total, net sales increased JPY 21.5 billion year-on-year. Overseas sales grew JPY 13.7 billion to JPY 232.4 billion. Domestic sales increased JPY 7.8 billion. Let me explain the breakdown of the overseas sales of JPY 232.4 billion. Sales increased JPY 10.8 billion in Asia and JPY 3.4 billion in China. As such, we could make significant growth in Asia and China, which are the markets we focus on. In terms of segments, Electronic Devices made substantial year-on-year growth of JPY 11 billion. Power and New Energy, Industry Solutions, and Food and Beverage Distribution increased year-on-year as well.
On this page, we compare the actual results to the forecast announced on January 31st, 2019. Net sales stood at JPY 914.9 billion, higher than the forecast by JPY 9.9 billion. Operating income was JPY 60 billion, JPY 2 billion higher, and ordinary income was JPY 63.5 billion, JPY 3.5 billion higher. Net income attributable to owners of parent was JPY 40.3 billion, which was JPY 2.3 billion higher than the forecast. Net sales recognized gain on translation of earnings of overseas subsidiaries of JPY 4 billion. Excluding this exchange rate effect, actual increase of net sales was about JPY 6 billion. Operating income includes exchange rate effect of JPY 400 million and actual growth of operating income generated by sales increase, cost reduction, and other factors was JPY 1.6 billion. This page shows consolidated financial results by segment.
We recognize net sales and profit increase in Power and New Energy and Electronic Devices due to following reasons: solar power generation systems projects made progress in percentage of completion in Power and New Energy, and in Electronic Devices, we had semiconductor-related business growth as well as exchange rate effects. This is consolidated balance sheet. Notes and account receivables, trade receivables increased JPY 21.7 billion year-on-year with sales volume increase. Inventories increased JPY 27.2 billion. Notes and account payables, trade payables increased JPY 12.7 billion as well. Working capital increased with business expansion. Investment has progressed to make tangible fixed assets grow JPY 7.5 billion to JPY 182.1 billion. Net defined benefit asset decreased by JPY 23.7 billion. Retained earnings after dividend payment increased JPY 28.4 billion year-on-year, we repaid JPY 9.5 billion for interest-bearing debts.
Total liabilities and net assets were recorded as JPY 952.7 billion, up JPY 37.9 billion year-on-year. As a result, net interest-bearing debt was reduced by JPY 5.3 billion to JPY 124.9 billion. Net D/E ratio was 0.4 times and equity ratio was 37%. ROA was 4% and ROE was 12%, both were unchanged from the end of previous fiscal year. This slide shows consolidated cash flow. Cash flows from operating activities were JPY 54.9 billion. Cash flows from investing activities were minus JPY 21.4 billion, as we increased investment in fiscal year 2018. Our target free cash flow was JPY 30 billion, we could post JPY 33.5 billion. This slide is about dividend of surplus. Dividend figures on this chart are per five shares. We plan to pay JPY 40 for year-end dividend, full year dividend will be JPY 80 in total.
We have been able to continue dividend increase after fiscal year 2011. We intend to continue this trend, increase dividend again in fiscal year 2019. That is all for my explanation on consolidated financial results for fiscal year 2018.