Presentations & Events
FY2008
- ended March 2009 (For 170th Fiscal Period)
Presentation for FY2008 Q3 Results
For First 9 months and 3rd Quarter ended December, 2008 - January 29, 2009
Disclaimer: The contents of these presentation materials, key points of presentation and QA and audio data of presentation have not reflected on the restatement publicly announced in September 2015. As a result, because these information therefore contains inappropriate information to be used for investment decision, please do not rely on this information if you actually intended to trade stock. Toshiba Corporation assumes no responsibility for problems resulting from or in connection with use of the information.
- PDF [233KB/28 pages]
- Earnings Release
Outline of the presentation
1. Consolidated results for the first 9 months of FY2008
| Net Sales | 4,984.1 billion yen | (-584.3 billion yen YoY) |
|---|---|---|
| Operating income (loss) | -182.3 billion yen | (-306.9 billion yen YoY) |
| Income (loss) from continuing operations, before income taxes and noncontrolling interests | -206.0 billion yen | (-432.3 billion yen YoY) |
| Net income (loss) | -159.6 billion yen | (-285.8 billion yen YoY) |
- Toshiba's overall consolidated sales in the first nine months of fiscal 2008 were 4,984.1 billion yen, a decrease of 584.3 billion yen against the same period a year ago. This result was strongly influenced by the overall market shrinkage resulting from the global economic downturn and by steeper than expected declines in semiconductor prices.
- Consolidated operating income (loss) worsened by 306.9 billion yen to -182.3 billion yen, as Electronic Devices, saw a significant deterioration, particularly in the Semiconductor business. Social Infrastructure saw positive operating income, though lower than expected, and Digital Products saw notably lower operating income.
- Income (loss) before income taxes and minority interest worsened by 432.3 billion yen to -206.0 billion yen. This difference resulted from a decrease in non-operating profit, which in the year-earlier period had reflected the gain from the sale of the Ginza Toshiba Building, including a loss from a write-down of securities. Net income (loss) worsened by 285.8 billion yen to -159.6 billion yen.
2. Financial Position and Cash Flows for the First Nine Months of FY2008
- Total assets decreased by 306.5 billion yen from the end of March 2008 to 5,629.1 billion yen.
- Shareholders' equity was 669.8 billion yen, a decline of 352.5 billion yen from the end of March 2008.
- Total debt increased by 528.1 billion yen from the end of March 2008 to 1,789.1 billion yen. As a result of the foregoing, the debt-to-equity ratio was 267%, a 144-point worsening from the end of March 2008.
- Free cash flow for the nine months (April-December) was -394.5 billion yen, 259.7 billion yen worse than for the same period of the previous year. The worsened net income (loss) was the primary cause of lower cash flows from operating activities. Cash flows from investing activities also worsened against the same period of the previous year, which saw a gain from the sale of the Ginza Toshiba Building.
3. Projections for FY2008
The global economy entered into recession, triggered by the financial crisis that resulted from the subprime mortgage crisis in the US. The recession caused rapid price erosion and demand declines in semiconductors and LCDs. In these circumstances, the deficit in Electronic Devices including the Semiconductor business and the LCD business is expected to largely surpass the revised forecasts announced on September 19, 2008. Digital Products is also expected to record worse results that do not match September's revised forecasts, due to the rapid decline in market demand. While Social Infrastructure is expected to remain steady, overall sales and operating income (loss) is projected to fall far short of the revised forecasts announced in September, reflecting the widening loss in Electronic Devices.
In light of these circumstances, Toshiba Corporation has revised its business forecasts for FY2008, ending March 31, 2009 as below. These revised forecasts replace the forecasts announced on September 19, 2008.
(1) Consolidated forecast
(billion yen)
| (A) Revised Forecast (Jan. 29, 2009) |
(B) Previous Forecast (Sep. 19, 2008) |
(A)−(B) | (A)/(B) | FY2007 | |
|---|---|---|---|---|---|
| Net sales | 6,700.0 | 7,700.0 | -1,000.0 | 87.0% | 7,668.1 |
| Operating income (loss) | -280.0 | 150.0 | -430.0 | - | 238.1 |
| Income (loss) before income taxes and minority interest | -330.0 | 170.0 | -500.0 | - | 255.6 |
| Net income (loss) | -280.0 | 70.0 | -350.0 | - | 127.4 |
(billion yen)
| Net Sales | Operating Income (loss) | |||
|---|---|---|---|---|
| Revised Forecast (Jan. 29, 2009) |
Previous Forecast (Sep. 19, 2008) |
Revised Forecast (Jan. 29, 2009) |
Previous Forecast (Sep. 19, 2008) |
|
| Digital Products | 2,480.0 | 2,960.0 | -20.0 | 70.0 |
| Electronic Devices | 1,310.0 | 1,660.0 | -340.0 | -65.0 |
| Social Infrastructure | 2,400.0 | 2,550.0 | 120.0 | 150.0 |
| Home Appliances | 680.0 | 770.0 | -30.0 | 0.0 |
| Others | 340.0 | 350.0 | -10.0 | -5.0 |
(2) Non-consolidated forecast
(billion yen)
| (A) Revised Forecast (Jan. 29, 2009) |
(B) Previous Forecast (Sep. 19, 2008) |
(A)−(B) | (A)/(B) | FY2007 | |
|---|---|---|---|---|---|
| Net sales | 3,250.0 | 3,830.0 | -580.0 | 84.9% | 3,685.6 |
| Recurring profit (loss) | -120.0 | 35.0 | -155.0 | - | 77.4 |
| Net income (loss) | -100.0 | 55.0 | -155.0 | - | 69.2 |
Q & A Session
- Q1. What are the reasons for the deterioration in performance and of your forecasts for the TV, PC, Semiconductor, LCD and Home Appliances businesses?
- In the TV business, unit sales were higher than for the same period of the previous year. However, as a result of falling average sale prices, sales and operating income (loss) are worse than for last year.
The PC business saw price declines and this, combined with a changing product mix (increased demand for lower priced PCs) and a weak euro, resulted in lower sales and operating income than for the same period last year.
The semiconductor business reported significantly lower sales and negative performances across each product area, reflecting the impact of the sudden worldwide recession. The main reason for the deterioration in the memory business was price erosion.
Sales in the LCD business were undermined by the worldwide recession resulting from the financial crisis, which triggered significant sales declines in all areas of application. Additionally, lower capacity utilization and the foreign currency exchange losses from the appreciating yen had a damaging impact on operating income (loss). The overall result was significantly lower sales and a significant deterioration in operating income (loss) on a year-on-year basis.
Home appliances saw a major market decline on decreased demand in all business sectors, including white goods, lighting system and air conditioners, and reported deteriorated operating income (loss) on a year-on-year basis. - Q2. Will the 300-billion yen reduction of fixed costs in fiscal year 2009, compared to fiscal year 2008 be enough to bring you back into the black?
- First of all, we are going ahead with the ¥300 billion reduction in fixed costs. In addition to this, we are discussing various positive measures for driving earnings growth, with the main focus on our social infrastructure business. We are also looking at measures that will support us in further reinforcing our procurement capabilities and enhancing development efficiency. All these steps are being taken as a matter of urgency.
- Q3. Going forward, will you continue to position the semiconductor business as a core business within Toshiba?
- We will continue to strengthen the memory business as a key part of our storage device business. For the system LSI and discrete businesses, we are looking hard at how to build optimum business structures for the current business environment.
- Q4. You have mentioned that you were studying more fundamental restructuring and potential alliances in your system LSI and discrete businesses. What kind of concrete negotiations are taking place?
- Up until now, we would have considered the various proposals that we receive from other companies. However, from now we must keep in mind a wider reorganization in the industry, and consider every possibility, including establishing a separate company. I have no more details to add to that at present.
- Q5. When, and what kind of restructuring are you considering for the system LSI and discrete businesses?
- We are examining fundamental restructuring that will maintain our competitive advantage and expand the business scale, including the possibility of establishing a separate company, but we cannot yet provide concrete details.
- Q6. Do you see any problems with raising funds?
- In the aftermath of last year's financial instability, we have been shifting to a reliance on indirect financing. With the full support of our main banks, we have been able to secure a certain amount of funds. In addition, circumstances in the commercial paper (CP) market are being improved by the emergency measures taken by the government (such as purchases of CP by the Bank of Japan and the Development Bank of Japan). Because of these moves we are fully able to secure funds. Beyond this, we continue to evaluate every available method of financing.
- Q7. If your credit rating were lowered, what quantitative and qualitative impact do you think it would have on you?
- In a general way, any lowering of credit rating results in wider spreads for corporate bonds, CP and the like. Moving ahead, we will be working to reform and improve our financial structure.
- Q8.When will your newly announced growth businesses begin to contribute to earnings?
- Market expansion in new businesses is expected by 2015, and we are working quickly to prepare for this. The social infrastructure business is already contributing to earnings. In addition, construction of new nuclear power plants overseas will begin after 2010 and this makes a further contribution.
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