Presentations & Events


- ended March 2011 (For 172nd Fiscal Period)

Presentation for FY2010 Q2 Results

For First 6 months and 2nd Quarter ended September, 2010   - November 9, 2010

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.

Outline of the presentation

1. Consolidated results for FY2010

Net Sales 3,081.1 billion yen (+184.4 billion yen YoY)
Operating income (loss) 104.8 billion yen (+102.7 billion yen YoY)
Income (loss) from continuing operations, before income taxes and noncontrolling interests 68.7 billion yen (+116.1 billion yen YoY)
Net income (loss) attributable to shareholders of the Company[1] 27.8 billion yen (+85.5 billion yen YoY)

[1] “The Company” refers to Toshiba Corporation.

  • Toshiba’s consolidated net sales for the first six months of FY2010 were 3,081.1 billion yen, an increase of 184.4 billion yen from the same period of the previous year. The consolidated operating income was 104.8 billion yen, an improvement of 102.7 billion yen. These results mainly reflect a significantly improved performance in Electronic Devices, due to a healthy performance in the Semiconductor business, particularly demand expansion and price stability in NAND flash memories, and the return to profit of the LCD business.
  • Income (loss) from continuing operations before income taxes and noncontrolling interests improved by 116.1 billion yen to 68.7 billion yen, and the net income (loss) attributable to shareholders of the Company improved by 85.5 billion yen to 27.8 billion yen.

2. Financial Position and Cash Flows for FY2010

  • Total assets decreased by 160.0 billion yen from the end of March 2010 to 5,291.2 billion yen.
  • Shareholders’ equity, or equity attributable to the shareholders of the Company, decreased to 772.8 billion yen, a decrease of 24.6 billion yen from the end of March 2010, in spite of the net income attributable to shareholders of the Company being 27.8 billion yen in the black. This reflects a deterioration in accumulated other comprehensive loss of 52.4 billion yen, due to a downturn in stock market prices and impacts from foreign currency exchange.
  • Total debt decreased by 23.5 billion yen from the end of March 2010 to 1,194.8 billion yen.
  • As a result of the foregoing, the shareholders’ equity ratio at the end of September 2010 was 14.6%, the same level as at the end of March 2010, and the debt-to-equity ratio at the end of September 2010 was 155%, a 2-point deterioration from the end of March 2010.
  • Free cash flow was -18.5 billion yen, 89.0 billion yen worse than for the same period of the previous year. In spite of positive net income attributable to shareholders of the Company, working capital was lower than for the same period of the previous year, and this resulted in lower cash flows from operating activities.

3. Projections for FY2010

Toshiba's business projections for its consolidated results for the fiscal year 2010 remain unchanged from the projections announced on May 7, 2010.

FY2010 Forecast Change from FY2009
Net Sales 7,000.0 +708.8
Operating income (loss) 250.0 +124.8
Income (loss) from continuing operations, before income taxes and noncontrolling interests 150.0 +115.6
Net income (loss) attributable to shareholders of the Company 70.0 +89.7

Q & A Session

Q1. Please explain the key points in your first half results.
The trend to higher sales that we saw in the second half of FY2009 continued, and net sales for the first half of FY2010 were 184.4 billion yen higher than for the same period a year ago, rising to 3,081.1 billion yen. Year-on-year, operating income increased by 102.7 billion yen to reach 104.8 billion yen, a recovery to a level surpassing our FY2007 results, prior to the Lehman Shock. This performance was mainly due to strong performances in the Electronic Devices segment. In this segment, we saw major improvements in the key areas of Semiconductors and LCDs, combined with cost reductions. The Digital Products segment saw higher profit on good performances in retail information systems and office equipment. Home Appliances moved into the black on increased sales of White Goods and cost reductions. As a result, income before income tax and noncontrolling interests and net income both saw a significant increase from the same period a year ago and moved into the black.
Q2. What exactly do you mean when you say that the mobile phone business is classified as discontinued?
Under the terms of an agreement with Fujitisu, we merged our mobile phone businesses on October 1, 2010, when they were 2 integrated into a new joint venture company, Fujitsu Toshiba Mobile Communications Limited. This is 80.1% owned by Fujitsu. In line with this, and acting with respect for US generally accepted accounting principles, we classified the mobile phone business as a discontinued operation in our consolidated accounts, and its results are not included in the group's net sales, operating income or income before income tax and noncontrolling interests. Results for prior periods have been reclassified to conform with the current classification.
Q3. What do you think of the FY2010 first half results in your semiconductor business, and how do you see future prospects?
In Semiconductor business sales, NAND flash memories saw a significant increase on increased demand for high-grade mobile products, and Discrete and System LSIs also recorded higher sales. As a result, total Semiconductor sales climbed 14% to 579.3 billion yen. Operating income increased with sales of NAND flash memories leading the way, and this, combined with from the effects of restructuring in product areas, including System LSIs, generated a significant improvement of 88.2 billion yen and a major advance into the black to 57.2 billion yen. Going forward, we will continue to allocate resources to our focus areas, and to take measures that enhance our growth and profitability.
Q4. What is your earnings forecast for FY2010 as a whole?
We have not revised the full-year consolidated business forecast that we released on May 7: net sales of 7 trillion yen and operating income of 250 billion yen. In the first half, our consolidated operating income and net income both surpassed our target, by 34.8 billion and 17.8 billion yen, respectively. We will make efforts to continue on that note, and we are executing measures with the intent of surpassing our full-year target.
Q5. What is the influence from changes of currency exchange, including yen appreciation?
If we compare the currency exchange impact in the first half against the same period last year, we see a negative impact on net sales of about 130 billion yen, with a negative impact on operating income of about 23 billion yen. In respect of the dollar-to-yen rate, the impact on the overall company's operating income is limited, since the foreign exchange portions of exports and imports are in balance. On the other hand, in respect of the euro and other currencies, our exports exceed imports, and by taking measures such as increasing overseas procurement, we are strengthening comprehensive exchange risk management.

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