Presentations & Events


- ended March 2012 (For 173rd Fiscal Period)

Presentation for FY2011 Q2 Results

For First 6 months and 2nd Quarter ended September, 2011   - October 31, 2011

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.

Key Points of the presentation

Net Sales decreased YoY in the first half, affected by sharp yen appreciation and, in part, by the continuing impact of the March earthquake. Operating income also decreased, but all four segments remained in surplus. Net income was at the same level as a year earlier.

Net Sales: 2,912.5 billion yen (YoY: -168.6 billion yen)
Operating Income: 80.2 billion yen (YoY: -24.6 billion yen)
Income before income taxes and noncontrolling interests: 42.3 billion yen (YoY: -26.4 billion yen)
Net Income: 22.7 billion yen (YoY: -5.1billion yen)

Operating income increased YoY in the second quarter (July to September), on the Digital Products, Electronic Devices and Home Appliances segments. The Social Infrastructure segment continued a solid performance and all four segments secured profits.

The interim dividend will be 4 yen per share.

Q & A

Q1. Please tell us the key points of the FY2011 first half business results.
We recorded net sales of 2,912.5 billion yen which was 168.6 billion yen lower than that for the corresponding period in the previous fiscal year. This was primarily due to the adverse effects of the sharp increase in the value of the Japanese yen and, to some extent, the impact from the Great East Japan Earthquake. Operating income for the period as a whole was also affected and was 24.6 billion yen lower than that of the same period last year, however four major business segments remained in the black and returned a total of 80.2 billion yen profit.
In the second quarter of the fiscal year (July to September) we achieved higher operating income than in the same period last year. On an individual segment basis, Digital Products, Electronic Devices and Home Appliances all increased profit, while Social Infrastructure also continued to perform solidly, with the result that all of our business segments were in the black. Net income (loss) attributable to shareholders of the Company was also maintained at the same level as for the same period last year.
Q2. Please tell us about the overall forecast for the FY2011 business results.
The overall forecast for the FY2011 business results remains unchanged (net sales of 7 trillion yen, operating income of 300 billion yen). Whilst there are certain risk factors that remain unclear such as the strong yen, EU sovereign risk and the flooding in Thailand, we are working to reinforce our risk response capabilities in order to minimize the impacts of such events. At the same time, by making progress with the implementation of restructuring of businesses and transformation of the business structure, which were announced in the presentation of management policies, we aim to achieve our annual target. Further, we have adjusted our exchange rate assumptions for the second half of FY2011 to 80 yen to the dollar and 110 yen to the euro.
Q3. Could you please tell us about the FY2011 first half business results in the semiconductor business?
Although the demand for NAND flash memories remained firm, sales fell due to the impact of the yen appreciation and the System LSI business also suffered due to a temporary decrease in demand. As a result, net sales were 13% lower on a year-on-year basis and fell to 502.4 billion yen. In terms of operating income, the System LSI business was negatively impacted by the earthquake and, as a result, operating income from the semiconductor business as a whole decreased by 27.5 billion yen against the corresponding period of the previous fiscal year, to 29.7 billion yen. However, NAND flash memories maintained solid level of profitability, despite the effects of yen appreciation.
Q4. Could you please tell us about the FY2011 first half business results in the Social Infrastructure segment?
In terms of sales, Thermal & Hydro Power Systems continued a healthy performance and sales were raised by the consolidation of Landis + Gyr AG, but the impact of sharp yen appreciation resulted in the same level of overall sales as the previous year. In terms of operating income, Thermal and Hydro Power Systems performed well, and the IT Solutions business saw increased profit. However, due to reduced profit in the Transmission and Distribution Systems, the segment as a whole recorded operating income slightly lower on a year-on-year basis.
Q5. How did the Digital Products segment and Home Appliances segment perform?
PC business in the Digital Products segment saw healthy sales in Japan, but the impact of yen appreciation and sluggish sales in Europe and the US resulted in lower sales. In terms of operating income, the PC business surpassed the target on the execution of proactive cost reductions and lower parts and materials costs.
On the other hand, while sales of LCD TVs in emerging markets expanded healthily, price declines in Japan, as well as lower demand in the US and Europe, led to lower sales and lower income. In the Home Appliances segment, favorable conditions in LED lighting and Air-conditioners, reflecting higher demand for goods that consume less electricity, led to the segment as a whole recording increased sales and higher income.
Q6. Free cash flow is minus 218.1 billion yen, which is 199.6 billion yen lower on a year-on-year basis. Why is that?
This is because strategic investments to enhance global competitiveness (to the value of approximately 150 billion yen), such as the acquisition of Landis + Gyr AG, were higher than in the same period of the previous year and working capital was weakened.

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