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FAQ:Q & A Archives FY2013

FY2013 Q4 Results Announcement - May 8, 2014

Q1. Please explain the main points of the consolidated results in FY2013.
All segments recorded higher sales than in the year-earlier period. The Electronic Devices & Components segment recorded significantly higher sales due to continued higher sales of NAND flash memories throughout the year. The Energy & Infrastructure segment recorded higher sales due to the healthy performance of Social Infrastructure business. The Community Solutions segment also recorded sales increase due to the healthy performance of Building Solutions business and Toshiba TEC. The Healthcare Systems & Services segment and the Lifestyle Products & Services segment also recorded higher sales.
Operating income of 290.8 billion yen was 47% higher than in the year-earlier period. The Electronic Devices & Components segment recorded operating income of 238.5 billion yen, its highest-ever, thanks to high profitability in NAND flash memories in the 4Q, which exceeded that of the first half. Although the Energy & Infrastructure segment felt the temporary negative influence of -31.0 billion yen in operating income, reflecting a conservative reassessment of the asset value of a U.S. developer of nuclear power plants, Nuclear Innovation North America LLC (NINA), the three pillars of Toshiba's business, Energy, Data Storage and Healthcare, achieved total operating income of 351.3 billion yen. The Lifestyle Products & Services segment saw a considerable second half improvement in operating income in each business against the first half.
Net income attributable to shareholders of the Company decreased on the negative effects of the reassessment of the asset value of NINA (-31.0 billion yen), the discontinuation of the ODD business (-15.0 billion yen), and the reversal of deferred tax asset due to abolition of the Special Corporation Tax for Reconstruction (-9.8 billion yen).
Q2. Please tell us about the overall forecast for FY2014.
Our FY2014 forecasts are as follow: net sales of 6,700.0 billion yen (YoY +197.5 billion yen), operating income of 330.0 billion yen (YoY +39.2 billion yen), and net income attributable to shareholders of the Company of 120.0 billion yen (YoY +69.2 billion yen). In the Energy & Infrastructure segment, we expect to see increases in sales and operating income thanks to growth in Transmission & Distribution Systems and Railroad Systems, and no recurrence of one-time expenses incurred by Nuclear Power Systems in FY2013. The Electronic Devices & Components segment is expected to continue to secure high profitability despite a more prudent estimate of the margin in NAND flash memories compared to FY2013. The Lifestyle Products & Services segment is forecast to see considerable improvement and to move into the black. Our foreign exchange rate assumptions for FY2014 are $1 = 100 yen and 1 euro = 135 yen.
Q3. Please tell us about the FY2013 business results in the Electronic Devices & Components segment.
The segment as a whole saw higher sales, reflecting higher sales of NAND flash memories throughout the year. The Storage Products business also recorded higher sales on sales of 3.5-inch HDDs. The segment recorded its highest-ever operating income. Despite price reductions for NAND flash memories in the 4Q, the segment maintained high profitability, supported by development of leading-edge process technologies and cost reductions. The Discrete business recorded positive operating income in 4Q.
Q4. Please tell us about the FY2013 business results in the Energy & Infrastructure segment.
The segment as a whole saw higher sales on increased sales in the renewable energy business, including Solar Photovoltaic Power Systems, and in the Social Infrastructure business, including Transmission & Distribution Systems, Railroad Systems, Automotive Systems, Industrial Equipment and Landis+Gyr, the world's leading Smart Meter company. The Social Infrastructure business' operating income continued to increase on good performances by Solar Photovoltaic Power Systems, Transmission & Distribution Systems, Railroad Systems and other businesses. Thermal Power Systems maintained high profitability. The segment as a whole saw lower operating income due to one-time expenses incurred by the overseas nuclear power systems and a conservative reassessment of the asset value of NINA.
Q5. Please tell us about the FY2013 business results in the Community Solutions segment.
The segment as a whole saw higher sales. Solar Photovoltaic Power Systems and Disaster Prevention Systems for local governments, and Building Solutions business including Elevators, Commercial Air Conditioners and Lighting, maintained solid growth. Toshiba TEC recorded higher sales, mainly in the Retail Store Solutions Business acquired from IBM. The segment as a whole saw higher operating income. The Elevator and Commercial Air-Conditioner businesses saw higher operating income thanks to business expansion in emerging economies. Toshiba TEC's Retail Information Systems and Office Equipment businesses also saw higher operating income on global expansion.
Q6. Please tell us about the FY2013 business results in the Healthcare Systems & Services segment.
The segment as a whole saw higher sales on sales of computerized tomography (CT) systems in Turkey and other emerging economies as well as in Japan. The Diagnostic Ultrasonic Systems recorded a solid performance. The service sector also saw good performances in Japan and overseas. The segment as a whole saw higher operating income, reflecting a solid performance by the service sector, especially for CT systems in Japan and the U.S., and the smooth establishment of local subsidiaries in emerging economies. Yen depreciation also improved the profitability of overseas operations.
Q7. Please tell us about the FY2013 business results in the Lifestyle Products & Services segment.
The segment saw a considerable improvement in operating income from the first half to the second half. The Home Appliances business continued to see positive operating income in the 4Q and saw higher operating income than in the 3Q. The TV business saw positive operating income in the 3Q, but recorded the cost of clearing inventories in Europe in the 4Q as part of structural reform. The PC business 4Q operating deficit was half that of the 3Q.
Q8. How was free cash flow and D/E ratio in FY2013?
Free cash flow in FY2013 was 40.0 billion yen and improved substantially by 104.0 billion yen from the year-earlier period. Improved cash flow was due to considerable increase in operating income in the Electronic Devices & Components segment and reduction of inventory. The D/E ratio also improved significantly by 29 points from the year-earlier period to 113%.

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FY2013 Q3 Results Announcement - January 30, 2014

Q1. Please explain the main points of the first nine months' consolidated results in FY2013.
All five main segments saw higher net sales than in the year-earlier period. The Electronic Devices & Components segment recorded considerably higher sales on continuing higher sales of NAND flash memories. The Energy & Infrastructure segment sales increased on a healthy performance by the Social Infrastructure Systems business, including Photovoltaic Power Systems. The Community Solutions segment also saw sales increase on good performances by the Elevator business and Toshiba TEC. The Healthcare Systems & Services segment and the Lifestyle Products & Services segment also saw higher sales.

Overall operating income increased by 55.0 billion yen on a year-on-year basis, and reached the highest ever level for the first nine months of a fiscal year. The Electronic Devices & Components segment recorded its highest ever operating income in this nine-month period, and the Community Solutions and the Healthcare Systems & Services segments also reported higher operating income. The Lifestyle Products & Services segment saw a considerable improvement in operating income (loss) in the 3Q against the 2Q. The LCD TV and Home Appliances businesses moved into positive operating income in the 3Q. The Energy & Infrastructure segment saw lower operating income than in the same period a year earlier, due to deterioration in the overseas Nuclear Power Systems. Net income decreased due to increases in income tax expenses, but surpassed the initial forecast.
Q2. Please give us your forecasts for FY2013 full-year results.
Our FY2013 full-year consolidated forecast remains unchanged from the projections that we announced on October 30, 2013. To recap, we anticipate net sales of 6,300 billion yen; operating income of 290 billion yen; income before taxes of 200 billion yen; and net income of 100 billion yen. We recognize this forecast as a minimum target and will try to surpass it. The assumed foreign exchange rate in the Q4 is 102 yen to the dollar and 139 yen to the euro.
Q3. Please tell us about the Electronic Devices & Components segment's results for the first nine months.
Sales increased as NAND flash memories continued to record solid sales and as the Storage Products business saw growth, mainly in 3.5-inch HDDs. Operating income increased significantly to the highest level ever for a nine-month period. NAND flash memories continued to secure high profit, although the supply and demand balance slightly eased in the 3Q.
Q4. Please tell us about the Energy & Infrastructure segment's results for the first nine months.
Sales continued to rise, largely due to increased sales in the Renewable Energy business, including Photovoltaic Power Systems, and other Social Infrastructure Systems, including Railroad Systems, Automotive Systems and Industrial Equipment. The segment as a whole saw higher sales, despite reduced sales in Nuclear Power Systems in Japan. Operating income was lower on the performance of the overseas Nuclear Power Systems. Social Infrastructure Systems saw operating income continue to increase on good performances by Photovoltaic Power Systems, Railroad Systems and other businesses. Thermal Power Systems saw lower operating income but secured high profitability.
Q5. Please tell us about the Community Solutions segment's results for the first nine months.
Segment sales increased. The Disaster Prevention Solutions, Elevators and Commercial Air-Conditioners businesses maintained solid growth. Toshiba TEC recorded higher sales, mainly in the Retail Store Solutions business acquired from IBM. Operating income increased, mainly in the Elevators and Commercial Air-Conditioners businesses on expansion in emerging markets, along with increased operating income at Toshiba TEC.
Q6. Please tell us about the Healthcare Systems & Services segment's results for the first nine months
Sales rose on increased equipment sales, especially of computerized tomography (CT) systems in emerging markets such as Turkey. Higher sales were also the result of a solid performance in the service sector following an increase in unit installations, especially overseas. Higher operating income mainly came from the service sector and equipment sales in emerging markets. Yen depreciation also contributed to increased operating income from overseas operations.
Q7. Please tell us about the Lifestyle Products & Services segment's results for the first nine months.
The Lifestyle Products & Services segment halved its deficit in the 3Q against the 2Q and steadily improved its profitability in each quarter. The LCD TV and Home Appliances businesses moved into profit in the 3Q. The PC business allocated the cost of inventory disposal to structural reform.
Q8. How was free cash flow in the first nine months and the third quarter?
Free cash flow in the 3Q was 25.4 billion yen. Even though free cash flow for the first nine months was minus 121.3 billion yen, we anticipate achieving our full-year target by promoting accelerated collection of receivables, especially in the Energy & Infrastructure segment, where sales have a strong seasonality and are concentrated in 4Q.

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FY2013 Q2 Results Announcement - October 30, 2013

Q1. Please explain the main points of the FY2013 first half (April – September) consolidated results.
Electronic Devices recorded a significant sales increase on higher prices and higher volume sales of NAND flash memories. Social Infrastructure saw a continued increase in overall sales on growth in Social Systems, including Photovoltaic Power Systems, Elevator and Building Systems and Medical Systems. Digital Products recorded higher sales on a positive performance at Toshiba TEC, and Home Appliances also saw increased sales. Overall sales increased 13% on a year-on-year basis. Overall operating income increased 36.9 billion yen YoY, supported by the highest ever operating income in Electronic Devices. Income before income taxes and noncontrolling interests also increased. Net income attributable to shareholders of the Company decreased due to an increase in the tax expense, but surpassed the initial forecast.
Q2. Could you please tell us about the FY2013 first half business results in the Semiconductor and Storage businesses?
We saw significantly higher sales on higher prices and volume sales of NAND flash memories, and the consolidation of NuFlare Technology, Inc. The Semiconductor business recorded its highest ever operating income on a half-year basis.
Q3. Could you please tell us about the FY2013 first half business results in the Social Infrastructure segment?
Overall sales increased. Social Infrastructure, including Photovoltaic Power Systems, automotive equipment and industrial equipment, saw sales continue to increase, and Elevators and Medical Systems also recorded solid performances. Operating income decreased on lower demand in domestic Nuclear Power Systems, and a decline in the fuel business in overseas Nuclear Power Systems. Thermal Power Systems saw a decrease but secured high profitability. Photovoltaic Power Systems, Elevators and Medical Systems all recorded increases.
Q4. Could you please tell us about the FY2013 first half business results in the Digital Products segment and Home Appliances segment?
The Digital Products segment saw an increase in overall sales due to higher sales at Toshiba TEC, mainly in POS systems, following the acquisition of IBM's retail store solutions business. LCD TVs saw a recovery in Japan but a decline in North America. Overall sales decreased on lower demand for PCs. The segment operating loss increased, but Toshiba TEC recorded increases in profit and LCD TVs improved on structural reform. The PC business recorded a loss due to a fall-off in demand, although the loss was half that of 1Q. Home Appliances recorded an overall increase in sales due to growth of White Goods, such as washing machines and refrigerators. Operating income deteriorated YoY mainly in White Goods, affected by yen depreciation, but the 2Q result was an improvement on 1Q.
Q5. Free cash flow during the FY2013 first half has fallen by 146.7 billion yen. Why is that?
Cash flow from operating activities improved but was -14.5 billion yen, due to increased demand for working capital, most notably in the Social Infrastructure segment. Cash flow from investing activities was -132.2 billion yen. We anticipate an improvement in working capital in the second half, and we will also promote accelerated collection of receivables, reduce inventory, and make carefully selected capital investments in response to market conditions. At this point we anticipate achieving our full-year target.
Q6. Please tell us about the overall forecast for the FY2013 business results.
We have revised the FY2013 business forecast upward. Net sales: 6,300 billion yen (200 billion yen higher than the previous forecast); operating income: 290 billion yen (30 billion yen higher than the previous forecast). Increases in both net sales and operating income in the first half, mainly due to NAND flash memories, and consistent progress in improvement in the Digital Products and Home Appliances segments underpin that upward adjustment.

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Medium-term Strategies for Future Growth through Creativity and Innovation (FY2013-2015) - August 7, 2013

Q1. Could you explain the scope of the Healthcare business that you have positioned as a new pillar of business?
The healthcare market is about to enter a period of enormous change because of such crucial healthcare challenges to society as population increase on a global scale, growth in social welfare spending due to aging of the population, chronic shortages in both the quality and quantity of healthcare providers and caretakers, and increased needs for sophisticated and effective medical diagnostic and treatment systems. Toshiba Group continues to have a dominant No. 1 share in Japan's imaging diagnostic systems market along with a top-level share in the worldwide market.
Going forward, we will expand into new business areas in healthcare that are centered on disease prevention and optimizing diagnoses and treatments of patients. These new transformational diagnostic and treatment methods go far beyond conventional approaches to imaging. This new healthcare business area will have the main objective of contributing to the social goal of better controlling spiraling healthcare costs by preventing diseases and providing more effective modes of treatment. Expanding healthcare demand is expected not only in the developed countries but also in the emerging economies. We are heading toward a new age in healthcare that will improve overall healthcare by using cloud technology and sensing data collection technologies to provide easy access to patients' electronic medical records such as their treatment history combined with their daily personal health records (PHR). This new direction in medical electronics will give birth to strong new healthcare businesses related to Big Data analytics and cloud creation services. New healthcare business opportunities are also emerging based on biotechnology fields. We will work to develop new approaches to patient care and health management with a focus on helping to provide better total lifetime healthcare.
Moreover, presently in the Toshiba Group, various businesses related to the medical field such as carbon ion radiotherapy systems, in-vitro diagnostic equipment, DNA chips, and hospital ICT (Information and Communication Technologies) systems are being developed by different business organizations within the Group.
We have set up a new organizational structure for healthcare businesses to provide solutions for increasingly diverse customers' needs. Accordingly, in FY2015, we plan to achieve net sales of ¥600 billion for our healthcare business.
Q2. Please explain your Energy business strategies.
The big issues posed for society by the worldwide expansion in demand for energy and the need to consider the global environment, particularly the need to reduce greenhouse-gas emissions, are in some sense in conflict with each other. Toshiba Group is accepting the challenge to work toward solutions of these difficult issues by means of developing and commercializing high-efficiency, low-carbon-emission baseload power technologies that contribute to protecting the global environment.
In thermal power generation, we achieved the world's highest-level high-efficiency, low-emission combined cycle power generating system. With regard to coal-fi red thermal power plants, we have developed the high efficiency Advanced Ultra-Supercritical (A-USC) power generation system, and at the same time, we plan to expand EPC (Engineering, Procurement and Construction) sales from our India production base to emerging economies where demand is growing rapidly for stable electric power supply. In addition to the types of clean renewable energy power-generation systems we are currently offering, including hydroelectric (Japan's No. 1 share*1), geothermal (world's No. 1 share*2) and photovoltaic (Japan's No. 1 share*3) power plants, we are also focusing on the development of renewable types of power generation that are still not widely in use such as small hydro and wind farms. In FY2015, we plan to achieve net sales of ¥350 billion for thermal power generation and sales of ¥200 billion for clean energy power generation.
With regard to our nuclear power business in Japan, reflecting our compliance with the new nuclear safety regulatory standards, we will further improve the safety of nuclear power generation as a low-carbon-emission baseline power source. We will continue to support the maintenance of safety and the dismantling of the Fukushima No.1 Nuclear Power Station. Outside of Japan, we will continue to steadily go forward with the construction of 8 AP1000 nuclear power units ordered in the U.S. and China. In addition, based on the extensive technologies and know-how we have acquired, we would like to contribute to providing solutions to the world's need for stable supply of energy and its need to reduce greenhouse-gas emissions by proposing and supplying the world's highest-level nuclear power plants that incorporate many new measures for further improving safety. The FY2015 net sales target for our nuclear power business is ¥630 billion.
The practical implementation of Smart Grids to more efficiently manage power generation, transmission and distribution and electricity consumption and help reduce the total level of carbon emissions is already a growing reality in many countries around the world.
We will globally expand our transmission and distribution business by focusing on the emerging economies. We will expand the core Smart Grid technologies within Toshiba Group by such means as deepening our coordination with Landis + Gyr AG – a world-leading Smart Meter company – to expand the usage of Smart Meters to gas, water and heat, and we are acquiring companies like Consert and cyberGRID that possess leading-edge technologies necessary to provide intelligent solutions for Smart Grid deployment such as demand-response technologies. These will add a new level of technology to our Smart Community business.
Going forward, we will offer products and solutions that are in line with the wide and growing worldwide demand for Smart Grid technology to implement advanced energy management systems. The net sales targeted in FY2015 for our Transmission and Distribution/Smart Grid and Smart Meter business are set at ¥700 billion.
  • *1: In terms of the total capacity of outstanding orders for ≥10MW water mills (as of August 2012 as researched by Toshiba)
  • *2: In terms of the total capacity of geothermal turbines delivered (Bloomberg Geothermal Market Outlook 2011 3Q)
  • *3: Mega-solar systems for electric power companies (as of Japanese 2013 as researched by Toshiba)
Q3. Please explain your Data Storage business strategies?

Along with the impressive evolution of data storage systems, the volume of information has continued to increase explosively, and in the storage device business it is necessary to develop products that have faster speed and higher capacity. Toshiba Group is the only one company in the world that can propose both NAND flash memory that is suitable for high-speed processing and HDDs (hard disk drives) that are suitable for higher data capacity needs, as well as also offering hybrid drives (NAND+HDD) that satisfy both needs.
In August, we began construction of the second phase of the Fab 5 building at our Yokkaichi Operations in Japan where NAND flash memories are being manufactured. At this new facility, which is scheduled for completion next summer, we will secure production space for next-generation 3D memory, and at the same time we will continue to develop and apply our leading-edge process technologies. In this way, we will strength our competitive power in these business areas. We place utmost importance on enhancing cost competitiveness and improving profitability, and while carefully watching market changes, we will flexibly and efficiently make investment decisions.

In the future as well, we will strengthen our storage device business by establishing a stable and highly profitable structure and leveraging our technological strengths across product lines. We will utilize Toshiba's superior semiconductor device technology to deliver unique optimal storage solutions. In FY2015, we plan to achieve net sales in the Data Storage business of ¥1.4 trillion.
Q4. How do you position TV, PC and White Goods in Toshiba's business portfolio?
With regard to our TV, PC and White Goods businesses, we will implement further sharing of management resources and efficiencies by integrated them into one new business group, the Lifestyle Group. We aim to achieve sales of ¥1.3 trillion in FY2015.
In our TV business, for two consecutive years we recorded large deficits, and the market is rapidly changing in the PC business because of the shift to smartphones. In addition, the majority of our White Goods are now being manufactured outside of Japan, and the recent decline of the yen is pressuring profit margins. In view of this situation, we are already steadily executing various measures in our TV and PC businesses, such as reducing the number of platforms and shifting human resources to growing business areas. Going forward, with regard to the profit-making situation of any of our businesses, we will implement the necessary structural reforms and without setting aside any aspect of a business as being off-limits, we will review our manufacturing and sales systems, both in Japan and overseas. In addition, with regard to White Goods, we will assiduously put forth measures to cope with the recent depreciation of the yen. We will work to strengthen our businesses outside of Japan and carry out structural reforms aimed at improving profitability.
To turn Lifestyle-related businesses back into the black, we will transform our consumer goods businesses to B to B and Smart Community businesses. We will strengthen B to B by developing products and services that utilize security and mobility technologies, which are strengths of our company. We will also enhance our cloud solutions business and expand our solutions in each business category to meet each customer's needs, especially in the education and healthcare fields. In addition, in emerging economies, we will share management resources and functions among our TV, PC and White Goods businesses, including for sales, marketing and services. We will adopt unified design concepts and aggressively develop local-fi t products.
Toshiba Group has been applying various technologies that were originally created in our Digital Products business across conventional boundaries into other business areas. Examples are our glasses-free 3D technology's practical application in medical-use CT scanners (commercialized in September 2013) and for digital signage solutions (commercialized in August 2013), and we are shifting the use of image processing and recognition technologies to apply to on-board vehicle cameras and security cameras. In the future, technologies that the TV, PC and White Goods businesses possess such as energy-saving, environment conscious, security and intelligent wearable technologies and such know-how as making products that are thin, light, small and inexpensive will become a great strength for us when we try to differentiate our company from other companies in the social infrastructure and healthcare businesses and will help our efforts to strengthen our Smart Community businesses. We consider TVs, PCs and White Goods as important businesses for our future component technologies, and we plan to shift more resources into the B to B and Smart Community business areas.

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FY2013 Q1 Results Announcement - July 31, 2013

Q1. Please explain the main points of the FY2013 first quarter consolidated results.
The Electronic Devices segment recorded a significant rise in net sales on higher prices and increased volumes of NAND flash memories. The Social Infrastructure segment also saw an increase, reflecting steady sales in overseas Nuclear Power Systems and in Photovoltaic Power Systems. Net sales increased 10% on a year-on-year basis. Operating income doubled, YoY, supported by the significant increase in the Electronic Devices segment and a positive result in Social Infrastructure segment that exceeded the target, despite lower operating income. Income before income taxes and noncontrolling interests and net income both improved significantly and secured a positive result.
Q2. How does yen depreciation affect to the company's performance?
Yen depreciation on the first quarter had the effects of a 130 billion yen increase in sales and a 10 billion yen increase in operating income. Yen depreciation basically has positive impacts on exporters, such as Semiconductors, Medical Systems and Power Systems. However, depreciation is also raising our procurement and electricity costs. In domestic LCD TVs, PC and Home Appliances businesses, where offshoring is advanced and imports amounts are larger, yen depreciation has a negative impact. In these businesses we will improve profitability through measures that include raising prices.
The assumed foreign exchange rate at the time when the full-year forecast was made was 90 yen to the dollar and 115 yen to the euro.
Q3. Could you please tell us about the FY2013 first quarter business results in the Semiconductor and Storage businesses?
The Semiconductor and Storage businesses saw substantially higher sales. NAND flash memories saw considerably higher sales on higher average prices due to improvements in the product mix. The consolidation of NuFlare Technology, Inc. in December 2012 also contributed to the segment's higher overall sales. NAND flash memories recorded an upswing in operating income on increased sales. Storage Products secured profit despite lower demand for PCs. The consolidation of NuFlare Technology, Inc. also contributed, and the overall operating income of the segment increased sharply to 47.9 billion yen, a rise of 38.5 billion yen against the same period last year.
Q4. Could you please tell us about the FY2013 first quarter business results in the Social Infrastructure segment?
Overall sales increased. Nuclear Power Systems overseas and Photovoltaic Power Systems continued to record healthy performances. Elevators and Medical Systems also saw solid performances. Automotive Systems, such as batteries and motors, recorded growth. Overall operating income decreased, but we secured a profit. Thermal Power Systems also decreased but secured high profitability. Photovoltaic power systems and Medical Systems recorded increases.
Q5. Could you please tell us about the FY2013 first quarter business results in the Digital Products segment and Home Appliances segment?
The Digital Products segment saw a decrease in overall sales. LCD TVs are on path for recovery in Japan, but declined on slumping sales in Europe and North America. PCs saw sales drop on reduced sales volume. The Retail Information Systems and Office Equipment businesses reported increase sales on positive effects from the acquisition of IBM's Retail Store Solutions business. However, the overall operating loss of the Digital Products segment increased. While the Retail Information Systems and Office Equipment businesses reported solid performances, LCD TVs saw lower operating income as a result of the downturn in Europe and other regions, despite improvement in Japan due to structural reform and higher sales prices. PCs saw a negative figure on lower demand and yen depreciation. Overall operating income was lower.
Home Appliances segment recorded an overall increase in sales, mainly due to growth in White Goods, such as washing machines and refrigerators, but operating income deteriorated as a result of yen depreciation.
Q6. How will you improve your performance in the LCD TV and PC businesses?
We plan to increase sales and profit by accelerating profit-focused resource allocation and establishing a business strategy to reduce fixed costs, improve profitability and strengthen the business foundations. We will also seek to promote sales in emerging markets, focus on enterprise business and develop high value-added products. We announced these measures on July 26 as a part of continuing structural reforms, and we will follow up with more reforms in this fiscal year. This will include a review of production and a reform of sales operations in Japan and overseas.
Q7. Please give us your forecasts for FY2013's first half and full-year results.
We are not changing our results forecast for the first half and full fiscal year. In addition to the positive effects from yen depreciation, NAND flash memories will maintain a strong performance and the Social Infrastructure segment is expected to see improvement. M&As completed in the last fiscal year, such as the acquisition of IBM's Retail Store Solutions business, will also have a positive impact. However, we must take into account changes in the digital products market, and we must make prudent estimates of increases in our procurement and electricity costs. We must also bear in mind that the prospects for the world economy are unclear, largely due to slowing growth in emerging economies such as China, and we need pay careful attention to changes in the external environment. Nonetheless, we have set the forecast as our minimum target and aim to achieve further improvement.

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