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Presentations & Events

FY2004

- ended March 2005 (For 166th Fiscal Period)

Presentation for FY2004 Q2 Results

For First 6 months and 2nd Quarter ended September, 2004   - October 29, 2004

Outline of the presentation

1. Consolidated Business Results of the First Half of Fiscal Year to March 2005

Net Sales 2,781.8 billion yen (+7% YoY)
Operating income 50.7 billion yen (+62.7 billion yen YoY)
Income before taxes, minority interest and equity in earnings of affiliates 21.5 billion yen (+39.1 billion yen YoY)
Net income 8.4 billion yen (+40.6 billion yen YoY)
  • Net Sales increased year-on-year in the Digital Products, Electronic Devices, Social Infrastructure and Home Appliances segments.
  • Electronic Devices made a robust contribution to Operating Income.
  • Digital Products, Social Infrastructure and Home Appliances also improved profitability.

2. Revised Business Forecast for the Full Year of FY2004

Net Sales 5,870.0 billion yen
(+1% of the previous forecast)
Income before taxes, minority interest and equity in earnings of affiliates 130.0 billion yen
(+20.0 billion yen to the previous forecast)
Net income 50.0 billion yen
(+20.0 billion yen to the previous forecast)

Q & A Session

Q1. Did the earthquake in Niigata prefecture have any impact on Toshiba's business?
Not at this moment. We have taken measures to minimize any business impact from supply of components from third vendors located in Niigata prefecture.
Q2. Why could Toshiba increase the PC sales revenue for FY04 forecast from 720 billion yen to 753 billion yen without increasing sales units of 5.5 million estimated in April?
Toshiba intends to improve the product mix by increasing high value-added products, such as the Qosmio AV-PC. Another reason is the softer price reduction than we assumed at the beginning of FY04.
Q3. Why did Toshiba lower the FY04 operating income forecast of Digital Products Segment from +25billion to +10billion?
The main reason is the unfavorable performance of the ODD (Optical Disk Drive) business. We are taking countermeasures to improve its profitability, including cost cutting.
Q4. What does Toshiba predict for the Mobile Phone Business in FY04?
We achieved results in the first half due to the successful new product introductions. However, we anticipate tougher market conditions in the second half.
Q5. How about Toshiba's TV business?
Thanks to the Olympic Games, TV sales revenue was higher than for the same period of last year. However it did not contribute very much to operating profit.
Q6. It looks like that the Toshiba's restructuring plans in PC business are progressing. Please let us know the business performance in the first half and the forecast for the second half.
We made a positive operating profit in June and July. Things have gone as planned since we started restructuring in April, and we aim at positive operating profit in the second half.
Q7. What about NAND flash memory business?
We faced 40% price erosion in the first half. This level was our yearly price reduction prediction at the begging of FY04. We expect further price erosion in the second half. However, we are going to maintain the original operating profit level in FY04 under firm demand conditions and by implementing further cost reduction plans.
Q8. How about the discrete and analog businesses?
Discrete devices contributed to increased sales and operating profit in the first half. We might face severe market conditions in the second half, but expect sustainable profit through FY04. In the analog business, we might face tough conditions in the second half, due to production adjustments for AV products and LCD panels.
Q9. How is the condition of the LCD business?
Sales and operating profit in the first half increased from the same period last year, mainly on improved production efficiency. We expect to maintain the forecast operating profit of 13-billion yen through FY04, in spite of the tougher market conditions expected in the second half.
Q10. Why did Toshiba increase the FY04 operating profit forecast by 15-billion in the Social Infrastructure segment?
The Industrial and Power System & Services business, Social Network & Infrastructure System business and Elevator and Building System business will contribute higher sales revenues and operating profits.
Q11. Please tell us the amount of income taxes, minority interest in income of consolidated subsidiaries, and equity in earnings of affiliates for FY04.
Income taxes will be around 72 billion yen, minority interest in income of consolidated subsidiaries 6 billion yen, and equity in earnings of affiliates 2 billion yen.
Q12. What about Free Cash Flow in FY04?
We are estimating as +80 billion yen in free cash flow at this moment.
Q13. What impact do you expect from exchange rate fluctuations in the second half of FY04?
In US dollar terms, the amount of imports almost balances exports. Therefore we do not expect much impact. In the euro, Toshiba will export around 0.9 billion for the half, of that around 80% has been already hedged.

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