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Presentations & Events

FY2008

- ended March 2009 (For 170th Fiscal Period)

Presentation for FY2008 Q2 Results

For First 6 months and 2nd Quarter ended September, 2008   - October 29, 2008

Outline of the presentation

1. Consolidated results for the first 6 months of FY2008

Net Sales 3,495.8 billion yen (-194.1 billion yen YoY)
Operating income (loss) -23.5 billion yen (-106.0 billion yen YoY)
Income (loss) from continuing operations, before income taxes and minority interest -63.5 billion yen (-140.3 billion yen YoY)
Net income (loss) -38.5 billion yen (-84.2 billion yen YoY)
  • Toshiba's overall consolidated sales in the first six months of fiscal 2008 were 3,495.8 billion yen, a decrease of 194.1 billion yen, a result was influenced by steeper than expected declines in semiconductor sales prices and overall market shrinkage resulting from the economic downturn.
  • Consolidated operating income (loss) declined by 106.0 billion yen to -23.5 billion yen. While Digital Products recorded significant increases and Social Infrastructure saw a healthy performance with increased profit, Electronic Devices, particularly the Semiconductor business, saw notably lower operating income (loss).
  • Income (loss) before income taxes and minority interest decreased by 140.3 billion yen to -63.5 billion yen and net income (loss) decreased by 84.2 billion yen to -38.5 billion yen.

2. Financial Position and Cash Flows

  • Total assets increased by 109.2 billion yen from the end of March 2008 to 6,044.8 billion yen.
  • Shareholders' equity was 954.1 billion yen, a decline of 68.2 billion yen from the end of March 2008.
  • Total debt increased by 332.4 billion yen from the end of March 2008 to 1,593.4 billion yen. As a result of the foregoing, the debt-to-equity ratio was 167%, a 44-point worsening from the end of March 2008.
  • Free cash flow for the six months (April-September) was -251.8 billion yen, 161.0 billion yen lower than for the same period of the previous year. The worsened net income (loss) was the cause of lower cash flows from operating activities. Cash flows from investing activities also worsened against the same period of the previous year.

3. Performance Projections for FY2008

  • Toshiba has not yet revised the projections for fiscal year 2008 consolidated results that it announced on September 19, 2008. Economic conditions have changed drastically since then and remain very uncertain, and it will take time to fully assess emerging economic trends and their implications.

Q & A Session

Q1. Why have you not revised your full-year forecast?
Toshiba has not yet revised the projections for fiscal year 2008 consolidated results announced on September 19, 2008. Economic conditions have changed drastically since then and remain very uncertain, and it will take time to fully assess emerging economic trends and their impacts.
Q2. What kind of impact do you expect recession to have on Toshiba's business performance for this fiscal year?
On the global scale, recession brings with it a severe market environment. We must discern and understand trends from now, and implement appropriate business management. We are concerned about the real economy, sluggish consumer spending in the US, and a negative effect on parts procurement. In Digital Products businesses, the PC and TV markets in the US are slowing down, and the PC market is slowing in Europe. Demand for mobile phones is slumping all over the world. On top of this, there are prospects of a fall in exports to the emerging market economies. In the current term, I do not see any great risk in connection with the Social Infrastructure business for this fiscal year.
Q3. What are the reasons for the increase of working capital and for rising inventory? Also, what measures will you take to improve free cash flow in the second fiscal half?
The reason why inventory assets are rising is that we have to have stock ready to meet sales demand in the second half. We expect to see higher sales in the second half and for that reason we are increasing inventory. In addition, we are scheduled to receive payment from the stock sale of Toshiba Building Co., Ltd. in the second half, and we anticipate free cash flow for the year of +50 billion yen. We also expect to see results from the Cash Conversion Project in the second half.
Q4. Apart from the PC business, could you give us the details of first six months actual results for each of your Digital Products businesses.
Both TV and HDD were in the black. Mobile phones were in the black in the last fiscal year, but this year they have fallen into the red.
Q5. You have expanded your production capacity by purchasing semiconductor manufacturing capacity from SanDisk, but do you think the market demand is there?
Although we purchased manufacturing capacity from SanDisk, it does not mean that there has been any increase in the combined production capacity of both companies, and we do not think this move will have any impact on market conditions.

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