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FY2009

- ended March 2010 (For 171st Fiscal Period)

Presentation for FY2009 Q1 Results

For 1st Quarter ended June, 2009   - July 29, 2009

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 FY2009

Net Sales 1,339.7 billion yen (-278.4 billion yen YoY)
Operating income (loss) -37.6 billion yen (-14.7 billion yen YoY)
Income (loss) from continuing operations, before income taxes and noncontrolling interests -62.1 billion yen (-46.8 billion yen YoY)
Net income (loss) attributable to shareholders of the Company[Note] -57.8 billion yen (-46.2 billion yen YoY)

Note) “The Company” refers to Toshiba Corporation.

  • Toshiba’s consolidated net sales were 1,339.7 billion yen, a decrease of 278.4 billion yen from the same period of the previous year, and a decrease of 331.8 billion yen from the previous period (4Q of FY2008).
  • The consolidated operating loss was -37.6 billion yen. This represented an improvement of 36.4 billion yen from the previous period mainly in Electronic Devices and Digital Products. However, compared to the same period of the previous year, the consolidated operating loss widened by 14.7 billion yen.
  • The loss before income taxes and noncontrolling interests widened by 46.8 billion yen to -62.1 billion yen, an outcome mainly reflecting the restructuring charges and foreign exchange losses. Net loss attributable to shareholders of the Company widened by 46.2 billion yen to -57.8 billion yen.

2. Financial Position and Cash Flows for the First Quarter of FY2009

  • Total assets decreased by 46.0 billion yen from the end of March 2009 to 5,407.2 billion yen.
  • Total equity increased to 1,074.8 billion yen, an increase of 315.5 billion yen from the end of March 2009, in spite of a net loss attributable to shareholders of the Company of -57.8 billion yen. This reflects an improvement in accumulated other comprehensive income of 41.6 billion yen due to gains on recovery in the stock market prices, impacts from foreign currency exchange, and also a capital increase from a June 2009 public offering.
  • Total debt decreased by 378.6 billion yen from the end of March 2009 to 1,432.1 billion yen.
  • As a result of the foregoing, equity ratio at the end of June 2009 was 19.9%, a six-point improvement from the end of March 2009, and the debt-to-equity ratio at the end of June 2009 was 133%, a 105-point improvement from the end of March 2009.
  • Free cash flow was 58.8 billion yen, a 265.7 billion yen improvement over the same period of the previous year. The improved working capital turned cash flows from operating activities to plus, and payments by acquisition of tangible fixed assets declined against the same period of the previous year.

3. Performance Projections for FY2009

Toshiba’s business projections for its consolidated results for the fiscal year 2009 remain unchanged from the projections announced on May 8, 2009, as it is necessary to carefully assess emerging trends in the business environment.

Q & A Session

Q1. How was the 1st quarter against your plan? What was the situation by segment?
First quarter net sales were 1,339.7 billion yen, a shortfall against the plan. In Social Infrastructure, actual results fell short of planned sales, as we had to contend with decreases in capital investment in industrial components. Home Appliance also had to face sales results that fell short of the plan. Digital Products performed as expected. On the other hand, the operating loss was 37.6 billion, better than our plan. The operating loss of Electronic Devices was better than our expectations. The main reason for this was an improvement in the memory business.
Q2. In respect of reductions in fixed costs, you achieved results beyond the scope of your plan in the 1st quarter, but what is your perspective on achieving your full year plan of 300 billion yen? What reductions do you think you can achieve in the second quarter?
In the 2nd quarter, we expect the same level of reduction in fixed costs as in the 1st quarter. Internally, we are now making efforts to reduce fixed costs by more than 300 billion yen on the full year basis.
Q3. What were the circumstances of your memory business in the 1st quarter?
The market in the 1st quarter still felt the cooling influence of the previous fiscal year, and the imbalance in supply and demand still continues. As a result of continuing production adjustment, supply and demand is beginning to firm up and prices rose. Sales have increased by 15% against the 4th quarter, and are now at the same level as for the same quarter of the previous fiscal year.
Q4. At what level of capacity utilization are your semiconductor plants now operating?
We anticipate improved utilization in the 2nd fiscal quarter. We expect to see 100% operation of our 12-inch system LSI line in the 2nd quarter. Our memory line capacity utilization was at 70% in the 1st quarter, and in the 2nd quarter we expect it to be between 80-100%. Newspapers reported full utilization, but in fact we will be monitoring the market and making adjustments.
Q5. What is the main reason for full operation of your 300mm system LSI line?
Main reason is a demand recovery in certain applications, such as digital consumer products and games consoles. In digital consumer products, Japan's “Eco-points” system to stimulate purchases of environmentally-conscious products had an influence, as did government measures to promote purchases of consumer products in China. That said, there is still a lack of clarity in respect of the 3rd quarter and after.
Q6. What impact did “Eco-points” system in Japan have on your 1st quarter?
“Eco-points” started on May 15, and its impact depends on the product area. Unit sales increased for flat panel TVs. The shift to digital broadcasting also had an influence here, and like other companies Toshiba also saw a large increase in unit sales. In refrigerators, our overall result was stable, since the models supporting “Eco-points” standards were limited to large capacity models in Toshiba's case. In air-conditioners, the unseasonal weather undermined the effects of “Eco-points”, and the industry saw fewer unit shipments than for the same period last year.
Q7. What is the situation in your Social Infrastructure business?
At this point, the recession has had no significant influence, due to backlogs centered on new nuclear power plants in overseas markets, but there has been some impact on business such as parts for industrial machinery, and we will keep an eye on this from now on.

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