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- ended March 2013 (For 174th Fiscal Period)

Presentation for FY2012 Q1 Results

For 1st Quarter ended June, 2012   - July 31, 2012

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*, mainly due to transfer of LCD business and yen appreciation, despite higher sales in Social Infrastructure increased orders for thermal power plants.

Net Sales 1,268.9 billion yen (YoY: -57.2 billion yen, -4.3%)

Operating income increased by 7.4 billion YoY, despite yen appreciation. Electronic Devices and Social Infrastructure recorded higher operating income. Net income decreased YoY, affected by currency exchange and increased non-operating expenditure, including expenditure on structural reform.

Operating income 11.5 billion yen (YoY: +7.4 billion yen)
Income before income taxes and noncontrolling interest -14.7 billion yen (YoY: -17.8 billion yen)
Net income -12.1 billion yen (YoY: -12.6 billion yen)

Free cash flow was secured at the same level YoY.

*YoY: year-on-year comparison

Q & A Session

Q1. Could you please explain the main points of the FY2012 first quarter results?
Net sales were 1,268.9 billion yen, a decrease of 57.2 billion yen against the same period of the previous year. Despite a strong performance in Social Infrastructure segment, primarily due to increase in the energy-related business, centered on thermal power generation, the transfer of the LCD business and yen appreciation led to lower sales.
Although operating income was affected by yen appreciation, the Electronic Devices segment and Social Infrastructure segment recorded higher income compared to the same period of the previous year, resulted in an approximately 3-fold increase in overall operating income, to total 11.5 billion yen.
Net income was lower compared to the same period the previous year due to increased non-operating expenditures, such as one-time expenses for the steady implementation of restructuring. Free cash flow was on par with the same period last year.
Q2. Could you please tell us about the circumstances surrounding the FY2012 first quarter results in the semiconductor and storage business?
Despite a healthy performance from the storage business, notably in hard disk drives (HDD), overall sales in the semiconductor and storage business decreased, due to price declines for NAND flash memories and yen appreciation.
Operating income for the semiconductor and storage business as a whole rose 6.8 billion yen compared to the same period last year, for a total of 9.4 billion yen. This was thanks to the System LSI business returning to profit through restructuring and increased revenue in the storage business, even though NAND flash memories saw income decrease due to price declines.
Q3. What are the circumstances surrounding the FY2011 first quarter results in the Social Infrastructure segment?
In respect of sales, energy-related businesses, centering on thermal and hydro power systems, continued to perform well in the domestic and overseas market, and we saw growth overseas in the elevator and medical systems businesses. On top of that, last year's acquisition of the Swiss company Landis+Gyr AG, the world's leading smart meter company, contributed to increased revenue for the segment as a whole. In respect of operating income, we were able to secure our highest ever first quarter operating income for the segment, largely due to healthy performances in thermal and hydro power systems, plus a rise in operating income from the transmission and distribution systems business and the medical systems business. In FY2012, we anticipate that the Social Infrastructure segment will win more orders and have a larger order backlog than in the previous year, and we expect the business to continue to forge ahead.
Q4. How did the Digital Products segment and Home Appliances segment perform?
Although the LCD television business has made significant improvements since the fourth quarter last year, the Digital Products segment saw overall segment income deteriorate due to lower sales and yen appreciation. However, due to continued cost cutting measures in the PC business, we were able to maintain a steady level of profit. In LCD televisions, further business restructuring will certainly be carried out beginning in the second quarter, as we work to shift to a profitable structure while looking to expand sales in the growth markets of emerging economies.
In the Home Appliances segment, white goods experienced lower sales, however, income in businesses such as commercial air-conditioning rose and the segment as a whole was able to stay in the black.
Q5. Please give us your forecasts for FY2012's first half and full-year results.
We are not changing our results forecast for the first half of the fiscal year. In the Electronic Devices segment, the storage business continues to see a firm performance. In the memory business, which was affected by price declines, we will conduct production adjustment to accelerate an improved supply-demand balance and increase the composition rate of high-value added products to raise cost-competitiveness. The Social Infrastructure segment continues to produce favorable results, and we should be able to obtain overall operating profit of 90 billion yen for the first half of the fiscal year.
In the second half of the year, we expect to see improvement in the supply-demand balance in the memory business and a continuation of favorable results in the Social Infrastructure segment. In light of this, we are not changing our full-year results forecast.

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