TOSHIBA Toshiba’s Mid-term Business Plan March 21, 2000 Toshiba’s Mid-term Business Plan ・For the three fiscal years to March 31, 2003 ・The first mid-term business plan under the in-house company system ・Strategies for each company to win in the highly competitive global marketplace Fundamentals of The Plan ■ Provision of value-added products and services by fully utilizing IT ■ Advance in-house company system and create inter-company value chain ■ Enhance corporate value and corporate governance Utilize IT to Provide Value Creating Products And Services Emergence of wireless and mobile technologies Product development utilizing world class technologies Notebook PCs Semiconductors LCD Media cards Bluetooth iValue Creation Company to take lead in mobile services business Promote B 2 B business MPEG4 Promote IT and Establish a New Business Style Mobile ＆ Network Provide solutions that meet customer requirements Create products with the advanced technologies Advancing The In-house Company System and Create an Inter-company Value Chain ■ Strategies to make each company a winner ■ Collaboration of companies in products, components, systems, services and content Inter-company Value Chain Inter-company Value Chain S&S Wireless Products Satellite Network Home Appliances Digital Broadcasting Service Internet Service ITS/ Automotive Semiconductor DDC SD Card Flash Application Memory Products Media Card Mobile DM iVC PS HA Content Distribution PC/ Cellular Telecom LSI LCD/ Battery Content Network AV System Digital TV LSI LCD Battery Mobile Data Broadcasting Digital White goods BtoC Content BtoB ASP Infrastructure PC for car System LSI Application CPU System Content Distribution BtoC Content LCD Fuel Cell Enhancing Corporate Value and Heightening Corporate Governance ■ Heighten customer satisfaction by creating value-added products and services ■ Enhance corporate value Reinforce Financial Status ■ Intensive cash-flow oriented management → cash-flow increase \100 billion + （FY99） ■ Create value and profits exceeding the cost of investment ROI ROE Free cash-flow Enhancing Corporate Value and Heightening Corporate Governance ■ Win satisfaction from stakeholders: customers, shareholders, employees and the local community ■ Increase disclosure Outline Consolidated Billion yen FY99 (Projection) Amount %against FY1998 FY00 (Plan) Amount FY02 (Plan) %against %against Amount FY1999 FY1999 5,700 108% 6,100 107% 7,800 137% Operating Income 100 328% 200 200% 420 420% Net Profit/ Loss -30 － 100 － 200 － Sales Achieving High Growth \7,800 billion \５,700 billion Global business operation focuses on IT ROE： 15.5% FY99 FY02 Emphasize Cash-flow Management - Reduce total debt in consolidated-base - ■ Maximization of cash-flow aimed to increase company value 200 150 120 150 Increase cash-flow \370 billion in three years 100+ 100 100 50 0 FY９９ Reduce total debt in consolidated-base FY００ FY０１ FY０２ (\billion） FY99 （FY02 D/E ratio≦100％） Total debt D/E ratio 1,990 (％) 146 （exclude Toshiba Credit Corp. and Toshiba Building & Lease Corp.） FY02 1,750 89 Sales by Segment \ billion 8000 Information & Communications and Industrial Systems 7000 Digital Media 6000 Power Systems 5000 Electronic Devices 4000 Home Appliances 3000 Others 2000 1000 0 FY99 FY02 Sales by Segment Others Others 440 Home Appliances 530 Information & Communications and Industrial Systems 500 7% 1,900 10% Information & Communication and Industrial Systems 6% 700 Power Systems 680 Power Systems Home Appliances 2,250 8% 550 25% 6% 29% Electronic Devices & Components 8% Electronic Devices & Components Digital Media 1,550 1,420 Digital Media 2,550 2,300 29% 26% 22% 24% FY99 FY02 \5,700 billion \7,800 billion Operating Income by Segment Others Home Appliances Information & Communications and Industrial Systems 28 3.5% 100 Electronic Devices & Components 2% Digital Media 160 9% 7% 24% Power Systems 11 15 3.5% Information & Communications and Industrial Systems 40 22% 32% 2 15 Power Systems Others Home Appliances 30 Digital Media 38% 100 24% 44 35% Electronic Devices & Components -25 billion yen FY99 FY02 \100 billion \420 billion Essentials for Mid-term Business Plan ■ Growth by focusing on IT business ■ Establish solid profit base ■ Establish new management style Growth by Focusing on IT Business System solutions, services, contents Mobile network equipment Components Reinforce Internet Business Mobile Internet service i-Value Creation BtoC business Content business A d v a n ce d S y s t e m s b y I n t e r n e t Te c h n o l o g i e s 500 billion yen electric administration system for government in FY2003 Retail/ manufacturing/ Financing e-Net Division BtoB／System solution Digital broadcasting ITS Wireless access Focusing on Mobile and Network-related fields Notebook PCs Next-generation cellular phone, W-CDMA Mobile AV network products Media cards Digital broadcasting Notebook PC Business Provide attractive products that define market trend and expand business in services Reinforce competitiveness and improve customer satisfaction through the completion of global SCM and CRM systems W-CDMA Business Opening of broadband era in Japan Establish W-CDMA Business Development Division The world’s first MPEG4 single chip LSI Mobile AV Network Internet MPEG4 Outdoos Mobile AV Memory card Mobile AV W-CDMA Mobile AV Bluetooth Mobile AV Mobile AV Mobile AV Home Media Card Business Notebook PC NAND Flash Memory Components Business Digital Mobile Devices MPEG camera I/O function Bluetooth Digital Audio Player DVD Distribution Business Content Production Content Strengthening The Components Business Semiconductors System LSI NAND flash memory LCDs Polysilicon LCDs Rechargeable Batteries Concentrate resources on mobile network Strengthen Services Business Billion yen 1,050 1,550 Others 1600 1400 iValue 1200 Medical/Elevators and Building Systems Energy 1000 800 600 Digital Media 400 200 0 Information Systems FY99 FY02 Establish a Solid Profit Base - Review The Organizational Structure power systems, consumer products, medical systems, elevator & escalator systems, industrial equipment • Globalization through alliances • Reshape business structure • Reshape business portfolios Stabilize and improve profitability Acceleration of IT-based Management Enhance productivity by strategic utilization of IT \150 billion investment in IT over three years 100% on-line procurement procurement costs for FY2002 to be \200 billion lower than in FY1999 Introduce integrated SCM, CRM, ERP system in semiconductor and PC business Improve customer service Group Management Corporate In-house companiy Subsidiaries and affiliates In-house company Subsidiaries and affiliates In-house company Subsidiaries and affiliates Reinforce monthly consolidated system in April 2000 Shape A New Corporate Culture Thorough implementation of Management Innovation 2001 program ・Introduced in April, 1999 to all in-house companies ・Concrete targets utilizing IT ・\560 billion in improvement over three years Environmental Management Start environmental accounting from FY1999 Full employment of zinc-free soldering Zero emission of trash Promote PRTR in all facilities Green procurement 30% reduction of chemical material disposal Investment in environmental protection Performance-based Human Resources Evaluation Performancebased treatment Creative and innovative corporate culture Add flexibility to remuneration structure Original remuneration systems in separate entity Resource Investment Plan Investment in products and technologies to maintain superior competitiveness Over \350 billion investment in R&D Centering on IT and components \350 billion for capital expenditure Head Count Plan 192,000 200000 180000 160000 140000 120000 100000 80000 60000 40000 20000 0 190.500 Overseas Subsidiaries and Affiliates Domestic Subsidiaries and Affiliates Non-consolidated FY99 Non-Consolidated Domestic Overseas Consolidated FY02 57,300 151,000 41,000 192,000 48,500 142,500 48,000 190,500 Toshiba in The 21st century Contribute to society through products and services A value-creating company Achieve continuous high growth and high profit
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