toshiba march 21, 2000 toshiba’s mid-term business plan

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TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan Toshiba’s Mid-term Business Plan

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Page 1: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

TOSHIBA

March 21, 2000

Toshiba’s Mid-term Business PlanToshiba’s Mid-term Business Plan

Page 2: TOSHIBA 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

Toshiba’s Mid-term Business Plan

Page 3: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

Provision of value-added products and services by fully utilizing IT

Advance in-house company system and create inter-company value chain

Fundamentals of The Plan

Enhance corporate value and corporate governance

Page 4: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

Utilize IT to Provide Value Creating Products And Services

iValue Creation Company to take lead in mobile services business

Promote B 2 B business

Emergence of wireless and mobile technologiesProduct development utilizing world class technologies

Notebook PCsNotebook PCs

Semicon-ductorsSemicon-ductors

LCDLCD MediacardsMediacards

BluetoothBluetooth MPEG4MPEG4

Page 5: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

Provide solutions that meet customer requirements

Create products with the advanced technologies

Mobile Network

Promote IT and Establish a New Business StylePromote IT and Establish a New Business Style

Page 6: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

Strategies to make each company a winner

Collaboration of companies in products, components, systems, services and content

Advancing The In-house Company System and Create an Inter-company Value Chain

Inter-company Value Chain

Page 7: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

Inter-company Value Chain

Media Card

Mobile

Network Home Appliances

Digital Broadcasting Service

Internet Service

ITS/ Automotive

S&S DM Semiconductor DDC iVC PS HA

SD Card Flash Content Application Memory Distribution Products

Wireless PC/ Cellular Telecom LSI LCD/ Battery Content Products Satellite

Network AV System LCD Content Digital Digital TV LSI Battery Distribution White goods

Mobile BtoC

Data Broadcasting Content

BtoB BtoC

ASP Content

Infrastructure PC for car System LSI LCD Fuel Cell

Application CPU System

Page 8: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

Enhancing Corporate Value and Heightening Corporate Governance

Heighten customer satisfaction by creating value-added products and services

Enhance corporate value■

Page 9: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

Reinforce Financial Status

Create value and profits exceeding the cost of investment

Intensive cash-flow oriented management    →  cash-flow increase \100 billion +  ( FY99 )

ROIROI ROEROE Free cash-flowFree cash-flow

Page 10: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

Enhancing Corporate Value and Heightening Corporate Governance

Increase disclosure ■

Win satisfaction from stakeholders: customers, shareholders, employees and the local community

Page 11: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

Outline

Billion yenConsolidated

FY99 (Projection) FY00 (Plan) FY02 (Plan)

Amount%againstFY1998

Amount%againstFY1999

Amount% againstFY1999

Sales 5,700 108% 6,100 107% 7,800 137%

Operating Income 100 328% 200 200% 420 420%

Net Profit/ Loss -30 - 100 - 200 -

Page 12: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

Achieving High Growth

FY99 FY02

\\ 55 ,700 billion,700 billion

\7,800 billion\7,800 billion

Global business operation focuses on ITGlobal business operation focuses on IT

ROE : 15.5%

Page 13: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

- Reduce total debt in consolidated-base -

Maximization of cash-flow aimed to increase company value

Emphasize Cash-flow Management

FY99 FY02

Total debt 1,990 1,750

D/E ratio ( % ) 146 89( exclude Toshiba Credit Corp. and Toshiba Building & Lease Corp.)

(\billion )Reduce total debt in consolidated-base( FY02  D/E ratio≦100%)

Increase cash-flow \370 billion in three years

100+ 100 120

150

0

50

100

150

200

FY 99 FY00

FY 01 FY 02

Page 14: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

Sales by Segment

0

1000

2000

3000

4000

5000

6000

7000

8000

\ billion

FY99 FY02

Information & Communications and Industrial Systems

Digital Media

Power Systems

Electronic Devices

Home Appliances

Others

Page 15: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

Sales by Segment

FY99

\5,700 billion

29%

1,900

1,4201,550

530

680

440

22%24%

8%

10%7%

FY02

\7,800 billion

25%

2,250

2,3002,550

550

700

500

26%29%

6%

8%

6%

Information & Communications and Industrial Systems

Digital Media

Electronic Devices & Components

Power Systems

Home Appliances

Others

Information & Communications and Industrial Systems

Digital MediaElectronic Devices & Components

Power Systems

Home Appliances

Others

Page 16: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

Operating Income by Segment

FY99

\100 billionFY02

\420 billion

24%

100

100160

1515

30

24%38%

3.5%

3.5%7%

Information & Communications and Industrial Systems

Digital Media

Electronic Devices & Components

Power Systems

Home Appliances

Others

32%

40

44

11

2

28

35%

9%

2%

22%

Electronic Devices

& Components

-25 billion yen

Information & Communications and Industrial Systems

Digital Media

Power Systems

Home Appliances

Others

Page 17: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

Growth by focusing on IT business■

Essentials for Mid-term Business Plan

Establish solid profit base■

Establish new management style■

Page 18: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

Growth by Focusing on IT Business

Mobile network equipment

System solutions, services, contents

Components

Page 19: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

Reinforce Internet Business

Advanced Systems by Internet Technologies

BtoC businessBtoC businessi-Value Creation

BtoBBtoB // System solutionSystem solutione-Net Division

electric administration system for government

Digital broadcastingITS Wireless access

Retail/ manufacturing/ Financing

Mobile Internet service

Content business

500 billion yen 500 billion yen in FY2003in FY2003

Page 20: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

Notebook PCs

Focusing on Mobile and Network-related fields

Next-generation cellular phone, W-CDMA

Mobile AV network products

Media cards

Digital broadcasting

Page 21: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

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

Page 22: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

W-CDMA Business

Establish W-CDMA

Business Development Division

Opening of broadband era in Japan

The world’s first MPEG4 single chip LSI

Page 23: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

Mobile AV Network

Home

Outdoos

InternetInternet

MPEG4

W-CDMA

Bluetooth

Memory card

Mobile AV

Mobile AV Mobile AV

Mobile AV

Mobile AV

Mobile AV

Page 24: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

Media Card BusinessMedia Card Business

DistributionDistributionBusinessBusiness

Content Content ProductionProduction

Digital Audio Digital Audio PlayerPlayer

ContentContent

Digital Mobile Digital Mobile Devices Devices

NAND Flash NAND Flash MemoryMemory

MPEG camera

DVD

Notebook PC

I/O function

Bluetooth

Components Business

Page 25: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

Strengthening The Components Business

Concentrate resources on mobile networkConcentrate resources on mobile network

SemiconductorsSystem LSI

NAND flash memory

Rechargeable Batteries

LCDsPolysilicon LCDs

Page 26: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

Strengthen Services Business

0

200400

600800

10001200

14001600

FY99 FY02

Others

iValue

Medical/Elevatorsand Building Systems

Energy

Digital Media

Information Systems

1,5501,050Billion yen

Page 27: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

Establish a Solid Profit Base - Review The Organizational Structure -

power systems, consumer products, medical systems, elevator & escalator systems, industrial equipment

Stabilize and improve profitability

• Globalization through alliances• Reshape business structure• Reshape business portfolios

Page 28: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

Acceleration of IT-based Management

Introduce integrated SCM, CRM, ERP system in semiconductor and PC business Improve customer service

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

Page 29: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

Group Management

Corp

orate

Reinforce monthly consolidated system in April 2000

In-house companiy Subsidiaries and affiliates

In-house company Subsidiaries and affiliates

In-house company Subsidiaries and affiliates

Page 30: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

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

Page 31: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

Environmental Management

Start environmental accounting from FY1999

Full employment of zinc-free soldering

Investment in environmental protectionPromote PRTR in all facilities

Zero emission of trash 30% reduction of chemical material disposal

Green procurement

Page 32: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

Performance-based Human Resources Evaluation

Performance-based treatment

Creative and innovative corporate culture

Add flexibility to remuneration structure

Original remuneration systems in separate entity

Page 33: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

Resource Investment Plan

Centering on IT and components

\350 billion for capital expenditure

Investment in products and technologies to maintain superior competitiveness

Over \350 billion investment in R&D

Page 34: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

Head Count Plan

020000400006000080000

100000120000140000160000180000200000

FY99 FY02

OverseasSubsidiaries andAffiliatesDomesticSubsidiaries andAffiliatesNon-consolidated

192,000 190.500

Non-Consolidated 57,300 48,500Domestic 151,000 142,500Overseas 41,000 48,000

Consolidated 192,000 190,500

Page 35: TOSHIBA March 21, 2000 Toshiba’s Mid-term Business Plan

Toshiba in The 21st century

Contribute to society Contribute to society through products and through products and servicesservices

Achieve continuous high Achieve continuous high growth and high profitgrowth and high profit

A value-creating companyA value-creating company