Financial Data and Key Metrics Changes - For the first half of FY 2021, sales revenue was ¥1,546.4 billion, an increase of ¥175 billion year-over-year, while operating income was ¥45 billion, up ¥41.9 billion compared to the same period last year [60][61] - Free cash flow improved to positive ¥131.4 billion, an increase of ¥124.3 billion year-over-year [61] - The company expects net sales of ¥3.5 trillion for FY 2023, with an operating margin of 5.7% and ROIC of 10% [55] Business Line Data and Key Metrics Changes - The Semiconductor business performed well, contributing to positive growth in revenue and income [59] - The Energy Systems segment saw net sales of ¥236 billion, with an operating income of ¥4.5 billion, reflecting a ¥45.9 billion increase from the previous year [72] - The Device & Storage segment reported net sales of ¥432.9 billion, up ¥108.9 billion year-over-year, with operating income increasing by ¥30.1 billion [75] Market Data and Key Metrics Changes - Orders received increased by 19% year-over-year, driven by large-scale projects [62][77] - The Infrastructure Systems segment experienced a slight decrease in revenue, while other segments saw increases [65] Company Strategy and Development Direction - The company plans to separate into three independent entities: Infrastructure Service Company, Device Company, and Toshiba, to enhance focus and agility in decision-making [15][21] - The Infrastructure Service Company aims for net sales of ¥2.1 trillion, focusing on renewable energy and infrastructure resilience [17] - The Device Company targets net sales of ¥870 billion, focusing on semiconductors and storage solutions [18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges such as rising material and logistics costs and semiconductor shortages but emphasized the strong performance of the semiconductor business [63] - The strategic reorganization is seen as the best path forward for sustainable profitable growth and value creation for stakeholders [21][35] Other Important Information - The company has committed to a targeted dividend payout ratio of 30%, increasing dividends from ¥30 per share in FY 2018 to an expected ¥80 per share in FY 2021 [28] - A special dividend of ¥110 per share was distributed during FY 2021, and a stock buyback of ¥100 billion was completed [64][28] Q&A Session Summary Question: What discussions led to the separation into three entities? - The Board and SRC had ongoing discussions for five months, evaluating various strategic options before concluding that a tax-free spin-off was the best path forward [90][91] Question: What are the sources of growth post-spin-off? - The focus will be on creating agile management structures that can respond quickly to market conditions, with specific investments in power semiconductors and other growth areas [94][96] Question: How will stakeholders be informed about the reorganization? - The company plans to communicate the benefits and processes of the reorganization to all stakeholders, ensuring understanding and acceptance [104][105] Question: What is the plan for Kioxia shares? - The company intends to return the net proceeds from the sale of Kioxia shares to shareholders while maintaining the IPO strategy for Kioxia [107]
Toshiba(TOSYY) - 2022 Q2 - Earnings Call Transcript