Toshiba 1997 Annual Report Download - page 29

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Sales of heavy electrical apparatus declined 5 percent to ¥1,172.8 billion (US$9,458 million). In Japan, sales were down
for both nuclear and thermal power stations. Demand for nuclear power stations has entered a soft period. Additionally,
Japanese utilities are holding back on capital expenditures. Sales of industrial electrical apparatus and machinery were also
lower. These factors caused domestic sales to decrease 8 percent to ¥1,060.8 billion (US$8,555 million). Overseas,
segment sales were up 35 percent to ¥112.0 billion (US$903 million). This was mainly the result of higher sales of trans-
portation equipment, elevators and escalators, and industrial plants. Moreover, sales of industrial electrical apparatus
posted solid growth in Europe, the United States and Australia.
Consumer products and others sales totaled ¥1,302.3 billion (US$10,503 million), virtually the same as in the
previous fiscal year. In Japan, sales were ¥975.4 billion (US$7,866 million). Washing machines achieved solid sales
growth, but a fall in sales prices impacted the performance of refrigerators and TVs. Toshiba achieved record domestic
shipments of air conditioners for the third consecutive year, but sales were down slightly because of lower sales prices.
Overseas sales advanced 7 percent to ¥326.9 billion (US$2,636 million) as weakness in Asian markets was offset by the
yen’s depreciation.
Net Sales by Region
Millions of yen
Years ended March 31 1997 1996 1995
Japan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥3,455,146 ¥3,451,062 ¥3,287,655
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 852,214 671,219 594,917
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 439,346 364,203 321,106
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 595,209 543,668 481,199
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111,482 89,934 105,889
Net Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥5,453,397 ¥5,120,086 ¥4,790,766
Japan—Sales in Japan were largely unchanged from the prior fiscal year. Lower semiconductor prices, weakness in the
heavy electrical apparatus segment and intense competition in the consumer products market were the negative reasons.
Offsetting this weakness to some degree were PCs, where sales increased 82 percent in terms of unit volume.
North America—Sales in North America were up by 27 percent. Results were weak at semiconductor manufacturing
and sales bases. PC shipments jumped by 94 percent due to a substantial rise in sales of notebook models and the intro-
duction of desktop models. Higher peripheral sales also contributed to this performance. Toshiba’s share of the North
American portable PC market rose to about 24 percent, well ahead of all competitors.
Europe—Sales in Europe increased 21 percent. Higher sales of TVs and HVAC equipment in the United Kingdom were
major contributors. Toshiba captured the number one share of the portable PC market, increasing total PC shipments in
this region by 76 percent.
Asia and Other Regions—Sales in this region were up 12 percent. Although semiconductor sales were significantly
lower, sales of liquid crystal displays in South Korea and Taiwan were brisk. Toshiba Display Devices (Thailand) posted a
solid increase in sales of cathode-ray tubes for PC monitors.
Net Income
Cost of sales was up 8 percent to ¥3,900.0 billion (US$31,452 million). Selling, general and administrative expenses
increased 9 percent to ¥1,399.1 billion (US$11,283 million). Personnel expenses and R&D expenditures were a major
reason for this growth.
Operating income fell 30 percent to ¥154.3 billion (US$1,244 million). Increases in production levels to support the
increase in sales during the year generated a net increase in operating income of ¥270.0 billion (US$2,177 million).
Foreign exchange movements contributed ¥109.0 billion (US$879 million) to the increase in operating income. These
positive factors were more than offset by a decline of ¥430.0 billion (US$3,468 million) due to the fall in sales prices of
semiconductor and other products.