Toshiba 2002 Annual Report Download - page 11

9
TOSHIBA CORPORATION
GROWTH POLICIES THAT MAKE TOSHIBA A WINNER 9
TOSHIBA CORPORATION
average annual sales growth of 8% and of
realizing ¥180 billion in combined operat-
ing income from these two domains in
fiscal 2005.
In the social infrastructure domain, our
target is operating income of ¥70 billion in
fiscal 2005, which we expect to achieve
even if the average sales increase is as low as
2% a year.
In all three of these core domains, we
expect overseas sales to account for 50% of
net sales in fiscal 2005, up 10% from the
fiscal year under review.
Through the 01 Action Plan and our
new mid-term business plan, we expect
consolidated net sales to increase to ¥6,600
billion by fiscal 2005, and project operat-
ing income of at least ¥270 billion. We also
expect to reduce the debt-to-equity ratio to
less than 160%.
Policies toward Growth
The direction technology will take in com-
ing years is strongly in Toshiba’s favor.
Industry-leading know-how in the digital,
mobile and network areas will sustain us in
developing innovative technologies, as
growth engines for products that will drive
the creation of promising new markets.
Our strengths include rich capabilities in
wireless and mobile technologies, such as
Bluetooth™, wireless LAN, MPEG4 digi-
tal image compression, portable PCs,
lithium-ion secondary batteries and fuel
cells. Accelerated R&D will be directed at
integrating these and other advanced tech-
nologies in differentiated products that
come to market at least one step ahead of
products from other companies.
Toward that goal, we will continue to
promote a high level of investment in
R&D, following on from fiscal 2002’s
¥340 billion with a total investment of
¥1,100 billion in the three years to fiscal
2005. Reflecting Toshiba’s commitment to
boost profitability, about three-fourths of
research funding will be channeled to the
high-growth domains.
In the same period, we will also promote
significant capital expenditure, from ¥204
billion in fiscal 2002, to ¥840 billion. Here
too, the emphasis will be on our growth
domains, with about 75% of expenditure
earmarked for semiconductors and other
growth areas.
TM1: Compressed Lead Times
We have already mentioned our resolve to
get products to market ahead of our com-
petitors. That is more than just ambition.
Through MI 2001, the six-sigma-based
management initiative introduced in 1999,
we have promoted concerted efforts to
maximize efficiency and cut lead times at
every stage, from product planning to mar-
ket launch. We have also achieved some
notable successes.
In August 2002, we brought new PCs to
the marketplace by placing priority on time
and on cross-functional cooperation across
sales and marketing, product planning, de-
velopment, procurement and production.
As a result, we met the demand spike at the
start of European and U.S. school years—
the intense, back-to-school market that can
make a big difference to the bottom line—
with products that met sales goals and
made a positive contribution to our profit
and loss figures. We were also able to close
August 2002 as the number one portable
PC vendor in the U.S. retail market.
Among the provisions of our latest mid-
term business plan is the “TM1
Movement,” or “Time to Market No. 1.”
Building on our successes so far, we will
make the TM1 Movement an essential part
of new product launches. We will promote
successive reductions in lead times and use
them to achieve rapid gains in market share
and improved sales and profits.
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