Toshiba 2006 Annual Report Download - page 10

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At the moment, we have plans to spend a cumulative amount of 2,040 bil-
lion yen in the three years from FY2006 to FY2008, including the acquisi-
tion of Westinghouse. That is an increase of about 900 billion yen over our
outlays in the period from FY2003 to FY2005. Our primary strategic focus
will be on Electronic Devices, which includes NAND Flash memory and
SED panel, as we want to expand our high growth, highly profitable busi-
nesses.
Q . What are the main points of the mid-term plan announced in May 2006?
In the mid-term plan announced in May, we have set much higher goals than
in the previous FY2005 mid-term plan. We aim to achieve consolidated net
sales of 7,800 billion yen and an operating income ratio of over 5%, in 2008,
the final year of the plan. If we take FY2005 as the base year, that means we
need to see a compound average growth rate of 7% in our sales revenue. We
have also set ourselves a series of other targets for FY2008: a consolidated
overseas sales ratio of 57%, a D/E ratio of 100% or less, and an ROE of 10%
or more.
We do no t anticipate that new businesses will have a big impact on earn-
ings during the course of the mid-term plan, so if we are to achieve our goal
of “Sustained Growth with Profit” we have to put the reinforcement of exist-
ing businesses at the top of our agenda until FY2008. Successful accomplish-
ment of this mid-term plan will lead to the achievement of “Vision for
2010,” our next major goal. Under this, we aim to reach consolidated net sales
of 9,000 billion yen and consolidated operating income of 540 billion yen in
FY2010. To that end, it is vitally important to press ahead with innovation.
Q . Many companies call for innovation. How different is your innovation strategy
from theirs?
Any executive in an excellent company knows the importance of innovation.
We are c urrentl y promot ing a program that allows us to promote innovation
in all operations related to development, manufacturing and sales, and to
make full use of the multiplier effect of this approach. This is “i cube” and it
embraces innovation in development, innovation in manufacturing and inno-
We will reinforce our cur-
rent businesses by FY2008,
in order to move on to
the next stage, our Vision
for 2010.
Without innovation, com-
panies will not see devel-
opment, nor will they see
growth.
An Interview with the President