Toshiba today provided an update on its November 12, 2021 strategic reorganization announcement. Toshiba announced its intention to separate the company into two standalone companies, instead of three.
Toshiba / Infrastructure Service Co.
Infrastructure Service Co. will consist of Toshiba’s Energy Systems & Solutions, Infrastructure Systems & Solutions, Digital Solutions and Battery businesses, in addition to Toshiba’s stake in KHC. Its products and services will include power generation, transmission and distribution, renewable energy, energy management, systems solutions for public infrastructure, railways and industry, and IT solutions for government agencies and private companies.
Toshiba / Infrastructure Service Co. is expected to have sales of ¥1.52 trillion in FY2021 and is projected to grow at a compound annual growth rate (CAGR) of 5.3 percent, reaching ¥1.87 trillion by FY2025. It expects to improve operating income margins from 3.6-6.4 percent.
Device Co. will comprise Toshiba’s Electronic Devices & Storage Solutions business. Its products will include power semiconductors (silicon, compounds), optical semiconductors, analog integrated circuits, high-capacity hard disk drives (HDD) for data centers (nearline HDDs) and semiconductor manufacturing equipment. It will be a leader in supporting the evolution of social and IT infrastructure.
Device Co. is expected to have ¥860 billion in net sales in FY2021 and is projected – when excluding the memory resale portion – to grow at a CAGR of 4.1 percent, reaching ¥1.01 trillion by FY2025. It expects operating income margins to improve from 6.4 percent in FY2021 to 7.9 percent by FY2025.
Device Co. will be spun-off from Toshiba and company stock of Device Co. will be distributed to Toshiba’s shareholders at the time of the spin-off record date.
The reorganization will be completed in the second half of fiscal year 2023.
To sell more
Toshiba has signed an agreement to sell its joint venture stake in Toshiba Carrier to the Carrier Group for approximately ¥100 billion.
The company will also be selling Toshiba Elevator and Building Systems and Toshiba Lighting & Technology. Toshiba has also designated Toshiba Tec as a non-core business.