Review of business portfolio and operational structure
Toshiba (TOSYY) has stated it plans to focus on its Energy and Storage businesses. It also plans to invite outside majority shareholders in its Healthcare business, thereby securing management resources for future growth in this segment. The firm stated that it plans to structure and slim down corporate staff functions “in line with independent autonomous management of in-house companies” to aim for “small but strong headquarters.”
Toshiba expects this action to help to reduce operating cost to some extent. It plans to focus on increasing its operational efficiency by creating a common platform for the Toshiba Group and also transfer business operations to in-house companies.
Need to reform the financial base of Toshiba
Toshiba stated that it plans to concentrate on cash flow in planning its mid-term business plans, budget, business performance management, and evaluation. It expects to emphasize effective management of interest-bearing debt by in-house companies. Toshiba noted that it will continue to focus on its cash flow and prioritize restructuring for its hoped-for recovery from a weakened financial platform.
According to its revitalization plan, Toshiba will set rules on limits to investments and allocate resources based on its redefined business portfolio and in businesses expected to generate a steady stream of cash flows. Toshiba plans to increase the investment in its Energy and Storage business segments, as well as limit investments in segments that need restructuring.
Toshiba plans to review its assets such as real estate and stocks, and it may consider selling them if required. Toshiba’s main competitors in the semiconductor segment include Micron Technology (MU), Intel (INTC), and Samsung (SSNLF). To get broad-based exposure to Micron Technology, you can invest in the iShares PHLX Semiconductor ETF (SOXX) and the VanEck Vectors Semiconductor ETF (SMH). Micron Technology constitutes 3.6% of SOXX and 3.4% of SMH.