TOSHIBA TEC Europe Retail Information Systems S.A.

TOSHIBA TEC Corp. post record high sales and operating income

New technologies and consolidation of market players lift 2008 outlook
Krefeld, Germany, October 2007 -- TOSHIBA TEC Corporation, the leading retail and industrial automation solutions provider, laid out its vision of the future on the announcement of financial results of operations for the year ended March 31, 2006.

Sales for fiscal year 2005 ended at 443 billion Yen (3.2 billion EUR), up from 376 billion Yen (2.72 billion EUR) in FY 2004 with operating income increased from 16.2 (117 million EUR) to 17.2 billion Yen (124 million EUR). The six billion Yen (43 million EUR) net income is the fourth consecutive record since FY2002, a winning streak that is expected to continue into 2007 and 2008.

"We are very pleased with our record performance in FY2005," said Kenji Hachisu, CEO and President of TOSHIBA TEC Europe. "The company's earnings power is growing. Our brand is delivering innovative and high-quality Retail and Automatic ID products and is benefiting from our company's world-class selling platforms," he said.

TOSHIBA TEC announced that it continued its structural reforms to transfer part of the production to Shenzhen, China to support the competitiveness of the home appliance division; further reinforced and expanding the global sales network of the Retail and Document businesses while all three Divisions rolled out innovative new products, including the WillPOS Self Check Out retail system that will be introduced in Europe later this year.

The sales increase in the Retail Division was primarily due to the acceleration of a consolidation trend in the domestic retail industry and the timely introduction of Self Check Out systems and RFID-based retail and supply chain solutions which pushed TOSHIBA TEC’s market share in Japan from 39 percent in 2003 to 46 percent in 2005, and climbing to within reach of 50 percent of the Japanese retail industry since then.

Outlook 2008
With a CAGR of seven percent for FY2005-FY2008 and an operating income ratio of five percent, TOSHIBA TEC set an expected 2006 financial sales target at 495 billion Yen (3.6 billion EUR), rising to 515 billion Yen (3.7 billion EUR) in 2007 and further to 540 billion Yen (3.9 billion EUR) in 2008. Net income is set to double from 6 to 12 billion Yen between FY2005 and FY2008.

“We are focusing resources on developing and implementing sales growth initiatives in the Retail industries across the world and on expanding into new product categories with our advanced RFID-based supply chain solutions,” Kenji Hachisu, CEO and President of TOSHIBA TEC Europe said.

Investment for Continuous Growth
Plant and production facilities are being upgraded to meet worldwide demand with investments going into a continued build-up of the components business in China and an increase of the color toner production in Japan. The overall capital and financial investments to support the sales channels will increase by 50 percent when compared to the FY2003-FY2005 Mid-Term Business Plan to 62 billion Yen (449 million EUR).

Retail Business
TOSHIBA TEC continues to dominate the domestic retail industry as the leading total solutions provider with a market share approaching half the Japanese retail industry. The Self Check Out systems and RFID-based solutions are moving out of the pilot environments and are being implemented in ever-larger projects. This, combined with a rigorous structural reform at development, production and sales divisions is helping to lift the operating income ratio to five percent for FY2008 in a steadily growing business climate.

Innovative products such as a the portable SP2D label printer, the WillPOS Self Check Out, the SX-8R rewritable printer and the unique SX-series that enables simultaneous barcode printing and writing data onto an RFID tag are making inroads in retailers’ management boards worldwide. A non-stop check-out system, based on RFID technology is due out by 2010.

Document Business
With a CAGR of nine percent for the FY2005-FY2008 period, this division is set to grow rapidly with a rapidly expanding product portfolio and a successful blend of Direct Marketing and a continuous cost-control program in place. TOSHIBA TEC’s focus in this market segment is on a strategic product offering with a high value-add in an otherwise rather stable market environment.

Home Appliance Business
An evolution in robot technology is changing the market outlook for commodity products in this market segment. Production facilities in China on the one hand and the release of high-class cordless vacuum cleaners on the other will support the profitability of this division in the next three years, with a revolutionary new autonomous robot vacuum cleaner expected to be released in 2010.

Resource Efficiency
TOSHIBA TEC continues to be one of the few global corporations that have no corporate debt, keeping a positive free cash flow that increased from 3 billion Yen in FY2005 to 3.5 billion Yen in FY2006 and is expected to rise to four billion Yen in FY2007.

Corporate Social Responsibility
TOSHIBA TEC puts the highest priority to life, safety and the adherence to laws and regulations. The company is implementing Environmental Vision 2010 to contribute to a sustainable development of the Earth throughout all the business processes and products. In Europe, the company is among the first to rigorously implement all necessary actions to adhere to WEEE and RoHS EU legislation. It is at times ahead of the adoption of these EU Directives by national governments to prove its strong commitment to minimize the environmental impacts of a product throughout its life cycle.