Market cap

* For banks, enterprise value is substituted with market cap. Source: Bloomberg Finance L.P.

Performance of the brand

Toshiba is best known as a manufacturer of consumer electrical and technology products, such as PCs and laptops, and is remembered by many UK consumers for such famous advertising slogans as ‘Ello Tosh, got a Toshiba’. Its operations are wide-ranging, however, and include power systems, utilities and social infrastructure. Its operations span communications equipment and systems, internet solutions and services, electronic components and materials, power systems, industrial infrastructure systems (including nuclear reactors) and household appliances. It employs 203,000 people and the current company president is Atsutoshi Nishida.

Toshiba has had a challenging year as have many Japanese manufacturers in the wake of the country’s largest earthquake on record and a tsunami which caused a significant nuclear accident at the Fukushima power plant. Profits were down 88% in the first quarter of 2011 as supply chains were disrupted. The slowdown in global PC sales has also hit Toshiba as personal computers have for years been the bread and butter of Toshiba’s personal electronics business.

The difficult conditions have manifested themselves in Toshiba’s updated results. Enterprise value and brand value have fallen from January reflecting the earthquake’s impact on logistics and consumer confidence. Brand Value has dropped from US$11,136 to US$10,409. The brand rating of AA- remains the same however and the Brand Value to Enterprise Value ratio, at 47%, is one of table's highest, indicating a strong brand, critical to Toshiba’s continuing success.

Positive Aspects

Major joint venture with Chinese electronics manufacturer TCL, Toshiba owns 51%

Chinese consumer electronics maker TCL Corp said it inked an agreement with Japan's Toshiba Corp to set up a 50-million-yuan joint venture to sell liquid crystal display (LCD) televisions in the Chinese market.

The new company, called Toshiba Visual Products, will be based in Huizhou, South China's Guangdong province, and is scheduled to start operations in September 2011, TCL said in an overnight statement. This is yet another important acquisition for Toshiba which is already a giant not just in personal electronics but in industrial and social infrastructure. Furthermore, Landis+Gyr will be acquired for US$2.3 billion to enable Toshiba to construct the world’s first Smart Grid. A fund backed by the Japanese government will invest $680 million for a 40% equity stake in unlisted Swiss-based meter maker Landis+Gyr, limiting the outlay by Toshiba Corp for the acquisition to $1.62 billion including debt.

The company released ’Thrive’, its tablet rival to the iPad this July

The Thrive has received positive reviews, though it is occasionally criticised for being too large. It also undercuts many tablet rivals on price at $429, however, as with all tablets, it faces the almost insurmountable challenge of Apple’s ever improving iPad series.

The company is refocusing its infrastructure divisions to renewable and efficient technology in the wake of adverse publicity around nuclear energy caused by the Fukushima disaster.

The manufacturing giant had planned to expand nuclear sales to 1 trillion yen (£7.5bn) in four years, but now fears that heightened safety procedures sparked by the ongoing crisis will lead to delays. Company president Norio Sasaki told reporters that Toshiba would aim for sales of 350 billion yen (£2.6bn) in solar, hydroelectric, geothermal, and wind power; 800 billion yen (£6.1bn) in energy-efficient motors, inverters and batteries; and, after announcing its planned purchase of Landis+Gyr, 900 billion yen (£6.8bn) in smart grid technology.

Negative Aspects

Eighty-eight percent profit drop in Q1/2011

This has been the result of a number of factors including the strong Yen and the Japanese earthquake and tsunami in March 2011. The weakening PC market is a further cause, denting demand for one of Toshiba’s key product ranges.

In Greenpeace’s Guide to Greener Electronics from October 2010, Toshiba only ranked 16th out of 18 leading electronic manufacturers.

This may however be remedied following the negative publicity and the drive towards efficient, renewable technology in the group as a whole.

 

 

Last changed September 9, 2011

League tables

Toshiba appears in the following brand league tables:

Rank 58 in the Global 500 2012.
Rank 74 in the Global 500 2011.
Rank 74 in the Global 500 2011.
Rank 83 in the Global 500 2010.
Rank 88 in the Global 500 2009.
Rank 110 in the Global 500 2008.