Mitsubishi Electric Announces Consolidated and Non-Consolidated Financial Results...

Mitsubishi Electric Announces Consolidated and Non-Consolidated Financial Results for Fiscal 2008

TOKYO--(Business Wire)--
Mitsubishi Electric Corporation (President and CEO: Setsuhiro
Shimomura) announced today its consolidated and non-consolidated
financial results for fiscal 2008 (April 1, 2007 - March 31, 2008).

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Consolidated Financial Results
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Net sales: 4,049.8 billion yen (5% increase from the
previous fiscal year)
Operating income: 267.2 billion yen (15% increase from the
previous fiscal year)
Income before income taxes: 226.6 billion yen (23% increase from the
previous fiscal year)
Net income: 157.9 billion yen (28% increase from the
previous fiscal year)
*T

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Non-consolidated Financial Results
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Net sales: 2,490.6 billion yen (5% increase from the previous
fiscal year)
Operating income: 144.6 billion yen (14% increase from the previous
fiscal year)
Ordinary profit: 134.3 billion yen (2% increase from the previous
fiscal year)
Net income: 77.3 billion yen (86% increase from the previous
fiscal year)
*T

The business environment in fiscal year 2008 saw a continued
general underlying strength in the global economy such as in China and
Europe, despite, in the latter half of the fiscal year, a stronger
sense of stagnation in the United States, while the subprime loan
issue lead to globally increased financial uncertainty. The Japanese
economy also saw a general underlying strength mainly due to foreign
demand, despite a slowed capital investment for construction arising
from the revised building standards law.

Meanwhile, the Mitsubishi Electric Group is involved in structural
reforms to increase and strengthen profitability under its 'make
strong businesses stronger' strategy, as seen in the termination of
the mobile handset business and the strategic shift of its resources
to other businesses the company plans to strengthen. Mitsubishi
Electric also continues to strengthen production and sales systems
both in domestic and overseas markets by establishing and reinforcing
operating facilities, etc.

In addition, Mitsubishi Electric is involved in company-wide
improvement activities like reducing inventory and increasing
productivity through Just In Time activities, etc., as well as
continuing our cost reducing C-Sigma program. We are also
strengthening our competitive edge through human resource investments
and by optimizing our human resource structure, etc.

CONSOLIDATED FINANCIAL RESULTS BY BUSINESS SEGMENT

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Energy and Electric Systems
Total sales: 1,057.9 billion yen (11% increase from the previous
fiscal year)
Operating income: 68.5 billion yen (19.2 billion yen increase from
the previous fiscal year)
*T

The social infrastructure systems business saw increases in both
orders and sales from the previous fiscal year due to expansions in
both domestic and abroad electric equipment for rolling stock, as well
as increases in our domestic power generation business and overseas
transmission/distribution related business.

Despite a decrease in construction for new buildings due to
revised building standards law in Japan, the building systems business
experienced an increase in both orders and sales from the previous
fiscal year, due to increases in domestic elevators and escalators for
the retail industry and railroad companies as well as increased orders
in China, the Middle East and India.

As a result, total sales for this segment increased 11% from the
previous fiscal year, and operating income increased 19.2 billion yen
from the previous fiscal year due to increased sales, etc.

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Industrial Automation Systems
Total sales: 1,017.5 billion yen (6% increase from the previous
fiscal year)
Operating income: 129.2 billion yen (3.0 billion yen increase from
the previous fiscal year)
*T

Factory automation systems business saw an increase in both orders
and sales from the previous fiscal year due to increased capital
investments related to flat panel display in Taiwan and South Korea in
the latter half of the fiscal year, in addition to domestic demand for
industrial machinery and expanding overseas capital investments such
as in China.

The automotive equipment business saw an increase in both orders
and sales from the previous fiscal year upheld by strong development
in global production of Japanese multinational automotive
manufacturers.

As a result, total sales for this segment increased by 6% compared
to the previous fiscal year. Operating income rose by 3.0 billion yen
from the previous fiscal year due to increase in sales, etc.

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Information and Communication Systems
Total sales: 644.3 billion yen (6% decrease from the previous
fiscal year)
Operating income: 2.3 billion yen (18.4 billion yen decrease from
the previous fiscal year)
*T

The telecommunications equipment business saw a decrease in both
orders and sales from the previous fiscal year due to a decrease in
mobile handsets.

The information system service business saw an increase in sales
from the previous fiscal year due to expansion in the system
integration business, etc.

The electronic systems business saw a decrease in orders from the
previous fiscal year, while sales increased from the previous fiscal
year due to increases in our electronics business, etc.

As a result, total sales for this segment decreased by 6% compared
to the previous fiscal year. Operating income decreased by 18.4
billion yen from the previous fiscal year due to decreased sales in
mobile handsets.

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Electronic Devices
Total sales: 192.0 billion yen (3% increase from the previous
fiscal year)
Operating income: 9.8 billion yen (2.3 billion yen decrease from the
previous fiscal year)
*T

The semiconductor business saw an increase in both orders and
sales from the previous fiscal year due to increases in power modules
for consumer use mainly for air conditioners and industrial use as
well as red laser diodes for recordable DVD players, etc.

The liquid crystal business saw a decrease in both orders and
sales from the previous fiscal year due to a decrease in products for
consumer use.

As a result, total sales for this segment increased by 3% from the
previous fiscal year. Operating income decreased by 2.3 billion yen
from the previous fiscal year due to a fall in liquid crystal prices,
etc.

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Home Appliances
Total sales: 1,000.2 billion yen (8% increase from the previous
fiscal year)
Operating income: 67.4 billion yen (30.8 billion yen increase from
the previous fiscal year)
*T

The home appliance business saw a 8% increase in sales from the
previous fiscal year due to increases in air conditioners and solar
power generation systems for the foreign market in addition to
electric water heaters, etc. for the domestic market.

Operating income increased by 30.8 billion yen from the previous
fiscal year due to increased sales, etc.

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Others
Total sales: 660.8 billion yen (5% increase from the previous
fiscal year)
Operating income: 16.9 billion yen (1.7 billion yen increase from the
previous fiscal year)
*T

Sales increased 5% from the previous fiscal year mainly in our
affiliated companies involved in material procurement and logistics,
etc. Operating income increased by 1.7 billion yen from the previous
fiscal year due to increased sales, etc.

Fundamental dividend distribution policy

Our fundamental policy is to comprehensively promote improvement
in shareholder profits from the viewpoints of appropriate profit
distribution commensurate with earning performance of its respective
fiscal year as well as strengthening our financial standing through
our internal reserves, with the ultimate goal of improving corporate
value.

FY 2008 and FY 2009 dividend

With our financial standing and business performance continuing to
improve, we will pay a year-end retained earnings dividend of 7 yen
per share for fiscal 2008. Adding the interim dividend of 6 yen per
share, the total annual dividend is 13 yen per share. Payment of
year-end dividends will start on June 3, 2008. The retained earnings
dividend for fiscal 2009 is still undecided.

cf. Fiscal 2007 dividend was 10 yen per share (interim dividend of
4 yen per share and a year-end dividend of 6 yen per share)

FINANCIAL CONDITION (CONSOLIDATED BASIS)

Assets, Liabilities, and Shareholders' Equity

The company's total assets for the fiscal year increased from the
end of the previous fiscal year by 32.8 billion yen to 3,485.0 billion
yen. This increase is mainly attributable to a 17.6 billion yen
increase in trade receivables in response to increased orders and
sales.

The balance of outstanding debts and corporate bonds fell by 90.2
billion yen from the balance as of the end of the previous fiscal year
to 550.7 billion yen, resulting in a reduction of its ratio against
total assets down to 15.8% (an improvement of 2.8 points compared to
the end of the previous fiscal year). Trade payables increased by 18.0
billion yen, while reserves for retirement and severance benefits
increased by 115.5 billion yen due to falling stock prices, etc.
leading to increased amount of shortage in pension reserves, etc.

Shareholders' equity decreased by 27.7 billion yen compared to the
same period of the previous fiscal year to 1,031.4 billion yen. The
ratio of shareholders' equity to total assets was 29.6%, a 1.1-point
decrease compared to the previous fiscal year. While retained earnings
increased by 132.2 billion yen owing to a 157.9 billion yen net income
despite a dividend payment of 25.7 billion yen, accumulated other
comprehensive income decreased by 159.9 billion yen due to a decline
in stock prices, etc.

Cash Flow

Cash flows from operating activities for this financial year
decreased by 15.7 billion yen compared to the same period of the
previous fiscal year to 258.8 billion yen (positive). Investment cash
flow decreased by 23.2 billion yen compared to the previous fiscal
year to 132.3 billion yen (used) due to decreases in loan receivables,
etc. As a result, free cash flow was 126.5 billion yen (positive).

Financial cash flow was 119.7 billion yen (used) due to dividend
payment and debt repayment.

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Cash Flow related index
FY '04 FY '05 FY '06 FY '07 FY '08
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Cash Flow to
interest
bearing debt
ratio(1) 4.3 times 4.4 times 2.4 times 2.4 times 2.3 times
---------------------------------------------------------------------
Interest
coverage
ratio(2) 17.0 times 17.6 times 31.5 times 28.1 times 26.3 times
---------------------------------------------------------------------
(1)balance of outstanding debts and corporate bonds* divided by cash
flow from operating activities
*Balance of outstanding debts and corporate bonds is the average of
the year-start and year-end balance of outstanding debts and
corporate bonds.

(2)cash flow from operating activities divided by interest paid
*T

CURRENT FORECAST FOR FISCAL 2009

The world economy is expected to show a general sense of
stagnation mainly in the first half of the fiscal year due to a
slowdown in the United States and Europe, etc. The Japanese economy is
also expected to experience a slowdown with decreases in foreign
demands as well as increases in material and crude oil prices. Also
arising from stronger yen and prolonged effects from the subprime loan
issue, etc., increased risk of an economic slowdown does not make us
optimistic about our management environments.

In the meantime, the Mitsubishi Electric Group will continue to
increase and strengthen profitability in each business segment. In
addition, we are committed to implementing various company-wide
measures toward improving business performance and financial standing.
We will also realize sustainable growth by steadfast growth
strategies.

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Current forecast for fiscal 2009: consolidated
Net sales 4,050.0 billion yen (no change from fiscal
2008)
Operating income 268.0 billion yen (no change from fiscal
2008)
Income before income taxes 240.0 billion yen (6% increase from
fiscal 2008)
Net income 158.0 billion yen (no change from fiscal
2008)
*T

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Current forecast for fiscal 2009: non-consolidated
Net sales 2,440.0 billion yen (2% decrease from fiscal 2008)
Operating income 110.0 billion yen (24% decrease from fiscal 2008)
Ordinary profit 110.0 billion yen (18% decrease from fiscal 2008)
Net income 80.0 billion yen (3% increase from fiscal 2008)
*T

MANAGEMENT POLICY

Fundamental Management Policy

Based on its corporate statement "Changes for the Better", the
Mitsubishi Electric Group hopes to build a better tomorrow by
contributing to the creation of new societies, industries and
lifestyles.

Keeping this corporate approach in mind, Mitsubishi Electric will
establish a solid business foundation and implement sustainable growth
through a three point balanced management of "Growth," "Profitability
& Efficiency" and "Soundness".

Mitsubishi Electric will also work to further enhance its
corporate value by becoming a conglomerate of highly competitive
electric-electronic businesses with a synergistic unity, capable of
responding to the expectations of customers, shareholders, and all of
our stakeholders.

Management Targets

The Mitsubishi Electric Group has established three management
targets that it continuously aims to achieve: an operating income
ratio of 5% or more, ROE of 10% or more, and a interest-bearing debt
ratio of 15% or less. Business performance for fiscal 2008 achieved
the first two of our management targets with an operating profit ratio
of 6.6% and an ROE of 15.1%, while the interest-bearing debt ratio, a
target revised last year from 20%, improved to 15.8%. The Group will
continue efforts to accomplish the management targets for the
operating income ratio and the ROE, while aiming at early achievement
of the target concerning the interest-bearing debt ratio.

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Management Target
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Ratio of operating income to net sales 5% or more
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ROE 10% or more
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Ratio of interest-bearing debt to total assets 15% or less
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*T

Corporate Agenda

Based on its three point balanced management of "Growth,"
"Profitability & Efficiency" and "Soundness", the Mitsubishi Electric
Group will continuously improve by strengthening quality, cost
competitiveness, and intellectual property as well as productivity,
R&D, and sales capabilities. We will also strengthen our two-tiered
growth strategy VI(1) strategy, 'making strong businesses stronger',
and AD(2) strategy, 'reinforcing solutions businesses centered on
strong businesses'. While also restructuring business segments in
response to changing business environments, we strive to create a
management base that will continue to strengthen and improve our
business performance.

Specifically, with an objective of strengthening our integrated
"Craftsmanship", we will strengthen our development and productivity
in software and hardware, and continue to streamline our productivity
with measures like Just In Time production. From the very first stages
of design and development, we will strengthen cost reduction
activities that respond to material price hikes and exert quality
consciousness. We will utilize and best arrange human resources to
enhance competitiveness, and engage in activities such as streamlining
our human resources structure from a mid- and long-term perspective.
We intend to improve our financial standing by further pursuing such
measures as inventory reduction. In addition, we will build an optimal
business structure and strengthen it both in global terms and for the
entire corporate Group. Also, by promoting strategies for
environment-related businesses and by further expanding business in
emerging markets, etc., we will actively pursue businesses in growing
markets. Finally, we will enhance our operational structure to manage
various businesses, through integration and coordination among various
aspects, including research, development, procurement, production,
sales and services, etc.

In addition, we will be committed to enhance Corporate Social
Responsibility (CSR) efforts based on the Corporate Mission(3) and
Seven Guiding Principles(4). Especially, in terms of legal and ethical
compliances, we will intensively implement internal control measures
and internal education, etc., as a priority task over the entire
consolidated group of Mitsubishi Electric Corporation. We will also
promote environmental initiatives to prevent global warming and create
a recycling-based society, etc.

Steadily executing the above strategy, the Mitsubishi Electric
Group will work to further enhance its corporate value.

(1)VI , the first two letters of 'Victory'

(2)AD, the first two letters of 'Advance'

(3)Corporate Mission: The Mitsubishi Electric Group will
continually improve its technologies and services through creativity,
and, at the same time, contribute to society.

(4) These principles are:

Trust: Establish relationships with all stakeholders based on
strong mutual trust and respect,

Quality: Provide the best products and services with unsurpassed
quality,

Technology: Pioneer new markets by promoting research and
development,

Citizenship: As a global player, contribute to the development of
communities and society as a whole,

Ethics: Honor high ethical standards in all endeavors,

Environment: Respect nature, and strive to protect and improve the
global environment,

Growth: Assure fair earnings to build a foundation for future
growth.

Cautionary Statement

The expectation of operating results herein and any associated
statement to be made orally with respect to the Company's current
plans, estimates, strategies and beliefs and any other statements that
are not historical facts are forward-looking statements. Words such as
"expects", "anticipates", "plans", "believes", "scheduled",
"estimated", "targeted" along with any variations of these words and
similar expressions are intended to identify forward-looking
statements which include but are not limited to projections of
revenues, earnings, performance and production. While the statements
herein are based on certain assumptions and premises that the Company
trusts and considers to be reasonable under the circumstances to the
date of announcement, you are requested to kindly take note that
actual operating results are subject to change due to any of the
factors as contemplated hereunder and/or any additional factor
unforeseeable as of the date of this announcement. Such factors
materially affecting the expectations expressed herein shall include
but are not limited to the following:

(1) Important trends

The Mitsubishi Electric Group's operations may be affected by
trends in the global economy, social conditions, laws, tax
codes, and regulations.

(2) Foreign currency exchange rates

Fluctuations in foreign currency markets may affect Mitsubishi
Electric's sales of exported products and purchases of
imported materials that are denominated in U.S. dollars or
euros, as well as its Asian production bases' sales of
exported products and purchases of imported materials that are
denominated in foreign currencies.

(3) Stock markets

A fall in stock market prices may cause Mitsubishi Electric to
record devaluation losses on marketable securities, or cause
an increase in retirement benefit obligations in accordance
with a decline in the fair value of pension assets.

(4) Supply/demand balance for products and procurement conditions
for materials and components

A decline in prices and shipments due to changes in the
supply/demand balance may adversely affect mainly Mitsubishi
Electric's Information and Communication Systems, Electronic
Devices, and Home Appliances segments. In addition, an
increase in material prices due to a worsening of material and
component procurement conditions may adversely affect all of
Mitsubishi Electric's operations.

(5) Fund procurement

An increase in interest rates, the yen interest rate in
particular, would increase Mitsubishi Electric's interest
expenses.

(6) Significant patent matters

Important patent filings, licensing, copyrights and
patent-related disputes may adversely affect related
businesses.

(7) Environmental matters

We may appropriate funds for losses or increase allowances to
respond to regulation trends or outbreaks of issues related to
the environment. This may impact manufacturing and all
corporate activities of the Mitsubishi Electric Group.

(8) Quality of products and services

We may appropriate funds for losses from defective services or
products, and the lowered reputation of the quality of all our
products and services may affect the entire Mitsubishi
Electric group.

(9) Litigation and other legal proceedings

The Mitsubishi Electric Group's operations may be affected by
lawsuits or other legal proceedings against Mitsubishi
Electric, its subsidiaries and/or equity-method affiliated
companies.

(10) Disruptive changes

Disruptive changes in technology, development of products
using new technology, timing of production, and market
introduction may adversely affect performance mainly in
Mitsubishi Electric's Information and Communication Systems,
Electronic Devices, and Home Appliances segments.

(11) Business restructuring

The Mitsubishi Electric Group may record losses due to
restructuring measures.

(12) Natural disasters

The Mitsubishi Electric Group's operations, particularly
manufacturing activities, may be affected by the occurrence of
earthquakes, typhoons, tsunami, fires and other large-scale
disasters.

(13) Other significant factors

The Mitsubishi Electric Group's operations may be affected by
the outbreak of social or political upheaval due to terrorism,
war or other factors.

About Mitsubishi Electric

With over 80 years of experience in providing reliable,
high-quality products to both corporate clients and general consumers
all over the world, Mitsubishi Electric Corporation (TOKYO:6503) is a
recognized world leader in the manufacture, marketing and sales of
electrical and electronic equipment used in information processing and
communications, space development and satellite communications,
consumer electronics, industrial technology, energy, transportation
and building equipment. The company recorded consolidated group sales
of 4,049.8 billion yen (US$ 40.5 billion*) in the fiscal year ended
March 31, 2008. For more information visit
http://global.mitsubishielectric.com

*At an exchange rate of 100 yen to the US dollar, the rate given
by the Tokyo Foreign Exchange Market on March 31, 2008

Mitsubishi Electric Corporation
Investor Relations Inquiries:
Investor Relations Group
Corporate Finance Division
Tel: +81-3-3218-2391
Cad.Irg@rk.MitsubishiElectric.co.jp
Media Contact:
Yurika Fujimoto, +81-3-3218-3380
Public Relations Division
prd.gnews@nk.MitsubishiElectric.co.jp
http://global.mitsubishielectric.com/news/

Copyright Business Wire 2008