Toshiba Corp.

The positive outlook reflects our view that, despite continued difficult market conditions amid the COVID-19 pandemic and stiff competition, Toshiba will generally maintain stable profitability by continuing to reduce costs and restructure businesses. The company's key financial ratios are likely to deteriorate due to aggressive investments in pursuit of growth, but the deterioration will likely remain within a certain range, in our view. We may consider upgrading Toshiba if one of the following conditions is met: Its debt-to-EBITDA ratio stays below 3x and its EBITDA margin is highly likely to consistently remain above 7.5% or so thanks to cost reductions and the resulting increased EBITDA; or Its operating performance and financial management appeared likely to become more stable through enhanced

...Toshiba's profitability is set to remain stable in the next one to two years, supported by the effects of cost reductions and business restructuring, in S&P Global Ratings' view. The Japan-based capital goods and diversified electronics company will likely have an EBITDA margin of about 8% in fiscal 2020 (ending March 2021), despite the impact of the COVID-19 pandemic. We expect the ratio to gradually improve thereafter. While the performance of printers and other businesses has deteriorated substantially, we believe the core infrastructure business is relatively resilient. Furthermore, the company has taken certain initiatives since fiscal 2019 that will likely yield results and partly offset the financial deterioration, in our view. These measures include withdrawing from loss-making businesses; restructuring of low-margin businesses; and reduction of various costs....

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