Sony Corp <6758.T> expects cash flow to improve by 100 billion yen ($1.20 billion) this fiscal year due to overhauling materials procurement and production, Executive Deputy President Yutaka Nakagawa told the Nikkei.

The Japanese electronics company's free cash flow plunged into the red because of the financial crisis, but has rapidly improved as it created special organizations to oversee procurement and production, the paper reported.

Expanded outsourcing of LCD television production to EMS (electronics manufacturing services) companies also contributed to improved cash flow, said the business daily.

Sony has taken steps such as delaying receipt of products from EMS firms and outsourcing inventory management, Nikkei said.

($1=83.66 Yen)

(Reporting by Fareha Khan in Bangalore; Editing by S. John Tilak)