Achieving our Mid-term Business Plan FY2019 November 6, 2017 - PowerPoint PPT Presentation

Achieving our Mid-term Business Plan FY2019 November 6, 2017

Contents 1. Next Mobility Strategy P.3 2. Africa Division’s Strategy P.9 2

1. Next Mobility Strategy 3

Initiatives in Response to Changes in Auto Industry Recent trends in auto industry Autonomous C A S E Connectivity Sharing Electrification Driving Toyota Tsusho’s Countermeasures ● Focus area ①● ● Focus area ②● ● Focus area ③● Next generation services （ P7 ） Autonomous Driving vehicles (P6) Next mobility (P8) ■ Batteries ■  Expansion of key device sales  Connectivity  Embedded software  Car sharing  Lithium mining, battery  Software development  Vehicle platooning parts/materials  Information & communication  Infrastructure (for FCVs)  Recycling & reuse ■ Materials ■ technology (ICT)  Aluminum, carbon, resins Next Mobility Development Department Next Technology Fund Harnessing our collective expertise, we welcome change as new business opportunities 4

How Changes in Auto Industry will Affect TTC over Next 10 Years Negative ～ Downside Risks ～ Positive ～ Business Opportunities ～ Division  Reduction of use in steel sheets due to lighter-weight vehicles  Growth in Li battery demand, recycling Metals Competition from other sectors & new entrants  Reduction of demand of molten  Aluminum processing metals due to shift to electric vehicle Flexible auto maker alliances  Growth in cargo volumes due to growth Global Parts  Reduction in number of car parts due in conventional car demand in emerging & Logistics to shift to electric vehicle markets  Auto sales growth driven by Automotive  Car ownership→sharing growth in conventional car demand in emerging markets  Electric vehicle production capacity growth Machinery,  Reduction on investment in  Increased investment in production capacity in Energy & conventional car production capacity emerging markets  Growth in new energy management business Project in developed countries opportunities  Growth in cars’ electronic component content  ICT business/next-generation services Chemical &  Growth in demand for batteries and electronic, Electronics resin & compound materials amid trend toward lighter-weight vehicles We aim to capture enough business opportunities to outweigh downside risks 5

Focus Area ① Autonomous Driving Vehicles: Capitalizing on Automotive Strengths Development Design Logistics Quality Manufacturing Warehousing Specialized Embedded Technology EMS Global sales Quality support centers electronic parts software solutions services network (TAQS) development warehouses General trading company functions NEXTY Electronics’ business domains (building value-added supply chains) ● Strength ● ● Strength ● ● Strength ● Embedded software development Global sales network Quality analysis Supplies Japanese companies, mainly in Meets customers’ quality Develops software by contract Toyota Group, with semiconductors demands in collaboration and solves problems sourced from 250 suppliers with suppliers with own corps of engineers ● Future focus areas ● ● Future focus area ● ● Future focus area ● Increase engineer headcount to 2,500 , Offer full array of electronic Provide more added value strengthen software development devices and peripherals for self- through defect analysis capabilities and promote car driving vehicles, a promising and parts reliability electronics standardization as growth market assessments core member of JasPar We aim to expand electronic device business by refining its strengths and adding more value 6

Focus Area ② Next-Generation Services: Leveraging ICT ICT Next generation (Information & services communication technology) Scope of business  Building networks for overseas Data center  Proof-of-concept testing of truck データセンター Toyota plants & major Japanese platooning companies  Development of traffic  Security (server monitoring ) information analysis systems to Expansion Vehicle, driving & ease congestion in Thailand location information Future plans & camera images  Investment in Grab ride-hailing  Automatic data software updates service company (remote vehicle maintenance) →Exploring new insurance, More applications  Security software upgrades maintenance & inspection  Data center maintenance, services that utilize vehicle development of new technologies information Communication devices Navigation system Radar Cameras Meters ABS Engine Image recognition Embedded Security software We will expand ICT business and challenge next-generation service businesses 7

Focus Area ③ Next Mobility: Batteries & Materials Batteries Materials Main battery businesses at present Aluminum Nickel battery Li battery  Using new aluminum materials as steel Lithium mining material sales & recycling & substitute logistics reuse  Improving aluminum processing & bonding technologies  Launched aluminum processing operations in We aim to leverage our expertise to help North America further develop an electric vehicle society. Future plans Optimize raw Establish closed-loop Stably supply material sourcing battery recycling battery resources arrangements scheme Carbon & resins ● Specific initiatives ● ① Reuse Li batteries and secure resource  Testing molding processes supplies through battery recycling carbon fiber & recycling ② Explore entry into all production processes from materials to battery packs ③ Develop next-gen batteries, offer materials & parts for them (photo courtesy of ④ Utilize energy management and storage cells Toray Industries) We are targeting electric vehicle market as a business opportunity, led by our Next Mobility Development Department 8

2. Africa Division’s Strategy 9

Current African Economic Environment Source: TTC, based on IMF data African economic growth rates by region Africa’s aggregate GDP bottomed in 2016 and is projected to gradually recover. However, growth rates vary by region. Central African resource-producing economies in particular are projected to remain sluggish again in 2017. 3,500 30% ＧＤＰ West Africa ＧＤＰ（US $bn） Growth rate (non-resource) GDP bottomed in 2016 24% 16 countries, including 3,000 Ghana, Ivory Coast, Senegal, and 18% Burkina Faso 2,500 West Africa 12% (resource) 2,000 8 countries, including 6% Nigeria, Gabon*, Equatorial Guinea, Chad, 1,500 Republic Of Congo*, 0% DRC*, Central African Republic & Cameroon* *Central African countries 1,000 -6% East Africa 18 countries, including 500 -12% Ethiopia, Kenya, Tanzania, Uganda, Burundi & Angola 0 -18% 2014 2015 2016 2017(E) 2018(E) 2020(E) East Africa W. Africa (resource) W. Africa (non-resource) Others All W. Africa (resource) East and West Africa, where TTC Group has a strong presence, are in mild economic recovery 10

Background & Aim of Africa Division’s Establishment New organization (April 2017 ～） Previous 4 years Internally Internally Successful acquisitions and TTC Group’s African operations alliances consolidated ⇒ 2 organizations, 2 strategies ⇒ 1 organization, 1 strategy Shift to Strategies higher are formulated Synergies Pursuing aim of “One Africa” and executed gear locally required to achieve 34 countries 30 countries sustainable growth Expanding and accelerating 53 countries operations Externally Externally across Africa Falling resource prices, diversification Fully utilizing CFAO’s functions & of needs resources B-to-C shift ⇒ Abundant human resources, Intensification of competition with localized operations, speedy management European and Chinese rivals By consolidating African operations, we will achieve further growth through pan-African management integration 11

Africa Division Organizational Chart (effective April 2017) Africa Division Executive Deputy Chief Division Officer Chief Division Officer and CFAO President Takashi Hattori Richard Bielle Automotive Healthcare & Consumer Goods & Technologies & SBU Chemical SBU Services SBU New Business SBU African Automotive Africa Business Development Department Department New CFAO Auto, Equip. & Consumer Tech & New Healthcare Services Goods Business （ 8 divisions + 1BU ） Auto Production & Auto Production & West Africa West Africa Eurapharma Eurapharma FMCG & FMCG & Agri Peripheral Peripheral 15,000 Division Division Division Division Division Division Business Division Business Division personnel EurAfrica EurAfrica Energy & Energy & Retail Division Retail Division Division Division Infrastructure BU Infrastructure BU ↓ Operations Technology Technology East/Southern East/Southern Africa Division Africa Division transferred Division Division from TTC We aim to accelerate and expand operations throughout Africa with CFAO as our regional headquarters 12