Long-Term Business Plan for the Fiscal Year Ending March 2017 May 11, 2012 Inquiries to: Investor Relation Group E-mail: ttc_ir@pp.toyota-tsusho.com Tel: +81-3-4306-8201 Fax: +81-3-4306-8818 1
1. About the Long-Term Business Plan 1. About the Long-Term Business Plan for the Fiscal Year Ending March 2017 for the Fiscal Year Ending March 2017 2. About Financial Policy and Risk Management Policy 3. About Dividends 2
Orientation of Long-Term Management Policy for the Fiscal Year Ending March 2017 【 VISION 2015 】 Aim to develop new pillars of profit with a focus on non-automotive areas and to build a balanced profit structure with the automotive business (core business) Changes in the business environment ● Shift to an aging society with low birthrate (Japan) ● Revolution in technology and materials ● Food shortages, increased demand for resources ● Change in major players driving the economy ● Increased awareness of environmental issues and regulation ● Expansion of HV, EV markets ● Ongoing yen strength ● Energy issues ● Population growth in emerging countries “GLOBAL 2020 VISION” was established to accelerate the building of non-automotive businesses and to make progress in strengthening global strategy and creating business in addition to dealing with diversified and complex customer needs and revolutionary new technologies. The completion of VISION 2015 in March 2017 is the first step toward the realization of GLOBAL 2020 VISION 3
Numerical Targets of Long-Term Business Plan for the Fiscal Year Ending March 2017 March 2017 Target Net income ¥120.0 billion ROE 12-15% Net DER 1.5 times or less (excluding goodwill) Aim for balanced growth while maintaining a sound financial position 4
Net Income Targets for the Fiscal Year Ending March 2017 (Billion yen) Figures in parentheses are actual net income Temporary factors after amortization of goodwill ■ Main negative adjustments ・ Gain on sale of assets 120.0 Non-automotive areas ・ Gain on transfer of benefit obligation relating to employees’ pension fund, etc. ■ Main positive adjustments Automotive area ・ Reversal of deferred tax assets, etc. 60.0 （ 70.0 ） （ 66.2 ） 86.0 （ 58.0 ） 82.0 74.0 34.0 34.5 26.5 60.0 52.0 47.5 47.5 March 2012 March 2012 March 2013 March 2017 results actual value forecast target 5
Important Policies Toward Realizing the Long-Term Business Plan ■ Innovate the business model Horizontal development of existing business model (new clients, new regions) Build new business model ■ Accelerate new investment Business domains important for each of the three areas of focus Business domains where we leverage our strengths to aim for the No. 1 position ■ Develop new markets Important countries (India, Brazil, others) Important regions (Africa, Middle East, Latin America, others) 6
Investment Plan for the Next Two Years Investment budget for fiscal years ¥250 billion ending March 2013 and March 2014 Major investment areas *The amount for each area has not been established Earth & resources Life & community Gas Grain processing and feed Iodine Fertilizer Electric power (IPP) Bio Retail business (medical/ Renewable energy long-term care), etc. Storage Electronic Lithium HEV, EV Recycling Rare earths batteries, etc. materials Manufacturing, Technoparks Dealer business CKD assembly, parts distribution Mobility 7
Policies to Achieve Targets (Automotive Area) (Billion yen) Changes in environment 8% annual growth ◆ Concern over declining profitability of existing business ・ Parts exports from Japan decreasing due to local sourcing 60.0 ・ Automobile retail profit margins falling due to intense competition 47.5 ・ Decreasing volume of materials due to smaller, lighter vehicles ◆ EV/HEV technology innovations and shift to new materials ◆ Expanding markets in emerging countries March 2012 actual value March 2017 target Results to date and future plans Metals Global logistics Automotive ・ Steel centers ・ Parts logistics ・ Dealer, distributor business ・ Aluminum smelting ・ Tire assembly ・ CKD (Egypt, Pakistan) Major results to business (Europe, North America, Asia) ・ Handle business transfers to other date ・ Technoparks (India, countries Thailand, Indonesia, others) ・ Steel centers ・ Parts logistics (other companies, ・ Dealer, distributor business (emerging countries) (other manufacturers) other regions) ・ CKD (emerging countries) Major future ・ Steel centers ・ Tire assembly (VW, Nissan, others) ・ Increase business transfers to other countries plans (other industries) ・ Technoparks (other emerging ・ New business (used cars, etc.) countries) Deepen (explore and strengthen functions), broaden (develop outside the Toyota Group) and horizontally develop (expand along with the Toyota Group) Toyota-related business to build an even more stable foundation for profit. 8
Policies to Achieve Targets (Non-Automotive Area) Changes in environment Changes in environment Company policy ・ Growth of global population and food shortages Grain, agriculture area → ・ Higher resource prices and increased awareness of environmental issues and regulation → Recycling business ・ Electric power supply concerns due to nuclear accident Renewable energy, gas → ・ Acceleration of aging society and low birthrate in Japan Medical, long-term care area → Results to date and future plans Earth & resources area Life & community area ・ Rare earths (India, Vietnam) ・ Electronic materials ・ Iodine (Chile) ・ Lithium (Argentina) (acquisition of Elematec Corporation) ・ Wind power generation (making Eurus ・ Paprika, tuna farming business Major results to Energy Holdings Corporation a subsidiary) ・ Biopet/ethanol/polyester date ・ Gas (Australia) ・ Flour milling business, etc. ・ Electric power (U.S., Canada) ・ Metal recycling (Green metal), etc. ・ Renewable energy (solar, geothermal) ・ Retail business (medical/long-term care) Major future ・ General recycling ・ Grain/grain processing/feed, etc. plans ・ Develop upstream and downstream businesses for iodine and lithium, etc. 9
Non-Automotive Area: From Investment to Profit (Post-Tax) Figures in parentheses are return on investment Profit from existing investments (last 3 years) post-tax profit/value of investment Post-tax profit Major funded investments Investment amount (*) profit March 2012 (result) March 2017 (forecast) Operating investments ・ Electric power (North America, ¥5.0 billion ¥6.5 billion ¥57.0 billion Canada) (8.7%) (11.4%) ・ Fukusuke Corporation ・ Topics Group, etc. Investments under development or in preparation - ¥1.5 billion ¥7.5 billion ¥76.0 billion ・ Elematec Corporation (-1.9%) (9.9%) ・ Australia gas project ・ Chile/iodine, etc. ¥3.5 billion ¥14.0 billion Total ¥133.0 billion ・・ >A (2.6%) (10.5%) Profit from future new investments * Excluding investments for production capacity increases, etc., associated with existing businesses Investments approved but not yet ・・ >B ¥60.0 billion ― ¥6.0 billion (10.0%) funded ¥200.0 billion(*) Future new investments ¥14.0 billion (7.0%) ・・ >C ― Total ¥260.0 billion ― ¥20.0 billion (7.7%) (*) ¥200.0 billion is the total of future new investments that are expected to contribute to profit in the fiscal year ending March 2017 10
Policies to Achieve Targets (Non-Automotive Area) (Billion yen) Net income before amortization of goodwill 60.0 14.0 Profit from future new investments (p. 10-C ） 6.0 Profit from approved but not yet funded investments as of March 2012 (p. 10-B) +13.5 Profit from existing investments 40.0 ＋ 10.5 （ 3.5 → 14.0 ） (P.10-A) 26.5 Elimination of losses ＋ 2.0 Others ＋ 1.0 March 2012 March 2017 actual value target The non-automotive area is harvesting profit from past investments and accelerating new investments to build the second and third pillars of profitability . 11
1. About the Long-Term Business Plan for the Fiscal Year Ending March 2017 2. About Financial Policy and Risk Management Policy 2. About Financial Policy and Risk Management Policy 3. About Dividends 12
Plan for Next Fiscal Year and Medium-to-Long-Term Quantitative Outlook March 2012 March 2017 March 2011 March 2013 Results assumption Results (Billion yen) Plan Net sales 5,743.6 5,916.7 6,700.0 9,600.0 PL Operating income 85.2 92.4 115.0 200.0 62.8 82.0 86.0 120.0 Net income(*) 3,100.0 4,200.0 Total assets 2,436.2 2,837.4 BS Net assets 667.3 751.7 820.0 1,200.0 Benchmarks ROE 8.0% 10.7% 11% 13% Financial Net DER 1.0 1.1 1.0 1.0 Others New investments 115.0 78.0 Continue at ¥250 billion over two years (*) Net income before amortization of goodwill Aim for growth while balancing growth, efficiency and soundness. 13
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