July 12, 2018
To Whom It May Concern
Company name
RepresentativeInquiries

Toyo Denki Seizo K.K.
Kenzo Terashima, President,
Representative Director(Code No. 6505 1st Section of theTokyo Stock Exchange)
Takatoshi Otsuka, General
Manager, Management Planning
Division(TEL 03-5202-8122)

Toyo Denki Seizo Announces “Revitalize 2020” New Medium-Term Management Plan
Toyo Denki Group today announced revisions to the “Next 100: Beyond 100 years, Ver.2” medium-term
management plan announced on July 12, 2016 (covering the period from June 1, 2014 to May 31, 2016 for Ver.1
and June 1, 2016 to May 31, 2018 for Ver.2) as described below, in the light of changing business conditions andhurdles that need to be addressed since the previous announcement and the newly developed “Revitalize 2020”
medium-term management plan that will come to an end in the fiscal year ending May 31, 2022.

Description
Based on the fundamental policy under the “Next 100” medium-term management plan, while Toyo Denki
Seizo K.K. (hereinafter “Toyo Denki”) has promoted reinforcements to its management foundations by taking
actions such as commencing operation of the new Shiga Ryuo Plant in June 2018 to commemorate the 100thanniversary of its founding, Toyo Denki still has hurdles that need to be addressed; i.e., improving profitability
and accelerating product development. Starting from the results achieved and the hurdles that remain under the“Next 100” plan, as well as a review of its business resources at the 100th anniversary of its founding, Toyo
Denki has decided to develop the new “Revitalize 2020” four-year medium-term management plan, whichtargets 2020 for its nearest goal.
Toyo Denki will improve its earning power based on the fundamental policy of this new plan and take a new
step towards establishing a strong operating system that generates steady profits.
1.

Long-term Vision
We will contribute to realizing a social infrastructure system that is friendly to the global environment by
providing high-quality products that combine the excellent motor drive technologies we have cultivated since
our founding and advanced breakthrough technologies worldwide based on our solid business foundations.

2.

Fundamental Policy
Toyo Denki Group will establish a strong operating system that generates steady profits by strengthening its
organizational power and promptly providing high-quality products to our customers.
In the first two years (from the fiscal year ending May 31, 2019 to the fiscal year ending May 31, 2020),
which we regard as a period for strengthening our base, we will focus on the pressing issue of improving ourprofitability. In the latter two years (from the fiscal year ending May 31, 2021 to the fiscal year ending May 31,2022), which we regard as a period for achieving growth to realize net sales of more than 47 billion yen, wewill focus on strategically developing our businesses, including new business alliances and M&As, inside andoutside Japan.
(1) Expanding overseas business(2) Expanding our business areas using our core technologies(3) Promoting development of technologies in advance of market needs(4) Establishing a stable business earnings structure(5) Developing foundations for expanding our production capacity(6) Developing human resources to play important roles in the future(7) Promoting ESG
3.

Major Actions(1) Expanding overseas business(i) Review our business strategies in accordance with the economic and technological development
conditions of the countries into which we advance.
(ii) Expand new industrial systems business in Southeast Asia(iii) Strategic participation in new urban transportation project(2) Expanding our business areas using our core technologies(i) Promote commercialization taking into consideration business potential and market trends(ii) Develop new businesses based on the results of the latest technological innovations(iii) Expand our business areas through business alliances and M&As
(3) Promoting development of technologies in advance of market needs(i) Develop products in a timely manner by strengthening our market analysis capabilities(ii) Establish new production technologies for key parts (products)(4) Establishing a stable business earnings structure(i) Reduce costs to improve business profitability(ii) Strengthen coordination among operation and plant systems through company-wide activities(iii) Promote group management that focuses on our earning powera) Promote selection and concentration throughout the Groupb) Establish integrated operation and plant systems within the Group(5) Developing foundations for expanding our production capacity(i) Reinforce process control by maximizing the functions of the basic system and establishing optimum
production lines(ii) Expand production capacity by re-stablishing production lines (Yokohama Works)(iii) Enhance operation rate of new production lines (Shiga Ryuo Plant)(iv) Re-establish supply chains(v) Improve business continuity plan (BCP)(6) Developing human resources to play important roles in the future(i) Establish and implement a personnel rotation system to revitalize the organization(ii) Develop the next generation of executives and overseas employees(iii) Early-stage development of young managers who will be key persons of the organization(7) Promoting ESG(i) Promote efforts to reduce environmental burden associated with business activities

(ii) Promote working-style reforms(iii) Enhance corporate governance4.

Numerical Management Targets (Consolidated)
In order to aggressively promote actions for the medium-term management plan listed above, we will add
equity in profit of unconsolidated subsidiaries and affiliates, ROE (Return on Equity) and dividend payout ratio
to targets.
(1) Corporate
Fiscal year
ended May 31,
2018(Results)
42.527

Net sales(Unit: Billions of yen)
Fiscal year
Fiscal year
ending May 31,
ending May 31,
2020
2022
(Plan)(Plan)
43.0
Over 47.0

Operating income(Operating margin)

0.366
0.9%

0.9
2.1%

24.3%

Ordinary income

0.515

1.1

2.4

Net income
Equity in profit of unconsolidated
subsidiaries and affiliates

0.692

0.7

1.6

0.116

0.12

0.4

ROE (Return on Equity)

2.7%

3.3%

5.0%

(Note) 68.2%

30.0%

30.0%

(2) Segment net sales
Transportation Systems
Industrial Systems

27.94911.769

29.0
13.0

31.0
15.0

Information Equipment Systems

2.801

1.0

1.0

Dividend payout ratio(Note)

For the fiscal year ended May 31, 2018, we will pay a commemorative dividend of 20 yen
per share to mark the 100th anniversary of our founding in addition to the regular dividend of
30 yen per share.
Dividend payout ratio for the fiscal year ended May 31, 2017 was 24.2%.