Financial Results Briefing
Fiscal 2015 (Ended May 2016)

July 13, 2016

Toyo Denki Seizo K.K.

Program- NEXT100

 Briefing on Financial Results: 25 minutes
1. Overview of Financial Results for Fiscal 2015
2. Outlook for Financial Results for Fiscal 2016
3. Medium-Term Management Plan
“Next 100: Beyond the 100-Year Mark (Ver. 2)”

 Q&A: 30 minutes

1. Overview of Financial Results forFiscal 2015
(June 1, 2015 – May 31, 2016)

- NEXT100

1-1. Overview of Consolidated Financial Results
Net sales and operating income are slightly higher than last year.
Ordinary income and net income are slightly lower than last year due to foreign
currency transaction losses.

(Billions of yen)YoY
FY2015 Change

FY2013

FY2014

Net sales

34.95

39.61

39.74

+0.13 +0.3%

Operating income

1.07

1.59

1.63

+0.04 +2.7%(%)(3.1%)(4.0%)(4.1%)

Ordinary income

1.03

2.05

1.49

-0.56 -27.4%

Net income

0.64

1.10

0.88

-0.22 -20.5%

Net income per share (Yen)

13.37

22.94

18.47-0.45

－ROE

3.4%

5.0%

3.7%

-1.3%

－Orders received

42.56

39.07

39.89

+0.82 +2.1%

Ratio of overseas sales tonet sales

27.3%

38.0%

31.8%

-6.2%

(+0.1%)(%)－－3

1-2. Factors Contributing to YoY Changes in Operating Income- NEXT100

Productivity transformation initiatives have been commenced in order to improve plant profitability
as quickly as possible.

Non-consolidated

Consolidated

YoY change+¥40 million

Increase/decreasein profitability
Changes in+¥150 million
gross margin
Changes in+¥130 million
overhead expenses Eliminations
and other+¥230 million
Increase/decrease-¥30 million
in profitability
Changes in-¥250
million
FY2015FY2014
plant profitability-¥200 million¥1,630 million¥1,590 million41-3. Details of Non-Operating Income and Expenses- NEXT100

Non-operating loss-¥140 million¥1,630
millionOperatingincomeBreakdown
Loss on foreign
currency exchange-¥420 million
Net interest anddividends+¥110 million
Equity in gain of equitymethod investments+¥80 million
Other+¥70 million

Income tax,other-¥610 million¥1,490
million¥880
millionOrdinary
incomeNet
incomeNote: Currency exchange rates
End of May 2015: ¥123.73/ US$1.00
End of May 2016: ¥110.94/ US$1.00

5

- NEXT100

1-4. Segment Performance: Transportation Systems

Orders received are improving both domestically and overseas. Net sales and income are slightly
down from last year.
(Billions of yen)Orders Received and Order Backlog
Orders received (line)
Order backlog (point)
350
35300
30250
25

Net Sales and Segment Income
Net sales (line)
300
30

29.79
24.75
25.64

200
20

24.61

27.09
24.55

25250

26.86

Segment income(bar)90926.75

80
8
22.19

70
720
200

60
650
515150

40
4150
15
10100

10100

30
33.11505

50500
FY20132014.5期

FY20142015.5期

FY20152016.5期

2.96

2.37

20210
10

FY2013
FY2014 2016.5期
FY20152014.5期
2015.5期
6- NEXT100

1-5. Segment Performance: Industrial Systems

Toyo Denki is working toward stabilizing earnings by restructuring the production system amidst achallenging environment for winning orders.
(Billions of yen)Orders Received and Order Backlog
Orders received (line)
Order backlog (point)
14140

12120

14140

11.42

10100

808
606
404

6.63

6.02

4.92

12120

30
3.0808

2.0
20606

1.5
15404

1.0
1000FY2015
2016.5期

12.02

2.5
25202FY2014
2015.5期

10.92

11.61

35
3.5

10100

202
FY20132014.5期

Segment income(bar)Net sales (line)

13.31

11.09

Net Sales and Segment Income

0.84

1.01

0.5
50.53

0
2014.5期
FY20132015.5期
FY20142016.5期
FY20157

- NEXT100

1-6. Segment Performance: Information Equipment Systems

Orders received improved over last year. Profit rebounded after a decline in the previous year.
(Billions of yen)Orders Received and Order Backlog
Orders received (line)
Order backlog (point)
202.0
1.6
16

1.36

16
1.6

8
0.8

1.12

1.2
12

0.98

0.880.95

0.8
80.6
60.4
40.34

0.4
40Segment income(bar)101.0

Net sales (line)
202.0
1.82

1.67

1.2
12

Net Sales and Segment Income

0.51

0.2
20.07

0.24
2014.5期
FY2013

0.4
40.09
2015.5期
FY20140.090
2016.5期
FY2015

0FY20132014.5期

FY20142015.5期

FY20152016.5期
8- NEXT100

1-7. Consolidated Financial Position(Billions of yen)

May 31,
2014
Total assets

44.8

2
May 31,
May 31,
02015
2016
153.0
50.2

YoY
Change-2.8

Current assets

23.6

25.6

25.5

-0.1

Fixed assets21.2

27.4

24.7

-2.7

Total liabilities

25.4

28.1

26.6

-1.6

8.9

9.4

8.3

-1.1

19.4

24.9

23.7

-1.2

43.2%

46.9%

47.1%

+0.2%

Of which, interest-bearing debt
Net assets
Equity ratio

AssetsFixed Assets: Decrease due to fall in market price of investment securities (-¥2.9 billion)
Net Assets
Increase in retained earnings (+¥0.6 billion) and decrease in accumulated other comprehensive income (-¥1.8 billion)

92. Outlook for Financial Results forFiscal 2016

- NEXT100

2-1. Consolidated Financial Forecast for Fiscal 2016
The forecast is ¥43 billion for net sales, ¥1.9 billion for operating income,and ¥1.8 billion for ordinary income.
• Target is ROE of 5% or greater• Risk of foreign currency fluctuation is likely.

(Billions of yen)

FY2015 (Result)
1H

Full Year

FY2016 (Forecast)
1H

Full Year

YoY Change
1H

Full YearNet sales

18.74

39.74

20.00

43.00

+1.26

+3.26

Operating income

0.61

1.63

0.50

1.90

-0.11

+0.27(%)(3.2%)(4.1%)(2.5%)(4.4%)

Ordinary income

0.70

1.49

0.40

1.80

-0.30

+0.31

Net income

0.47

0.880.27

1.20

-0.20

+0.32

Net income per share (Yen)

9.82

18.47

5.60

24.90

-4.2

+6.4

+3.47

+4.11

Dividend forecast
ROE
Orders received
Year-end order backlog

19.13

6 yen/share

6 yen/share

3.7%

5%

39.89

22.60

44.00

31.1
11

- NEXT100

2-2. Segment Outlook

Expecting an increase in scale of Transportation Systems and improvement in profit ratio for
Industrial Systems(Billions of yen)

FY2016(Full YearForecast)

YoY
ChangeTransportation
Systems

Industrial
Systems

Information
Equipment
Systems

Adjustment

TotalNet sales

29.00

12.50

1.50

0.00

43.00

Segment income/Operating income

2.89

1.25

0.25-2.49

1.90

Orders received

30.00

12.50

1.50

0.00

44.00

Net sales+2.22+0.48+0.54+0.00+3.24

Segment income/Operating income

-0.07

+0.23

+0.16

-0.06

+0.26

Orders received

+2.91

+1.08

+0.13

-0.01

+4.11

12

3. Medium-Term Management Plan
“Next 100: Beyond the 100-YearMark (Ver. 2)”

3-1. Medium-Term Management Plan—“Next 100”

- NEXT100“Next 100: Beyond the 100-Year Mark (Ver. 2)”

 Business Environment• Transportation Systems: China and ASEAN nations continue high investment inrailway infrastructure. Japan continues to see an increase in domestic train demand
to due to upcoming Olympics and increasing inbound tourism.
• Industrial Systems: Due to the uncertainty in the future of overseas economics,
further decrease in capital investment demand is expected.
 Group Actions• Transportation Systems: Working on the reorganization of Yokohama Works, andinitiatives such as strengthening production capacity and transforming productivity.
• Industrial Systems: Working on improving production efficiency and expanding
product portfolio by consolidating manufacturing functions at the new plant in Ryuo.
 Two manufacturing bases: Yokohama Works & new Ryuo factoryMay 2018 has been reset as the final year of the plan, with a focus on the following
two points of the basic policy of Next 100:
• Build a stable business earnings structure• Restructure production system14

3-2. Medium-Term Management Plan—“Next 100”

- NEXT100

Resetting the final target and ending year to restart the “Next 100” midterm management plan asVersion 2

 Period Covered (Ver.2)
June 2016 to May 2018(shifting the timing to our corporate centennial anniversary) Fundamental Policy
The fundamental policy of the
Next 100 medium-term
management plan started in June
(VI) Train human resources 2014 will be kept in place, with adeeper emphasis on the following
to support global
two points:development• Build a stable businessearnings structure(V) Establish newbusinesses• Restructure production system(I) Strengthen international
competitiveness(II) Build a stable businessearnings structure(III) Restructure production
system(IV) Promote developmentof technology
15

- NEXT100

3-3. Medium-Term Management Plan—“Next 100”

Aiming to strengthen the management foundation as a 50 billion yen company under the slogan:“Beyond the 100-Year Mark”

 Performance Targets(Billions of yen)

NEXT100
Ver.1

Ver.2

FY2014FY2015FY2016FY2017(1st year result)(Result)(Forecast)(Final year target)

Net sales

39.61

39.74

43.00

46.00

Operating income

1.59

1.63

1.90

2.40

(Operating income margin)(4.0%)(4.1%)(4.3%)(5.2%)

Ordinary income

2.05

1.49

1.80

2.50

Net income

1.10

0.88

1.20

1.70

Overseas net sales

15.06

12.65

23.00

(Ratio of overseas sales to net sales)(38.0%)(32.0%)(50%)

16

3-4. (I) Strengthening International Competitiveness- NEXT100(Transportation Systems)
International Railway Projects

1. Orders to be received for upgrade of electrical
2. Order for electrical equipment forequipment for electric towing locomotives forexpansion to Chengdu Metro Line 1 inPanama Canal (about 100 train cars in volume)
China• Upgrade completion scheduled for 2019
• 6 cars x 23 forms (138 cars)• Scheduled for delivery in Spring 2017

Electric towing locomotives for Panama
Canal

Chengdu Metro Line 117

3-5. (I) Strengthening International Competitiveness- NEXT100(Transportation Systems)
Commercialization of driving gear unit and pantographs incorporating Japanese engineering inEuropean standard components

1. Development of driving gear units for highspeed trains for European-specification trainsused in Chinese railways
2. Prepare for increase in volume of standard
China high speed trains

Driving gear unit (European specification)

3. Introduction of our pantographs to theBeijing Subway
4. Order for our pantographs for Chengdu
LRV

Pantographs for Beijing Subway18

3-6. (I) Strengthening International Competitiveness- NEXT100(Industrial Systems)
Proposing industrial systems in Southeast Asia with power savings as the cornerstone
Delivery of dispersed power
generation systems such as inhouse power generation systems
and small hydroelectric generation

Myanmar:Biomass power generation

Thailand:Water infrastructure
Machine tools

Malaysia: Textile andfilm manufacturers
Pakistan:
Biomass power generation

Indonesia:
Paper manufacturers

Bangkok Representative
Office19

3-7. (II) Building a Stable Business Earnings Structure- NEXT100(Industrial Systems)
Small hydroelectric generation• Bountiful experience with powercompanies in Japan• Higher efficiency by combining withpermanent magnet synchronous motors• Lineup with a wide range of powergeneration capacity from 10 to750 kW

Nikaho City, Akita Prefecture

Permanent magnet synchronous motors
City office of Tsuru City, Yamanashi Prefecture20

3-8. Business Development in Industrial Systems- NEXT100

Development to transform our current product lineup to meet our customer needs

1. Use of inverters (VF66 series) to power DC motors to standardize investment
for equipment upgrades
2. Creation of series of power generators (5 to 20 MW) to meet the optimal market
range for biomass and waste incineration power generation
3. Expand ED motor capacity zone
4. Deployment of new VF series inverter to comply with 690 VAC input5. Creation of series of high-speed, low-inertia motors for automobile testingsystems
6. Creation of series of distribution panels that meet customer needs

 Realization of these through consolidation of our industrial plants21

- NEXT100

3-9. (III) Restructure Production System
Commencement of basic design for construction of new Ryuo plant.
Construction begins March 2017.

Site size: 33,400 m2

Progress as of May 2016
RyuoInterchange

Mitsui Outlet
ParkRyuo Sports
Park

当社取得用地Land
acquiredby Toyo Denki
SofugawaRiver223-10. (III) Restructure Production System- NEXT100

Consolidation of our industrial plants for one-stop development, design, manufacturing and quality
assurance
Our new factory will be able tosupport everything from development
to quality assurance for a greater
product lineup.
Factory floor space will be around
20,000 m2 for 30% greater
production capacity.

2F
Development
testingbuilding

1F

1. Lab for automobile development
testing systems to speed up
development
2. Improved efficiency by having thelines for motors, inverters andsystem boards all in the same
factory23

3-11. (III) Restructure Production System- NEXT100

Production capacity increase with the new Ryuo plant
1. New Ryuo plant in Shiga Prefecture for improved production ratio of high value addedproducts
2. Improved efficiency of new product development by adding a development testing building
onsite for automobile testing systems
3. Preparation to expand capacity of motors and inverters
4. Preparation for regular use generator testing environment

Lineup expansion ofautomobile testing systems

In-house production ofcontroller boards243-12. (III) Restructure Production System- NEXT100

Improving production capacity and efficiency of Yokohama Works
Yokohama Works will focus on becoming a transportation factory to improve production
capacity by 30%.

Main products to be focused on for production capacity improvements

VVVF Inverter
Auxiliary power supply

Driving gear units

High-speed circuit breakers

Train information systems
25

3-13. Business Development in Information Equipment Systems - NEXT100
Order received for 50 commuter pass vending machines for the Transportation Bureau of the Cityof Yokohama (delivery end of March 2017)
Composite ticket vending machine that meets security authorization standards,
compatible with future upgrade demands• Compatible with a variety of tickets suchas IC cards, magnetic PET tickets, largemagnetic tickets cut from rolled paper,and Edmondson old style tickets.
• About 20% less power consumed whenin standby mode compared toconventional units.
26

3-14. Development in New Business- NEXT100

Production of electrical components for Hitachi Construction Machinery’s ZH200 hybrid shovel
Hybrid system that achieves both high fuel efficiency and environment performance

Products we have delivered:
1. Electric swing motor
3. Capacitor unit

2. Power control unit (PCU)
4. Power generation assist motor
27

Thank you for your interest.
https://www.toyodenki.co.jp/en/Inquiries
PR, IR, and CSR Department, Management Planning Division
Toyo Denki Seizo K.K.
Phone: 03-5202-8122
Email: contact@toyodenki.co.jp

Disclaimer- NEXT100• Statements concerning financial results forecasts are based ondata available as of the date of publication of this material andassumptions concerning the elements of uncertainty that will affectfuture business performance as of the date of publication of thismaterial. Actual financial results may differ depending on a varietyof factors.
• Forward-looking statements contained in this material are thejudgments of the Toyo Denki Group based on data available at thetime of publication of this material. Such statements anddescriptions are by no means comprehensive.

- NEXT100

Reference: Transportation Systems — Trend in Orders Received

Rate of international orders is trending higher. Orders in Japan are also showing signs of increase.
(Billions億円 of yen)

300
30

Trend in Japanese/International Orders (Non-Consolidated)JapanJapan
International
International

250
25200
20150
15
100
10505
0'00.5 FY00
'01.5 FY01
'02.5 FY02
'03.5 FY03
'04.5 FY04
'05.5 FY05
'06.5 FY06
'07.5 FY07
'08.5 FY08
'09.5 FY09
'10..5FY10'11.5FY11'12.5FY12'13.5FY13'14.5FY14'15.5FY15'16.5FY16'17.5
FY99(Forecast)30

- NEXT100

Reference: Contribution of Group Companies (Simple sum)Group companies in Japan are robust. Chinese equity method affiliates are growing.
(Billions of yen)120
12Subject companies• Toyokouki Co., Ltd.
• Taihei Electric Co., Ltd.

100
10808660
440
2200(Billions of yen)606

FY2009'10.5

FY2010'11.5

FY2011'12.5• TD Drive Manufacturing Co., Ltd.
• Toyosangyo K.K.

FY2012'13.5

FY2013'14.5

FY2014'15.5• Toyo Shoji K.K.

FY2015'16.5

FY2016'17.5 (Forecast)'16.5
FY2015'17.5 (Forecast)
FY2016

Subject companies• Hunan Xiangyang Electric Co., Ltd.
• Changzhou Ruiyang Transmission Technology Co., Ltd.
• Beijing Jingche Shuangyang Traction System Co., Ltd.

505

404
303
202
101
0'10.5
FY2009'11.5
FY2010'12.5
FY2011'13.5
FY2012'14.5
FY2013'15.5
FY201431