Financial Results Briefing
Fiscal 2014 (Ended May 2015)

July 13, 2015

Toyo Denki Seizo K.K.

Program- NEXT100

 Briefing on Financial Results: 25 minutes
1. Overview of Financial Results for Fiscal 2014
2. Current Status of the Medium-Term
Management Plan—“Next 100：Beyond 100years”
3. Outlook for Financial Results for Fiscal 2015

 Q&A: 30 minutes

1. Overview of Financial Results forFiscal 2014

- NEXT100

1-1. Overview of Consolidated Financial Results
Significant increase in both net sales and income year-on-year

FY2015Long-term perspective• Operating income increased by about 50% due to revenue • Recorded highest net sales amount since the introduction ofand plant profitability improvement
consolidated reporting (recorded highest amount for• Ordinary and net incomes almost doubled due to foreign
Transportation Systems)
currency exchange gains• Achieved new records for both overseas net sales and the ratio ofoverseas sales to net sales(Billions of yen)
FY2012FY2013
FY2014
YoY
Difference(%)(%)
ChangeNet sales

30.57

34.95

39.61

+4.66 (+13.3%)-0.38 (-1.0%)

Operating income(%)

0.50(1.6%)

1.07(3.1%)

1.59(4.0%)+0.52 (+48.3%)(+1.0%)--0.20 (-11.3%)(-0.5%)-Ordinary income(%)

1.15(3.8%)

1.03(3.0%)

2.05(5.2%)+1.02 (+98.5%)(+2.2%)--0.04 (-2.1%)(-0.1%)-Net income(%)
Net income per share (Yen)

0.72(2.4%)+14.980.64(1.8%)+13.371.10(2.8%)+22.94+0.46 (+71.6%)(+0.9%)+9.57 (+71.6%)-0.09 (-7.9%)(-0.2%)-1.96 (-7.9%)

ROE

4.3%

3.4%

5.0%

+1.6%

Orders received

33.94

42.56

39.07

-3.49 (-8.2%)

Ratio of overseas sales tonet sales

23.7%

27.3%

38.0%

+10.7%-----5.93 (-13.2%)--3

- NEXT100

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

FY2013¥1,070 million
Increase inplant profitability+¥370 million
Additional
revenue effect+¥610 million

FY2014
Increase insubsidiaries’ income+¥120 million¥1,590 million+¥520 million

Increase in
Decrease inoverhead expenses gross margin-¥480 million-¥90 million

4

- NEXT100

1-3. Details of Non-Operating Income and Expenses

Non-operating income+¥460 million¥1,590million

OperatingincomeBreakdown
Gain on foreign
currency exchange+¥360 million
Net interest anddividends+¥60 million
Equity in gain of equitymethod investments,
other+¥40 million

Income tax,
other-¥950 million¥2,050
million¥1,110
millionOrdinary
incomeNet
incomeNote: Currency exchange rates
End of May 2014: ¥101.66/ US$1.00
End of May 2015： ¥123.73/ US$1.00

5

1-4. Segment Performance: Transportation Systems- NEXT100

Net sales and segment income have significantly increased thanks to international projects.
Order backlog has remained high.
Billions ofyen300
30Net Sales

25
2.517.32

202.0

150
15(Forecast: 2.8)

3.11
2.37
1.91

15
1.5

10100

101.0

550

50.500FY2012
2013.5期
Billions ofyen

FY20132014.5期

FY20142015.5期

FY2012
2013.5期

Billions ofyen
300
30(Forecast: 28.0)

Orders Received

350
35

29.79

300
30
250
25Segment Income

30
3.0

22.19

250
25200
20

Billions of(Forecast: 26.0) yen
35
3.5
26.86

24.75
20.94

FY20142015.5期

Order Backlog
25.64

24.61

2014.5期
FY20132015.5期
FY201425025200
20200
20FY2013
2014.5期

18.05

15150150
1510100100
1050555000FY2012
2013.5期

FY20132014.5期

FY20142015.5期

2013.5期
FY2012

6- NEXT100

1-5. Segment Performance: Industrial Systems

Significant earnings growth due to structural reforms and increased revenues. Orders received haverecovered to the level prior to the 2008 global financial crisis.
Billions ofyen
140
14120
12Net Sales
11.54

10.92

(Forecast: 12.6)

11.61

100
1060
6

(Forecast: 1.1)

0.84
0.53
0.43

0.44

40
4

0.22

20
200

FY2012
2013.5期

FY20132014.5期

FY20142015.5期

FY2012
2013.5期(Forecast: 15.5) Billions ofBillions ofyen

12012Segment Income0.88
0.6680814014Billions ofyen
101.0Orders Received

yen70
711.0960
613.3111.45

1001050580
844060633040422020211000

FY2012
2013.5期

FY20132014.5期

FY20142015.5期

FY20132014.5期

Order Backlog
4.75

4.92

FY2012
2013.5期

FY20132014.5期

FY20142015.5期

6.63

FY20142015.5期
71-5. Reference: Industrial Systems Orders Received- NEXT100

A large expansion in orders received started in the Dec.–Feb. quarter in FY2014

Year-on-year growth rate for quarterly orders receivedFiscal 2015 is expected to record orders of 16 billion yen, higher than just before the 2008
global financial crisis.

80%60%
40%20%0%-20%-40%-60%

FY2011FY2012FY2013
FY20141Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Note:
1Q: Jun.–Aug.; 2Q: Sept. –Nov.; 3Q: Dec. –Feb.; 4Q: Mar. –May

8

- NEXT100

1-6. Segment Performance: Information Equipment Systems
Station operating equipment orders fell due to a dip in upgrade demand.
Billions ofyen202.0

Billions ofyen
0.44

Net Sales1.70

1.82(Forecast: 1.40)

15
1.50.33

1.12
10
1.00.2250.50.1100FY2012
2013.5期
Billions ofyen
20
2.0FY20132014.5期

FY20142015.5期

1.67

151.5
10
1.00.34
0.26(Forecast: 0.24)

0.07

FY2012
2013.5期
Billions ofyen
50.5

Orders Received
1.54

Segment Income(Forecast: 1.50)

40.40.98

30.3

FY20132014.5期

FY20142015.5期

Order Backlog
0.39
0.24

20.2
5
0.5

0.09

10.100FY2012
2013.5期

FY20132014.5期

FY20142015.5期

FY2012
2013.5期

FY20132014.5期

FY20142015.5期9- NEXT100

1-7. Consolidated Financial Position(Billions of yen)
May 31,
2014
Total assets

44.75

May 31,2015

YoYChange

53.04

+8.29

Notes (Major Factors Contributingto Changes)

Current assets

23.55

25.59

Cash and deposits: +0.57, notes and+2.04 acounts receivable-trade: +2.03
Inventories: -0.70, other

Fixed assets

21.19

27.44

+6.25 (Due to the rise in market value of existing

Investment securities: +6.06, othercapital holdings)

Total liabilities

Deferred tax liabilities: +1.96

25.40

28.14

+2.74 Interest-bearing liabilities: +0.50, other

8.92

9.42+0.50

19.35

24.89

Retained earnings: +1.19,+5.54 Unrealized holding gain on available-forsale securities: +4.36

Equity ratio

43.2%

47.0%

+3.7%

Net assets pershare (yen)401.45516.82+115.37

Of which, interestbearing debt
Net assets

102. Current Status of the Medium-TermManagement Plan—“Next 100”

- NEXT100

2-1. 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”

 Period Covered
June 2014–May 2017

 Performance Targets(Billions of yen)

NEXT100

 Fundamental Policy(I) Strengthen international
competitiveness(II) Build a stable business (VI) Train human resources
to support global
earnings structuredevelopment(III) Restructure productionsystem(V) Establish newbusinesses(IV) Promote developmentof technology

FY2013

FY2014FY2016
Forecast

34.95

39.61

50.00

1.07

1.59

3.00

(3.1%)(4.0%)(6.0%)

Ordinary
income

1.03

2.05

3.20

Net income

0.64

1.10

1.90

Overseas netsales

9.55※15.06

25.00(Ratio of overseas
sales to net sales)(27.3%)(38.0%)(50.0%)Net sales
Operatingincome(Operatingincome margin)12

2-2. (I) Strengthening International Competitiveness- NEXT100(Transportation Systems)
High level of orders continues with products for Chinese high-speed rail. Overseas expansion ofChina Railway Rolling Stock Corporation (CRRC) is also anticipated.
• The total length of the Chinese high-speed rail system is about five times that of Japan's Shinkansen, andfurther expansion is expected.
• Toyo Denki gear unit orders are also staying at a high level.
• Toyo Denki accommodates new vehicle demand associated with the new line opening and take measures tomeet strong upgrade demand.

Expansion of the Chinese High-speed Rail Network

Total Network Length(km)(Vehicles)

Vehicle Stock

30,00040,00030,00020,00020,00010,00010,00000
Up to 2010

Up to 2014

Up to 2030
Current level inJapan (Shinkansen)

Up to 2010

Up to 2014

Up to 2030

2-3. (I) Strengthening International Competitiveness- NEXT100(Transportation Systems)
Development, testing and delivery are all moving forward as planned for international projects.
1.Shipped electrical equipment and started tests
for LRV for Los Angeles Metro

Vehicle with Toyo Denki electricalcomponents undergoing testing

3.Enhanced sales activity in the Middle Eastand Southeast Asia
• Initiative for the Jakarta Mass Rapid
Transit (MRT) project• More inquiries from other regions as well

4.Expanded business in electrical equipment
into the automated people mover (APM)
segment• APM expansion in Macau, etc.

2.Commercialized and launched high-speed circuit
breakers to market• Joint development of new products withHitachi, Ltd.

Macau APM railtransportation system14

2-4. (II) Building a Stable Business Earnings Structure- NEXT100(Industrial Systems)
Strengthening sales activities such as sales channel expansion and securing upgrade demand
 Initiatives for automotive development testing
equipment• Measures to support the overseas expansion ofJapanese automakers• Expansion towards manufacturers in Japan• Development of overseas automaker customers

 Securing DC motor upgrade demand(including control devices forprocessing machines)

1. Replacement of the DC
motor control

2. Can also be used for AC
motor operation• Launching inverters by adding a DC
motor operation function in addition to AC
motors• Helping users by reducing capital
investment and responding to needs forenergy saving

DC motorAC motor15

- NEXT100

2-5. (III) Restructuring Production System
Securing a new plant site in order to achieve net sales of ¥50 billion or moreAims• Transportation Systems: Increase production capacity at the Yokohama Plant by 30% or more
• Industrial Systems: Consolidate scattered sites and functions in the Shiga district, andstrengthen profitability and competitiveness. (Integrate functions such as development, design,manufacturing and quality assurance into the Shiga district)

Site overview• Location: Ryuo-cho, Shiga Prefecture• Scheduling contract signing: March 2015
• Land area: 34,400 m2(Yokohama Plant: 55,300 m2)• Scheduled start of operation: Spring 2018

Recently acquired land
(Ryuo Shiga industrial park)↑ Current Shiga Factory16

2-6. (V) Establishing New Businesses (Transportation Systems)- NEXT100

Start of maintenance business in China. Concept realization also begun for mediumand long-term development.
Background• Secured over 30% of the electrical equipment demand fromthe Beijing Subway

Current situation• Beijing Jingche Shuangyang Traction System Co., Ltd. startedoperations in October 2014
• Capturing all the demand for electrical equipment overhaulfrom the rapidly expanding Beijing SubwayBusiness outlook• Also capturing subway maintenance demand outside Beijing.
• Increasing the plant scale and capacity to more than three times
the current levels.
 Plans for plant relocation as part of Beijing-Tianjin-Hebei
economic zone plan.

Office of Beijing Jingche
Shuangyang Traction System(Non-equity methodaffiliated company)

17

2-6. Reference (V) Establishing New Businesses- NEXT100(Transportation Systems)
Estimated number of Beijing Subway vehicles requiring maintenanceResults ←Equipmentmanufacturer1234

Toyo

Fuba186

ToyoBatong180

Toyo

2126

Japan A

4198

Overseas C

Daxing

192

Overseas C

5210

Japan B

6512

Overseas D

8234

Japan A

Under
construction,planned

Existing route

Route/Line

Vehicles

9144

Toyo

10504

Toyo

13336

Japan B

2002

2003

2004

2005

2006

2007
Note 1

2008

2009

2010

120

2011

2012

2013

2015

62

(As of December 31, 2014)

2018

2019

2020

2021

2022

2023

4040

40

38

38

386248114

2017
注２）

84

62
48

1242

42

38

38

38

6666

66

66

64

64

192
210

70
512
198

70

336

Phase 3

246

N.A.

86
112 112 112

82

N.A.

15162

Overseas D

162

Changping

162

Japan A

162

Yizhuang

138

Toyo

138Fangshan

126

China E

Airport40

Overseas C

626264170 170 170

1442582025

70

Phase 2 To west
Phase 22024

48

198

148686

66

66

66 N.A.

48

48

48

82

82

82

N.A. N.A. N.A.

112 112 11282

41

Phase 2Phase 2

54

54

54

To
south54

54

54

46

46

46

24

24

24

13

To west

To
north

72
40

13

7

13

N.A.

N.A.

Western Suburb

N.A.

Haidianshanhou

N.A.

16

Total vehicles

2016

114
6296

2014

→ Plan (estimated)

N.A.

Many routes opened around theBeijing Olympics
3,766
Total new vehicles

336 9600082

Note 1: Circled figures indicate the number of newly introduced
vehiclesNote 2: After 10 years, general inspection and repair to carriedout over an average of two or three years

Many vehicles need general inspection andrepair after 10 years from introduction

324 502 198 726 468 758

0Total vehicles for general inspection
and repair (estimated)

174 174 222 118 150 190 177 265 451 542 766 540 433

182-7. (V) Establishing New Businesses (Industrial Systems)- NEXT100

Strengthening of the generator business (up to 30 MW). Developing the Japanese and international
markets.
Capacity
Applicationexamples

Toyo Denki’s target market
1 to 10 MW
11 to 30 MW• Biomass power generation (energy recovery)• Waste processing furnace (energy recovery)• Power supplies (emergency / regular), etc.

HigherPower plants

Application examples for biomass power generation (sugar cane refinery)
Sugar cane Sugar

Ethanol refinery

Sugar refinery

Molasses
Sugar equipment

In-house power generation

Ethanol refining
equipment

Biomass power
generation facility
Steam

Sugar canebagasse

Ethanol
Electricitysales

Boiler

Turbine generator

19

3. Outlook for Financial Results forFiscal 2015

- NEXT100

3-1. Consolidated Financial Forecast for Fiscal 2015
Net sales is forecast at ¥44 billion and operating income is forecast at ¥ 2.1 billion(Billions of yen)

FY2014
1H
Full Year[A][a]

FY2015 (Forecast)
1H
Full Year[B][b]

YoY Change
1H
Full Year[B]－[A][b]－[a]Net sales

19.06

39.61

18.00

44.00

-1.06

+4.38

Operating income
(%)

0.58
(3.1%)

1.59(4.0%)

0.30(1.7%)

2.10(4.8%)-0.28(-1.4%)+0.50(+0.7%)

Ordinary income
(%)

0.87
(4.6%)

2.05(5.2%)

0.35(1.9%)

2.20(5.0%)-0.52(△2.6%)+0.14(△0.2%)

Net income(%)
Net income per share(yen)0.51(2.7%)

1.10(2.8%)

0.20(1.1%)

1.40(3.2%)-0.31(-1.6%)+0.29(+0.4%)

10.69

22.94

4.15

29.05

-6.54

+6.11

Dividend forecast(yen/share)

6.0

6.0

0.0

ROE

5.0%

5.5%

+0.5%

Orders received
Year-end order backlog

19.60

39.07

19.50

46.00

-0.10

+6.93

31.34

21

3-2. Consolidated Financial Forecast for Fiscal 2015
by Segment- NEXT100

Increase in net sales and income is expected as a result of full-scale industrial recovery andcontinued strong business for Transportation Systems.
(Billions of yen)Transportation
Systems

Industrial
Systems

Information
Equipment
Systems

Adjustment,etc.

Net sales

28.50

14.00

1.50

0.00

44.00

Segment income

3.20

1.20

0.23

(2.53)

2.10

Orders received

28.50

16.20

1.30

0.00

46.00

Net sales

+1.63

+2.39

+0.37

-0.01

+4.38

YoY Change Segment income

+0.08

+0.35

+0.16

-0.09

+0.50

Orders received

+3.74

+2.88

+0.32

-0.01

+6.93

FY2015

Total22

3-3. Conclusion- NEXT100

Looking toward the next 100 years, focusing on priority issues and segments below

Transportation Systems• Revenue expansion for the new maintenance business• Expansion of overseas development areas• Expanding and deepening alliances

Industrial Systems• Strengthening initiatives for the new generator business• Strengthening sales channels and product foundations for automotive
testing equipment

Both Segments• Execution of investment strategy for medium-term growth• Improvement of capital efficiency

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.