Financial Results Briefing
Fiscal 2008 (Ended May 2009)

July 17, 2009

Toyo Denki Seizo K.K.

Program Briefing on Financial Results
1.
2.
3.
4.

Overview of Financial Results for Year Ended May 2009
Outlook for Financial Results for Year Ended May 2010
Outlook on an Individual Business Segment Basis
A New R&D Facility and CSR

 The New Medium-Term Management Plan
About the “Challenge Up Plan”
 Business Alliance with Fuji Electric Systems Co., Ltd.
 Q&A: 30 minutes

21. Overview of Financial Results for Year Ended May 2009
1-1. Overview of Consolidated Financial Results(Unit: Million yen)Orders received

Fiscal
2007

Fiscal2008

YoYchange

38,87336,464-2,409

Firm results in theTransportation BusinessTransportation Businessresults remain flat, decrease in
the Industrial and Information
Systems segments

Net sales

38,13033,226-4,904

Operating income

1,391

1,396

+5%

3.6%

4.2%

Ordinary income

1,197

1,267%

3.1%

3.8%

Net income

532

103%

1.4%

0.3%

Net income per share(yen)+11.84

+2.32

Notes

+70-428-9.52
31. Overview of Financial Results for Year Ended May 2009
1-2. Ordered Received, Sales, and Operating Income by Business Segment(Unit: Million yen)Ordersreceived

Sales

Operatingincome

Transportation
BusinessIndustrial
Systems

Information
Systems

Fiscal 2007

21,932

14,623

2,318

38,873Fiscal 2008

24,353

10,0362,073

36,464

YoY change+2,421-4,587-245-2,409Fiscal 2007

19,781

15,901

2,447

38,130Fiscal 2008

19,122

12,3991,704

33,226

YoY change-659-3,502-743-4,904

Fiscal 2007

544

798

49

1,391

Fiscal 2008

1,501

10(115)

1,396

YoY change+957-788-164+5Total

41. Overview of Financial Results for Year Ended May 2009
1-3. Key Factors Contributing to Changes in Consolidated Operating Income

FactorDetails

Transportation Business:
Industrial Systems:
Information Systems:

Down 200 million yen
Down 1000 million yen
Down 200 million yen

Improvements in grossprofitTransportation BusinessIn line with changes in accounting
standards

Up 800 million yen

Manufacturing efficiency,
otherTransportation Business
Improvements in manufacturing
efficiency
Industrial Systems
Reductions in personnel andoperating expenses

Drop in revenue

Up 400 million yen

Up 200 million yen
51. Overview of Financial Results for Year Ended May 20091-4. Consolidated Financial Position(Unit: Million yen)

May 31, May 31,YoY
2008
2009
change35,37132,780-2,591

Current assets

21,70520,205-1,500

Fixed assets

13,665

12,575-1,09021,641

20,316-1,325

5,505

6,361

+856

Net assets

13,72912,464-1,265Equity ratio

38.8%

38.0%

--

Net assets per share (yen)308.51

282.40-26.11

Total assets

Total liabilities
Of which, interest bearing
debt

Notes

Differences in
evaluation of othermarketable securities
 Acquisition of treasurystock6

2. Outlook for Financial Results for Year Ending May 2010
2-1. Consolidated Forecast(Unit: Million yen)

Fiscal
2008

Fiscal2009

YoYchangeOrders received

36,46440,000+3,536

Net sales

33,22635,000+1,774

Operating income

1,396

1,300-96%

4.2%

3.7%

Ordinary income

1,267

1,200%

3.8%

3.1%

Net income

103

600%

0.3%

1.7%

Net income per share(yen)

2.32

13.59

Notes
 Increase in theTransportation Business Increase in theTransportation Business

-67

+497

+11.27

7

2. Outlook for Financial Results for Year Ending May 2010
2-2. Ordered Received, Sales, and Operating Income by Business Segment(Unit: Million yen)Transportation
Business

Orders received

Sales

OperatingincomeIndustrial
Systems

Information
SystemsNewBusinessTotal

Fiscal 2008

24,353

10,0362,073--

36,464

Fiscal 2009

26,70011,0002,000

300

40,000YoY change+2,347+964-73--+3,536

Fiscal 2008

19,122

12,3991,704--

33,226

Fiscal 2009

22,50010,0002,200

300

35,000YoY change+3,378-2,399+496--+1,774

Fiscal 2008

1,501

10-115--

1,396

Fiscal 2009

1,650(300)50(100)1,300

YoY change+149-310+165---9682. Outlook for Financial Results for Year Ending May 2010
2-3. Order Environment

Comments

Market overall(1) Triggered by the sub-prime loan crisis, fluctuations in the U.S.
economy contribute to the worldwide recession. Recovery not
anticipated until the beginning of 2010
(2) Pickup in global rail infrastructure investment

Transportation
Business(1) Firm domestic market(2) Robust overseas demand for high-speed railway systems as well asurban transportation networks

IndustrialSystems

Information
Systems(1) Recovery in capital investment from 2010(2) Structural decline in social infrastructure demand(1) Little or no change in market scale for IC card-compatible equipment
relating to railway station operations

92. Outlook for Financial Results for Year Ending May 2010
2-4. Key Factors Contributing to Changes in Consolidated Operating Income

FactorDetails

Increase/Drop inrevenue

Transportation Business:
Industrial Systems:

Fixed Expenses

Transportation Business:
Increase in personnel andoperating expenses
Industrial Systems:
Decrease in personnel andoperating expenses

Transportation Business:
Manufacturing efficiency,
Industrial Systems:
otherConsolidated subsidiaries

Up 600 million yen
Down 700 million yen

Down 600 million yen

Up 500 million yen
Up 200 million yen
Down 100 million yen

102. Outlook for Financial Results for Year Ending May 2010
2-5. Dividends(1) Toyo Denki’s fundamental policy calls for a stable dividend(2) In addition to strategic allocation to research anddevelopment, capital expenditure, and overseas expansion
with the objectives of future business expansion andstrengthening of the management base, internal reserves areused to strengthen the company's financial position(Unit: Yen)

Fiscal2005
Annual dividend per share

5.00

Fiscal
2006

6.00

Fiscal2007

6.00

Fiscal2008

6.00

Fiscal2009

6.00(Forecast)

Note: Toyo Denki holds approximately 5.2% of its common stock issued and outstanding.

113. Outlook on an Individual Business Segment Basis
3-1. Transportation Business Division(Unit: Million yen)

(1) Consolidated financial results
for fiscal 2008
Fiscal
2007

Fiscal2008(2) Forecast for consolidated
financial results for fiscal 2009
YoYchange

Fiscal 2009

YoY change

Ordersreceived

21,932

24,353+2,421

Ordersreceived

26,700+2,347

Net sales

19,781

19,122△659

Net sales

22,500+3,378+957

Operatingincome1,650+149%

7.3%

Operatingincome

544

1,501%

2.8%

7.8%

Comments
 Orders received:
 Net sales:

Increase in domestic orders received
Overseas orders received showing
current signs of having settled down
 Operating income: Steps to address changes inaccounting standards Improvement
in manufacturing efficiency

Comments
 Orders received:
 Net sales: Operating income:Substantial increase inoverseas orders received
Increase in overseas sales
Improvement in manufacturing
efficiency
Improvement in overseas
subsidiary profitability

12

3. Outlook on an Individual Business Segment Basis3-1.Transportation Business Division — Topics —(1) Received order for electrical equipment for JR East E5 Series Shinkansen (bullet train) cars
• In preparation for the opening of Tohoku Shinkansen Shin-Aomori
Station, JR East is working to complete a next-generation Shinkansen
car capable of speeds up to 320 kilometers per hour
• Received orders for traction motors, drive gear units, auxiliary power
supply apparatus, pantographs, etc.

Shin-Aomori -Hachinohe
Scheduled for completionthe end of fiscal 2010
The Tohoku
Shinkansen
connection Moriokawith Shin-Aomori13

3. Outlook on an Individual Business Segment Basis
3-1.Transportation Business Division ― Topics ―China Power Investment
Corporation Railway (lineconnecting Daban withJingzhou under construction)(2) Received large-volume order for drivegear units for a high-speed rail service
connecting Wuhan and Guangzhou

HarbinBaiyinhua• Received orders from CSR Sifang
Locomotive and Rolling Stock Co., Ltd.
(Qingdao City), manufacturer of rail cars
under the supervision of the China RailMinistry• Manufacture of 720 sets of drive gear unitsfor 30 trains (each train consisting of eightcars) capable of speeds up to 350kilometers per hour for the approximate
1,000 kilometer route linking Guangzhou
and Wuhan

Daban
Jingzhou

Shenyang

Beijing
Shenmubei

Shenhua GroupRailwayLanzhou

XianHuanhua
Taiyuan Shijiazhuang
Jinan

Qingdao

XuzhouZhengzhou

NanjingShanghaiChengduHangzhou
Wuhan

NingboChongqing
Nanchang• Progressive delivery from summer 2009
through to railway line opening in 2010

ChangshaFuzhouKunmingGuiyang

Guangzhou

Shenzhen143. Outlook on an Individual Business Segment Basis
3-1.Transportation Business Division ― Topics ―(3) Electrical equipment for the Chengdu Subway Line 1• Progressive delivery through to line opening inautumn 2010
• Products for delivery
Electrical equipment for rail cars (speed controlunits, traction motors, drive gear units, lowpressure power supply apparatus,transmission equipment)
Braking systems fro rail cars

Honghuanyan
North Railway Station(Huochebeizhan)
Renmin North Road
(Renminbeilu)
Wenwu Road
Luomashi
Tianfu Square(Tianfuguangchang)
Jinjiang Bingguan
Xiaotianzhu
Provincial Stadium(Shengtiyuguan)
Nijiaqiao
Tongzilin
South Railway Station(Huoche'nanzhan)
Sourhern Third Ring
Road (Nansanhuan)
Xinyizhou
Fuhuayuan

Chengdu Metro Line 115

3. Outlook on an Individual Business Segment Basis
3-2. Industry Business Division(Unit: Million yen)

(1) Consolidated financial results
for fiscal 2008
Fiscal
2007

Fiscal2008(2) Forecast for consolidated
financial results for fiscal 2009
YoYchange

Fiscal 2009

YoY change

Ordersreceived

14,623

10,036-4,587

Ordersreceived

11,000+964

Net sales

15,901

12,399-3,502

Net sales

10,000-2,399

Operatingincome798

10-788Operatingincome

(300)

-310%

5.0%

0.1%

Comments Orders received: Sharp decline from the second half Net sales:
Decline from the second half Operating income: Positive earnings despite thedecline in sales
Reduction in personnel andoperating costs%--Comments
 Orders received:

Recovery from the beginning of2010
 Net sales:
Difficult conditions in the first half Operating income: Forecast loss due to lower sales
Breakeven point 11 billion yen16

3. Outlook on an Individual Business Segment Basis
3-3. IT Business Division(Unit: Million yen)

(1) Consolidated financial results
for fiscal 2008
Fiscal2007

Fiscal2008(2) Forecast for consolidated
financial results for fiscal 2009
YoYchange

Fiscal 2009

YoY change

Ordersreceived

2,318

2,073-245

Ordersreceived

2,000-73

Net sales

2,447

1,704-743

Net sales

2,200+496

Operatingincome

49(115)-164

Operatingincome

50+165

%

2.0%

--%

2.3%

Comments

Comments

 Orders received:

 Orders received:

Settled conditions for IC
compatible equipment
 Net sales:
As above Operating income: Loss attributable to lower sales

Increase in sales of remotemonitoring systems
 Net sales:
Increase in remote monitoringsystems
 Operating income: Positive earnings on the back ofincreased sales173. Outlook on an Individual Business Segment Basis
3-3. IT Business Division — Topics — Sales of the Toyo Wireless Measurement System, a radio facility data collection
system commenced in July 2009
• Easy installation with batteryless and wireless design• Possible application in measuring energy-saving effects in thefacilities and equipment monitoring fields

Wireless
Current sensor

Power sensor
Receiver unit

PC

Analog sensor

18

3. Outlook on an Individual Business Segment Basis
3-4. Business Development Division (New Business)
 Business Development Division established to pursue the commercialization ofEV systems from June 200919

4. A New R&D Facility and CSR(1) A new R&D and design facility under construction at the Company’s Yokohama
Works (construction completion scheduled for December 2009); Solar and wind
power generation facilities to be installed
Wind-power generation(Proprietary R&D products)

Solar panels

Toyo Denki’s
Yokohama Works(2)

Change in plant layout; steps toaccommodate increased production
Image of thecompleted facility

20

The New Medium-Term
Management Plan
The “Challenge Up Plan”
Fiscal 2009 to Fiscal 2011

Key Policies of the “Challenge Up Plan”(1) Further increase Group corporate value(2) Fortify the Group’s efforts toward overseas expansion(3) Generate new businesses(4) Develop new products(5) Bolster CSR activities(6) Establish and promote a dynamic corporate culture22

「Numerical Targets under the “Challenge Up Plan”(Unit: Million yen)

Fiscal 2008
ActualFiscal 2011
Targets

Net sales

33,22642,000Operatingincome

1,396

3,000

(%)

4.2%

7.2%

Ordinary
income

1,267

2,800

Net income

103

1,500
23

Reference: Change in Consolidated Net sales and Operating income, and Forecast(Unit: Billionyen)5045

Net sales (Scale: left)
Operating income (Scale: right)

40
34.7

3530

28.7

2915

42
36.5

38.1
33.2

32.4

35
10

30.2

25
20
515
2.53

105

1.85

3

2.59

1.77

1.92

1.4

1.4

1.3

0.37
00
2002/05 03/05 04/05 05/05 06/05 07/05 08/05 09/05 10/05(Project 0)

Grow Up 123

Innovation 90

~

12/05

Challenge Up Plan24

Reference: Performance Trends in the Transportation Business Division

15.0

30
25

Net sales (Scale: left)
Operating income (Scale: right)

19.8
16.3

14.9

1025

18.7

20
15(Unit: Billionyen)

19.1

22.5

17.2

14.8

5

10
2.2
5

1.65

1.6

1.6

1.3
1.0

0.5

0.5

00
2003/05 04/05(Project 0)

05/05

06/05

Grow Up 123

07/05

08/05

09/05

Innovation 90

10/05

~

12/05

Challenge Up Plan
25

Reference: Performance Trends in the Industry Business Division(Unit: Billionyen)

20
18

Net sales (Scale: left)
Operating income (Scale: right)

9
15.9

15.7

16
148

14.5

14.1
12.8

10

13.5

13

12.4

7
6

12
10
10

5

8

4

6

34

2

2

0.5

0.7

1.1

0.8

1.0

0.8

0.5
0.0

-3.0

09/05

10/05

0
2003/05 04/05(Project 0)

05/05

06/05

Grow Up 123

07/05

08/05

Innovation 90

10~

12/05

Challenge Up Plan26

Reference: Performance Trends in the IT Business Division

43.5

Net sales (Scale: left)
Operating income (Scale: right)(Unit: Billionyen)

3.7

4

3
3

32
1.5
10.5に含む
Transportation Business Division

2.5

2.6

2.5

2.2
2

1.7

1.6

1
0.4
0.1

0.1

0
2003/05 04/05(Project 0)

2.4

05/05

0.2

0.1
-1.006/05

Grow Up 123

07/05

08/05

Innovation 90

0.1
-1.2
09/05

10/05

0~

12/05

Challenge Up Plan27

Reference: Trends in Overseas Sales(Unit: Billion yen, %)15.0
Overseas sales

30.0①海外売上比率は上昇したが、15%の回復をFiscal 2009の目標とする。
Overseas sales as proportion of12.0②中国・米国の都市交通、アジアにおける発電分野に今後も積極的に参入。
consolidated sales

30.0
25.0

(Unit: Millionyen)

10.0

20.0

18.0
15.4

15.5

13.3

12.3
5.0

5.4

5.0

11.3

6.3

15.0

5.1
4.2

4.1

3.7

12.7

10.0
5.0
0.0

0.0
2004/05

06/05

Grow Up 123

08/05
Innovation 90

10/05

~

12/05

Challenge Up Plan28

Reference: Changes in Consolidated Capital Expenditure and Depreciation Expenses(Unit: Millionyen)

1,800
1,600

Capital expenditure
Depreciation expenses

1,600

1,400
1,050
958

1,000
800

1,000

819
730

666
562

600
400

1,200
1,100

1,173

1,200

374334

507
371

406

2000
2004/05
Grow Up 123

06/05

08/05
Innovation 90

10/05~12/05

Challenge Up Plan
29

Reference: Changes in Consolidated Research and Development Expenses(Unit: Millionyen)

1,400

1,200

1,200
1,000
811
800

675

807

826

850

665

600
425
400
2000
2004/05
Grow Up 123

06/05

08/05
Innovation 90

10/05

~

12/05

Challenge Up Plan
30

Reference: Changes in Consolidated Personnel Expenses and Number of Employees(Unit: Million yen)

(Unit: Persons)

1,200

16,0001,150

Employees (End of year)

14,00012,00010,0001,071

1,064(Note)

1,081 1,087

1,097

1,150

1,110

1,100

1,023
8,800

9,200

9,500

9,600

9,700

9,800

9,400 9,500

1,050
1,000

8,000

950

6,000

900
850

4,000
800

Personnel expenses

2,000

750

0700
2004/05
Grow Up 123

06/05

08/05
Innovation 90

10/05~12/05

Challenge Up Plan
Note: Including approximately 50 contract employees

31

Business Alliance with Fuji Electric Systems Co., Ltd.

Business alliance with Fuji Electric Systems Co., Ltd. encompassing
electrical equipment and components for rail cars
• Potential to supply a comprehensive lineup of electrical equipment andcomponents for rail cars including alternating devices• Potential to supply a full range of electrical equipment and component
systems for rail cars to such overseas markets as the United States, China,
India and Russia
Areas of collaboration
1. Procurement
2. Joint research and development
3. Complementary products
4. Engineering services
5. Service collaboration

32