Consolidated Financial
Highlights

Top Interview

Top Interview

New Medium-Term Management Plan
“Next 100 : Beyond 100 years” launched.
Building foundation for the next 100 years.

Q“DASH 2015,” we have formulated a new medium-term management
plan “Next 100 : Beyond 100 years” placing the fiscal year ending May

Consolidated Financial Statements

Corporate Data /Stock Information

inverters, in order to capture rising demand for energy saving at

to the hike of consumption tax and such.

manufacturing sites centering in Southeast Asian market. As part of suchactivities, we are working to open a representative office in Bangkok, Thailand,

Please tell us about the conditions in overseas
businesses.

We are proactively working to win railroad contracts
mainly in China and the U.S. In the Industrial Systems
segment, we are working on opening our base in Thailand.

A

Due to the expansion of overseas railroad contracts in the Transportationand is planned to start operation in September 2014.
Overseas business expansion is the main theme of the new medium-term
management plan to be discussed later, and we will strive to put ourcompany-wide efforts into it.

Q

Please tell us about the development of theautomotive electric equipment business.

ASystems segment, the overseas net sales ratio in fiscal 2013 rose to 27.3%.

In terms of overall conditions, net sales achieved the level close to the initial

equipment for increased rail vehicles on Beijing Subway Line 10 and Chengdu

forecast as the growth in the Transportation Systems segment made up forMetro. Furthermore, additional orders for LRV in Los Angeles were settled with

In an aim to jointly develop and provide motors and invertors for industrial

the decreased revenue in the Industrial Systems segment. However, the profit

the option contract. In addition, we are promoting activities to win an option

machineries and electric traction systems, we have entered into a businesscame under the plan due to factors such as development and design costs

contract for automated people mover (APM) in Macau and to receive orders

and capital alliances with TOYOTA INDUSTRIES CORPORATION in February,

being recorded in advance for increased number of new contracts in thefor electrical equipment for LRV in Dallas.

2011 and established a joint venture, ELETT CORPORATION.

Transportation Systems segment. Orders received reached a record-high level

After reviewing the current three-year medium-term management plan

Topicsthrough reprogramming of railway station operating equipment correspondingQ

Please tell us about the business conditions
and results of fiscal 2013.

Orders received were at a record high. Although bothrevenue and operating income increased, the profit
plan was not achieved.

President Kenzo Terashima (Second from the right)

Review of Segment
Operations

due to the strong Transportation Systems segment, and we are in a situation

Driving gear units for the Chinese high-speed railroads contributed to theexpansion of sales, and we have newly won the orders for electricalIn the Industrial Systems segment, we are implementing our businessdevelopment of factory system solutions, such as high-efficiency motors andWe dissolved the jointly established ELETT CORPORATION.
We will continue cooperation for electrification ofindustrial machines in a new form.

AFor three years since, ELETT CORPORATION has promoted businessactivities targeting at needs for hybridization and electrification in construction

where increase in revenue for this fiscal year (fiscal year ending May 31,

machinery field as an automotive electric equipment business. However,2015) can be expected.

despite future market growth is expected, the business is remaining at thestage of manufacturing prototypes before mass production.

The Transportation Systems segment largely increased both revenue andTherefore, the Company and TOYOTA INDUSTRIES have decided to dissolve

profits backed by the recovery in demand for rail vehicles in Japan and strong
demand for improvement of high-speed railroad networks and city transit

ELETT constructively as of the end of March 2014 to continue our cooperation

31, 2017 as its final year. President Kenzo Terashima hereby explains

networks mainly in China and the U.S. In the Industrial Systems segment,

for electrification of industrial machines in a new form. Both companies intend

mainly the contents of the plan and future development.

while the testing equipment for automobile development was strong, systems

to start projects such as a joint development aiming at improving

for production facilities including printing equipment and processing

electrification technologies and entry into industries and fields not restrictedequipment was weak and the sales decreased. However, increase of profitsby the conventional framework in the future.

August 2014
President

Kenzo Terashima

was achieved, due to the effects of improved profitability of factories. The

Inverter for LRV in Los Angeles

Information Equipment Systems segment expanded both sales and profits

12Top Interview

QTop Interview

Consolidated FinancialHighlights

Please tell us about the new medium-term
management plan.

With the final year of “DASH 2015” remaining, we
formulated and started the new “NEXT 100” to achieve
the net sales of 50.0 billion yen.

Aissues in business environment that occurred after the formulation of “DASH2015.”

Review of Segment
Operations

TopicsCorporate Data /Stock Information

As to the future prospect for the domestic market, we will strive to maintain

Philippines. One example is a power generation using biomass resources ofthe domestic net sales around 25.0 billion yen, based on assumption that thebiological origin as a fuel, such as strained lees of sugarcanes emitted fromIn “NEXT 100,” we plan to achieve consolidated net sales of 50.0 billion

demand for renewals of rail vehicles other than new Shinkansen projects willsugar mills, which makes the mills a recycling-oriented energy system whereyen and consolidated operating income of 3.0 billion yen (operating income

be the core in the Transportation Systems segment and that the transfer ofgenerated power and refined ethanol can be used within the sugar mills. We

ratio of 6%) through promotion of globalization and increase our overseas net

production to overseas are in progress in terms of the capital investment byplan to aim at sales of 3.0 to 4.0 billion yen in the three years of “NEXT 100”

sales ratio to 50% from 27.3% of results for the current fiscal year. We have

manufacturers in the Industrial Systems segment. Consequently, expansion ofthrough the sales expansion by collaborating with a local engineering

We started a three-year medium-term management plan, “DASH 2015,” inset six principal measures which include, (1) strengthening of internationaloverseas business in each segment is indispensable to achieve net sales ofcompany.

fiscal year ended May 2013 and worked on securing potential for growth withcompetitiveness, (2) building of stable business earnings structure, (3)50.0 billion yen; therefore we will implement measures such as strengthening

the overseas business expansion as its main axis. Although “DASH 2015” isrestructuring of production system, (4) promotion of development of

the production capacity, increasing the number of employees, developing

on a stage of the remaining final year after the end of fiscal 2013, we havetechnology, (5) establishing new businesses, and (6) training of humansuppliers, and improving quality and ability, to achieve such goal.

newly formulated a new medium-term management plan, “NEXT 100 :resources to support global development. We will build the base for “next”

Beyond 100 years” placing the fiscal year ending May 31, 2017 as its final

growth focusing on the year of our 100th anniversary of founding to come inoperations of the Japanese and the overseas rail vehicle manufacturers

year, after reviewing our strategies and goals based on the changes andfour years (2018) and beyond, through the implementation of these measures.

mainly from our business bases in China, the U.S., Southeast Asia, and India,

In the Transportation Systems segment, we plan to advance our global

while entering the local rail vehicle maintenance business. In terms of theThe new medium-term management plan and its fundamental policy

New medium-term management planNEXT 100 : Beyond 100 years

Numerical Targets for Management
Item

Net sales

Industrial Systems segment, we will develop factory systems for capturing theFiscal 2013
(Actual Results)

Fiscal 2016
(Forecast)

Increase/Decrease

34,950 million yen

50,000 million yen+15,040 million yen(June 2014 to May 2017)

Transportation
Systems Segment

22,200 million yen

31,000 million yen+8,800 million yen

The three years to strengthen our management foundation as the 50.0 billion
yen company based on “the 100th anniversary of founding and beyond.”

Industrial Systems
Segment

10,920 million yen

16,000 million yen+5,080 million yen

Information
Equipment
Systems Segment

1,830 million yen

3,000 million yen+1,170 million yen

1,070 million yen

3,000 million yen+1,920 million yen

3.1%

6.0%

+2.9%

Ordinary income

1,030 million yen

3,200 million yen+2,160 million yen

Net income

640 million yen

1,900 million yen+1,260 million yen

Overseas net sales

9,560 million yen

25,000 million yen+15,440 million yen

Overseas net sales ratio

27.3%

50.0%

+22.7%

2
Build a stable businessearnings structure
3Restructure
production system

3

Consolidated Financial Statements

1
Strengthen international
competitiveness

Fundamental Policy
4
Promote developmentof technology

6
Train human resources tosupport global development
5
Establish newbusinesses

Operating income
Operating income ratio

As another new business, we plan to enter the maintenance businessoverseas in the Transportation Systems segment.

QDo you have any comments you would like tomake to shareholders?

We aim to achieve our goals through steady and boldmeasures to leap toward the next 100 years.

demands for energy saving at manufacturing sites in Southeast Asia,

A

centering our representative office in Bangkok, Thailand mentioned earlier.

The aforementioned growth strategy for globalization through “NEXT 100” isWe expect further expansion of orders received in this fiscal year (fiscal

indispensable for us to leap toward the next 100 years as we celebrate ouryear ending May 31, 2015), which is the first year of “NEXT 100,” by

100th anniversary of its founding. The next three years are important period

achieving an increase in revenue and doubling operating income based on thefor building its foundation, and we are determined to achieve our goals

backlog of orders received in fiscal 2013.

through steady and bold measures.
We would like to ask for the continued support of our shareholders inQ

anticipation for our businesses to grow beyond the future.

Please tell us the details of “establish newbusinesses” in the principal measures of “NEXT 100.”

We launched the sale of biomass power generation
system and the electrification of production facility
equipment in Southeast Asia.

A

One is related to power generation business, mainly the biomass power
generation system to be developed in the Southeast Asian market such as the4

Review of Segment Operations

Consolidated Financial
Highlights

Review of Segment
Operations

Top Interview

TopicsConsolidated Financial Statements

Corporate Data /Stock Information

Transportation Systems Segment
Manufacturing, sales and related construction for electrical equipment for rail vehicles,
magnetic levitation vehicles (high speed surface transport or HSST) systems, light railvehicles (LRV), alternative rail vehicles and special purpose vehicles, as well as railway
power storage systems.

Percentage of
total net sales

63.5%

Orders
Received

29,790 million yen

Orders Received (Unit: Million yen)
29,790Net Sales

22,198 million yen

20,940(Up 42.3% year on year)(Up 28.1% year on year)

Segment
Income23,991
17,50622,198Segment Income (Unit: Million yen)
2,701

17,324

2,374
1,913

2,374 million yen(Up 24.1% year on year)
2012/5

Propulsion inverter

Net Sales (Unit: Million yen)

2013/5

2014/5

2012/5

2013/52014/5

2012/5

2013/5

2014/5

Driving gear unit

Orders received recorded an increase in Japan and saw a sharp
upturn outside Japan, including high-speed railroad and subway
contracts in China as well as LRV in the U.S. In overall terms, orders
received increased 42.3% compared with the previous fiscal year to29,790 million yen.
Net sales increased sharply as a result of a recovery in vehicle
demand in Japan, as well as increased momentum outside Japan,
and totaled 22,198 million yen representing 28.1% year-on-yearincrease.
Due mainly to increased revenue, segment income totaled 2,374
million yen representing 24.1% year-on-year increase.

Industrial Systems Segment
Manufacturing, sales and related construction services for motors, inverters, testing
equipment, water supply and sanitation equipment systems, power generating
equipment, alternative power generating systems and in-wheel motors.

Percentage of
total net sales

31.3%

Orders
Received
Net Sales

11,097 million yen(Down 3.1% year on year)

Orders Received (Unit: Million yen)

Net Sales (Unit: Million yen)

12,43912,265

10,924 million yen

11,457 11,097

536
11,542 10,924(Down 5.4% year on year)

Segment
Income433253

536 million yen(Up 23.8% year on year)
2012/5High-speed, low-inertia dynamos

Segment Income (Unit: Million yen)

2013/5

2014/5

2012/5

2013/5

2014/5

2012/5

2013/5

2014/5

Orders received decreased 3.1% compared with the previous fiscal
year to 11,097 million yen, due to rather weak orders received forinfrastructure system related despite strong testing equipment for
automobile development and capital investment related.
Net sales in this segment decreased 5.4% year on year to 10,924
million yen, mainly for the same reasons underlying the decrease inorders received.
Segment income increased 23.8% year on year to 536 million
yen, which was mainly attributable to improved profitability offactories.

Example of system configuration of testing
equipment for automobile development

Information Equipment Systems Segment
Manufacturing, sales and related construction services for commuter pass issuingmachines, onboard ticket vending machines, smart card vending machines, remotemonitoring systems and other systems and information systems equipment.

Percentage of
total net sales5.2%Orders
Received

1,673 million yen

Net Sales

1,828(Up 8.4% year on year)

Orders Received (Unit: Million yen)

1,701

million yen(Up 7.5% year on year)

Segment
Income5

Commuter pass issuing machine

Toyo Wireless Measurement System

Net Sales (Unit: Million yen)
2,303

2,714

1,544

1,828

Segment Income (Unit: Million yen)
666

1,673

348 million yen

265348(Up 31.3% year on year)
2012/5

2013/5

2014/5

2012/5

2013/5

2014/5

2012/5

2013/5

Orders received in this segment increased 8.4% compared with theprevious fiscal year to 1,673 million yen, due to an increase in bothrailway station operating equipment and remote monitoring systems.
Net sales in this segment increased 7.5% year on year to 1,828
million yen, due to reprogramming of railway station operating
equipment corresponding to the hike of consumption tax and such.
Segment income for this segment increased 31.3% year on year
to 348 million yen.

2014/56

TOPICS
FactoryTour

We held the factory tour for ourshareholders for the first time.

We invited our shareholders in April 2014 to hold a factory tour atYokohama Plant, the Company’s major production base.
Date
Place of Tour
Number ofparticipants
Schedule

Friday, April 11, 2014 1:30PM - 5:00PMYokohama Plant (Kanazawa-ku, Yokohama)(Factory building, Engineering Center, Technical Training
Center, etc.)
31 of our shareholders (120 applicants)(i) Meet at Keikyu Main Line Kanazawa-bunko Station(Travel by bus)(ii) Arrive at Yokohama Plant/ Greetings from thePresident, Company Presentation(iii) Factory and facilities tour. Questions and Answers.
(iv) (Travel by bus) to Keikyu Main Line Kanazawa-bunko
Station and dismiss.
Survey Results 93.5% of the shareholders responded “very satisfied” or“satisfied.”

Exhibition

We participated in the special
exhibition specific to M2M*
held at the Tokyo Big Sight.
*M2M is an abbreviation of “Machineto Machine,” the communication
between devices, which is thenetwork system where information
is exchanged automatically throughwireless communication technology
between one machine to another,
without involving humans.

Scene from tour of Factorybuilding (Site of pantographassembly)

7

Scene from tour of TechnicalTraining CenterOur Booth

Exhibition’s NameJapan IT Week Spring 2014 / The 3rd Wireless M2M
ExpoDates

Wednesday, May 14, 2014 to Friday, May 16, 2014Venue

Tokyo Big Sight (Tokyo International Exhibition Center)

Details of theRemote monitoring and control systems
Company’s Exhibit

Exhibition

Greetings from the President Terashima

The IT Business Unit exhibited at“Wireless M2M Expo.”

The Industry Business Unit
exhibited at “2014 AutomotiveEngineering Exposition.”

We participated in “2014
Automotive EngineeringExposition,” a special
exhibition for automotiveengineering, held at Pacifico
Yokohama.

Our BoothExhibition’s Name

2014 AUTOMOTIVE ENGINEERING EXPOSITION

Dates

Wednesday, May 21, 2014 to Friday, May 23, 2014

Venue

Pacifico Yokohama (National Convention Hall ofYokohama) Exhibition Hall

Details of theTesting system for automobiles
Company’s Exhibit