Summary of Q&A, Conference call for FYE 2024 Financial Results

Q1. It has been stated that about 1 trillion yen will be secured in the next three years through capital
generation, including a considerable reduction in policy-held shares. Could you specify whichshares are anticipated to be sold? Will this include the so-called policy-held shares and, specifically,shares of Toyota Motor Corporation?
A1. We will continue to advance the examination of specific divestment targets while maintaining
careful communication with the counterparties. No particular company is excluded fromconsideration. The decision on the scale will take into account our own funding needs, among otherfactors.
Q2. It's mentioned that shareholder returns will be advanced by approximately 700 billion yen overthe next three years. What kind of return methods are assumed?
A2. For dividends, we are assuming a consolidated dividend payout ratio of about 30–35%. As forother methods, nothing is decided at the current moment. We will consider the most appropriate
method at each point in time.
Q3. On May 10, the share buyback was announced with an upper limit of 10 million shares and avalue of 180 billion yen. Can you explain the reason behind the timing and the scale of thisannouncement?
A3. After careful consideration of various factors, including the situation with the engine certification
issue, we decided as we disclosed.
Q4. The cumulative investment for growth and infrastructure over three fiscal years from 2025 to2027 is expected to be around 1.5 trillion yen, which approximates to an average of 500 billion yen
per year. What does this investment include, and can you provide an idea of the proportion bybusiness segment?
A4. We are not thinking in annual terms, but rather in the context of an overall three-year period.
This will include capital investments, mergers and acquisitions, and others. In terms of theproportion by business segment, we believe that the solution related business, including material
handling equipment and logistics among others, will have a larger share as we leverage ourstrengths.
Q5. How is the discussion being approached concerning the difficulty in exceeding shareholder
required returns due to holding many marketable securities?
A5. Reducing shareholder equity alone is not meaningful without simultaneously increasing profitsand contributing to corporate growth. Our discussions include how to balance these aspects.
Q6. As for the future management perspective, what is the background for setting the ROE target
at 6%?
A6. The 6% ROE is just a perspective. Our previous 2030 vision was based on an ROE target
calculated on the basis of acquisition cost, but this time we reviewed the figures in a more realisticmanner. We aim to achieve this target through both further profit generation from business growthand efficient capital utilization.
Q7. Could you tell us about the breakdown by business division for the operating profit target ofover 300 billion yen for FYE2027-28?
A7. We are mainly expecting contributions from the solutions-related business. Additionally, weintend to expand such businesses including electric compressors and car electronics parts.
Regarding the battery business, we have just completed the startup of the third production line,
and we plan to further improve profitability going forward.

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Q8. Regarding the battery business, could you provide us with the sales and earnings forecasts for
FYE2024 and FYE2025? Also, with respect to the operating profit target of 300 billion yen, whatlevel of contribution do you expect from the battery business? I believe the development of lithiumion batteries and solid-state batteries is proceeding beyond the mass-produced bipolar nickel-metal
hydride batteries for HEVs; could you elaborate on the investment plans as well?
A8. As for increasing the production capacity of bipolar nickel-metal hydride batteries, there are no
fixed plans at the current time beyond the third production line that started mass production in
January 2024. Regarding lithium-ion and solid-state batteries, research and development are
ongoing, but there are no fixed plans currently for significant investments. For example, the"hydrogen production key device through water electrolysis" presented in the materials is seen as
a potential new business opportunity as we move from our knowledge and insights of materials
cultivated through bipolar nickel-metal hydride batteries. We also hold expectations for the battery
business to not only contribute to profits but to venture into new materials. We are progressing withR&D for lithium-ion and all-solid-state batteries, however, we currently do not have any fixed plans
for substantial investment.
Q9. I understand that logistics solutions will be one of the pillars of the company's future growth.
While I believe the strength lies in manufacturing, in the logistics solutions business, I think
integration of data and digital transformation (DX) will be important. Could you tell us about Toyota
Industries’ strengths as a software provider?
A9. Each company we have acquired has its own strengths. For instance, Vanderlande hasdeveloped software to manage multiple autonomous lift trucks, Bastian and viastore have knowhow in warehouse management, and our domestic logistics solutions have expertise in software
for automating the operation of forklifts and tow tractors. We are moving forward with a businessmodel that brings together engineers from each company to use each other's software interactively,
combining multiple types of software to create complex systems.
Because logistics solution customers span all industries and sizes, we act as an integrator providing
systems and functions tailored to each customer by gathering software and hardware. Sometimes
there is lack of systems and functions at hand, and we consider whether to purchase missing
portions externally or produce them in-house to determine the optimal form. We believe that thisbusiness model is where our strength lies.
Q10. Could you explain the intention behind Mr. Terashi becoming the chairman after theshareholders' meeting?
A10. Mr. Terashi has a wealth of technical knowledge, connections, and experience, and has tenureas Executive Vice President at Toyota Motor Corporation. We expect his insights into the future ofautomobiles and mobility for our automobile-related businesses and the electrification of material
handling equipment.
Q11. Regarding the engine certification issue, are there concerns about additional special losses?
Is it correct to understand that today's explanation marks a conclusion on the matter for now?
A11. The investigations in Europe and America are still ongoing, and there are uncertainties, but
the figures we have disclosed represent all that is known at this point.
Q12. This fiscal year's performance forecast seems flat compared to past conservative tendencies,
which could suggest potential swings in either direction. Could you comment on the confidence
level of these projections?
A12. While the unit sales of material handling equipment is decreasing, the effect of price increases
is continuing, and we anticipate almost flat sales. For the compressor business, we expect anincrease in electric types, and increase in North America by region. Overall, we feel it will be settled
on the figures that have been published. We have received feedback that our forecast has been
too conservative in the past, so going forward, we intend to further increase understanding on
Toyota Industries by further enhancing dialogues with investors.
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