Business Report

BUSINESS

Transportation Systems Segment

Support railway transportation that connects people and cities withsafety and trust, through manufacturing that merges electronics
technologies and mechanical technologies in a highly advanced mannerBusiness Overview

Percentage of
total net sales

Electrical equipment for rail vehicles manufactured by the Company using its technological capability developed over about a century covers a wide range of fields, including propulsion systems (drive systems),
auxiliary power supply and door-closing units of trains, and we contribute to the maintenance and development of railway infrastructure overseas, not to mention in Japan, by pursuing safety and comfort oftrains.

(Down 0.9% year on year)

Segment Income

2,578 million yen(Down 16.2% year on year)

TOPICSFY 2015 2016

2017

2,578

2017

3,079

2,964

27,94927,949 million yen

28,199Net Sales

Segment Income (Unit: Million yen)

26,757(Down 11.9% year on year)

Net Sales (Unit: Million yen)

25,86625,866 million yen

Orders received decreased 11.9% compared with the previous fiscal year to25,866 million yen, due to a decrease inJapan despite an increase overseas(China).

29,366

Orders Received

27,092

Orders Received (Unit: Million yen)

Results for fiscal 2017

65.7%

Net sales totaled 27,949 million yen,largely unchanged from the previous fiscal year, due to a decrease overseas(China) despite an increase in Japan.
Segment income decreased 16.2%
compared with the previous fiscal year to2,578 million yen, due to the increase incosts of some overseas projects.

FY 2015 2016

FY 2015 2016

2017

Establishment of a new Group company “Chengdu Yonggui Toyo Rolling Stock Equipment Co., Ltd.” in China—20 years since launching business in China, we are starting a pantograph business“Yonggui Toyo,” the new company established in Chengdu, Sichuan Province in August 2017, finally began
its operations. Yonggui Toyo mainly assembles and tests pantographs for urban transit railway vehicles,
and will deliver to operators such as the Chengdu Metro. As the population of Chengdu is larger than thatof Tokyo and more metro lines will be constructed going forward, business growth is expected.
To further strengthen our business in Chengdu, we made additional investments in Taiping Zhanyun,which previously was engaged mainly in the business of door engines, changed the company name to“Yangdian Zhanyun” and its structure to one that takes on the process of pantograph production. Throughsuch efforts, we have set up the structure of assembly by Yonggui Toyo and components processing by
Training for pantograph assembly at Jingche Shuangyang
Yangdian Zhanyun for our pantograph business in Chengdu.
Furthermore, Jingche Shuangyang acquired a new operating license,
Toyo Denki (Beijing) Co., Ltd.
adding “product assembly” to the management scope on top of the mainteBeijing Jingche Shuangyang Traction System Co., Ltd.
nance operations conducted to date. At the end of 2017, technicians were
Changzhou Ruiyang Transmission
Beijing
Technology Co., Ltd.
dispatched from the Yokohama Plant to the local site and conducted training
Chengdu Yonggui
Changzhou Yangdian Zhanyun
for pantograph assembly there.
Toyo Rolling Stock
Transport Equipment Co., Ltd.
Equipment Co., Ltd.
As seen from the above, we are strengthening the cooperation between
Changzhou
ChengduGroup companies, and further expanding the business for urban transit railHunan Xiangyang Electric Co., Ltd.
Changshaway vehicles in China.

Toyo Denki Seizo Report 20188Business Report

BUSINESS

Industrial Systems Segment

Business Overview

2017

FY 2015 20162017

Net Sales

2,801 million yen(Up 101.8% year on year)

Segment Income

314 million yen(Up 3.1% year on year)

TOPICSNet sales increased 101.8% year on year
to 2,801 million yen for a reason similar
to that for increased orders received.
Segment income increased 3.1% compared with the previous fiscal year to314 million yen, owing to an increase in
net sales, despite the effects of someprojects where orders were received
strategically.

314

FY 2015 2016

304

2017

FY 2015 2016

2017

95

FY 2015 2016

(Up 35.1% year on year)

Orders received increased 35.1% compared with the previous fiscal year to2,416 million yen, due to the receipt of alarge-scale order for railway station operating equipment.

Segment Income (Unit: Million yen)

2,801

747

1,019

11,76912,0272,416 million yen

6.6%

1,388

(Down 63.0% year on year)

Orders Received

Percentage of
total net sales

Net Sales (Unit: Million yen)954

276 million yen

Segment income totaled 276 million yen, a63.0% decrease compared with the previous
fiscal year, due to the effects of a lower operating rate in line with the transfer to a newfactory, and the greater weight of projects
where the development element is large, suchas testing equipment for automobile development.

Orders Received (Unit: Million yen)

Results for fiscal 2017

2,416

Segment Income

In the Information Equipment Systems segment, we operate in the two fields of railway station operating
equipment and remote monitoring systems, by merging advanced telecommunication technologies andmechatronics.
With regard to railway station operating equipment systems, we develop and manufacture commuter
pass issuing machines that quickly became IC card compliant and portable terminal devices for conductors,and provide systems for smooth toll collection and income management system to railway operators.
Our remote monitoring systems greatly contribute to labor saving and maintenance saving of customers through realization of various equipment monitoring and position monitoring, by leveraging cloudcomputing.

1,788(Up 6.3% year on year)

Segment Income (Unit: Million yen)276

11,769 million yen

Net sales increased 6.3% year on year to
11,769 million yen, due to increased orders
for power sources and electrical equipment
such as processing equipment and printingmachines.

Business Overview

27.7%

Net Sales (Unit: Million yen)

11,073

Net Sales

11,309(Down 7.2% year on year)

12,194

11,309 million yen

Orders received decreased 7.2% comparedwith the previous fiscal year to 11,309 million
yen, due to decreased orders for testing equipment and power sources, despite increasedorders for electrical equipment such as processing equipment and printing machines.

11,421

Orders Received (Unit: Million yen)

Percentage oftotal net sales

Provision of products that make the execution of operations
on station premises and trains smooth and convenient andM2M solutions based on mobile phone networks and cloudservers using remote monitoring system

1,369

The Company is extensively contributing to customers at home and abroad through general industrial
machinery and equipment, testing equipment for automobile development and social infrastructure
equipment that is indispensable to the daily lives of people. In addition, we address manufacturing that
contributes to the prevention of global warming, while providing products manufactured through highsystem-building technologies that make full use of energy-saving motors, inverters, FA controllers andnetworks.

Orders Received

BUSINESS

Information Equipment Systems Segment

Deliver technologies and gratitude to customers with highly
precise, highly responding and highly efficient powerelectronics, for realization of an environment-friendly society

Results for fiscal 2017

Business Report

FY 2015 20162017

FY 2015 20162017

New products being developed at the Shiga Ryuo Plant
We are developing new products at the new factory that began operations in June 2018.

9Flat-type Dynamo

20,000 rpm Dynamo

By evolving the dynamo into a flat-type model that is the same size as an actual tire, it
can now fit inside the wheel well of the vehicle body. As a result, the possibilities of its
applications are expanding, including in development test for autonomous cars where
many sensors are used.

The super-high-speed large-capacity dynamo, which
has a rotary part that performs 20,000 rotations per
minute, is applicable for development tests of electricvehicles.

TOPICS

Delivery of in-car supplementary ticket issuing machine for WEST JAPAN RAILWAY COMPANY

The Company delivered a total of some 2,700 in-car supplemental ticket issuing machines to West Japan Railway Techsia Co., Ltd. for use on the Shinkansen lines and existing railway lines of WEST JAPAN RAILWAY COMPANY. Compared with conventional machines, it can not
only read but also write on transportation IC cards, it accepts payments by IC cards and credit
cards (magnetic stripe) in addition to cash, and English can be printed on tickets for the convenience of foreign visitors.
The machine conforms to the security authorization standards of the Congress of Japan Railway Cybernetics.
We will continue to develop and provide easier-to-use railway station operating equipment.

Toyo Denki Seizo Report 201810Business Report

BUSINESS

Expansion of New Businesses

The Company received an order from East Japan Railway Company to conduct operations related to equipment manufacturing and thepreparation of test reports for verification tests of a superconducting flywheel power storage system for railways.
Based on the “Basic Agreement on Technology Development of Superconducting Flywheel Power Storage System for Railways” concluded on March 29, 2018 between Yamanashi Prefecture, the Railway Technical Research Institute, and East Japan Railway Company,
this system is being developed for the world’s first practical use in the railway field. The Company will conduct the design and manufacturing of the power conversion equipment, and will be responsible for the overall coordination of this power storage system’s construction, incooperation with MIRAPRO Co., Ltd. (Hokuto, Yamanashi Prefecture; President & CEO: Hiroyuki Tsugane).
Through this business, the Company will work on the construction of a new power storage system that contributes to the improvementof energy efficiency, the stable usage of renewable energy and technology development in the railway field.

The flywheel power storage system is a systemthat, by rotating a large disk (flywheel) within thedevice, stores regenerative electric power as kinet-

When charging
Regenerative electric power of the train
is absorbed, and flywheel accelerates
When discharging
Power is supplied to the train,
and flywheel decelerates

ic energy (charging), and converts kinetic energy

Rotational speedof flywheel

Storage System for Railways

Charging

Discharging

Time

Superconducting Flywheel Power Storage Systemback to electric power (discharging) as necessary.
The bearing portion of the superconducting fly-Generator motor

wheel power storage system adopts the superconductivity technology designed by the Railway

Discharging

Charging

rayama, Yamanashi Prefecture. The technology al-Flywheel
Superconducting
magnetic bearing

Power conversion
equipment

Technical Research Institute, and establishedthrough verification tests conducted in Komeku-

Strong magnetic
repulsive force realized
by the superconducting
magnetic bearing
allows the flywheel tofloat

lows the flywheel to float, reducing rotational loss
as there is no contact, and realizes a reduction inmaintenance efforts.

Overhead wires

When braking

When accelerating

When the train decelerates:Regenerative electric power is generated

When the train accelerates:
Train consumes electric power

 nnouncement of new product IORemoterLTE: IoT terminal for Toyo IoT/M2MAsolutions/remote monitoring and control systems
The Company has announced IORemoterLTE, a new product that is an IoT terminal for remote monitoring
and control systems, for Toyo IoT/M2M solutions.
The IORemoterLTE is a high-speed IoT terminal integrated in the LTE module. Through the use of theToyo IoT/M2M solutions cloud service, the remote monitoring and control of various facilities, controllers,devices, and mobile entities can be conducted faster and at a larger capacity.

11BUSINESS

Research and Development/Intellectual Property

Order received for consigned research and development ofsuperconducting flywheel power storage system for railways

Superconducting Flywheel PowerBusiness Report

R&D to support the development of social
infrastructure and supporting frameworks
Research and Development
The Group’s R&D activities are based on seeking to create products that fully satisfy our customers and challenging the creation and expansion of these products, and we actively promote development of technologies of our existing businesses and basic technology developments that support this development as well as development of new products that expand our businesses.
Results and topics from fiscal 2017

Segment

Project
Development of electric doorclosing unit

Transportation
Systems
Right-angle cardan electricalequipment for super low floor
type trains
Development of 20,000 rpm
and 350 Nm high-speed motor
Industrial
for automobile testing facilities
Systems
Development of inverter compliant
with 690 V power sources
Information
Development of IC-exclusive
Equipment
ticket issuing machine
Systems
Function expansion of remotemonitoring unit
Expansionof New
Reduction in size and weight
Businesses from structural improvements
in water-cooled inverter unit

ResearchLaboratory

Description
Developed electric door-closing units that can be installed in existing spaces (the Company’s air-operated
door-closing units of type Y2, Y4, etc.), utilizing our many years of experience in the design and manufacturing of air-operated door-closing units.
Developed a self-ventilating main motor with the aim of reducing size and weight, as well as a drive unit withthe aim of reducing noise and the burden of maintenance.
Developed a motor with a highest rotational speed of 20,000 rpm and a rated torque of 350 Nm, for use intesting facilities to test on-board motors for driving used in electric cars, hybrid cars, etc.
Developed a 500 kW-class inverter unit compliant with 690 V power sources, for use at large-scale facilities
overseas.
Developing a ticket issuing machine that is IC-exclusive, as more operators choose not to use magnetic tickets and operate only with transportation IC cards.
Added the new functions of Wi-Fi compatibility, routing function within a FOMA-Ethernet, LTE compatibility, andthe remote maintenance function to the IORemoter, an existing product, and launched it as IORemoterLTE.
To achieve further reductions in size and weight in the water-cooled inverter unit for on-board use, a main
circuit structure that applies double-side cooling elements was designed, and it was confirmed that a 70%
size reduction compared with conventional models is possible. Going forward, verification will be conducted
through prototype manufacturing, and its application in small and light products will be promoted.

Development of main motor
insulation system for overseas
markets

Developed a motor insulation system that enables a reduction in man hours and the application of lowpriced materials, with the purpose of reducing costs of main motors for rail vehicles overseas.

Improvement in strength ofvehicle cogwheels

Shot peening treatment for vehicle cogwheels is being considered, with the aim of increasing the strength,
improving the reliability, extending the lifetime, and reducing the weight of vehicle cogwheels. It is confirmedthat shot peening treatment increases strength, and final endurance tests are being conducted using testing
equipment that simulates actual vehicle cogwheels in action with this treatment applied.
Patent applications grantedIntellectual Property
Our intellectual property is placed as a key corporate resource.
Our intellectual property department is responsible for the management of intellectual property and our research laboratory andthe development divisions in each business unit actively apply forpatents and utility models.
In the overseas markets which we expect to further expand ourbusinesses, we have started to actively engage in activities concerning our intellectual property in order to protect our technologies and brand.

Patent applications:
Granted cases:(Applications)8060540

22035
33

62

1030
3002014057
16 0162015

465 27141420160Overseas
Overseas

664545JapanJapan51
33

1472624201720189Toyo Denki Seizo Report 201812