FY2012 2nd Quarter
Financial Results

October 31, 2011

Financial Summary

FY2012 2Q

Performance(Billion yen)

FY2011 2Q FY2012 2Q(6 months) (6 months)

ChangePreviousplan

Net sales

729.8

722.6

(7.2)

(1.0%)

710.0

Operatingincome36.2

29.2(7.0) (19.3%)

20.0

Ordinary
income

38.3

36.7

(1.6)

(4.2%)

26.0

Net income

23.6

25.9

2.3

9.5%

15.0

1 /33

FY2012 Forecast

Performance(Billion yen)

FY2011FY2012

Net sales

1,479.8

1,580.0 100.2

Operatingincome

68.7

75.0

6.3

Ordinary
income73.9

Net income

47.2

ChangePrevious
plan

6.8%

1,570.0

9.0%

70.0

85.0

11.1 15.0%

80.0

55.0

7.8 16.5%

46.0

2 /33

TOYOTA INDUSTRIES GROUP

Vision 2020

Toward Further Independence and Growth
FY2009Apr. “Times have changed. We must change our mindset.”
Launch profit improvement activities•Meticulous management of personnel allocation
and working hours•Review of investments•Reduction of expenses, etc.

Sep. Global financial crisis
Dec. Accelerate profit improvement activities･Launch of Emergency Profit Improvement Committee

FY2010

Promote comprehensive structural
downsizing<Mainly Materials Handling Equipment andCar Air-Conditioning Compressor businesses>•Reorganization of production bases•Streamlining of personnel, etc.

FY2011

Solidify defenses shift to offensive•Continue to strengthen our corporate structure
while maintaining streamlined structure•Be attuned to market changes and seize
business opportunities

Initiatives to strengthen corporate
structure have improved profitgenerating capabilities(¥ Billion)

150

Operating income

100
50
0
-50
(¥ Billion)

Net sales

2,000
1,500
1,000
500
0
2007

2008

2009

2010

2011

(FY)

3 /33

Toward Further Independence and Growth
Earthquake and tsunami disasters

Harsh Business Environment
FY2012

Initiatives to normalize production
Agile response leveraging independent
supply chain enabled quick recovery of lift
truck production

Automobile-Related
Businesses(Vehicle, engine, car air-conditioning
compressor, foundry, electronics)

Operating income(¥ Billion)

Proprietary Businesses
Engaging in Development
through to Sales(¥ Billion)

25

25

20

20

15

15

10

10

5

5

0

0
1H

2H

FY2011

Strong yen, high corporate income tax rates, strict
labor regulations, delay in free trade agreements,
power shortages, ambitious targets for curbing
greenhouse gas reductions(Materials handling equipment, logistics,
textile machinery, etc.)

1H

1H

FY2012FY20112H

1H

FY2012

During the recovery phase, such nonautomobile segments as materials
handling equipment shored up businessresults significantly

Aim for further independence andgrowth through original products
and technologies
Formulate and announce
Vision 2020 and MediumTerm Management Plan

4 /33

<Background of Vision 2020 and basic assumptions>
1) World in 2020

2) TICO’s Current Condition

Population increase mainly in Asia

Various business sectors, global No. 1 share products

Environment/energy issues

Balanced business growth from inside and outside

Borderless society (Advanced information

Technology/hardware-oriented products

communication, etc.)

Oriented toward developed markets whiledeveloping business in emerging markets

Intensification of competition on a global scale

3) TICO’s Aspired Image
Toward 2020, qualitative progress using environmental technology in developed countries and quantitative progressin emerging markets, especially in Asia, will serve as the driving force of our business growth.
It is necessary to leverage our strength and counter our weaknesses in order to increase growth potential.

Innovative technological development in environment/energy (3Es) fields
Do business anywhere there is a market
Strengthen market/customer orientation
Expand value chain
Well-balanced software/hardware development
Leverage synergies among divisions to the full extent

5 /33

Support industries and social foundation around the world by continuously
supplying products/services that anticipate customers’ needs in order tocontribute to a comfortable society and enriched lifestyles.

To contribute to a comfortable society and enriched lifestyles
Solution

Key components

Mobility

New productNew productNew productNew product
Energy, Environmental protection

3Es ( and Ecological thinking

New product) <Technological innovation in environment/energy areas>

Value Chain<Expansion of value chain>

World Market<Business development in world markets>

Contribute to realizing asociety with minimum
environmental impact throughtechnological innovation inenvironment/energy areas

Create new business value
by strengthening both
hardware and softwaredevelopment by cultivating
technology “seeds”

Develop businesses allover the world andmeticulously respond toeach region’s customer
needs

Maintain the world’s
highest-level SEQCD byimproving our businessbased on team strengthand TPS

Strengthen growthpotential by leveraging
synergies among
divisions, strategic M&As
and alliances

6 /33

1) Contribute to realizing a society with minimum environmental impact throughtechnological innovation in environment/energy areas
Research and product development centered on the keywords of “3Es”(energy saving, electrification, lighter weight, etc.)
Develop and distribute environment-friendly products in mobility/materials handling equipment/ textile
machinery areas (components for HVs/EVs, clean diesel engines, hybrid/electric lift trucks, etc.)
Contribute to realizing green logistics

Current

Reduction ofenvironmentals

impact7 /33

2) Create new business value by strengthening both hardware and softwaredevelopment by cultivating technology “seeds”
Comprehensive development structure from basic/applied research to massproduction/commercialization
Promote well-balanced software/hardware development ahead of the times

Development
開発ステップDevelopment
steps
開発ステップ steps

SoftwareElemental
technology
Environmental
technology

Mass-production
Mass-production
development
development

Manufacturing
technology
Mass-production
technology

Hardware

製品技術
生産技術

量産化技術

New businessCompany/Divisions

Advanceddevelopment
Advanced development

環境技術
Productionengineering section

Producttechnology

Transfer TICO DNA to
the future

要素技術
R&D section

Basic/appliedresearch
Basic/applied research

Division
Division inin charge
chargePlanning
sectionTechnical
planning/strategy
Technical planning/strategy

Technology
Technology

value

8 /33

3) Develop businesses all over the world and meticulously respond to each region’s
customer needs
Expand product lineup and services to flexibly respond to each region’s customer needs
Achieve global optimum production and risk diversification through global specialization/collaboration
Further develop global supply chain and sales/service network

Meticulously
respond toeach region’s
Function(value chain)

Product
Focus
mainly on
developed
markets

Marketcustomer needs

Around the world

9 /334) Maintain the world’s highest-level SEQCD by improving our business based on teamstrength and TPS
Transmit “team strength” and “TPS” to group companies
Strengthen monozukuri (manufacturing) by “development of human resources” around the world

Team
Strength

Development of
human resources
and monozukuri
around the world

Just in time

ＴＰＳWorld’shighest-level
SEQCD

Make what is needed, when it isnecessary, and in the amountneededJidoka(Automation with human touch)

Never let defects flow to
post-processes

10 /33

5) Strengthen growth potential by leveraging synergies among divisions,strategic M&As and alliances
Maximize synergies among divisions including group companies
Complement/generate synergies by strategic M&As and alliances

Solution

Synergies
Synergies among
among divisions
divisions

Elemental
Elementaltechnology,
technology,manufacturing
manufacturingtechnology,
technology,
mass-production
mass-productiontechnology,
technology,
development,
development,sales
sales&&service
servicebases
bases

Key components

MobilityStrengthen
growthpotential

Strategic
Strategic M&As
M&As andand alliances
alliances

11 /33(Target Level)- Net Sales

More than- Operating Income*- ROA 5%,More than*ROE 10%

JPY 3,000 billion

JPY 200 billion (7%)

140

68.7
2,000

200

More
Mor than

3,000*Calculated based on book value of investment securities

Operating Income(JPY Billion)
96.8

Net Sales(JPY Billion)

More than

22.0

1,377

75

Solution
More than

1,479

2,000

JPY 1,500 billon
Materials handlingequipment, Logistics,
Textile Machinery

1,580

Key Components
JPY 700 billion
Compressor, Electronics

Mobility
JPY 800 billion
Vehicle, Engine

2008

2010

2011

2012

(Actual)(Actual)(Actual)(Plan)

2016

2021 (Fiscal Year)12 /33

TOYOTA INDUSTRIES GROUP

Medium-Term Management Plan
(FY2013 – 2016)- Toward the Realization of Vision 2020 -1. Targets for FY2016(JPY Billion)

FY2011
1,479

Net Sales(%)

FY2012 (Plan)(4.6%)

Operating Income
*1

68

1,580
(4.5%)

75

FY2016More than(7.0%)

2,000
140

2.8%

3.3%

5.0%

ROE *1

9.0%

9.8%

10.0%

Investment intangible assets

38

60

ROA

500 *2FY2013-2016 cumulative total*1 Calculated based on book value of investment securities*2 Including M&A investment

13 /33

2. Business Plan
1) Solution
Net Sales Targets

Priorities toward FY2016(1) Materials Handling Equipment(Developed Countries)
Maintain and increase market share(JPY Billion)
12,0001,200

1,050 Textile
machineryandothers900
9,000

Logistics

760
675
6,000
600

Materials
handling
equipment
3,000
300

• Product development centered on “3Es”• Improved competitiveness through global optimum
production/procurement• Better response to wide-area, large-fleet customers

Expand value chain(Emerging/developing countries)
Anticipate the market and develop new markets• Roll out products matched to each market’s customer needs in atimely manner• Strengthen production/sales/service structure(2) Logistics
Concentrate on core competence and reinforce business base
• Expand 3PL business by leveraging strengths and increase added
value in parts distribution business• Provide high value-added services matched to customer needs

0

’11

’12

’13

’14

’15

’16 (FY)(3) Textile Machinery
Maintain global No.1 market share of air-jet looms• Differentiate technologies centered on energy savings and softwaredevelopment• Strengthen business base with a view toward global alliances

14 /33

2) Key components
Net Sales Targets

Priorities toward FY2016(1) Car Air-Conditioning Compressor
Expand global market share• Product development matched to market needs• Higher sales in developing markets

Strengthen profit structure(JPY Billion)
370

400
4,000

Electronics
and others

3,000
300

• Promote local production and procurement to minimize the impactof currency fluctuations• Secure unrivaled level of manufacturing in Japan

261
231

(2) Electronics

2,000
200

Car airairconditioning
compressor

1,000
100

Product development centered on “3Es”• Promote electrification of automobiles and materials handlingequipment• Strengthen control technology and software development

Increase cost competitiveness

0

’11

’12

’13

’14

’15

’16

(FY)

• Increase competitiveness through simultaneous engineering andglobal optimum production/procurement

Develop global sales networks

15 /33

3) Mobility
Net Sales Targets

Priorities toward FY2016(1) Vehicle
Strengthen role as utility factory within Toyota Group• Maintain top position in QCD among all Toyota Group companies• Achieve flexible and highly efficient production of a wide variety ofvehicles in small quantities(JPY Billion)
8,000
800

Develop new as well as auxiliary businesses
6,000
600

572

• Develop plastic glazing window business

580
559
Engine(2) Engine

4,000
400

Vehicle200
2,000

Strengthen role as diesel engine manufacturer within
Toyota Group• Contribute to Toyota Group in R&D and production in and outside
Japan

0

’11

’12

’13

’14

’15

’16

(FY)

Strengthen product appeal and increase sales volume ofindustrial engines
・ Expand product lineup
・ Develop production, sales and service networks

16 /33

Materials Handling
Equipment BusinessInitiatives for Further Growth
Global Lift Truck Market

Developed countries:
Slow growth yet huge markets(Thousand units)

1,200

Maintain and improve market share

1,000
800

Emerging countries:
Expected to grow steadily

Other

600
400
200
0

Strengthen sales expansion

EuropeNorth America
Japan

2008 2009 2010 20112015 (CY)

Toyota Industries Lift Truck Sales

Develop global models
Build optimum production and supply
structures
Strengthen sales capabilities(Thousand units)

300
200
Other

100
0

Materials Handling Equipment

EuropeNorth AmericaJapan

2009 2010 2011 20122016 (FY)• Expand value chain• Strengthen sales network

Aim for further business expansion
17 /33

Develop Global Models
Market Needs

Materials Handling Equipment

Developed countries: High-performance, highly functional products
Emerging countries: Products with well-balanced performance/functions and cost

◆Global Models• Standardize basic platform and create modules matched to the needs of each market

Three-wheel/
four-wheel

Electric lift trucks• Integrate/discontinue models and reduce the number of components to significantly keep down costs

Reach trucks

Internal-combustion lift trucks

More than 100 models

Aim for halving the number of models
Introduce 1st model: Launch 8 FBN (electric lift truck)• Commenced production in China in May 2011global models
and started sales for the Chinese market• Gradually introduce to other markets

・・・・・・・・・・・・・・・・・・・・・・・・

Consider gradually introducing
other global models

18 /33

Build Optimum Production and Supply Structures Materials Handling Equipment◆ Supply from optimally located production
base to emerging countries◆ Establish new production bases(China, Vietnam)

 Aim to minimize the impact of currency
fluctuations by shifting supply bases

 In response to expanding demand in Asia,
establish production bases for lift trucks[Previous] Mainly supply from Japan to emerging countries

China

Raymond Dalian
Commence production in
Jan. 2012
China

BT Foshan
Commence production in
Jan. 2012[Future] Switch to optimally located bases to supply emerging countries
Currently underway with mid- and small-size
internal-combustion lift trucks

VietnamTIEVCommence production in
Apr. 201219 /33

Materials Handling Equipment

Strengthen Sales Capabilities
Priority Items◆ Developed countries: Expand value chain◆ Emerging countries: Strengthen sales network

Europe:North America:• Utilize integrated sales network for direct distribution
and channels• Better response to large-fleet customers• Strengthen business through TMHNA, Inc, a manufacturing
and sales headquarters• Make some distributors into subsidiaries and acquire a stake inother distributors

China:• Establish joint venture sales company and start operations
Ex. Shanghai Makisin Toyota Forklift Co., Ltd. (Sep. 2011), etc.

India:• Establish sales/service company and start operations
Toyota Material Handling India Pvt. Ltd. (May 2011)

South America:
Australia:• Utilize integrated sales network for direct distribution andchannels• Utilize integrated sales network for direct distribution andchannels• Strengthen local sales structures• Introduce new products

20 /33

Car Air-Conditioning
Compressor BusinessInitiatives for Further Growth
Global Compressor Market(Million units)

90
80
70
60
50
40
30
20
10
0

Developed countries:
Slow growth yet huge markets

Global automobile sales

Emerging countries:
High growth expected

Compressor market

Emerging
countries

Developed
countries

2007 2008 2009 2010 20112015 (CY)30

Develop products with excellent cost
performance

25

10
5

For developed countries:
For emerging countries:(Million units)

15

Expand sales by leveraging broad
product lineup
Strengthen fuel-efficient products

Toyota Industries Compressor Sales

20

Car Air-Conditioning Compressors

Emerging
countries
Developed
countries0
2008 2009 2010 2011 20122016 (FY)Strengthen production/procurement
structure
Aim for further sales expansion tocarmakers worldwide
21 /33

For small
vehiclesFor large
vehiclesExpand Sales by Leveraging Broad Product Lineup

Fixeddisplacement,swash plate type

Fixeddisplacement,
vane type

Variabledisplacement,swash plate type

Car Air-Conditioning Compressors

Electric type

Fixeddisplacement,
scroll type
ModelsTarget emerging countries

Target developed countries

Make finely tuned response to various customer needs byproviding broad product lineup targeting both emerging
countries and developed countries

22 /33

Further Strengthen Appeal of Broad Product Lineup

Car Air-Conditioning Compressors

Development trend
Variable-displacement type: Meet increasing needs for better fuel efficiency
Productsfordeveloped
countries• Develop next-generation variable-displacement compressors

Electric type: More compact, lighter weight, better fuel efficiency andhigher efficiency• Improve performance of electronic components (inverters, motors, etc.)• Strengthen software for high-speed rotation control

Products
foremerging
countries

Fixed-displacement type: Better cost competitiveness
Variable-displacement type: Optimum balance between performance and cost
• Further strengthen technical support for carmakers<Primary sales targets>
ASEAN countries, India, Brazil: Major Japanese, U.S. and European carmakers
China: China-produced vehicles by U.S. and European carmakers, China domestic
carmakers

23 /33

Strengthen Production/Procurement Structures

Car Air-Conditioning Compressors

Initiatives for production
Europe:• Production of compressors for small cars

North America:• Strengthen production of variabledisplacement types

Japan:• Establish production structure impervious to volume changes• Strengthen unrivaled manufacturing
Asia:• Commenced production at TACI (Indonesia) in Jun. 2011
Establish production structure capable of producing 1.6 million units
by FY2016

TICO production bases
Licensed manufacturers

Initiatives for procurement◆ Establish globally optimum procurement structure◆ Expand scope of locally procured products
24 /33

Commercialization of Lightweight Technology

Environmental Technologies in Line with Keyword “3Es”

Our plastic glazing fitted in the Priusα

Aim for further sales expansion

Promote sales activities tocarmakers worldwide
Expand product lineup
Panoramic roof

Products underdevelopment

Products to be developed

High-functional roof
Priusα(%)
100

Dramaticallylighter than glass
counterparts

40%
Decrease

Feature of plastic glazing
・Light・Flexibility of shape

Quarter window

Rear window
Front butterfly window

50

Back door window

Front side window
Wind shield・Hard to break・Well-insulated
0
Glass

Plastic
glazing

Contribute to improvement offuel efficiency by lowering
the weight of automobile bodies
25 /33Financial Results

FY2012 2Q

Performance(Billion yen)
FY2011 2Q(6 months)

FY2012 2Q(6 months)

ChangeNet sales

729.8

722.6

(7.2)

(1.0%)

Operatingincome

36.2

29.2

(7.0)

(19.3%)

Ordinary income

38.3

36.7

(1.6)

(4.2%)Net income

23.6

25.9

2.3

9.5%

Net income
per share¥76.02¥83.21¥7.19-

Dividends
per share

¥25

¥25

-

-

Investments intangible assets

16.3

21.0

4.7

29.0%

Depreciation

29.9

28.6

(1.3)

(4.4%)

¥/US$

¥89

¥80

(¥9)

-

¥/Euro

¥114

¥114

(¥0)

-

Exchange rate

26 /33

FY2012 2Q

Performance(Billion yen)

As of March
31, 2011

FY2012 2Q

Total assets

2,481.4

2,350.9(130.5)(5.3%)

Total net
assets

1,075.9

968.9(107.0)(9.9%)

Equity ratio

41.4%

39.2%

-

-

Consolidated
subsidiaries

162

165

3

-

Change27 /33

FY2012 2Q

Segment Information
 Net sales(Billion yen [Operating Income])
FY2011 2Q (6 months)
FY2012 2Q (6 months)

450
400

[18.6]

408.9

250

[6.1]

360.6

200

350

193.7
155.2

150

[18.9]

300

276.9[11.7]

250

98.2 90.6 96.9 96.7

100

230.8

200

50

150

0

19.9 18.0
Vehicle100[2.7] [1.6]

53.8 46.3

50[1.0] [0.9] [1.7]EngineCar airconditioning
compressor

Foundry,electronics
parts

[1.3]

18.519.7 17.6 19.0

0
Automobile

Materials
handling
equipment

Logistics

Textilemachinery

Others28 /33

FY2012 2Q / FY2012 Forecast

Unit sales(Thousand units)
FY2012 forecast

FY2011 2Q(6 months)

FY2012 2Q(6 months)

ChangeVitz (Yaris)

95

80

RAV4

57

Current plan

ChangePrevious plan
（6/14）

(15)

182

1

181

38

(19)

93

(16)

90

2

3

1

5

0

4

Vehicle

154

121

(33)

280

(15)

275

Diesel

186

188

2

423

41

395

Gasoline

121

86

(35)

207

(25)

185

307

274

(33)

630

16

580

9,400

9,870

470

22,0003,170

21,800Materials
handling
equipment

69

86

17

190

37

183

Air-jet loom

3.0

2.4

(0.6)

5.0

(2.2)

6.0

Mark X ZiOEngineCar airconditioning
compressor

29 /33(2.4)

Increase in expenses and others

Increase in the net amount of
non-operating income

Decrease in sales volume

Increase in labor cost

Negative impact of
exchange rate fluctuations

Increase in raw material cost

36.7
Cost reduction

FY2012 2Q(6 months)
FY2011 2Q(6 months)

(2.7)
38.3

(14.0)
+12.4

(2.7)
+7.0

(Billion yen)

(3.2)
+5.4

FY2012 2Q

Change in Ordinary Income(3.0)

30 /33

FY2012 Forecast

Performance(Billion yen)

FY2011FY2012

ChangePrevious plan

Net sales

1,479.8

1,580.0

100.2

6.8%

1,570.0

Operatingincome

68.7

75.0

6.3

9.0%

70.0

Ordinary
income

73.9

85.0

11.1

15.0%

80.0

Net income

47.2

55.0

7.8

16.5%

46.0

Net income
per share¥151.51¥176.46¥24.95-¥147.64

Dividends
per share

¥50

¥50

-

-

¥50

Investments intangible assets

38.2

60.0

21.8

56.8%

60.0

Depreciation

62.3

60.0

(2.3)

(3.8%)

62.0

Exchange rate

*Second half

¥/US$

¥86

¥78 [¥75*]

(¥8)

-

¥80

¥/Euro¥113¥110[¥105*]

(¥3)

-

¥112
31 /33

FY2012 Forecast

Segment Information
 Net sales(Billion yen [Operating Income])
FY2011FY2012900[32.8]

804.1

820.0

400

800

375.5

355.0

350
300

700

250

580.0

600

200

[23.9]

490.6

500

197.3 204.0 191.8

214.0

150
100

400

39.3 47.0

50

300

0
Vehicle

200

[5.3]

107.7 100.0

100

[2.5]

EngineCar airconditioning
compressor

Foundry,electronics
parts

[3.4]

42.7 40.0 34.4 40.00Automobile

Materials
handling
equipment

Logistics

Textilemachinery

Others32 /33(5.7)

Increase in expenses and others

Increase in the net amount of
non-operating income

Increase in labor cost

Increase in raw material cost

Negative impact of
exchange rate fluctuations

85.0

Cost reduction

Increase in sales volume

73.9

FY2012FY2011

(2.5)
+18.0

(21.7)
+32.8

(6.5)
+10.0

(Billion yen)

(7.0)
+4.8

FY2012 Forecast

Change in Ordinary Income

33 /33

Cautionary Statement with Respect
to Forward-Looking Statements
This presentation contains projections of business results as well as statements regarding
business plans, forecasts, strategies, and other forward-looking statements that are not tobe taken as historical fact. Projections and forward-looking statements are based on thecurrent expectations and estimates of Toyota Industries and its Group companies. All
suchprojections

andforward-looking

statements

are

based

on

management’s

assumptions and beliefs derived from the information available to it at the time of
producing this report and are not guarantees of future performance. You should also beaware that certain risks and uncertainties could cause the actual results of Toyota
Industries and its Group companies to differ materially from any projections or forwardlooking statements appearing in this report. These risks and uncertainties include, but are
not limited to, the following: 1) economic trends, 2) various competitive pressures,3) changes in relevant laws and regulations, and 4) fluctuations in exchange rates.