January 12, 2021
To Whom It May Concern
Company Name
RepresentativeInquiries

Toyo Denki Seizo K.K.
Akira Watanabe, President(Code: 6505, 1st Section of the Tokyo StockExchange)
Toshihito Nakanishi, Operating Officer, GeneralManager, Management Planning Division(Tel. 03-5202-8122)

Revision of the Medium-Term Management Plan “Revitalize 2020”
Toyo Denki Seizo K.K. (hereinafter “Toyo Denki”) today announces that Toyo Denki Group has decided to revise
part of the management numerical targets and measures under the medium-term management plan “Revitalize 2020
(Fiscal 2018 to Fiscal 2021),” announced on July 12, 2018, as below. This has been decided by taking into accountchanges in the business environment, new challenges to address and other matters that occurred since then.
1.

Achievements in the First Two Years and Future Challenges
Toyo Denki Group started the medium-term management plan “Revitalize 2020” in the fiscal year ended May
2019. The aim was to establish a leaner business structure that could produce stable profits, and this is a four-yearplan with 2020 set as the nearest target. Positioning the first two years (from the fiscal year ended May 2019 to thefiscal year ended May 2020) as the period for establishing a firmer footing, we focused on improving profitability,
which was an urgent issue. We then managed to reach initially intended achievements, such as generating target
profits and improving ROE.
We had planned to carry out our measures in the latter two years (from the fiscal year ending May 2021 to thefiscal year ending May 2022), which were positioned as the period for achieving growth. We aimed for net salesof over 47 billion yen, securing a 5% level of ROE and others. However, the spread of the new coronavirus allover the world has started causing revisions or postponements to new construction and replacement plans of rollingstock of some railway operators and to equipment renewal plans in part of manufacturing, ending up affecting ouractivities for receiving orders. This tendency has hindered our future sales expansion.

2.

Changes in the Business Environment
The economic situation in Japan and overseas remains uncertain for the time being amid concerns over theresurgence of the new coronavirus in particular. However, there are signs of a recovery in capital investment due
to the effects of various government policies and a pickup in overseas economies, including China. Especially,
there are signs of a nascent recovery in demand for railway infrastructure in China, particularly for the maintenanceof high-speed railways and urban transportation.
In Japan as well, new customer needs toward the “post-pandemic” era are emerging, efforts toward the realizationof a decarbonized society will start in full swing, and digital transformation (DX) is expected to advance.
In this environment, Toyo Denki Group will focus on further expanding its business areas, which are deeply
connected with social infrastructure development and global environmental conservation.

3. Policy for Revision(1) Name
The new plan is named “Revitalize 2022.”(2) Positioning of the latter two years

Initially, we set the latter two years as the period for achieving growth (from the fiscal year ending May 2021 tothe fiscal year ending May 2022), based on an improvement in profitability achieved during the first two years.
However, taking the considerable change in the business environment into account, we reposition the latter twoyears as the period for “accumulating our earning power and returning to a growth path.” In this way, we will
establish a foundation that enables us to achieve the initial goals “Net sales of over 47 billion yen, Operating
income of 2 billion yen and Securing ROE of 5%” within the first two years in the next medium-term management
plan, which starts in the fiscal year ending May 2023.
(3) Fundamental way of thinking
We are working to fulfill the initial aim of “establishing a ‘leaner’ business operation structure that generates stableprofits by strengthening organizational power and rapidly providing high-quality products to customers.” To thisend, Toyo Denki Group will continue pursuing seven fundamental policies to expand the scale of sales and makeconstant efforts to improve profitability.
Major measures have been revised as below, based on a response to the aforementioned change in businessenvironment and others.
4. Fundamental Policies and Major Actions (revised major actions are underlined)(1) Expanding overseas businessi. Review our business strategies in accordance with the economic and technological development conditions ofthe countries into which we advanceii. Expand new industrial systems in Southeast Asiaiii. Strategic participation in new urban transport projects
iv. Roll out industrial motors into the Chinese market(2) Expanding our business areas using our core technologies
i. Promote commercialization taking into consideration business potential and market trends
ii. Promote the application of IoT technology to the maintenance fieldiii. Expand business areas through business alliances and M&As
(3) Promoting development of technology in advance of market needs
i. Develop products that contribute to the realization of a decarbonized society and bring them to market at anearly stage
ii. Promote development of test equipment that contributes to the electrification and autonomous driving ofautomobilesiii. Commercialize wireless power supply technology at an early stage
iv. Establish new production technologies for key components (products)(4) Establishing a stable business earnings structure
i. Improve business profitability with operating income in mind
ii. Reduce fixed costs through united efforts by administration, sales and plants
iii. Promote group management that focuses on our “earning power”a) Promote “selection and concentration” (selection of business fields and concentration of resources)
throughout the groupb) Establish integrated operation and plant system within the group(5) Developing foundations for expanding our production capacity
i. Reinforce process control by maximizing the functions of the basic systems and establish optimum production
lines

ii. Expand production capacity by re-establishing production lines (Yokohama Plant)iii. Explore production methods that incorporate energy efficiency
iv. Re-establish supply chains
v. Establish a business continuity plan (BCP) that can respond to the pandemic(6) Developing human resources to play important roles in the future
i. Promote personnel rotation to revitalize the organization
ii. Develop the next generation of executives and overseas employeesiii. Early-stage development of young managers who will be key persons of the organization(7) Promoting ESG
i. Establish sustainability policy and roadmap
ii. Promote working-style reformsiii. Enhance corporate governance5.

Numerical Management Targets (Consolidated) (Revised)
We decided on the following numbers in order to establish a foundation so that we can position the period up tothe fiscal year ending May 2022 as “the period for accumulating earning power and returning to a growth path.”
In addition, we considered the impact of the new coronavirus on our activities to collect orders.
We aim at achieving our initial targets of “Net sales of over 47 billion yen, Operating income of 2 billion yen, andSecuring ROE of 5%” within the first two years in the next medium-term management plan that starts in the fiscalyear ending May 2023.

(1) Entire companyNet sales
Operating income(Operating margin)Ordinary income
Net income
Equity in profit ofunconsolidated
subsidiaries andaffiliates
ROE
Dividend payout ratio

Fiscal year
ended May
2018
(Results)
425.2
3.6(0.9%)
5.1
6.9

Fiscal year
ended May
2019
(Results)
411.7
5.5(1.4%)
4.9
6.9

Fiscal year
ended May
2020
(Results)
390.7
10.6(2.7%)
12.0
10.8

(100 million yen)
Fiscal year
ending May
2022(Revised plan)
3606(1.7%)87

1.1

0.1(0.3)

1

2.7%
68.2%

2.7%
39.9%

4.4%
24.8%

3.0%
30.0%

(2) Segment Net SalesTransportation
279.4
272.3
242.6
220
Systems
Industrial Systems
117.6
123.3
130.2
130
Information
28.0
15.8
17.7
10Equipment Systems(Note) In the fiscal year ended May 2018, we paid a commemorative dividend of 20 yen per share to mark the 100
year anniversary of our founding in addition to the ordinary dividend of 30 yen per share.
The dividend payout ratio for the fiscal year ended May 2017 was 24.2%.