Top Message

Value Creation Process

Value Creation

Initiatives for Growth

Promotion of ESG
Initiatives

Corporate andFinancial Information

Value Creation Process

In line with our founding spirit, Toyota Industries remains committed to creating value and contributing
to society by engaging in and developing our diverse businesses.

Six Capitals Supporting Growth
Since our founding, we have strived to achieve sustained growth by flexibly
responding to a drastically changing society based on the six capitals we haveaccumulated to date.

Aspiration in the Medium to Long Term and CSR Materiality
Based on the Toyoda Precepts (corporate creed) and basic philosophy, we have been working to directly
address the changes and challenges surrounding society and make the most of the core assets andstrengths we have accumulated to date to achieve our 2030 Vision and CSR material issues.

Climate change
Human Capital
Diverse human resources committed to creating and delivering products andservices that contribute to society Human resources comprised of more than 70,000 employees possessing diverse
strengths in their respective business field Certified as a Health and Productivity Management Organization
 Systems and training programs to help individual employees to demonstrate theirabilities to the fullest regardless of age or gender Lifting Group-wide capabilities to the next level through global exchanges acrossbusinesses and functions

EnergyResources
Water issues

Intellectual Capital

Digitalization

Electrification
Automation

Decliningbirthrate andaging population

Work style
diversification

GeopoliticalrisksSocial issues
and changes

Toyota Industries Report 2023

Contribute to making the earth a better place to live, enrich lifestyles, and promote a compassionate society by supporting
industrial and social infrastructure around the world through the continuous supply of products/services that anticipate
customers’ needs.

ee thMakch lifestyles, and promo
e to live, enrite a coer plact
mpastebasionahtrea
tes,” “safe/reliable, comfortabl
issione” anmeod “s/zermanaert”“ClTechnology, expertise and know-how related to automobiles and materials handlingequipment Strengthening development capability and competitiveness through collaboration
between the Materials Handling Equipment and Automobile-related businesses Accumulation of knowledge thanks to involvement in the production of automobiles
spanning from vehicle assembly to the development of key components
 Wide-ranging responsiveness and sustainable growth potential stemming fromtechnologies in the development of both automation and electrification
 Research and development mainly on automation and electrification by also drawing
on external expertisesociety

Create new values by being studious and creative

Automobile

Materials
Handling
Equipment /Logistics

Take on challenges and enter into new businesses

Manufacturing Capital

Textile Machinery

Production structure and investments in tangible assets to deliver quality products
to customers around the world Superb quality and productivity based on the Toyota Production System Globally stable production and supply structures of respective businesses
 Proactive capital investment for further business expansion

TPSTeam

Manufacturing foundation strength

Toyoda Precepts

Link todetails onVision 2030

Social and Relationship Capital
Extensive sales and service networks together with relationships of trust withvarious stakeholders Global sales and service networks mainly for materials handling equipment
 Close collaboration with Toyota Group companies as well as major automakers andother manufacturers around the world
 Sustainable supply chain built on mutual cooperation with business partners
 Proactive dialogue with shareholders, investors and members of local communities

Natural CapitalGroup-wide initiatives aimed at reducing environmental impact and realizing acarbon neutral society Business activities to realize clean/zero emissions in terms of production and products
 Proactive initiatives to reduce CO2 emissions and introduce renewable energy on aglobal scale Activities to reduce logistics-derived CO2 emissions per unit of production(non-consolidated) and waste generation

Financial Capital
Solid financial foundation underpinning sustained business expansion
 Share of equity attributable to owners of the parent: ¥3,837.4 billion
 Net cash provided by operating activities: ¥194.9 billion
 Equity ratio: 49.1%
 Return on equity: 5.0%

12Vision 2030

CSR Materiality
CSR Materiality

SDGs to Contribute Mitigation of Global Warming Contribution to Circular Economy
Resolving Social
Issues throughOur Business Creation of Innovative Values Products and Services Which Contributeto Safety, Reliability and Comfort
 Mutual Prosperity through Partnerships
with Local Communities

FoundationSupportingOur BusinessOperations

 Safe and Healthy Work Environments
 Leveraging Diversity and Inclusion
 Sustainable Procurement Compliance and Risk Management

Link to CSR
Materiality

Basic Philosophy
Toyoda Precepts

13Top Message

Value Creation

Initiatives for Growth

Promotion of ESG
Initiatives

Corporate andFinancial Information

Value Creation Process

Using our resources and strengths as the foundation, we strive for growth in the Materials Handling Equipment, Automobile and Textile
Machinery businesses. At the same time, we aim to enhance our competitiveness by leveraging synergies among these businesses.

We will meet the expectations of our stakeholders by achieving sustainablegrowth and enhancing not only the value of our products and services but also
the value of the Toyota Industries Group itself.

¥84.3 billion¥957.8billion¥7.8 billion

Customers
Contributing to such needs as electrification,
automation and energy savings as well as safety andreliability through high-quality products and services¥34.6
billionNet sales

Operating profit¥3,379.8¥169.9FY2023

FY2023Business Partnersbillionbillion

Materials Handling
Equipment
Automobile¥121.8¥2,283.8

billionbillionTextile Machinery

Materials Handling Equipment
Net Sales

Lift trucks and logistics solutions that
contribute to greater logistics efficiency
for customers(¥Billion)

1,500

90

1,000

60

500

300Net Sales

Comfortable and appealing automobiles
Fuel-efficient and clean engines
Car air-conditioning compressors that realize
a comfortable vehicle interiorElectronics and batteries that contribute to theelectrification of automobiles, etc.

Textile Machinery
Weaving and spinning machinery toproduce fabrics and yarns of high qualityand soft texture2122(¥Billion)

212223Developing employees’ work values and motivatingthem to demonstrate their potential by creating safe
and secure workplaces for diverse human resources(¥Billion)

40023(FY)Operating
Profit(¥Billion)

100

Local Communities

212223

8660

440

2

Contributing to reducing CO2 emissions, mitigating
resource depletion and curtailing environmental risks
by promoting environmental management0212223-2(FY)

Contributing to the prosperity of each country andlocal community through promoting social welfare,youth development, environmental protection,community contribution and other activities

Global Environment(¥Billion)

8002210200(FY)21204000Employees

30600(FY)

Toyota Industries Report 2023(FY)

Operating
Profit1,0002014023800

Net Sales

150120Shareholders and Investors
Returning profits to shareholders and investors byenhancing corporate value through sustainablegrowth(¥Billion)

2,000(FY)

Automobile

Operating
Profit2,500

Co-existence and co-prosperity based on mutual
trust cultivated through open, fair and equitablebusiness relationships

212223Further Evolutionand Growth

Utilizing andenhancing
six capitals
Human capitalIntellectualcapital

Manufacturing
capitalSocial andrelationshipcapitalNatural capital

Creation of greater corporate value

Values and Joys for Stakeholders

Contribute to making the earth a better place to live, enrich lifestyles, and promote a compassionate society

Business Results

Financial capital

15

Top Message

Identification of Issues Relevant toToyota Industries

Under the Toyoda Precepts (corporate creed), Toyota Industries has been undertaking a broad range of businesses byupholding the philosophy of contributing to society since its founding. In keeping with recent changes in the businessenvironment, we have clarified which social issues we should tackle as our CSR material issues, and will
Link towork for the resolution of these issues. We use part of the evaluation on target achievements for initiatives
details
on key CSR materiality items as a reference index for calculating bonuses for executives.
CSR Materialityl Mitigation of Global Warmingl Contribution to Circular Economy

Resolving Social Issues through Our Business

SDGs to Contributel Creation of Innovative Values
SDGs to Contributel Products and Services WhichContribute to Safety, Reliability andComfortl Mutual Prosperity throughPartnerships with LocalCommunities

Contribution to Vision 2030 (Aspiration)
Clean/zero emissions:
Mitigating global warming and achieving acircular economy through such initiatives as
reducing CO2 emissions and waste in ourbusiness activities and expanding the lineup ofenvironmentally friendly products in our efforts tocontribute to maintaining and improving theglobal environment over the long run

Creation of innovative value, smart:
Contributing to achieving a “smart” society andmore enriched lifestyles by resolving social issues
through technological advancement andinnovation that create new value

Safe/reliable, comfortable:
Contributing to creating a compassionate society
by offering products and services that anticipate
the needs of customers and various stakeholders
and that are safe, reliable and comfortable to use
while fulfilling our responsibilities as a member ofsociety to thrive together

Identifying, among various social issues, the ones
relevant to our business activities based on the United
Nations 17 Sustainable Development Goals (SDGs) and169 targets as well as guidelines[Items we refer to]1) 17 SDGs and 169 targets
2) Important ESG items

Action Policies
l R educing CO2 emissions from production
activitiesl Reducing CO2 emissions from productionrelated logisticsl Reducing CO2 emissions through productand technology development

Assessment of Importance[Assessment method]1) Conducting questionnaires anddiscussions with relevant internal
departments
2) Plotting onto a 2 x 2 materiality matrix
to select issues having higher degrees
of importance

Action Targets and Activitiesl Reduce production-derived CO2 emissions
Total emissionsl Adopt renewable energy sources
Introduction ratel Reduce logistics-derived CO2 emissions
Emission volume per unit of production (non-consolidated)l Implementing initiatives to promote 3R(reduce, reuse and recycle) design for
effective resource utilizationl Reduce use of resources and promote reuse and recycling of resourcesl Offering high-quality and safe products andservices and maintaining and improving thestructure to realize this goal

SDGs to Contributel Continuously promoting grassroots activities
in local communities and thrive together as amember of societyl Ratio of R&D expenses for electrification and automationl Expand peripheral fields and new business fields Net sales

Develop new technologies and products for logistics automation and expand sales(Materials Handling Equipment)
Sales of automation products (growth rate)(FY toachieve)

Results for FY2023

Page
numberTargets for
FY2024(2026)–30%

P. 38–40—

15%(2026)

15%

P. 38–40—–11%(2026)

–8%

—

—

—

P. 38–40—–17%

P. 41–43

—

—

P. 41

—

—

P. 41–43—

Importance for Toyota Industries

Targets–25%*(vs FY14 level)(vs FY14 level)–12%(vs FY14 level)

70%
Over ¥1 trillion
Over(2026)(2031)(2031)

Foundation Supporting Our
Business Operationsl Fostering safe and healthy workplaces foreveryone

Twofold(100%)(vs FY2021)(2031)l Expand sales of electrification-related products (all businesses)(2031)
Over 70%
Ratio of electrification-related products to net sales
Offer highly efficient and energy-saving electric compressors that are excellent in terms of quiet operation andcomfort (Automobile Business)
Offer clean and high-quality fuel cell units and on-board batteries (Automobile and Materials Handling Equipmentbusinesses)
Offer power source-related products, on-board or otherwise, that can also be used as social infrastructure during disasters andother occasions (Automobile Business)l Conduct product risk assessment (target products)(2031)
100%
Implementation rate (non-consolidated)(2031)
100%l Promote quality education Training participation rate (non-consolidated)
Expenditure/number of participantsContribute to biodiversity conservation of local communitiesl Sustainable Procurementl Compliance and Risk Managementl E liminate serious accidents—l Creating the environment for everyone to geta fair share of opportunities to develop anddemonstrate their potential

Number of serious accidents	Frequency rate of lost workday injuries (non-consolidated)l Utilize diverse human resourcesl Leveraging Diversity and Inclusion

Ratio of female managers (non-consolidated)	Ratio of employees with disabilities (non-consolidated)

42.2%

—

46%

—

P. 27–29

—

—

P. 31

—

—

P. 30–31—

100%

P. 46–47

100%

92.3%
¥910 million/
28,500 persons
—
—
00.06
1.7%
2.57%

P. 47

100%

P. 57

—

P. 43–45P. 52

—
—
00.00
—
Over 2.4%

P. 49

100%

P. 66

0P. 71–72—
0100%(2031)

0(2031)

100%(1,140 companies)
1(2031)—0(2031)—

P. 19–23(2031)(2031)

58%
—

50.1%

Up

00.00
3.6%
Over 2.7%(2031)

P. 19–20
P. 27–29
P. 31

P. 56–57
P. 53–54
P. 54
P. 52

Up

71%

l Maintain sound transactions and strengthen structure throughout the supply chain
Implementation rate of sustainability checks on target suppliers (non-consolidated)l Establishing the foundation to remain acompany that is trusted and needed bysociety

54.1%——

Promote other community contribution activitiesl Safe and Healthy Work
Environments

Approval byTop Management
Gaining approval of the CSR
Committee chaired by thepresident and comprising our topmanagement based on thevalidation results

Develop new technologies and products that contribute to resolving environmental and social issuesl Promote social contribution activities

Corporate andFinancial Information

Conducting reviews by both ourtop management and outside
experts to receive feedback andconfirm the adequacy of theselected issuesl Develop technologies that contribute to an even greater level of energy efficiencyl Reduce waste generation volume
Waste generation volume per unit of production (non-consolidated)l Promote water conservation activities corresponding to the water situations in each country
and regionl Enhancing electrification-related products
and services that are highly functional,
ecologically sound and adaptable as social
infrastructure

Promotion of ESG
Initiatives

Validation of Adequacy

Assessing the importance of the identified issues from both internal andexternal viewpoints to select those having higher degrees of importancel Effective resource utilization in production
activitiesl Promoting development of new technologies
that create new valuel Improving core technologies and utilizing thenew knowledge of business partners to enter
into peripheral fields of existing businesses
while developing and offering technologies
and products in new business fields

Initiatives for Growth

Initiatives to Resolve Social Issues
and Improve Corporate Value

Process to Determine CSR Materiality

Importance whenviewed from outside

Initiatives to Resolve Social Issues and Improve
Corporate Value

Value Creationl Eliminate serious compliance violations

Number of violationsl Promote risk management activities taking a risk-based approach
Improve BCP effectivenessRespond to cybersecurity risks

Number of serious incidents

0P. 70* As a more ambitious target, we are aiming for a 50% reduction by fiscal 2031 from the fiscal 2014 level.

16

Toyota Industries Report 2023

17