Financial Results Briefing
First Half of Fiscal 2020(Ended November 30, 2020)
January 13, 2021
Toyo Denki Seizo K.K.

Program Briefing on Financial Results:
1. Overview of Financial Results for First Half of
Fiscal 2020
2. Outlook for Financial Results for Fiscal YearEnding May 2021
3. Revision of Medium-Term Management Plan
4. Topics11. Overview of Financial Results for First
Half of Fiscal 2020
(From June 2020 to November 2020)

1-1. Overview of Consolidated Financial Results
Although orders received and net sales decreased due to the impact of the novel
coronavirus, the Company secured a certain level of operating income throughconsiderable improvements in profitability.
Unit: 100 million yen
YoY Change

Publishedvalue ratio%
増減率

Published
2021.5value for 1H
2Q公表値
FY2020-26.7-13.8%

175.0

-7.8

95.5%

1.7

-1.2

-41.3%

0.4＋1.3

425.0%(1.5%)(1.0%)-0.5pt－(0.2%)+0.8pt－Ordinary Income

経常利益

3.8

3.5

-0.2

-6.7%

2.3

＋1.2

152.2%Net
Income
純利益

2020.51H
FY20192021.51H
FY2020

193.9

167.2

Operating
営業利益
Income

3.0

(率)
(%)

2Q累計

Net Sales
売上高

前期比

2Q累計

公表値比
%
達成率

4.7

4.5

-0.1

-4.1%

4.0

＋0.5

112.5%[Net income per share(yen)] (円)][一株当たり

52.63

50.49

-2.14

－

44.73

+5.76

－

Orders received

受注高

203.4

143.9

-59.4

-29.2%--

Ratio ofoverseas sales
海外売上比率to net sales

20.8%

17.2%

-3.6pt－-3

1-2. Factors for Increase and Decrease in Operating Income (YoY change)
Despite a decline in income due to lower net sales, the Company secured acertain level of income through drastic improvements in profitability andreduction of expenses.

Decrease insales (nonconsolidated)-370 million yen
Decrease insubsidiary
profits, etc.
-210 million yen

Decrease in selling, general &administrative expenses (nonconsolidated)+80 million yen
Plant profit/loss (nonconsolidated)+160 million yen
Improvement in grossmargin (non-consolidated)+200 million yen

300 million yen

170 million yen<1H FY2019><1H FY2020>4

1-3. Breakdown of Non-Operating Income/Expenses and Extraordinary
Income/Loss
Non-operating
income/expenses+170 million yen

Extraordinary
income/loss+400 million yen• Dividend income• Gain on sales of+150 million yen
investment securities• Equity in profit of+400 million yen
unconsolidated
subsidiaries and760
affiliates+20 million yen
million yen• Interest expenses-30 million yen• Foreign exchange
losses-10 million yen
350• Other+50 million yen million yen

Incometaxes

450
million yen

170million yen

OperatingincomeOrdinary
incomeIncome before
income taxes

Net
income5

1-4. Segment Performance Transportation Systems
The Company managed to secure segment income that was comparable to thelevel of a year earlier despite fewer orders received and lower net sales.

 Orders received and order backlog

 Net sales and segment income

300

300

Order
backlog

218.2

233.1

111.9
100

Segment income

Net sales

30

217.4

200
Ordersreceived(100 million yen)

200

131.2

128.5
86.6

100

20

Net sales

10.5

121.3

110.7

10.1

10.6

10

Segment
income00
1H FY2018 1H FY2019 1H FY2020

0
1H FY20181H FY20191H FY2020• Orders received from JR increased, while those from private railway companies, China and overseas (excluding China)
declined.
• Despite an increase in overseas (excluding China) net sales, as a whole, declined due to a fall in sales to JR, China, and of
consolidated subsidiaries.
• The Company managed to secure segment income that was comparable to the level of a year earlier through reinforced
manufacturing process control.

61-5. Segment Performance Transportation Systems Factors for Increase
and Decrease in Income
Although net sales declined mainly due to lower sales of consolidated subsidiaries, the Company
managed to secure income that was comparable to the level of a year earlier by enhancing factory
profitability through efforts such as reinforcing manufacturing process control.

Decrease insubsidiary profits,
etc.
-210 million yen
Decrease in sales(non-consolidated)-10 million yen

Change in gross margin(non-consolidated)+0 million yen
Plant profit/loss(non-consolidated)+260 million yen

Increase in selling,
general &administrative
expenses(non- consolidated)-0 million yen

1,010 million yen

1,060 million yen<1H FY2019><1H FY2020>71-6. Segment Performance Industrial Systems
The Company managed to secure a certain level of segment income
despite fewer orders received and lower net sales.
 Orders received and order backlog

100
80

60
40

100
74.3

80
58.4

73.9
Ordersreceived(100 million yen)Segment income

Net sales

Orderbacklog83.0

 Net sales and segment income

67.1
55.1

60

Net
sales

57.7

20

0

0

8

64.5
50.3
4.8

40

20

1H FY20181H FY20191H FY2020

10

Segment
income

6
4

3.7

1.2

2

0

1H FY20181H FY20191H FY2020• Orders received fell mainly for testing equipment and processing equipment.
• Net sales decreased mainly due to a decrease in sales for testing equipment and power supplies.
• Segment income was secured by minimizing the impact of declining net sales throughreinforcement of cost control and other steps.
81-7. Segment Performance Industrial Systems Factors for Increase andDecrease in Income
Although income declined due to lower net sales, the Company secured a certain
level of income through efforts to reinforce cost control and reduce expenses.

Decrease in sales(non-consolidated)-300 million yen

Increase in subsidiary
profits, etc.
+20 million yen

Plant profit/loss(non-consolidated)-70 million yen

Decrease in selling, general& administrative expenses(non- consolidated)+50 million yen

Change in gross margin(non-consolidated)+190 million yen

480 million yen

370 million yen<1H FY2019><1H FY2020>9

1-8. Segment Performance Information Equipment Systems
Net sales and income decreased due to a fall in large-scale projects as areaction to big sales recorded in the previous fiscal year.
 Orders received and order backlog

15

10

15

Ordersreceived

6.2
5
4.2
0

 Net sales and segment income

Orderbacklog

10

7.6

7.2

6.7

Segment income

Net sales

Net
sales

(100 million yen)

6

7.9
6.0

5

3

2.1

Segment
income1.4

1.2

1H FY2018 1H FY2019 1H FY2020

9

2.4

1.7

0

0

1H FY2018 1H FY2019 1H FY2020• Orders received decreased mainly due to a reactionary drop in demand for software
upgrading generated by the consumption tax hike in the previous fiscal year.
• Net sales fell for the same reason as orders received.
• Segment income slipped due to lower net sales.
101-9. Consolidated Financial Position

Unit:
100 million yen
単位：億円
2015年6月末
May 31, 2November
2020年
2021年 前期末比
Change
0
2020
30,
2020
5月期末
2Q末
1

Remarks
備考

551.6

538.7

-12.8

Current assets
流動資産

262.8

273.2

+10.4 現金及び預金+13億円
million yen

Fixed assets
固定資産

288.8

265.4

-23.3 投資有価証券△20億円
yenTotal liabilities
負債合計

309.8

307.4

-2.3

112.5

109.7

-2.8

241.8

231.3

-10.5 △12億円
for-sale securities: -1,200 million yen

43.8%

42.9%

-0.9ptTotal assets
総資産

Of which, net interest-

うちNet有利子負債
bearing debt

Net assets
純資産
Shareholders’ equity ratio
自己資本比率Cash and cash equivalents: +1,300
Investment securities: -2,000 million

Unrealized holding gain/loss on availableその他有価証券評価差額金11

2. Outlook for Financial Results for Fiscal
Year Ending May 2021

2-1. Outlook for Financial Results for Fiscal Year Ending May 2021
(Consolidated)
Orders received of 31.5 billion yen, net sales of 34 billion yen, andoperating income of 250 million yen.
Unit: 100 単位：億円
million yen
FY ended May 2020
2020.5月期（実績）(Result)
Full
year
通期

2Q

FY2021.5月期
ending May 2021
Full year

2Q(Result) 通期(予想)
2Q(実績)(Forecast)

前期比

YoY Change
Full year

通期

Net
Sales
売上高

193.9

390.7

167.2

340.0

-50.7

Operating
Income
営業利益
(%)
(率)

3.0

10.6

1.7

2.5

-8.1

(1.5%)(2.7%)(1.0%)(0.7%)

Ordinary
Income
経常利益

3.8

12.0

3.5

5.0

-7.0

Net
Income
純利益

4.7

10.8

4.5

7.0

-3.8

[Net [一株当たり(円)]income per share (yen)]

52.63

120.98

50.49

78.28

-42.70

Dividend per share (yen)一株当たり配当(円）Ordersreceived
受注高

30.0
203.4

385.2

30.0
143.9

315.0

-70.2
13

2-2. Outlook for Financial Results (by Segment)
Unit: 100 million yen
Transportation
Systems

交通

FY ending
May 2021
2021.5月期
Forecast
予想（通期）(Full year)

YoY Change
前年同期比Net sales
売上高

Industrial
Systems

産業

Information
Equipment
情報機器
Systems

223.5

108.0

8.5

22.0

6.5

2.5

Orders received
受注高

196.0

113.0

6.0

Net sales
売上高

-19.1

-22.2

-9.2

-2.8

-3.5

-2.1

-61.1

＋1.1

-10.1

Segment income
セグメント利益

Segment income
セグメント利益
Orders received
受注高14

3. Revision of Medium-Term
Management Plan

3-1. Review of the First Two Years of the Medium-Term Management Plan
For the first two years of the Medium-Term Management Plan “Revitalize2020” (FY ended May 2019
through FY ended May 2020), the Company focused on improving profitability, thereby achieving
intended results, including hitting profit targets and improving ROE.

Unit: 100 million yen

Net Sales
売上高
Operating Income
営業利益(Operating margin ratio)（営業利益率）Ordinary Income
経常利益
Net Income
純利益
Investment gain on
equity method
持分法投資利益
ROE
ＲＯＥ
Payout ratio
配当性向

FY ended May 20192019年5月期
Result実績
411.7
5.5(1.4％)
4.9
6.9
0.1
2.7%
39.9%

FY
ended May 20202020年5月期
Plan
計画
430.0
9.0
(2.1％)
11.0
7.0
1.2
3.3%
30.0%

Result
実績
390.7
10.6
(2.7％)
12.0
10.8
-0.3
4.4%
24.8%

290.0
130.0
10.0

242.6
130.2
17.7

<Net sales by segment>
Transportation Systems
交通事業
Industrial Systems
産業事業
Information Equipment
情報機器事業
Systems

272.3
123.3
15.8

16

3-2. Revision of Medium-Term Management Plan
The latter two years of the Medium-Term Management Plan (FY ending May 2021 through FY
ending May 2022) are renamed “Revitalize2022” and are positioned as “a period foraccumulating earning power and returning to a growth path.”
 Main objective
Although the latter two years were positioned as “a period for creating growth,” the Company
has revised its goals and approach amid ongoing uncertainty due to the global spread of thenovel coronavirus infection.
 Changes in the business environment• There is a sense of uncertainty due to the impact of the novel coronavirus.
• Signs of a recovery in capital investment due to the effects of various government policies
and a pickup in economies.
• Overseas: Signs of a recovery in demand for new construction of high-speed railway
carriages and maintenance of urban transport systems in China• Japan: Shift to the full-scale effort to realize a decarbonized society.
Advance of digital transformation (DX) The Company takes this trend as an opportunity to expand its business areas, which are
deeply involved in infrastructure development and global environmental conservation.
 Positioning of the latter two years
As “a period for accumulating earning power and returning to a growth path.”
Establish a foundation to achieve the initial target of “Securing net sales of over 47 billion yen,operating income of 2 billion yen, and ROE of 5%” within the first two years of the next
medium-term management plan.
17

3-3. Medium-Term Management Plan Fundamental Policies and Major
Actions
The Company will continue the current seven fundamental policies but has justrevised major actions by taking responses to changes in the businessenvironment into account.
*Underlined parts are revised.

1. Expanding overseas businessi.

Review our business strategies in accordance with theeconomic and technological development conditions of thecountries into which we advance.
ii. Expand new industrial business in Southeast Asia.
iii. Strategic participation in new urban transport projects.
iv. Roll out industrial motors into the Chinese market.
Manufacturing base of industrial
motors in China “Chinalco Toyo”

2. Expanding our business areas using our core technologies
i.
ii.

iii.

Promote commercialization taking into consideration
business potential and market trends.
Promote the application of IoT technology to themaintenance field.
Expand business areas through business alliancesand M&As.

Utilize our IoT terminals for maintenanceof electric equipment of railway carriages

18

3-3. Medium-Term Management Plan Fundamental Policies and Major
Actions*Underlined parts are revised.

3. Promoting development of technology in advance of market needsi.

Develop products that contribute to the realization of adecarbonized society and bring them to market at an earlystage.
ii. Promote development of test equipment that contributes tothe electrification and autonomous driving of automobiles.
iii. Commercialize wireless power supply technology at an
early stage.
A test machine for development ofiv. Establish new production technologies for key
automobiles “in-wheel-welldynamo” is under development.
components (products).
4. Establishing a stable business earnings structure
i. Improve business profitability with operating income in mind.
ii. Reduce fixed costs through the united efforts of administration, sales and plants.
iii. Promote group management that focuses on our “earning power.”a) Promote “selection and concentration” throughout the group.
b) Establish integrated operations and plant systems within the group.
193-3. Medium-Term Management Plan Fundamental Policies and Major
Actions*Underlined parts are revised.

5. Developing foundations for expanding our production capacityi.

Reinforce process control by maximizing the functions of the basic systems andestablish 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.
ii.
iii.

Promote personnel rotation to revitalize the organization.
Develop the next generation of executives and overseas employees.
Early stage development of young managers who are key persons of the organization.

7. Promoting ESG
i.
ii.
iii.

Establish sustainability policy and roadmap.
Promote working-style reforms.
Enhance corporate governance.
203-4. Medium-Term Management Plan Numerical Targets (Consolidated)
The period up to the end of the fiscal year ending May 2022 was revised to “a period for accumulating earning
power and returning to a growth path.”
Establish a foundation to achieve the initial target of “Securing net sales of over 47 billion yen, operating incomeof 2 billion yen, and ROE of 5%” within the first two years of the next medium-term management plan.
Unit: 100 million yen

Net Sales
売上高
Operating Income
営業利益(Operating margin ratio)（営業利益率）Ordinary Income
経常利益
Net Income
純利益
Investment gain on
equity method
持分法投資利益
ROE
ＲＯＥ
Payout ratio
配当性向

FY
ended May 20182018年5月期

FY
ended May 20192019年5月期

FY
ended May 20202020年5月期

FY
ending May 2022
2022年5月期

Result実績
425.2
3.6(0.9％)
5.1
6.9
1.1
2.7%
68.2%

Result実績
411.7
5.5(1.4％)
4.9
6.9
0.1
2.7%
39.9%

Result
実績
390.7
10.6
(2.7％)
12.0
10.8
-0.3
4.4%
24.8%

Revised plan
見直し計画
360
6
(1.7％)
8
7
1
3.0%
30.0%

272.3
123.3
15.8

242.6
130.2
17.7

220
130
10

<Net sales by segment>
Transportation Systems
交通事業
Industrial Systems
産業事業
Information Equipment
情報機器事業
Systems

279.4
117.6
28.0

* In the fiscal year ended May 2018, we paid a commemorative dividend of 20 yen to celebrate the
100 year anniversary of our founding in addition to the ordinary dividend of 30 yen.

21

4. Topics

4-1. Sales Activity
Promoting sales activities that utilize our website
 IoT & 5G Solutions Expo (October 2020)
The Company opened a booth at the Expo,
held at Makuhari Messe, and in parallel,
started a dedicated page on the Company’s
website.
By doing this, we were able to show ourremote monitoring IoT terminals to customers
who did not visit our booth.

 Online preview showing of transportation products (December 2020)
The Company held a preview showing of new
products for customers in our website.
About 15 products were introduced through interviews
with engineers and promotion videos.
We will analyze the results of accesses to the website
by customers to held online sales meetings about
products that interested them.
23

4-2. Overseas Operations
Sales activities of Chinalco Toyo (Changshu, Jiangsu Province, China)
Chinalco Toyo exhibited at the International Motor Exhibition in Shanghai in
November 2020.
Permanent magnet synchronous motors manufactured by Chinalco Toyo weredisplayed there, and sales activities were conducted to prospective customers(manufacturers of fans, pumps, compressors, mechanical products, etc.), andactions were taken to find suppliers.
• Exhibition name: MOTOR CHINA 2020
• Exhibition hall: Shanghai New International Expo Center• Exhibition period: From Monday, November 16, 2020 to Wednesday, November
18, 2020• Exhibited product: Permanent magnet
synchronous motor• The Company advertised the roll-out
of its highly efficient permanent
magnet synchronous motors into theChinese market.
24

4-3. ESG/SDGs Initiatives
The Company’s products contribute to the realization of a decarbonizedsociety and its sustainable development.
• The Company’s products are widely adopted by railway operators, automotive
manufacturers, and for plant facilities as energy-saving products, and contribute to
reducing environmental burden and establishing and developing social infrastructure.
• The Company contributes to the spread of renewable energy with its product groups forsmall hydroelectric power generation, wave power generation, biomass power
generation, and grid interconnection technologies, as well as remote monitoring
systems.
• The Company supports the realization of a decarbonized society with its non-contact
power supply technology.
• Efforts are made particularly on penetrationof energy-saving products toward achieving
sustainable development goals 7 and 13.
“SDG 7: Affordable and clean energy”“SDG 13: Climate action”<

The Company’s products are widely used in society. >25

4-3. ESG/SDGs Initiatives
Specific initiatives
 Held a donated course at Yokohama City University
The donated course was on the theme of the “Future of EcoCities Pioneered by Green Purchasing and SDGs.”
Under the title of “The history of railways and railway
ecology,” this course introduced the features of electric trains
with excellent environmental performance by linking themwith the Company's business activities and SDGs.
 Conducted clean-up activities around the plant.
Employees of the Shiga Ryuo Plant participated in a river
beautification campaign organized by a river beautification
association Ryuo Seiryu Kai. Conducted river cleanup
activities in cooperation with local governments andneighboring companies.
 Published Toyo Denki Seizo Report 2020
Issued an integrated report “Toyo Denki Seizo Report 2020.”
Showed the Company’s efforts in SDGs to the public inaddition to its business report, ESG report, and financial
report.
https://www.toyodenki.co.jp/esg_csr/report.php
26

Thank you for your interest.
https://www.toyodenki.co.jp<Inquiries>
Toyo Denki Seizo K.K.
PR, IR, and CSR Department, Management Planning Division
TEL: +81-3-5202-8122
Email: contact@toyodenki.co.jp

Disclaimer• Statements concerning financial results forecasts are based ondata available as of the date of publication of this material andassumptions concerning the elements of uncertainty that willaffect future business performance as of the date of publicationof this material. Actual financial results may differ depending on
a variety of factors.
• Forward-looking statements contained in this material are thejudgments of the Toyo Denki Group based on data available atthe time of publication of this material. Such statements anddescriptions are by no means comprehensive.

28