TOYO TANSO Results for the Fiscal Year Ended
May 31, 2010

July 2010
Copyright © Toyo Tanso Co., Ltd. All Rights Reserved

Toyo Tanso Co., Ltd.

Table of Contents

1-1. Business Results
1-2. Results for the Fiscal Year Ended May 31, 2010
1-3. Factors Affecting Changes in Recurring Profit
1-4. Net Sales
2-1. Earnings Forecast for the Fiscal Year Ending May 31, 20112-2. Future Investment (Capital Investment, Depreciation Cost, R&D Cost)
2-3. Return of Profits to Shareholders
2-4. Key Performance Indicator Trends
3. Brushes, a Super Product and an Engine of Growth – Brush Division(Reference 1) Overview of Operations by Product and Segment(Reference 2) Balance Sheet for the Fiscal Year Ended May 31, 2010

P. 3
P. 4
P. 5
P. 6
P. 9
P.10
P.11
P.12
P.13
P.15
P.17

(Reference 3) Statement of Cash Flows for the Fiscal Year Ended May 31, 2010

P.18

Copyright © Toyo Tanso Co., Ltd. All Rights Reserved21-1. Business Results(単位：百万円)(Unit:
Yen, millions)

Net sales

Recurring profit

40,00012,00034,53135,00031,381

32,00030,97430,00010,00027,92425,49225,000 23,003

7,795

8,000

7,123

20,000

6,000
4,961

15,0003,724

17,372

15,500
4,100

3,369
2,280

5,000

4,483

14,866
12,227

10,00017,979(Q2 cumulative)

3,754(Q2 cumulative)

4,000

12,6462,070(Q2 cumulative)

2,500(Q2 cumulative)

2,000(Q2 cumulative)(Q2 cumulative)

1,200
661

0

FY05/5

Copyright © Toyo Tanso Co., Ltd. All Rights Reserved

FY06/5

FY07/5

FY08/5

FY09/5

FY10/5

FY11/5(Forecast)03

1-2. Results for the Fiscal Year Ended May 31, 2010
(Unit: Yen, millions)

FY9/5

FY10/5

Change%increase

Net sales

30,97427,924(3,049)(9.8%)

Operatingprofit

4,741

2,253

(2,488)(52.5%)

15.3%

8.1%

Ratio of operating
profit to net sales

Recurringprofit

4,483

2,070

Ratio of recurring
profit to net sales

14.5%

7.4%

Profit before
income taxes

4,615

2,225

Net income

2,566

1,442

Net income
per share

123.80 yen

69.56 yenExchangerate

99.6 yen/＄
138.3 yen/€

92.0 yen/＄
129.3 yen/€

Copyright © Toyo Tanso Co., Ltd. All Rights Reserved(2,413)(53.8%)(2,390)(51.8%)(1,124)(43.8%)

Notes
・The impact of production andinventory adjustments by ourcustomers weighed down on mostapplications until 2010 Q3 andadversely impacted net sales.
・In 2010 Q4, a robust increase inorders rapidly boosted sales almost to
their previous peak level.
・The strong yen and the decline inmarket prices had an almost
devastating effect, but net sales
somehow landed at a level only 10%
lower compared to the previous year.

・In addition to a drop in marginal
profit as a result of decreased net
sales, profit margins also declined dueto the impact of the stronger yen,increased depreciation costs, andfalling market prices.
・However, profit margins improved in2010 Q4, as a result of a rapid
increase in sales.
41-3. Factors Affecting Changes in Recurring Profit
Profits declined primarily as a result of increased depreciation costs,
the impact of the stronger yen, and falling market prices

5,000

4,483
462

4,000

2,000

1,000

Change indepreciation
costs

636
Impact ofexchangerates

FY09/5Recurringprofit3,000

Reduced personnel
expenses and travel
expenses

The majority of products
saw a drop in sales prices(mainly in China)

Partialcarryover tothe following
year

Product
structuredifferences
and pricerevisions

FY10/5Drop in prices offeed coke and fuels(kerosene)

1,526
113
Change insales
volumes

Differencein othercosts

Streamlining
and differencein operating
rates

419

Considerable recovery in Q4

473
270

Recurring profit(Unit: Yen, millions)

2,070

Change inrawmaterials
prices0

Copyright © Toyo Tanso Co., Ltd. All Rights Reserved51-4. Net Sales by Product and Segment(Unit: Yen, millions)(comparison with previous year)
Total ofSpecial Graphite Products

34,53135,00031,381

32,00030,9748,098

30,00027,924

6,261

25,492
4,804

20,0006,616

14,184
6,190

1,769
2,682

2,086

4,257

1,008

2,991

2,735

936
2,269

4,598
4,081

[Carbon Products for Mechanical(-17.0%)Applications]

1,871

1,776

10,000Carbon Products for General Industries

16,1846,460

15,000(-7.1%)

15,834

8,100

13,8077,227(-4.2%)

Special Graphite Products[Others]

7,057

7,783

Special Graphite Products

8,250
17,96815,916(-19.0%)[General Industries Applications]

8,715

25,000Special Graphite Products[Electronics Applications]

967
2,314
4,062

3,931

Carbon Products for General Industries[Carbon Products for Electrical
Applications]Compound Materials andOther Products[Three Major Products](-3.7%)(-2.3%)

3,811
5,524

5,000
5,261

7,555

525

969

FY06/5

FY07/5

Copyright © Toyo Tanso Co., Ltd. All Rights Reserved

5,939
7,295

2,031

0

6,454
7,924
1,469
1,047

FY08/5

1,355
676

FY09/5

6,711

5,802

908
827

FY10/5

8,588
9,597
1,008
191

FY11/5(Forecast)Compound Materials andOther Products[Other products]

Related goods(-33.0%)(+22.4%)6

1-4. Net Sales by Product and Segment (half-year basis)(Unit: Yen, millions)(comparison with previous year)

20,00018,00017,372

16,00014,00017,97917,159

3,897
9,066

12,00012,994

9,451

8,902

3,880

1,453
2,487

0

3,780

1,537

1,502

2,666

2,803

2,110

2,377

399
1,233

448
1,041

1,704

1,915

4,145

694
584

776
463

4,198

803
450

3,096

FY08/5

FY08/5

FY09/5551
226
FY09/5

Q1 + Q2
cumulative

Q3 + Q4
cumulative

Q1 + Q2
cumulative

Q3 + Q4
cumulative

Copyright © Toyo Tanso Co., Ltd. All Rights Reserved

487
1,228
2,016

3,395

3,453

2,544

(+8.7%)(+17.9%)

3,387

819

3,369

(+20.9%)Carbon Products for General Industries[Carbon Products for MechanicalApplications]

3,220

609

3,086

Special Graphite Products[General Industries Applications]

3,836

6,472

6,733

4,000
2,000

12,646

3,666

3,793

(+19.1%)

Special Graphite Products[Others]

7,712

4,219

950

6,000

15,278

5,048

4,201

10,0008,000

Total ofSpecial Graphite Products

Special Graphite Products[Electronics Applications]

2,349
2,761

411
456

Carbon Products for General Industries[Carbon Products for Electrical
Applications](+5.3%)

Compound Materials andOther Products[Three Major Products](+47.0%)Compound Materials andOther Products[Other products](+20.5%)

Related goods(-18.5%)3,950

FY10/5496
371
FY10/5

Q1 + Q2
cumulative

Q3 + Q4
cumulative7

1-4. Net Sales by region
Overseas sales continued to be high (56.0%), particularly with the increasing presence of Asia

(Unit: Yen, millions)

Percentage Distribution
Japan

40,00034,531

Slumping demand across most segments,
particularly semiconductors, as a result of the
dragging impact of production and inventory
adjustments

35,00031,38130,97427,92430,00025,492

16,92725,00013,426

16,313

12,291
20,0009,867

Compound semiconductors and brushes faredwell, and the mainstay solar cell segment
recovered toward the end of the year, to markan overall recovery trend

10,017

5,000

3,337

0

2,928
315
FY06/5

Copyright © Toyo Tanso Co., Ltd. All Rights Reserved

4,158

3,561
3,058

3,864
229
FY07/53,324
254
FY08/5(11.0%)

10,392
North America

4,970
3,826

(35.9%)

Weak demand all around, against the
downturn of European economies

15,00010,000Asia

Europe13,9407,146(44.0%)

3,295
298
FY09/52,376
180
FY10/5(8.5%)

Demand for mainstay semiconductors, solar
cells, and polysilicon manufacturing products
slowed down and bottomed out at the end of
the year

Other regions(0.6%)
8

2-1. Earnings Forecast for the Fiscal Year Ending May 31, 2011
Notes
(Unit: Yen, millions)

FY10/5

FY11/5(Forecast)

Change%increaseNet
Net salessales

27,92432,000

4,075

14.6%

OperatingOperatingprofitprofit

2,253

2,500

246

11.0%

Ratio of operating
profit to net sales

8.1%

7.8%

Recurring
Recurringprofitprofit

2,070

2,500

Ratio of operating
profit to net sales

7.4%

7.8%

Net
Net income
income

1,442

1,500

Net
Net income
incomeperper shareshare

69.56 yen72.34 yenExchange
Exchangerate
rate

92.0 yen/＄
129.3 yen/€

90 yen/＄110 yen/€

Copyright © Toyo Tanso Co., Ltd. All Rights Reserved

429

20.8%

57

4.0%

・Full-scale recovery was seen across all
applications, particularly in the mainstay
solar cell and semiconductor products, with
Asia continuing to lead the trend.
・ Demand for coated products grewconsiderably as a result of the robust
performance of LED and other compound
semiconductors. C/C composite products also
showed rapid expansion mainly in solar cell
products. Compound materials increased its
overall share to 30%.%.
・ Despite losses caused by a stronger yen(approx. 1 billion yen decrease year-on-year),
we forecast net sales of 32 billion yen (yearon-year increase of 14.6%), with acommitment to regain our growth momentum.
・Even factoring in the increase in marginal
profit from increased sales, we estimate arecurring profit of 2.5 billion yen (year-onyear increase of 20.8%), taking into
consideration the considerable increase indepreciation costs (+17.1 billion yen)accompanying large-scale investments madeduring the previous year, as well as theimpact of the stronger yen and declining
prices in some applications.

92-2. Future Investment(Capital Investment, Depreciation Cost, R&D Cost)
Full-scale operations commenced at the new Takuma isotropic graphite plant. The completion of large-scale
investments brought the size of investments to ordinary levels. Depreciation costs will reach peak as a resultof high-level investments made during the previous year.
(Unit: Yen, millions)(Unit: Yen, millions)
12,000

1,300
1,200

1,130

10,141

1,100
1,000

1,018

900
800

731

700

4,255
4,000
2,166

2,000

R&D cost

1,037

R&D cost

6,000

941

Depreciation cost

8,000

1,014
Capital investment

・ Depreciation cost
Capital investment

10,000

1,392

5,484

5,437

3,255

3,291
2,755
2,091

1,709

649

746

0
FY07/5(Q2 cumulative)

1,276

400
(Q2 cumulative)

1,892

300

1,561

(Q2 cumulative)

600
500

3,753

(Q2 cumulative)

Copyright © Toyo Tanso Co., Ltd. All Rights Reserved

4,746

4,300

(Q2 cumulative)

FY06/5

5,469

5,113

200
1,615

100
0

FY08/5

FY09/5

FY10/5

FY11/5(Forecast)10

2-3. Return of Profits to Shareholders Dividend Trend
We plan to increase dividends next year, in anticipation of future profit growth and cash flow improvement
Payout ratio

Dividends
35 yen(33)

40%

Dividends per share(30)

Dividends per share(Figure taking theshare split into account)

30 yen28.8%

Consolidated payout ratio

25 yen(30)(22.5)

30.4%
30%

22
20

20 yen

35%

25%

20

20%

15

15 yen12
10 yen

15%

10

16.2%
10%

5 yen

5%

6.1%
4.1%
0 yen

FY06/5

3.6%
FY07/50%
FY08/5

FY09/5*A 3-for-2 stock split was conducted on June 1, 2007
Copyright © Toyo Tanso Co., Ltd. All Rights Reserved

FY10/5

FY11/5(Forecast)11

2-4. Key Performance Indicator Trends

25%
22.7%

22.6%
Recurring profit ratio

20%

19.5%

ROE
ROA

14.5%

15%
12.4%

11.9%

8.9%

9.1%

11.3%
10%

7.4%

7.1%

7.8 %

5.5%
5%
4.4%

3.0%
2.4%

0%
FY06/5

Copyright © Toyo Tanso Co., Ltd. All Rights Reserved

FY07/5

FY08/5

FY09/5

FY10/5

FY11/5(Forecast)12

3. Brushes, a Super Product and an Engine of Growth —Brush Division

Net sales of the brush division
All divisions(Unit: Yen, billions)
35
30
25

25.4

34.5
31.3
30.9
All divisions

32
27.9

23
8.7

8

20
6.2

8.2
7

Electronics segments
4.2
4.1
4

4.3

4.8

4.8

3.6

3.8

4.4 Brushes

10
8
6
4
2
0

FY05/5 FY06/5 FY07/5 FY08/5 FY09/5 FY10/5 FY11/5(Forecast)

Brush and electronics segments

1. Development and characteristics of the brush division
Net sales by region (fixed exchange rate)
5432

Europe,Americaandotherregions

0.98
Asia

1.45

1
0

Net sales by application(Unit: Yen, billions)

Japan

0.93
FY05/5

0.84

0.84

0.68

0.61

(as of FY10/5)

0.67

0.82

1.6

0.96
FY06/5

Others*VacuumWashing

1.99

2.11

2.11

2.24

2.47

1.03

1.09

1.02

0.97

0.95

FY10/5）

FY07/5

FY08/5

FY09/5

FY11/5(Forecast)

Net Sales cleaners
machines
4 billion yen
Electric tools*Brushes for industrial, automotive,
and small home appliances

1. Maintains slow but steady growth, unaffected by economic conditions.
2. Supports business performance by maintaining stable double-digit profit rates, albeit in the low
profitability.
3. The three major applications are worth approximately 12 billion yen, corresponding to a market share of
30%. (Vacuum cleaner applications have the largest share in the market at 50%.)
4. Globalization was achieved from an early stage with the establishment of production bases in China and Europe,
which now account for approximately 80% of net overseas sales.
5. A global business unit that cuts across all organizations, companies and regions ensures efficient global
competence.
6. Our company was founded on this segment. While it is a mature industry, there is ample room for growth inemerging countries. Brushes are a super product that hold the key to development and technologicalinnovations.
Copyright © Toyo Tanso Co., Ltd. All Rights Reserved13

3. Brushes, a Super Product and an Engine of Growth —Brush Division

2. Future strategies and mid-term visions
1. The market is showing gradual growth particularly in emerging countries.
To increase our share, we plan to expand our business by steadily achieving
a 5% or greater annual growth of net sales.
2. We will strengthen the production system in our three
production bases in Japan, China, and Europe.
3. We will further accelerate our efforts to strengthen global
competence. We will soon begin to study expanding
our operation to other regions.
4. We will direct our efforts to developing new products andcultivating new applications.
5. To cope with declining market prices, we will make greater
efforts to cut costs (introduce automation, improve processes,
and promote production in optimum locations).

Netsalessales
Net

7.0billion
billionyenyen
Net sales 7.0
Net sales
30million
millionNetsalessales
5.5 billion yen 30
Net
5.5 billion yen unit*
capacity
4.1billion
billionyenyen
20 million unit* capacity
4.1
20 million
16million
millionunit* capacity
16
unit* capacity
unit*capacity
capacity
unit*
Target for
Forecast for
Target for
thenext
the next
FY11/5
4 – 5 years
7 – 9 years*Monthly production quantity of mass-produced
brushes in terms of pellets<Expansion of the brush business>(Shanghai Toyo Tanso Co., Ltd.)

Brush Division Global Meeting (July 7 – 8, 2010)
Copyright © Toyo Tanso Co., Ltd. All Rights Reserved（Toyo Tanso Europe S.p.A.）(Totankako Co., Ltd.)

14

(Ref. 1) Overview of Operations by Product and Segment

Notes and future outlook (1/2)

Image of net sales byapplication

Application

Electronics applications
General industries applications
and others

Special graphite products

FY10/5
Q1, Q2

FY10/5
Q3, Q4

Notes and future outlook

FY11/5
Forecast

Products for solar cellmanufacturing

・ The slump in demand continued during the first half of the year, particularly in the Chinese and European markets,
but signs of recovery were evident mainly in China after the turn of the year.
・ The domestic market also showed a recovery trend in the latter half of the year. The trend is expected to continue
strong hereafter, given improved operations among our major customers and the launching of new facilities.
・ Net sales in 2010 Q4 fell to around 80% of their previous peak level (excluding C/C), but recovered to the 90%
level in terms of quantity, when taking into account the decline in foreign exchange rates and prices.
・ Given improvements in the macro environment brought about by heightened environmental awareness, thetemporary upset settled down to a gradual but steady growth trend. This year, we forecast a 30% or greater growthcompared to the previous year, even accounting for losses caused by a stronger yen, and expect sales to reach theirprevious peak level in the latter half of the year.

Products for single
crystal silicon
manufacturing

・The impact of our customers’ inventory adjustments dragged on and caused a slump in demand, but orders
increased after the turn of the year, and sales levels in 2010 Q4 bounced back to reach approximately 90% of theirprevious peak level.
・However, this year we anticipate only a slight increase in sales from 2010 Q4, because the pending issue ofincreasing the production of 300 mm wafers still remains unclear.

Products for compound
semiconductor
manufacturing

・ Non-coated products are mainly used in the manufacture of GaAs substrates for mobile-phone IC switches and PC
wireless LAN. Having a large market in Japan, they will continue to enjoy stable demand. (LEDs and otherproducts for compound semiconductor manufacturing are mentioned under SiC coated graphite products below, as
the majority are coated products.)

Products for EDM
electrode
manufacturing

・ A recovery trend emerged in the latter half of the year. Demand returned, owing to the recovery of the automobileand consumer electronics industries particularly in China and other overseas markets.
・ The mold industry is in a difficult state characterized by severe competition, especially in the domestic market. We
are placing our hopes on further increases in demand in Asia and emerging countries.

Products forcontinuous casting andmetallurgy, etc.

・ Demand returned to normal levels overall, as a result of the turnaround of the economy and increased infrastructure
investments particularly in emerging countries.
・ Given the robust performance of the automotive and semiconductor/electronic parts industries, steady demand isanticipated mainly in products used in the manufacture of optical fibers and electronic materials and products
related to industrial furnaces and continuous casting.

Copyright © Toyo Tanso Co., Ltd. All Rights Reserved

15

(Ref. 1) Overview of Operations by Product and Segment

Notes and future outlook (2/2)

Image of net sales by application

Carbon products formechanical applications
Carbon products forelectric applications

Three major products

Compound materials and other products

Carbon products for general industries

Application

FY10/5
Q1, Q2

FY10/5
Q3, Q4

FY11/5
Forecast

Notes and future outlook

Products for generalindustries

・ In the domestic market, mainstay bearings and seals shifted to a recovery trend in the latter half of the year as the performance ofpumps and air conditioners bounced back. This moderate trend is expected to continue hereafter.
・ Overseas demand is finally picking up and showing positive growth, with efforts for cultivating new customers making gains, as aresult of robust growth in the energy and infrastructure industries.

Products fortransport machinery・ Pantograph sliders remain unaffected by economic conditions, and continue to enjoy small but steady demand. While sales to private
railways companies are expanding at a gradual rate, we are also exploring and contemplating overseas advancement in considerationof various measures, including collaboration with other industries.

Products for small
motors・ Given the recovery of the global economy, demand returned quickly mainly in the core Chinese market. Overseas sales account for
approximately 80% of net sales, and are gradually increasing, although there has been some loss caused by a stronger yen. Domestic
sales also picked up, but the situation is relatively difficult, due in part to the hollowing out of the industry.
・ Efforts were directed to achieving further increases in sales by pushing forward global strategies particularly in China. Sequential
facility expansions are also being planned in China.

Industrial andautomotive products,
etc.

・ Products for industrial uses emerged from their slump and are beginning to recover, but sales remain small. Demand for automobile
products (fuel pumps, etc.) continued to grow steadily, led by the growth of hybrid vehicles and motorcycles.

SiC coated graphite
products

・ Compound semiconductor products continued to show strong growth, mainly in LEDs. Increased demand particularly in South Korea,
Taiwan and China tightened the demand-supply situation and prompted increased activities in domestic plants which had been lagging
behind Asian plants. Products for LCD backlights and lighting show signs of full-fledged recovery, and products for compound
semiconductors are expected to continue their strong upward trend. Semiconductor-related products (for Si-Epi, etc.) appear to havebottomed out at long last and to be moving toward full-scale recovery.
・ On the whole, sales in the latter half of the year increased by more than 30% compared to the first half of the year, and are expected to
expand by more than 70% this year on a year-on-year basis. In anticipation of this increase, we are strengthening our supply system byconsiderably expanding facilities in our production bases in Japan and the United States. We aim to gain an overwhelming edge over
our rivals by increasing our competitive power in integrated manufacturing, from material development to processing and coating.

C/C composite
products

・ Products for the manufacture of 300 mm wafers continued to struggle as a result of the dragging impact of inventory adjustments bymajor customers, but signs of recovery began to appear at long last, as a result of the gradual progress of adjustments.
・ Sales of solar cell products increased considerably in 2010 Q4, thanks to increased demand for thin-film type products and demand
from new customers. The rapid expansion was also boosted by the delivery of products related to nuclear fusion reactors for which
orders were already previously received.
・ Sales in the latter half of the year increased two-fold from the first half of the year, and are expected to increase by more than 40% by
year end on a year-on-year basis.

Graphite sheets

・ Our mainstay products for automobiles and semiconductors took the lead in showing a recovery, and steadily increased in demand
from the first half of the year. The strong upward trend is expected to continue hereafter.

Copyright © Toyo Tanso Co., Ltd. All Rights Reserved

16

(Reference 2) Balance Sheet for the Fiscal Year Ended May 31, 2010

(Unit: Yen, millions)

FY09/5Notes

FY10/5
 Increase of 2,398 million yen

from the end of FY09/5, as aresult of the recovery in sales
in 2010 Q4.

Total
Total assets
assets58,821

61,786Trade
Trade notes
notes and
andaccounts
receivableaccounts receivable

8,257

10,656Inventory
Inventory

9,520

10,910 Increase of 1,390 million yen

from the end of FY09/5, as aresult of the systematic
accumulation of intermediatestock.

Tangible
Tangible fixed
fixed assets
assets23,20828,290Total
Total liabilities
liabilities andandnet
net assets
assets58,821

61,786

Interest-bearing
Interest-bearing debt
debt

1,394

2,113

 Increase of 5,082 million yen

from the end of FY09/5, as aresult of expanded capacity inisotropic graphite production
and added-value processes.

CapitalCapital

7,692

7,692

Net
Net assets
assets

48,606

48,960EquityEquity ratio
ratio

80.6％

77.4％

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17

(Reference 3) Statement of Cash Flows for the Fiscal Year Ended May 31, 2010

(Unit: Yen, millions)

FY09/5

FY10/5

Cash and cash equivalents at
the end of the period

6,412

5,802

Changes in cash and cash
equivalents(4,079)(609)
 Despite increase in

Cash and cash equivalents atthe beginning of the period

10,491

6,412

CF from operating
activities

5,105

3,377

CF from investing
activities(8,420)(4,103)

CF from financing
activities

(568)

252

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Notes
ポイント

depreciation costs, net
income decreased.

 Expenditures were made forthe acquisition of tangible
and intangible fixed assets,
but proceeds from time
deposits resulted in a net
decrease.

18

Note: This presentation contains “forward-looking statements” and forecasts of business results. Thesestatements are not historical facts but instead represent the Company’s beliefs regarding future
events, many of which, by their nature, are inherently uncertain and out of the Company’scontrol. It is possible that the Company’s actual results may differ, possibly materially, from theanticipated results and financial condition indicated in these forward-looking statements.
IR Contact
E-mail: ir@toyotanso.co.jp

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19