FY2017 Financial Results

May 9, 2017

0/34

I. Financial Summary
1. Points of financial results
2. Financial results for FY2017
3. Financial forecast for FY2018

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Points of Financial Results for FY2017
1. Profits decreased from previous fiscal year due tonegative impact of yen appreciation. However, weachieved increase in profits if not affected by yen
appreciation.
2. Dividends for FY2017 is ¥125, ¥5 increase fromprevious fiscal year. Plan of dividends for FY2018 is¥130, ¥5 increase from FY2017.
3. Decrease in net sales and increase in profits are
expected for the full year forecast, due to impact ofapplication of IFRS. However, increases in net sales
and profits are expected if FY2018 forecast on IFRS
and FY2017 results on IFRS estimation are compared.
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Performance <FY2017>(Billion yen)

FY2016FY2017(Japanese GAAP)(Japanese GAAP)

Change2,243.2

2,250.4

7.2

0.3%

Operating profit

134.7

122.9

(11.8)(8.7%)

Ordinary profit

185.3

177.1

(8.2)

(4.5%)

Profit attributable toowners of the parent

183.0

125.5

(57.5)(31.4%)

Earnings per share¥582.58¥402.00(¥180.58)-

Dividends per share[Year end]

¥120
[¥60]

¥125
[¥65]

5
[¥5]

[-]

Consolidated payout ratio

20.6%

31.1%

-

-

Total return ratio

30.4%

31.1%

-

-

¥/US$

¥120

¥108

(¥12)

-

¥/Euro

¥133

¥119

(¥14)

-

Net sales- Better model mix in Vehicle business contributed to increase of net sales.
- Profits decreased due to negative impact of exchange rate fluctuations, especially in Materials
handling equipment segment and Car air-conditioning compressor business..
- Increase of dividends from FY2016 ¥120 to FY2017 ¥125.
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Segment Information <FY2017>
Net sales [Operating profit](Billion yen)

FY2016FY2017(Japanese
GAAP)(Japanese
GAAP)

ChangeVehicleEngine

480.0
158.2

557.6
167.3

77.6
9.1

16.2%
5.8%

Car air-conditioning
compressor

342.6

334.7

(7.9)

(2.3%)

Electronics parts,
foundry and others

64.8

64.7

(0.1)

(0.1%)

Automobile

1,045.7[33.3]

1,124.5[26.9]

78.8[(6.4)]

7.5%

Materials handlingequipment

1,031.4[87.1]

1,001.5[84.3](29.9)[(2.8)](2.9%)

Textile machinery

65.6
[4.1]

66.2
[5.0]

0.6
[0.9]

0.9%

Others

100.2
[9.3]

58.0
[6.5]

(42.2)[(2.8)](42.1%)

Total

2,243.2[134.7]2,250.4[122.9]7.2[(11.8)]0.3%

Unit sales(Thousand units)
FY2016FY2017

ChangeRAV4Vitz (Yaris)

201
92

206
101

5
9

Vehicle

293

307

14

DieselGasoline

242
192

294
207

52
15

Engine

434

501

67

Car air-conditioning
compressor

30,37032,5502,180Materials handlingequipment

239

253

14

Air-jet loom

6.2

6.9

0.7

Vehicle:Better model mix with production of HEV models of RAV4 and Yaris, as well as increase of unit sales
contributed to increase of net sales.
:Net sales increased by unit sales increase of GD diesel engines, manufactured in Japan as well as in India.
EngineCar air-conditioning compressor :Although unit sales increased in each region, net sales decreased due to negative
impact of yen appreciation.
:Although unit sales increased in Europe and other regions, net sales and profits
Materials handling equipment
decreased due to negative impact of yen appreciation.
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Changes in Operating Profit and Ordinary Profit
Year-on-year comparison (FY2016 and FY2017)
Ordinary profit: ¥8.2 billion decrease(from ¥185.3 billion to ¥177.1 billion)
Operating profit: ¥11.8 billion decrease (from ¥134.7 billion to ¥122.9 billion)

+10.0

+5.0

(21.5)*

Decrease indepreciation+16.5(Billion yen)

(6.9)

Sales efforts
Negative
impact ofexchangerate
fluctuations

185.3
Cost
reduction(14.9)
Increasein labor
cost

+3.6

177.1

Increase in Changes in the net
expenses amount of nonoperating profit andand others non-operating
expenses+31.5(43.3)FY2016*Cost reduction as well as sales efforts of the Materials handling equipment segment
and Car air-conditioning compressor business contributed to the increase of
consolidated profit.
*Exchange rate fluctuations and increases in labor cost as well as expenses and others
negatively affected on profits.

+3.6
FY2017*Includes ¥5.9
billion exchange
conversion loss on
operating profit
outside Japan.
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Changes in Operating Profit and Ordinary Profit
Year-on-year comparison (FY2016 and FY2017)

Progress of profit improvement

Ordinary profit: ¥8.2 billion decrease(from ¥185.3 billion to ¥177.1 billion)
Operating profit: ¥11.8 billion decrease (from ¥134.7 billion to ¥122.9 billion)

+16.5
185.3

(21.5)(6.9)(Billion yen)

(14.9)＊1

Increase inlabor cost

+18.0

+3.6

177.1

Cost reduction(3.0)
Negative
Decrease of profit Sales efforts
impact of arising from gain
exchange on sales of sharesrateof subsidiaries*2
fluctuations(24.5)

Increase in
expensesand others

Profit improvement +12.7

FY2016

Substantially progressed profit improvement, if excluded
negative impact of exchange rate fluctuations and decreaseof profit arising from gain on sales of shares of subsidiaries.

Changes in the
net amount of
non‐operating
profit and non‐operatingexpenses+3.6
FY2017*1: Includes ¥5.9 billion exchange

conversion loss on operating
profit outside Japan.
*2: Asahi Security Co., Ltd. andWanbishi Archives Co., Ltd.

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Performance <FY2017>(Billion yen)

FY2016FY2017

ChangeInvestments intangible assets

75.4

77.7

2.3

3.1%

Depreciation

77.3

72.3

(5.0)

(6.5%)- Investments in tangible assets in the Automobile segment increased, mainly for the vehicle
and car air-conditioning compressor businesses, while it decreased in the Materials
handling equipment segment.
- Depreciation decreased because of exclusion of Asahi Security Co., Ltd. and Wanbishi
Archives Co., Ltd from consolidation.

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Performance <FY2017>(Billion yen)

As of March
31, 2016

As of March
31, 2017

Total assets

4,199.1

4,428.6

229.5

5.5%

Total net assets

2,113.9

2,256.2

142.3

6.7%

Total net assets
per share¥6,481.97¥6,995.47¥513.50-

Equity ratio

48.5%

49.0%

-

-

Consolidated
subsidiaries

214

207

(7)

-

Change*Total assets and total net assets increased due to an increase inmarket value of investment securities.

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Performance <FY2018 Forecast>
FY2017FY2018(Japanese GAAP)(IFRS)(Billion yen)

Change2,250.4

1,850.0(400.4)(17.8%)

Operating profit

122.9

135.0

12.1

9.8%

Ordinary profit

177.1

188.0

10.9

6.2%

Profit attributable toowners of the present

125.5

130.0

4.5

3.6%

Earnings per share¥402.00¥418.69¥16.69-Cash dividends per
share 〔Year-end〕

¥125
〔¥65〕

¥130
〔¥65〕

¥5
〔-〕

〔-〕

Payout ratio

31.1%

31.0%

-

-

¥/US$

¥108

¥105

(¥3)

-

¥/Euro

¥119

¥115

(¥4)

-

Net sales

Note: FY2018 forecast is based on IFRS, showing profit before income taxes instead of ordinary profit.

[Impact on application of IFRS]- Net sales decreases by ¥580 billion due to offset of pass through sales and other factors.
- Operating profit increases by ¥3 billion due to discontinuance of depreciation of goodwill andother reasons.
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Segment Information <FY2018 Forecast>
Net sales [Operating profit](Billion yen)

FY2017FY2018(JapaneseGAAP)(IFRS)

ChangeUnit sales(Thousand units)
FY2017FY2018Change3.7%

RAV4
Vitz (Yaris)

206
101

205
95

(1)
(6)

2.3

3.6%

Vehicle

307

300

(7)

580.0

(544.5)(48.4%)

DieselGasoline

294
207

281
249

(13)
42

1,001.5[84.3]

1,156.0

154.5

15.4%

Engine

501

530

29

Textile machinery

66.2
[5.0]

56.0

(10.2)(15.4%)

Car air-conditioning
compressor

32,55033,500950

Others

58.0
[6.5]

58.0

0

0.0%

Materials handlingequipment

253

255

2

1,850.0[135.0](400.4)[12.1](17.8%)

Air-jet loom

6.9

5.0

(1.9)

Total

2,250.4[122.9]VehicleEngine

557.6
167.3

72.0
94.0

(485.6)(73.3)(87.1%)(43.8%)

Car air-conditioning
compressor

334.7

347.0

12.3

Electronics parts,
foundry and others

64.7

67.0

Automobile

1,124.5[26.9]

Materials handlingequipment[Impact on application of IFRS]- Net sales decrease due to offset of pass through sales includes ¥490 billion in Vehicle business and¥80 billion in Engine business.
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Changes in Net Sales
Year-on-year comparison (FY2017 full year and FY2018 full year forecast)2,250.4(580.0)(Billion yen)

+60.0

(30.4)

1,850.0+150.01,670.4
Impact on *1
applicationof IFRSFY2017(Japanese GAAP)FY2017(IFRS estimation)

Impact of
Existing business exchange rate
fluctuations
Acquisition of *2
logistics systems
companies

FY2018 (IFRS)+179.6*1 Off-set of pass-through sales (Vehicle: ¥490 billion, Engine: ¥80 billion) and others*2 Bastian Solutions and Vanderlande Industries¥179.6 billion increase is expected based on IFRS comparison
11/34

Changes in Profit before Income Taxes (ordinary profit) and Operating Profit
Year-on-year comparison (FY2017 full year and FY2018 full year forecast)Profit before income taxes ¥7.9 billion increase (from ¥180.1 billion to ¥188.0 billion)
Operating profit: ¥9.1 billion increase (from ¥125.9 billion to ¥135.0 billion)+16.0
Cost reduction
＋8.0

177.1

+3.0
Impact on *1
applicationof IFRS

180.1

Sales efforts＋8.0

Profitimprovement(Billion yen)

(16.0)
Labor cost
(8.0)
Depreciation(0.7)
Expenses andothers (7.3)

+14.0
(4.9)

Increase in
expenses

Impact of *2 Change inexchange rate
retirement
fluctuations
benefit plan

+9.1
FY2017 (Japanese GAAP) FY2017 (IFRS estimation)

(1.2)

188.0

Negative
impact offinancialearnings andexpenses(1.2)
FY2018 (IFRS)*1 ¥7.0 billion increase for discontinuance of depreciation of goodwill,¥3.0 billion decrease for method change in depreciation,¥1.0 billion decrease for others*2 ¥1.4 billion decrease is included for exchange conversion loss on
operating profit outside Japan
12/34

Performance <FY2018 Forecast>(Billion yen)

FY2017FY2017

ChangeInvestments intangible assets

77.7

120.0

42.3

54.4%

Depreciation

72.3

76.0

3.7

5.1%

13/34

II. Our Business Initiatives
toward Medium Term GrowthMaterials Handling Equipment
Car air‐conditioning Compressor
1. Previous efforts to strengthen business
2. Lift truck market and our initiatives
3. Enhancement of production outside Japan
4. Expansion of value-chain
5. Expansion and enhancement of logistics solution business

14/34

Materials Handling Equipment
1. Previous efforts to strengthen business
Promotion of Concentration and
Selection of Businesses
2 0 0 8 Financial crisis
Bottom of the market, keeping our2 0 0 9 streamlined structure
2010

Solidify defenses, shift to offensive

2011

Expansion of
Value Chain

Expansion of Sales finance business in Mexico and2 0 1 4 France
2015

Strengthening
Logistics Solutions
Business

Acquisition of lift truck business of Tailift in Taiwan
Acquisition of lift truck sales finance Operation in
the USA2016
2017

Strengthening our initiatives forlarge order customers

Acquisition of Cascade Corporation in the US to

2 0 1 3 strengthen attachment business

Enhancement of local production

Vietnam plant to produce motors for electric lift

2 0 1 2 trucks

Direct distribution channels in
Europe and USA

Strengthening
business
structure ofMaterials
Handling
Equipment
Business

Expansion and strengthening of Value Chainand Logistics Solutions Businesses

Acquisition of Bastian Solutions in the USA
Acquisition of Vanderlande in the Netherlands
15/34

Materials Handling Equipment
2. Lift truck market and our initiatives
Global lift truck market(Thousand units)

Lift truck market (CY)*

1,000
Developed countries

500
Emerging countries

0*Estimate by TICO

08

09

10

11

12

13

14

15

16

17

20 (CY)[Developed countries]- Slower market increase- Proportion of electric lift trucks further
increases backed by more stringent
environmental regulations[Our initiatives]- Strengthen product appeal by internal developed
motors and controllers for electric lift trucks- Differentiate products with advanced technologies
including lithium ion batteries and fuel cells[Emerging countries]- Continuous increase of the market is
expected centered on internal
combustion lift trucks by economical
growth and increase of logistics volume- Increase of needs for quality andperformance in mid- long-term[Our initiatives]- Appeal economical advantages for life-cycle ofthe lift truck backed by superior after-sales
services- Product development utilizing Tailift- Differentiate products with environmental
technologies
16/34

Materials Handling Equipment
3. Enhancement of production outside Japan[Global production]
Increased production volume outside Japan(Thousand units)

FY2012[Production in the USA]FY2017
Japan
24%

Japan
30%

Lift truck production bases

35 k/year

184

253

Outside Japan70%

Outside Japan76%

48 k/year(New York)(Indiana)

Manufactures annually more than 80 thousand units of lift truck
already in the US, covering most of units sold in the country.
‐ Mainly counter type at Indiana site
‐ Mainly warehouse equipment at New York site

Warehouseequipment
Counter type

17/34

Materials Handling Equipment
4. Expansion of value-chain
Strengthened value-chain structure

Sales finance-US sales finance new base started its operation in Texas-European sales finance Italian branch started its operation- Contribute to maximize revenues by offering customer support
services covering life cycle of lift trucks, fromnew truck sales to maintenance and used trucks- Offering various services including maintenance andlift truck management systems utilizing IT
After sales
technologies such as telematics
services- Increasing capability for after sales services throughsuch efforts as service skills contest- Enhance cooperation with Cascade, the global
leading lift truck attachment suppliersComponents- Strengthen product appeal with internal developed
components including engines and motors- Enhance initiatives of middle- to low-price products
Initiatives forutilizing Tailift
emerging countries- Strengthen and enhance sales networks

Aim to maximize outcome of these initiatives
18/34

Materials Handling Equipment
5. Expansion and enhancement of logistics solution business Global e-commerce market(Billion $) Growth of sales by type of
packaging (image of Europe)

E-commerce sales

1,000

Asia / Pacific
Unit

North America

750

CartonEurope
500

2005

10

15

20

25 (CY)

Pallet250

E-commerce market grows globally
0

2012

14

16

Source: Markets & Markets

18 (CY)

Shipment volume of unit typepackaging increases
19/34

Materials Handling Equipment
5. Expansion and enhancement of logistics solution business
Qualitative changes of logistics inside warehouses

Strengthen logistics solutions businesses to meet rapid changes of logistics
20/34

Materials Handling Equipment
5. Expansion and enhancement of logistics solution business Acquisition of Bastian Solutions tostrengthen logistics solutions
businesses[Profile of Bastian]-Company name: Bastian Solutions LLC Logistics management system Designing distribution center-Headquarters: Indianapolis, Indiana, U.S.A.
-Business activities : Materials handling system integrator*1-Sales: Approximately JPY24 billion*2 (as of December 2016)-Customer segment : Retail, food & beverage, consumer goods & e-commerce,manufacturing & industrial, pharma & healthcare and others:  Superior expertise in the development of software to control and-Strengths
manage materials handling systems at logistics centers Leader in combining hardware and software, system development,
networking and maintenance[Acquisition overview]-Schedule: April 2017
-Cost
: Approximately JPY29 billion*2*1: Systems integrator perform materials handling systems engineering in accordance with customer needs,
procure most equipment from outside suppliers, and deliver systems as a turnkey package.
*2: Calculated at an exchange rate of US$ 1 = ¥ 110.

21/34

Materials Handling Equipment
5. Expansion and enhancement of logistics solution business Sales proportion for 2016 and examples of customers
Customers in diverse industries

GM
BOSCH
BOEING

iHerb
neweggJohnson & Johnson

THE HOME DEPOTMOLSON Coors
Southern Wine &Spirits
22/34

Materials Handling Equipment
5. Expansion and enhancement of logistics solution business Acquisition of Vanderlande
Industries to strengthen logistics
solutions businesses[Profile of Vanderlande]
Shuttle type automated storage
Automated baggage storage
for hub airport-Company name
: Vanderlande Industries Holding B.V.
-Headquarters: Veghel, the Netherlands-Business activities : Automated materials handling solutions*1-Sales: Approximately JPY130 billion*2 (as of December 2016)-Business segment : Warehouse automation, Parcel and post handling,
Baggage handling-Strengths
 Development and manufacture a full lineup of materials handlingequipment and software Capable to complete large-scale projects in short timeframes Global network and business activities centered in Europe[Acquisition overview]-Schedule: Scheduled in May 2017
-Cost
: Approximately JPY140 billion*2*1: Such business category to provide logistics systems including hardware and software to solve customers’ logistics problems.
*2: Calculated at an exchange rate of EURO 1 = ¥ 120.

23/34

Materials Handling Equipment
5. Expansion and enhancement of logistics solution business Sales proportion for 2016 and examples of customers
Focuses on three areas of warehouse, parcel and post handling, and airport

Warehouse

AirportAmsterdam
LondonParis
Oslo
Los Angeles
Singapore
Istanbul

Amazon LEGO
woolworths
Zalando ASDA
Albert Hein
Parcel and post handlingDHL

TNT upsSF Express

FedEx
24/34

Materials Handling Equipment
5. Expansion and enhancement of logistics solution business Outline of warehouse, parcel and post handling businesses- Supply whole systems in distribution centers from receiving to shipment- Propose logistics solutions targeting industry leading companies
25/34

Materials Handling Equipment
5. Expansion and enhancement of logistics solution business Outline of baggage handling business for airports- Provide complete airport baggage handlingsolutions from check-in to load and unload- Focus on projects of world hub airports

26/34

Materials Handling Equipment
5. Expansion and enhancement of logistics solution business

Expand and enhance logistics solutions business globally throughcooperation between TICO, Bastian and Vanderlande

EuropeCloser cooperation between
Vanderlande and European
materials handling headquarters
to catch an opportunity ingrowing market

Japan, Oceania,
Asia and other regions
Aim to grow the businessthrough cooperation between
TICO and Vanderlande

strengths

strengths- Broad lineups of materials
handling systems- Capability for large-scale
projects- Global network- World No.1 lift truck market share- Global network- Superior after-sales services
Quality- Combined proposals of lift trucks
and logistics solutions

North America
Expand the business bysynergy effects ofBastian’s systemengineering expertise andVanderlande’s capability
for large-scale projects

strengths- Industry leading softwaredevelopment- Logistics systems
engineering expertise

27/34

II. Our Business Initiatives
toward Medium Term GrowthMaterials Handling Equipment
Car air‐conditioning Compressor
1. Outlook of mid-term business growth
2. Our initiatives toward diverse customers’ needs
3. Our product development capability to produce world first products
4. Enhancement of production outside Japan
5. Our initiatives leveraging development strengths
6. Our initiatives leveraging manufacturing strengths

28/34

Car air‐conditioning Compressor
1. Outlook of mid-term business growth*Estimate by TICO

Our market share(％)

Our strengths
Vast range of product lineups

Global No.1* Share50

Product development capability anticipating
customers’ needs

45

Stable manufacturing and supply structures
Aim for more than
50% market share

40

Business strategy leveraging our strengths

35

Compressor market and our unit sales(Thousand units)

Market*80,00060,000Our
sales
40,000

Respond to diverse customers’ needs
meticulously by leveraging vast range of
product lineups and superior development
capability
Develop industry leading products backed byour comprehensive strengths including
product development and manufacturing
capabilities as well as superior proposals
Further increase quality and productivity at
the manufacturing sites outside Japan bysharing strengths of mother plants in Japan

20,00002014 2015 2016 2017 20182021 (FY)29/34

Car air‐conditioning Compressor
2. Our initiatives toward diverse customers’ needs
Respond to market needs by an exclusive full line of products
Compressor
type
VehiclemountedMinicar

For internal combustion vehicle

For electric vehicle

Variable
Fixed displacement
displacement type
type

Electric typeNo market needs

A
C

Small
MiddleB

C

Large
Bus, etc.

We cover all needs

Note: A, B and C are other compressor manufacturers

30/34

Car air‐conditioning Compressor
3. Our product development capability to produce world first products
Developed new electric compressor for Toyota new Prius PHVWorld first mass production
Developed new electric compressor withgas injection function

Fitted with new Prius PHVExtend EV drive range contributing tolower fuel consumption‐ Enables heating by car air‐conditioner without
operating engine in outdoor air temperature atten degrees under zero
‐ Achieved approximately 30% improvement ofheating performance in cold temperature,keeping existing cooling performance

ESBG27
Awarded a Technology
Development Award by
Toyota Motor Corporation

Industry leading development capability
Produce world first products+
Product quality pursued fromthrough R&D activities anticipating
raw materials and components
needs of car manufacturers+
Superior proposals based on accumulated knowhow
31/34

Car air‐conditioning Compressor
4. Enhancement of production outside Japan[Global production]
Increased production volume outside Japan(Thousand units)

FY2017FY2012

OutsideJapan
21,550 46%
Japan
54%

Japan
40%

OutsideJapan
32,550 60%[Production in the USA]
Compressor
production bases(Michigan, Georgia)

Key component
production base (Georgia)

Manufacture annually approximately
eight million units already in the US‐ Covering about 75% of our sales in the US

Manufacture key components andmaterials as well in the US<Basic approach of global production structure>

Basically manufacture at the place near customers,
while mother plants in Japan supports fluctuations of production volume outside Japan.
32/34

Car air‐conditioning Compressor
5. Our initiatives leveraging development strengths‐ Offer suitable proposals tocustomers with vast range of
product lineups
Fast and extensive
response leveraging wide
range of element
Full lineups of compressors for engine
technologies
vehicles as well as HV, PHV, EV and FCV‐ Provide meticulous response
to customers’ needs and realize
reduction of development leadtime through localization ofmatching design and evaluation
works together with car
manufactures outside Japan

GermanyUSA‐ Our compressor wasapproved credits* from EPA,
first in the industry, being
evaluated its high fuelefficiency* Rules to provide favorable treatments to
car manufacturers to apply such technologies
EPA Decision Document
supporting fuel efficiency improvement‐ Further increase ourtechnological advantages ofquietness and low vibration,
those are becoming more
important for vehicle
electrification, leveraging our Development utilizing in‐house experimental
know how gained throughinstallation recreating an
development of products for environment close to theactual vehicle‐fitted
luxury vehicles
condition

Further differentiate our products byindustry leading product appeals and meticulous responses
33/34

Car air‐conditioning Compressor
6. Our initiatives leveraging manufacturing strengths‐ Pursue thorough develop‐
ment and production of highquality key components
those support productappeals of our compressors
through strong production
structures including
activities to pursue
consolidated companies and Group‐widehigh quality of products
suppliers in Japan‐ Maintain stable productquality at mass production
globally by sharing knowhow
accumulated at the motherplantsPromoting continuous improvement
activities outside Japan to further
increase quality and productivity

Sharing improvement
knowhow‐ Realize unparalleled productquality and performancethrough enhancement of
production technologies bydeveloping in‐houseproduction facility* Share information on quality withcar manufacturers worldwide- Accumulated knowhow throughmass production of various typesof modelsIn‐house facilities ofmajor assembly
process and inspection
process‐ Minimize quality variation
leveraging the IoT to precisely
manage data at eachmanufacturing process*Further improve management levelat each manufacturing base*Pursue preventive maintenance

Production of electriccompressors

Trainers training

Further enhance earning capacity by pursuing our strengths ofmanufacturing as well as development
34/34

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 to be taken as historical fact.
Projections and forward‐looking statements are based on the current expectations and estimates ofToyota Industries and its Group companies. All such projections and forward‐looking statements are basedon 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 be aware thatcertain risks and uncertainties could cause the actual results of Toyota Industries and its Group companies
to differ materially from any projections or forward‐looking statements appearing in this report. Theserisks 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.

35/34