1

Realizing the Target Vision for
the Future of Tokai Rika
- Growth Strategy for Enhancing
Corporate ValueMay 29, 2024

TOKAI RIKA CO., LTD.
Securities Identification Code: 6995

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Actions for quality and market issues
For market quality:- June 14: Start free of charge repairs
at dealers.
- June 17: Restart vehicle production.

Future actions:
Our product(Door open switch)- Ensure the incorporation of defect-freeconditions (ryohin joken) throughout allprocesses from design to production.
- Enhance traceability (individual productmanagement).
- Train and nurture quality-oriented humanresources (human capital capable ofproactively expressing opinions).

3◇Realizing the Target Vision for the Future ofTokai Rika (Growth Strategy)
1. The Vision of Tokai Rika for the future
2. Realizing the Future Vision
3. Promotion of Carbon Neutral Strategy◇Human Capital-Related Initiatives
1. Promotion of Legal Compliance and Fraud
Prevention
2. Active Participation of All Employees(Promotion of Human Capital management)◇Progress of Mid-Term Business Plan
1. Progress of Mid-Term Business Plan
2. Actions for Enhancing Corporate Value

4◇Realizing the Target Vision for theFuture of Tokai Rika(Growth Strategy)

1. The Vision of Tokai Rika for the future
Purpose5

Pass on our founding spirit* and forge
connections between technological evolution
and people to turn the delight into reality.
* If it’s something necessary in the world, we do what others won’t do.
Yoshio Kato (Founder of Tokai Rika)

VisionEnhance our technologies in the fields of physics,
chemistry, electronics, and machinery that we havenurtured through vehicle development to provide products
and services that contribute to the community and theenvironment, and to help realize an ever safer, more secure,and a higher quality of life.
“A Call to Thought and Action”
booklet issued to the Tokai Rika group

Value(Extract)- We believe that safety and quality come first.
- We pride ourselves on being honest, truthful, and sincere,
and we will work to gain the trust of our customers andpartners.
- We will always remember to be grateful and humble, andwe will strive for coexistence and shared prosperity.

62. Realizing the Future Vision◆Growth strategy
Newtechnologies

Technologies

Enhance our technologies to expand the scope of our businessto goods and services needed by society.

Develop and propose new products andservices in reaction to changes inmobility.
Contribute to ever safer, more secure,and higher quality mobility-based
lifestyles.

ExpandContribute to people’s wellbeing andthe realization of a sustainable society.
Advance
DeepenAdvance
DeepenExisting
technologies

Toward the resolution of social issues
and people’s concerns.
Contribute to ever safer, more secure,and higher quality lifestyles.
ExpandVehicles/mobility

Society (new fields)

Market/field2. Realizing the Future Vision◆Contribute to ever safer, more secure, and higher quality
mobility-based lifestyles.
Utilize mobility
technology to maketravel an ever safer,more secure, and higher
quality experience!
- Ornamentation andhidden technology tocreate more relaxing
interior spaces.
- HMIs suited to thestate, emotions, andhealth of the occupants.

Proactive
collaborative
development withinterior and display
manufacturers

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2. Realizing the Future Vision◆Contribute to ever safer, more secure, and higher quality
mobility-based lifestyles.
Utilize mobility
technology to make
Growthtravel an ever safer,
Commodity products must also
more secure, and higher
change in accordance with mobility.
quality experience!
- Ornamentation anddevelopment and proposal ofhidden technologyContinue
tocreate more relaxing
HMI products in reaction to changes
interior spaces. in mobility as volume is forecast to- HMIs suited to thedecrease and the number of companies
Seat
state, emotions, andinvolved in these fields declines.
belts
health of the occupants.

Also expand new added value ofProactive
collaborative
HMI products.
development withinterior and display
manufacturers

ECUs,
smart keys

Shifters
Steeringcolumns

Newbusiness
新領域fieldsNB
Mirror(NB)

Switches
SwitchKey LockProfitability

2. Realizing the Future Vision

9◆Contribute to ever safer, more secure, and higher quality
Detect signs oflifestyles.
wheels coming off →Eliminate tire
separation incidents.

Bqey → Eliminate
drinking anddriving.

Detect childrenthat have been left
behind →Eliminate tragic
accidents.

Through products and services, we are aiming to help realize an
ever happier future by preventing tragic accidents !

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2. Realizing the Future Vision◆Contribute to ever safer, more secure, and higher qualitylifestyles. Achieve higher quality free time - Taking on thechallenge of maximizing the utilization of valuable time

国交省 国土長期展望専門委員会（MRI）資料This challenge was prompted by a single comment from a young
employee, leading to the creation of a business emblematic of thetransformation of Tokai Rika.
Zenaim: an original brand dedicated to winning.

Finally, we will take on the challenge of the North
American market, described as the home of gaming
devices and e-Sports!

Connect rental cars andusers with digital keys.
Resolve staff shortages
and eliminate
troublesome matterswhile traveling.
Gradual expansion ofservice areas !

Through products and services, we are aiming to help realize
ever higher quality time, lifestyles, and people!
Copyright © TOKAIRIKA,CO, LTD. All rights reserved.

2. Realizing the Future Vision

Target sales in FY 2030:
1.0 billion yen or more

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◆ Contribute to people’s wellbeing and the realization of asustainable society.
Biomass material: BAMBOO+■New value: Wholly unique patterns derived from bamboo
fiber
Refined gloss texture and smooth-touch finish■Contribution to local communities: Bamboo harvestingand preservation of bamboo forests in healthy condition■Environmentally friendly: Approx. 50% reduction* inmanufacturing CO2 emissions ( * C o m p a r e d t o A B S )CutbambooChips✓Applicable physicalproperties for use as
automotive interiormaterial

Convert to fibers
using proprietarytechnology.

Composite bamboo fiber material(Bamboo fiber + PP)(* The photographshows a material withblack specifications.)

Synthetic leather(vegan leather)■Working to start production in the middle of 2025.

- Company started up inside Tokai Rika (January2024).
- Company factory space acquired (March 2024).

Production
due to startin the middleof 2025.

✓Bamboo fiber
content: 51% orhigher123. Promotion of Carbon Neutral Strategy

Progress: We are making progress toward the realization of a sustainable
society while introducing new technologies and working with local■Tokai Rika Tohoku: From the start. 100% local
communities.
renewable energy from Akita

Tokai Rika group

800

Progress of reduction in life cycle CO2 emissions

Opening in June 2024

600

Production

Targets

ProductionResults:-20%FY 2013

400

Products200

Purchasing
Logistics/other0-60%

Production compared to2019-10%
Products comparedto FY 2020
-20%
Purchasing -19% Purchasing comparedto FY 2019

Products -3%

2 HV
Logistics/ Environment
Logistics/ logistics
ally friendly
otherothertrucks
logistics
updated:vehicles:
50% or more
2%20232030■Development and operation of
innovative production technology
Highly efficient and compact
electric casting machine

Akita Pre.

Innovation directed at
power-hungry equipment

CO2

60% lower CO2
emissions thanconventional
equipment

Conventional Developed
equipmentmachine

13◇Human Capital-Related
Initiatives

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1. Promotion of Legal Compliance and Fraud Prevention◆Creation of systems and workplace culture that encourage frank andhonest reporting (initiatives based on best practices of other companies)
Utilization of whistleblowing system
Legal compliance questionnaire(Number of reports)

FY

2021

20222023(1) Hotlines for whistleblowing
and consultation

62

２967

(Of which, reports made toexternal attorneys-at-law)

（5）

（４）

（２）

―

―

2

(Newly established in 2023)

―

55

４５

Total

62

８4

114

(2) Hot line direct to thepresident(Newly established in 2023)(3) Workplace consultant system

Other consultation hotlines:- Family consultation hotline- Consultation hotline for suppliers- “All Toyota Speak Up Hotline”
We have established a wide range of hotlines to createa system that makes it easier for people to speak out.

Running parallel to the passive
whistleblowing system, we are also
implementing a system that communicatesdirectly to employees.

Returning to our starting line(Tokai Rika-ism)
A Call to Thought and Action (extract)- We believe that safety and quality come first.
- We pride ourselves on being honest,
truthful, and sincere, and we will work
to gain the trust of our customers andpartners.
- We will always remember to be
grateful and humble, and we will strive
for coexistence and shared prosperity.

2. Active Participation of All Employees

15(Promotion of Human Capital management)

Growth strategy of Tokai Rika

Business strategy

Human resourcesstrategy

Basic human resources policy: Encourage and utilize the diverse individuality of ouremployees to build a working environment and human resources capable of creating newvalue by taking on challenges.
➋Human resources with the necessary challenging
spirit and evolving capabilities
Provide support to create self-reliant human resources
capable of taking on challenges and carrying out actions.

➌Nurturing and utilizing the required humanresources
Utilize our human resources to build systems thatcreate results.

Tokai Rika Human Capital Management= We aim to be a company for which everyone is highly
motivated to work.
➊Team building to realize active participation by all employees
Build an organization and workplace culture that enables all our humanresources to work and participate enthusiastically.

2. Active Participation of All Employees

16(Promotion of Human Capital management)
Three pillars➊
Build workplacecultures thatfacilitate activeparticipation byall employees.

Main initiatives- Promotion of health and productivity management- Building of workplaces with excellent emotional
wellbeing- Work-life balance (child raising, family care,
medical treatment)- Building of teams based on creative collaboration- Introduction of stock-based compensation
system for employees

Pyramid-type organization

2023

2025
Less than- Absenteeism 3.9% 2.0%
Less than- Presenteeism 22.4% 18%

Creative collaboration teams
Individual capabilities converted into team capabilities,
generating high-level performance.

Department Manager

Group Manager

Main KPIs (2023 results → 2025 targets)

Group Manager

Experienced
employees

Experienced employees
provide advice and guidance
to individual team members at
an equal level.

Experienced
employees

2. Active Participation of All Employees

17(Promotion of Human Capital management)
Three pillars➋Humanresources with
the necessary
challenging spiritand evolving
capabilities

Main initiatives- Support for self-reliant careerdevelopment (promotion of transfers,expansion of calls for submission of ideas
from inside the company)- Promotion of networking with or transfers
to different industries- Renewal of educational systems(enhancement of skills related to business,management levels, and quality)➌Nurturing andutilizing therequired humanresources- Nurturing of innovative human resources- Construction of pay structures fordifferent staff categories- Further development of software engineers

Main KPIs (2023 results → 2025 targets)- No. of Participants in
networking withdifferent industries

2023

2025

50150

- 2025: Introduction of businessand management training- 2025: Introduction of pay structuresfor different staff categories- 2025: New establishment of softwarecourse at the Tokai Rika Training School- No. of employees
2023
participating in re-skilling(development of softwareengineers)

60

2025
100

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◇Progress of Mid-TermBusiness Plan

1. Progress of Mid-Term Business Plan
Source: May 2023 IR materials

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Existing businesses/sales expansion (target: 485billion yen)
Forecast to meet target due to sales activities, including salesexpansion.
Promote and complete establishment of production system inresponse to sales expansion.
- Tokai Rika Tohoku (opening in June 2024)- New factory in India (opening in August 2024)- Reorganization in North America (production in Indiana factory
ended in April 2024 and expansion of Mexico factory due to becompleted in July 2024)

India

Opening in August 2024

Japan

Opening in June 2024

MexicoExpansion to becompleted in July 2024

Secured production capacity to achieve the existing businesssales target.

1. Progress of Mid-Term Business Plan
660.0
145/$

(Unit: billion yen)

610.0
145/$

550.0
115/$

610.0
145/$

600.0
115/$
50.0
50.0

40.0

15.0(NB)

623.0
143/$

580.0
145/$

546.0
115/$

Results for
FY 2023

Plan for
FY 2024

Forecastfor FY 2025

Mobility: new
added value, newfields, and newbusinesses
485.0
115/$

Forecastfor FY 2030

11520The risk of decreasing sales is
eventualizing more slowly than
anticipated.
→ Forecast is for increase in FY2025.
Orders realized for new technologies
and products.
Continue venturing into new businessfields.
→ Definite progress toward FY
2030 targets
Consider revising targets next FY in
response to changes in the businessenvironment and the most recent
exchange trends.

Promote initiatives for meeting FY 2030 targets through new added value
etc. in the mobility field.

1. Progress of Mid-Term Business Plan
Consolidated operating profit(in billion yen)

4.6％

4028.8

30

3.0％

2.6％

Situation in FY 2023 and 2024

<Operating Profit>
FY2023: OP ensured by volume increase and(in billion yen)price adjustment of inflation costs
25.0-Operating profit : FY2024: OP decrease by volume decline andadvanced investment / costs
25.0<Profit Structure>-Break-even
Even though variable costs improved, BES rose due
sales : 435.0-Fixed cost : 128.0 to increased fixed costs.

13.5

10145 yen / 115 yen /USD
USD0Operating profit
ratio

4.6％ FY2025 Targets

37.0

23.0

16.9

204.0％

Operatingprofit
6.0％

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FY 2023 results FY 2024 forecast FY 2025 forecast

Break-even sales (BES) and consolidated fixed costs Forecast towards FY2025 and FY2030(in billion yen)

494.0
(※)

464.1
(※)

500
3,000

152.2

200

(※)

140.6
(※)

498.0

479.0

Fixed costs

BEP

144.0

155.0

485.0

465.0

152.0

140.0

432.0
先⾏投資負担を除く

130.0<FY2025 Target>- OP : In line with achieving the target due to sales
expansion- BES /fixed costs : Not achieved yet due to advanced
investment(achieve target level excluding advanced investment)

100

145 yen / 115yen/
USD
USD

FY 2023 results

0

FY 2024 forecast

FY 2025 forecast* Excluding quality-related expenses of 11 billion yen

Excluding advanced
investment costs- To strengthen profit structure in FY2030, taking actions
to monetize future investment, enhance cost planning
activities, and promote optimized global production

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2. Actions for Enhancing Corporate Value- Actions to improve PBR PBR）

Correlation between ROE and PBR- Achieved ROE target = 8%
- Raising expected growth ratio is our challenge

Tokyo Stock Exchange
Prime market (median value)
Concerns about negative growth from◆- Our core business due to change in vehicle interiors

1.0
Automotive industry ◆(median value)●● FY 2018 ②- Quality issues①

Initiatives toward achieving PBR ≧ 1

FY 2023 Tokai Rika
●FY2021● FY2022

0.50%5%

Note: Share price at end of fiscal year

Actions for FY 2025

- Increase in added value on exisiting
business and sales expansion- 1/n investment, smooth startup of newHigher sales factories- Resource shifting to new fields, including/incomeMirai investment- Revision of quality business structure for
Recall Free
Reduction of- Selling assets, etc.
equity capital
Human- Increase engagement by introduction of20% Resources
stock-based compensation system forinvestment
employees(ROE: 8%, PBR: 0.7)

Actions to date:- Strengthening production base in accordance withcustomer volume increase- Profit/Cost Kaizen activities focusing structureenhancement
Higherdividend/share buybacks
0.0-5%

Item

8%10%

15%ROE

Capital cost of Tokai Rika: 8.89% (FY 2023, risk-free rate: 10-year
government bond yield)

Dialogue withinvestors- Regular dialogue with investors inside and outsideJapan- Enhancement of information communication, such as
IR activities to individual investors① ②● ●
● ●
●
● ●
●
●
●

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2. Actions for Enhancing Corporate Value- Cash allocation for future growth FY 2022 to 2023

FY 2024 to 2025

(Past cash allocation)

Fund for growth

Cash inExistingbusinesses

Cash out(in billion yen)

Capitalinvestment: 38.5
CF from
Operating
Strategic/
items
Mirai investment: 13.0
80.0
Shareholder return: 26.5
(Dividend: 11.8 +share buybacks: 14.7)

Net increase in funds: 2.0

Main item(in billion yen)

Purpose of investment

Capital New- Expanding ZENAIM sales overseas
investbusinesses
ment- Proposals for new products and
CF from
New fields/
new businesses services reacting to changes toOperatingvehicle cockpits
Futureitems- Contribution to sustainable
Bamboo+society85.0 +α businesscreation
External(selling- Challenge for small-lot/multiple
investsemiconductor
assets, etc.) ment
semiconductor market
sales- Human resources investment
Other enhancements- Enhancement of quality and safety
to business foundations structures- Consideration of dividend policy/
Shareholder return additional share buyback factoringin DOE/dividend yield

Actual fund balance at end of FY 2021 92.0 billion yen
Actual fund balance at end of FY 2023 94.0 billion yen(Cash and deposits + public and corporate bonds - bonds payable)

Allocation- Making new products- New factory establishment andexpansion in locally and overseas

50.0

20.0
15.0ーCautionary Statement with Respect to these Materials

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These materials contain forward-looking statements determined by the management ofTokai Rika Co. Ltd. based on currently available information. These forward-looking
statements incorporate assumptions and assumption-based reasonings. Information andreasonings that are based on assumptions related to the business environment may differ
from actual results. Although these forward-looking statements reflect the plans andexpectations of future performance as determined by the management of Tokai Rika Co.,
Ltd., these forward-looking statements are not guarantees that these plans or expectationsof future performance will be achieved in full or part. In addition, unless otherwise stated,
Tokai Rika Co., Ltd. shall be under no legal obligation to ensure that any forward-looking
statements remain up to date.

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