Financial Results Briefing

for the Six Months Ended
November 30, 2023

January 12, 2024

Toyo Denki Seizo K.K.

Program◼ Briefing on Financial Results: 40 minutes
1. Overview of Financial Results for the Six Months
Ended November 30, 2023
2. Financial Results Forecast for the Fiscal YearEnding May 31, 2024
3. Progress and Specific Initiatives in MediumTerm Management Plan
4. Toyo Denki Seizo’s Initiatives for Sustainability◼ Q&A: 20 minutes
11. Overview of Financial Results for the
Six Months Ended November 30, 2023
(from June 1, 2023 to November 30, 2023)21-1. Overview of Consolidated Financial Results
Orders received increased significantly and the business continued to recover. Both net
sales and profit increased from a year earlier thanks to efforts to improve profitability
despite ongoing difficulties in procuring parts and materials
100 million yen
6M FYE May 6M FYE May
2024
2023

6M FYE May
2024
Forecast

YoY Change%

Change vs. Forecast%

Orders received

170.7

229.3

+ 58.6+34.4%

173.0+ 56.3132.5%Net sales

138.2

148.1

+ 9.9

+7.2%

159.0

(10.8)

93.1%

Operatingprofit

(0.8)

1.8

+ 2.6

(1.2)

+ 3.0

(%)

（－ % ）(1.3%)－（－ % ）ー

Ordinary profit

1.9

5.5

+ 3.5

0.5

+ 5.0

ー

Profit

0.2

3.1

+ 2.9

1.8

+ 1.3

172.2%[Profit per share(yen)]

2.98

33.80

+30.82

19.08+14.72

ー

18.0%

20.3%

+2.3ptRatio of overseas
sales to net sales－+181.7%

－

ー

－

3

<Reference> Review of Business Environment for the six
months ended November 30, 2023

Transportation
Business

Industry
Business• Demand for new rolling stock production and equipment upgrades
increased in line with the improvement in business performance of thedomestic railway operators backed by the increase in inbound traffic andthe recovery of footfall from the COVID-19 pandemic.
• Overseas, economies are gradually recovering in many countries. Orders
for maintenance parts are increasing in China, and Southeast Asian
countries are seeing active development driven by infrastructure demand.

• Capital investment is strong in many industries, and inquiries to Toyo
Denki Seizo K.K. (the “Company”) are increasing.
On the other hand, in the testing system for automobiles, some companies
are reconsidering capital investment in testing equipment due to the shift
to electrification.
• Prolonged difficulties in procuring parts and materials continue to impact
the Company’s production processes.

ICT Solution
Business• Orders for software upgrades for station equipment increased steadily as
fares were revised and services for railway users improved.

41-2. Factors for Increase and Decrease in Operating Profit(YoY change)
Operating profit grew, reflecting higher sales and our efforts to improve gross profit
On the other hand, SG&A expenses increased due to the pressure from operating
expenses, testing and research expenses, etc.
Plant profit/loss SG&A expenses(non(nonconsolidated)consolidated)+120
million yen

Higher profitability

Change in grossmargin(non-consolidated)(120)
million yen

Subsidiary
profits, etc.

+160
million yen
Increase/decreasein sales(non-consolidated)(80)
million yen+130
million yen• Increase in testing andresearch expenses• Increase in operating
expenses(10)
million yen
The impact of therestructuring of thedevelopment promotion
system is excluded

180
million yen

0.0+260 million yen

6M FYE May 2023

6M FYE May 20245

1-3. Breakdown of Non-Operating Income/Expenses andExtraordinary Income/Loss
Non-operating
income/expenses

Extraordinary
income/loss+360 million yen(30) million yen

Equity in profit of unconsolidated
subsidiaries and affiliates+200 million yen
Dividend income +110 million yen
Foreign exchange
gains+50 million yen
Interest expenses (20) million yen
Other+10 million yen

Gain on sale of investment
securities+150 million yen
Business structural reform
expenses(190) million yen

550
million yen

520
million yen Income taxes
310
million yen

180million yen

0.0OperatingprofitOrdinary
profitProfit before
income taxes

Profit6

1-4. Segment Performance: Transportation
Business

Transportation

Orders received strongly grew driven by orders for large projects in Indonesia
Net sales increased, but segment profit decreased due to an increase in operating
expenses and testing and research expenses◼ Orders received and order backlog◼ Net sales and segment profit

400

Net sales
400

Order backlog

Orders received

299.8

300
Order backlog

202.6

Net sales

300

200

30

20

Net sales

101.1

176.0

Ordersreceived

89.0

Segment profit

Segment profit
40

223.5

200

100

(100 million yen)

90.9

95.4

100

106.4

10.3
0

0
6M FYE May 2022 6M FYE May 2023 6M FYE May 2024

10
Segment
profit6M FYE May 2022

11.9

11.2
0

6M FYE May 2023

6M FYE May 2024

• Orders received from JR companies declined as a reaction to large orders received in the previous fiscal
year, while orders received from overseas (other than China) surged reflecting large orders fromIndonesia, and orders received from private railway companies and China increased• Net sales grew thanks to higher sales to private railway companies and overseas (other than China)
despite lower sales to China and to JR companies which saw a fall as a reaction to strong sales in theprevious fiscal year
• Segment profit declined due to an increase in operating expenses and testing and research expenses
71-5. Transportation Business: Factors for Increase
and Decrease in Segment Profit

Transportation

Segment profit declined slightly due to increase in operating expenses andtesting and research expenses

1,190
million yen

Change inIncrease/grossmargindecrease in sales(non(nonconsolidated) consolidated)

Plant profit/
loss(nonconsolidated)

SG&A
expenses(nonconsolidated)

+6
(20)
+20
(110)
million yen million yen million yen million yen

Subsidiary
profits, etc.

+30
million yen

1,120
million yen• Increase in testing and researchexpenses• Increase in operating expenses(70) million yen

0.0

6M FYE May 2023

6M FYE May 20248

1-6. Segment Performance: Industry BusinessIndustry

Orders received decreased. Net sales increased, and segment profit grew backed byhigher sales and our efforts to improve gross profit◼ Orders received and order backlog◼ Net sales and segment profit(100 million yen)

100
Order backlog

Orders received

Segment profit

Net sales
Segment profit

80

60

Order backlog

77.3

73.2

59.8

100

10

80

8

Net sales

57.5
40

Net sales

49.5

60

43.7

49.6

Orders received
20

40
20

0

42.1

0

47.8

6

3.2

4

Segment profit

2

(0.9)

(0.7)

6M FYE May 2022

6M FYE May 2023

06M FYE May 2022 6M FYE May 2023 6M FYE May 2024

△ 20

6M FYE May 2024△2

• Orders for power generation and power supply systems increased, but orders for automobile testing
equipment and production and processing equipment systems declined, partly due to a backlash fromlarge orders in the previous fiscal year, resulting in a decrease in the total orders received in the segment• Net sales increased for automobile testing equipment, production and processing equipment systems,
and power generation and power supply systems• Segment profit grew, reflecting higher sales and our efforts to improve gross profit

91-7. IndustryBusiness: Factors for Increase
and Decrease in Segment Profit

Industry

Segment profit grew, reflecting higher sales and our efforts to improve gross profit
SG&A
expenses(nonconsolidated)

Plant profitability+60(nonconsolidated) million yen
Change ingross margin(nonconsolidated)+120
million yen

Subsidiary
profits, etc.

(50)
million yen

320
million yen

Cost control+160

Increase/decrease in million yen
sales(nonconsolidated)(70)
million yen+110
million yen

Higher profitability
The impact of therestructuring of thedevelopment promotion
system is excluded

0.0+390 million yen

6M FYE May 2023

6M FYE May 202410

1-8. Segment Performance: ICT Solution Business

ICT
Solution

Orders received fell as a reaction to the previous fiscal year. Net sales and segment
profit declined slightly◼ Orders received and order backlog◼ Net sales and segment profit(100 million yen)Segment profit

Net sales
1010
Order backlog

8

2

8

6
Orders received

3.4

4.3

Net sales

8

6.7

6

4

10
Segment profit

Orders received

3.6
3.1

1.4

4.8

4

3.0

2

Segment profit

0.4

4

1.2

1.1

6M FYE May 2023

6M FYE May 2024

0
6M FYE May 2022 6M FYE May 2023 6M FYE May 2024

6

Net sales

Order backlog
0

5.0

2

0
6M FYE May 2022

• Orders received fell as a reaction to the strong demand for software upgrades for station
operating equipment in the previous fiscal year
• Net sales declined due to a decrease in sales for station operating equipment systems• Smaller sales resulted in a fall in segment profit
111-9. Consolidated Financial Position(100 million yen)

November 30,
2023

May 31,
2023

ChangeRemarks

496.8

500.6

+3.7

Current assets

267.3

263.4

(3.9)

Non-current assets

229.4

237.1

+7.7 Investment securities: +0.64 billion yen

250.9

248.3

(2.6)

56.5

60.3

+3.8

Net assets

245.8

252.2

+6.4

Equity-to-asset ratio

49.5%

50.4%

+0.9ptTotal assets

Total liabilities
Of which, net interestbearing debt

Cash and deposits: (0.67) billion yen
Inventories: +0.45 billion yen

Valuation difference on available-for-salesecurities: +0.52 billion yen

122. Financial Results Forecast for the
Fiscal Year Ending May 31, 202413

2-1. Outlook for Financial Results for Fiscal Year Ending
May 31, 2024 (Consolidated)
Orders received are expected to reach 41.0 billion yen driven by the contribution fromlarge overseas projects in the transportation businessNet sales of 34.5 billion yen and operating profit of 600 million yen are unchanged fromthe previous forecasts
FYE May 2023 (Results)(100 million yen)

2Q

Full year

FYE May 2024

YoY Change

2Q

Full year

Full year(Results)(Initial forecast)(Revised forecast)

Full year

Orders received

170.7

332.4

229.3

372.0

410.0

+ 77.5Net sales

138.2

310.2

148.1

345.0

345.0

+ 34.7

Operating profit

(0.8)

5.1

1.8

6.0

6.0

+ 0.8

(%)

（ー % ）(1.7%)(1.3%)(1.7%)(1.7%)(+0.0pt)

Ordinary profit

1.9

9.8

5.5

9.5

9.5

(0.3)

Profit

0.2

8.2

3.1

8.0

8.0

(0.2)

[Profit per share(yen)]

2.98

91.85

33.80

84.81

84.81

(7.04)

30.0

30.0

Dividend per share
(yen)

30.0

14

2-2. Outlook for Financial Results (by Segment)
Transportation
Business(100 million yen)FYE May 2024
(Forecast)YoY Change

Industry
Business

ICT Solution
Business

Orders received

269.0

125.0

16.0

Net sales

218.0

116.0

11.0

Segment profit

24.5

9.5

2.5

Orders received+ 59.3+ 16.4+ 1.7

Net sales+ 19.4+ 16.9(1.5)

Segment profit

+ 1.9

+ 4.7

(1.6)

15

3. Initiatives in Medium-Term
Management Plan 2026
(from June 1, 2022 to May 31, 2026)16

3-1. Medium-Term Management Plan 2026
◼ Consolidated financial targets for FYE May 2026
Net sales
40 billion yen
Operating margin 5%

ROE 8%

Return sales to the pre-COVID level of 40 billion
yen through “expansion of new businesses andproducts”
Improve operating profit and ROE significantly
by “thorough improvement in earnings
structure of existing businesses” and“improvement in asset efficiency withawareness of capital cost”◼ Three basic policies
Expansion of new
businesses and products

Strengthen and expedite development of new business areas
across the Company, and respond to electrification, DX, anddecarbonization

Thorough improvement inearnings structure ofexisting businesses

Radical strengthening of profitability with plants and marketingin unison from both aspects of improving production efficiency
and securing appropriate sales prices

Improvement in asset
efficiency with awarenessof capital cost

Continue to reduce cross-shareholdings, review capitalefficiency of each business and consider reallocation ofmanagement resources17

3-2. Initiatives in Medium-Term Management
Plan 2026

Transportation

Initiatives to “expand new businesses and products”
November 8 to 10, 2023
Exhibited at “Mass-Trans Innovation
Japan 2023” (Makuhari Messe)

Electrical equipment
for railway vehicles
Electric door
operating equipment◆ Electric door operating equipment
With a similar size as conventional pneumaticdoor operation systems, electrical systems enable
door operations to be finely controlled◆ Door step device
This device is stored in the lower part of the vehicle
entrance, and when it operates, the step plate ispassed from the vehicle side to the platform toeliminate the gap between the entrance and theplatform
Vehicle side

Door step device
Door step device

Platform side18

3-3. Initiatives in Medium-Term Management
Plan 2026

Transportation

Initiatives to “expand new businesses and products”
November 8 to 10, 2023
Exhibited at “Mass-Trans Innovation
Japan 2023” (Makuhari Messe)

Electrical equipment
for railway vehicles◆ Maintenance saving gear device
Circular-arc-tooth gear and cylindrical roller bearings reduced assembly workand extended bearing life
Helical gear

Conical roller
bearing

Circular-arc-tooth
gear

Cylindrical roller
bearing19

3-4. Initiatives in Medium-Term Management Plan 2026
Efforts for “thorough improvement in earnings structure of existing
businesses”◆ Processing and assembly of transportation products started at
Shiga Ryuo Plant
Processing and assembly of transportation products started at Shiga Ryuo
Plant (including TD Drive, a subsidiary), our mainindustrial plant.
Examples● Assembly of propulsion inverters (VVVF inverter unit)● Machining of parts of traction motors and driving gear

units
Support large orders for transportation products

An example of machine tools

Efforts for “improvement in asset efficiency with awareness ofcapital cost”◆ Sale of cross-held sharesContinue to sell investment securities.
20

3-5. Orders for large projects

Transportation

Orders received for electrical equipment for newly built cars forIndonesia Commuter Railway
We received orders from PT Industri Kereta Api, a state-owned rolling stock
manufacturer in Indonesia, for electrical equipment for 192 newly built vehicles for
PT Kereta Commuter Indonesia. *Illustrations and product photos are from our materials to introduce services
Order amount

Approx. 5.5 billion yen

Due date

From November 2024

Recording of sales

FYE May 2024 toFYE May 2026

Items ordered in our
product lineup

Pantograph

Door operating
equipment

Driving gear
unit
Passenger information
display system

Master controllers
Total train
communication
systemTraction motor

Propulsion inverter

Twin disk
couplings

Auxiliary power supply

The Company is currently reviewing the impact on its financial results forthe fiscal year ending May 2024, and will promptly disclose any mattersto be disclosed.

21

3-6. Purchase of treasury shares
Notice concerning determination of matters related to acquisitionof treasury shares
The board of directors resolved on January 11, 2024, to acquire up to 300 million
yen’s worth of treasury shares
Reason for acquisition

To enhance shareholder returns and improve
capital efficiency

Total number of shares
to be repurchased

Up to 300,000

Total acquisition price

Up to 300 million yen

3.18% of total issued shares (excluding treasury stock)

Acquisition period

January 12, 2024, to January 10, 2025

Acquisition method

Market purchase on the Tokyo Stock Exchange
Total number of issued shares

Treasury shares as ofNovember 30, 2023

(excluding treasury shares)

Treasury shares

9,432,747
302,253
22

4. Toyo Denki Seizo’s Initiatives for
Sustainability23

4-1. Initiatives for Sustainability
Revision of Environmental Philosophy, Quality Policy, and Material
Procurement Policy (December 2023)
Revisions were made to clearly express in the philosophy and guidelines that we arepromoting various sustainability actions to realize a sustainable society

Environmental
philosophy

Quality policy
Material
procurement policy

This revision is based on the progress made in responding to climatechange, including expressing support for the July 2023 TCFD
recommendations
Expressing the Group’s concept of contributing to society by providing
a stable supply of safe and high-quality products and services, while
clearly indicating measures to improve product quality and comply
with requirements
Clarifying a policy of procuring raw materials and services for
products in consideration of social requirements such as human rights
and the environment, and contributing to the realization of asustainable society together with suppliers244-2. Initiatives for Sustainability
Sustainability policy and recent achievements from three perspectives◆ Sustainability policy
Threeperspectives

Initiative in Products andServices

Initiative in Production
Activities

Initiatives to Value Peopleand Local Communities

PolicyWe will provide products
and services that
contribute to therealization of a sustainable
society using our group’s
outstanding technologies.

We will reduce theenvironmental burden of
our production activities
and continue to enhance
the local environment.

We will care about ouremployees and local
communities and deliver
our vitality to the future.

Small hydroelectric power
plant in Fujiyoshida City
Effectively using water flowing
through local agricultural
canals.

Reduction of power
consumption at Ryuo Plant
Reduced automatic operation
time by introducing an
automatic control system forair conditioning.

Dialogue between thepresident and employees
Held regularly for the purposeof sharing the values of thepresident and employees.

RecentNew products underachievements development
Promoted development ofelectric door operating
equipment and door steps.

Participated in a donation
course at a university
Introduced the history ofenvironmentally friendly trains
and the role played by Toyo
Denki Seizo.

25

4-3. Initiative in Products and Services
Provision of power generation equipment utilizing green energy
We provided products to Fujinoshizuku Power Plant, completed in Fujiyoshida City, Yamanashi
Prefecture. This power plant uses water flowing through local agricultural canals, which had
never been utilized as an energy source◆ Helping with the introduction of renewable energy - Smallhydroelectric power plants• Effectively using water flowing through local agricultural canals to generate electricity.
• As a feature of our products that are useful for disaster prevention in the community, thistype of power plant can supply power to smartphones andelectric vehicles in the event of a power failure• Continue to contribute to promoting the introduction ofrenewable energy

26

4-4. Initiatives to Value People and Local Communities
We will care about our employees and local communities and deliver our vitality
to the future.
Held round table meetings to share the values of the president and employees, and introduced
the Group’s sustainability initiatives at a donation course at Kanto Gakuin University◆ Round table meeting• Round table meetings were held in which front-line employees
and the president had direct conversations to share values andawareness of issues.
• Since its launch in December 2022, a total of 46 people haveparticipated, and two-way communication has been activated.

◆ Participated in a donation course at Kanto Gakuin
University• Delivered a lecture to university students, who will lead the future,on the history of trains, which are environmentally friendly
vehicles, and introduced the Group’s efforts to produce electric
equipment that is indispensable for trains.
27

4-5. Publication of Toyo Denki Seizo Report 2023
Toyo Denki Seizo Report 2023 was issued on December 21
The integrated report was issued to show future growth potential by integrating financial andnon-financial information, including business principles, the value creation process, and activities
in each businessCore Values and Strengths

Consolidated basis

Output and Outcomes[Group Business Principles](FY2022)
Intellectual capital⚫ Number of patents, etc. held
(Japan and overseas)(Patents, utility models,designs)⚫ Prioritize ethics and contribute to the prosperity ofcustomers and society as a whole⚫ Encourage creativity and an enterprising spirit to meetthe challenges of the future⚫ Build trust by focusing on quality first255⚫ R&D spending[Products and Services][Sustainability]

Transportation Business Segment

Initiative in Products and Services⚫ Electrical equipment for
railway vehicles⚫ Railway power storage
systems⚫ Door operating
equipment for buses

Planning/
development/design

750 million yen
Human capital⚫ Number of employees

1,149(Men: 1,011; Women: 138)
Social and related capital(non-consolidated)⚫ Number of customers
394
companies⚫ Number of suppliers
655
companies⚫ Number of countries supplied

Needs andissuesIndentifica• Achievements and reliability in 100
tionyears of business⚫ Number of production sites
Japan 5
Overseas 5(affiliates)⚫ Annual capital spending
million yen

Procurement• Tireless challenge to improve
technologies• Full commitment to facing ourcustomers squarely

31
Manufacturing capitalIndustry Business Segment⚫ Automobile testingmachines⚫ Production and processing
equipment drive systems⚫ Power generation andpower supply systems⚫ Car-mounted electricalequipment⚫ Other• Close networks with suppliers

Aftersales
service• Development of manufacturing
professionals

ICT Solution Business Segment
Production⚫ Railway station operating
equipment systems⚫ IoT Solutions

310⚫Development of the world’s
railway infrastructure⚫Development of manufacturing
and infrastructure around theworld⚫Creation of new services
through advanced
telecommunication technologies
Initiative in Production Activities⚫Reduction of environmental
footprint through energy saving,
decarbonization, andimprovement of recycling rates
Initiative in Valuing People and Local
Communities⚫Realizing the happiness of
employees and their families⚫Development and production ofgood members of society andcorporate citizens⚫Contribution to local
communities

Sales

Natural capital⚫ Energy consumption

2,255 kL
Financial capital⚫ Total assets 49.6 billion yen⚫ Equity-to-asset ratio 49.5%[Fundamental Policies of the Medium-Term
Management Plan (FYE May 2023 through FYE May 2026)]
1. Expand new businesses and products
2. Thoroughly improve the earnings structure of existing
businesses
3. Improvement asset efficiency with an awareness of capitalcosts Revitalization and transformation of Toyo Denki

Expand out into the whole world,
Including the Chinese and Asianmarkets and the UnitedStates,as a global brand

Our Heart and Technology
for the Future
Toyo Denki Seizo’s goal

Longterm
VisionHelp build social and industrial infrastructure that is
considerate of the global environment, with a focus
on exceptional motor drive technologies

Input(corporate resources)

External Environment⚫ Changes in demographics⚫ Human rights considerations,human capital management⚫ Increase in geopolitical risks⚫ Carbon-free business management, arrival of
the closed-loop economy⚫ Rising costs of resources and energy⚫ Acceleration of technical innovation

https://www.toyodenki.co.jp/esg_csr/pdf/2023/all_mihiraki.pdf

28

<Reference> Our company profile and business overview(1) Establishment: June 20, 1918 (105 years since establishment)(2) Capital stock：4.9 billion yen(consolidated: fiscal year ended May 31, 2023)(3) Net Sales：310 billion yen (ditto)(4) Number of employees：1,149 (ditto)(5) Business lines: Transportation
Business
Industry Business
ICT Solution
Business(6) Production base

<Yokohama Plant>: Yokohama Plant
Shiga Ryuo Plant<Shiga Ryuo Plant>29

<Reference> Our company profile and business overview
We are contributing to the development of the railway and industrial
fields as a heavy electric machinery manufacturer with threebusinesses: Transportation Business, Industry Business, and ICT
Solution Business.
Transportation Business: products and systems for moving trains

Pantograph

Variable Voltage Variable Frequency(VVVF) Inverter Controller

Industry Business: production, infrastructure facilities,
etc.

Automobile test system

Inverter

ED motor

Motor

Gear units

ICT Solution Business: station service equipment,
etc.

Portable terminal for
conductor

Cloud-type remotemonitoring control system
30

Disclaimer• Statements concerning financial results forecasts are based on data
available as of the date of publication of this material andassumptions concerning the elements of uncertainty that will affectfuture business performance as of the date of publication of thismaterial. 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 at thetime of publication of this material. Such statements anddescriptions are by no means comprehensive.
<Inquiries on this presentation>
Toyo Denki Seizo K.K.
PR, IR, and CSR Department, Management Planning Division
TEL:03-5202-8122
Inquiry form:https://www.toyodenki.co.jp/inquiry/inquiry.php
31