Medium to Long-Term Management Plan

2030 Business Plan

August 9, 2023
TOYODA GOSEI CO., LTD.

1. Progress towards 2025 Business Plan
• Sales are increasing at a faster pace than automobile production volume. We are also benefittingfrom the weak yen, and expect to hit our target.
• As for profits, although we have made progress with reorganizing loss-making operations in Europe
and other locations, we expect to miss our target by a few points due to the adverse impact ofproduction fluctuations and materials market conditions during the COVID-19 pandemic.
ROE 10%Operatingprofit ratio 8%

Target line
ROE

¥951.8 bn

Operatingprofit ratio

Sales ¥1 tn

3.7%

Sales
FY2018FY2019FY2020

FY2021

FY2022■ Challenges for further growth

FY2025
Forecast① Adapting to CASE (Connected, Autonomous, Shared, Electric) technological advanceswith a focus on BEVs
Roll out different products for different regions and customers. Expand organizations and human capital in eachoverseas region.

② Restructuring of business portfolio

Focus on fields that balance social value and economic value.

③ Business management with an awareness of capital efficiencyShift resources into high-growth, high-profit fields and manage balance sheets.

④ Creating new businesses and products to serve as new pillars in the next generation
Speed up the generation of ideas and ascertain their commercial viability. Develop products fromthe customer’s point of view and market them as solutions.

22. Outline of 2030 Business Plan
[Vision for the company]

Become a company that pursues the possibilities of polymers tocontribute to a future of better mobility and living.

P. 5–10[Delivered value]

SafetyComfortDecarbonization

Through safety systems

Through interior & exterior
components

Through new businesses forpolymer materials[Basic policy]

P. 4[Basic policy and priority measures]

P. 11

Focus on fields that balance social value and economic value. (business portfolio restructuring)P. 12, 13[Priority measures] Structural reforms aimed at growth in priority businesses, regions, and customers(expand sales in safety systems, interior/exterior, and materials businesses to regional automakers
in North America, India, and China)

 Forge strategic alliances to accelerate growth globally and strategically reinforce development andintellectual properties (IP).
 Revamp management with a “polymer-like organization” that organically binds people and theorganization.

[FY2030 financial objectives]
Revenue¥1,200.0 bn

Operating profit¥100.0 bn

Operating profit ratio

8%

ROE

P. 14, 15

10%3

3. Vision for the Company in 2030
[Vision for the company]

Become a company that pursues the possibilities of polymers tocontribute to a future of better mobility and living.
[Polymer business]

What are polymers(or polymer compounds)?
• Compounds such as rubber and plastics
that have a large molecular mass
• In polymers, intermolecular forces arestrong, and the interactions of these forces
determine the polymer’s structure andproperties.

Contribute to society and the environment by tapping into our wealthof knowledge in the rubber and plastics business, which we haveoperated in ever since our foundation.
• Bring the safety, and comfort we have perfected with our
automobile components to people’s mobility and living.
• Lead society in decarbonization by leveraging polymer technology
to pursue carbon neutrality and economic sustainability.

[Polymer-like organization]• Get people and organizations
working closely together torealize high levels of creativity andproductivity.
• Create new value by customizingorganizational forms to align withchanges in our environment.

44. Enhancing Social and Economic Value
4-1. Changes in Mobility in Society

Advances in CASE and decarbonization• With the advances in CASE and decarbonization, mobility is changing, and so is people’srelationships with cars.
• We will provide value in terms of safety, comfort, and decarbonization in responseto changes in mobility in society.
Proliferation ofclean energy

Acceleration inresource recycling

Improve
ElectricityUsageMobility in futuresociety
SafetyComfortDecarbonization

Review ofautomotive
manufacturing
Improvement ofoccupant restraintperformance(Safety improvement)

Transformation from means oftransportation to space for relaxation

A senseof future

Human coexistence with new forms of mobility

54. Enhancing Social and Economic Value
4-2. Contribution to Safety• Over the years, we have reduced traffic fatalities by supplying airbags of various types.
• As BEVs and autonomous vehicles proliferate, our next task is to develop and bring tomarket sophisticated products for protecting vehicle occupants.

Deepen collaboration with Ashimori Industry Co., Ltd.
Offer seat belt and airbag systems

Provide safety toeveryone on the move

Provide safety to variousvehicle occupants

Added value

Provide safety to BEV
users
Airbag and seat belt solutions
optimized for changes in vehicles
brought on by the shift to BEVs

Illuminated steering wheels that connect
the person with the vehicle, and lap
airbags that protect occupants invarious postures in anticipation of theproliferation of autonomous vehicles

Airbags adapted to changing
modes of transportation andnew forms of mobility+Cyclist airbags that offer protection forpedestrians and cyclists in case ofcollisions

2025

Biometric sensing technology and variablevolume airbags that protect the elderly andmothers-to-be

2030

FY2030 airbag
production volume
1.5 times higher thanin FY226

4. Enhancing Social and Economic Value
4-3. Contribution to Comfort• By integrating safety systems and illuminated products into interior & exterior components, we will offer
new functionality suited to BEVs.
• With our polymer technology, we will also upgrade car designs and manufacturing to bring about new formsof mobility.

Ramp up collaboration
with other manufacturers

Communication
with other vehicles
and pedestrians

External signage and lighting

Added value

Designs that evoke
the essence of BEVs
Sensor transparent front end
and sensory illumination

Employ polymer technology
to contribute to theevolution of mobility

Plastic-based, lightweight, integrated

Frontend module

Space to relax
during autonomous
driving
Retractable steering wheel
and multifunction console

Transformation ofstructure and build

Broad instrument panel and integration of components

Instrument panel module

BEV-relatedshareof salesin FY2030
40%

2025

2030

74. Enhancing Social and Economic Value

4-4. Contribution to Decarbonization (1) Commercialization of Materials• Harness our knowledge of polymer materials (formulation, kneading) to focus ondevelopment of high-performance materials and recycling materials.
• Contribute to decarbonization and recycling promotion in society at large by not only utilizing
the materials ourselves but also selling them externally.
Base ingredient
manufacturer

Monomers/
polymerization

Toyoda Gosei

Automakers

Formulation,
kneading
Molding,
processing

Assembly

Recycling
company

Collection/recycling

Polymer materialsknowledge andknowhow
Collaboration/alliance

High-performancematerials

Fire-resistant materials,
insulating materials, etc.
Expand into organic synthesis
and develop new materials

Collaboration/alliance

Recycled materials

External salePlastics, rubber, airbags, etc.
Collect waste materials externally andrecycle them into new materials

84. Enhancing Social and Economic Value

4-4. Contribution to Decarbonization (2) Carbon Neutrality• Go beyond day-to-day improvements and push forward with production technology innovation toaccelerate energy conservation.
• Bring forward the achievement of Scope 1 and 2 carbon neutrality to 2030 and provide CO2-free,high-added-value products.
CO2 emissions
530,000 t

Day-to-day
improvements

Other
Painting/
plating
Rubberextrusion
molding
Plasticinjection
molding

Develop decorative techniques that
reduce environmental impact during
the painting and plating process
Optimize vulcanization
conditions during therubber molding process

Production
technology
innovation

Implement
electrification andreduce pressure during
the plastic molding
process

Renewable energy
utilization

2030
Achieve Scope 1 and 2
carbon neutrality

2050
94. Enhancing Social and Economic Value
4-5. Expansion of Scope of Contribution• Offer a wide range of products, not just automobile components, to bring value to society
and benefit greater numbers of people.
• Strengthen structures for deploying CVC and creating new value to swiftly get new
businesses off the ground.
Deployment of corporate venture capital (CVC)+[Expansion of hydrogen tank business]

Repeat a cycle of rapidly generating ideas andascertaining their commercial viability

EnergyHealthcare

Communities/society

Energy infrastructure
Smart insoles

Lifestyles
Blood sugar
measurement devices

Deep UV LED
air sterilization
devices

Mobility

GaN power
semiconductors

Hydrogen tanks

Microwave
electricity supply

Hydrogentanks

Perovskite
solar cells

Passenger vehicles

2025

For households

2030

Tanks for commercial vehicles;
trains and ships

10

5. Business Portfolio Restructuring• Shift resources into fields that balance social value and economic value.
• Deliver safety, comfort, and decarbonization through business.

Economic value (profitability)■ Envisioned business portfolio in 2030 (circle size denotes revenue)
BEVexclusive Decarbonization
products

Resource shift
Fuelsystemproducts

Weatherstrip
products

Make interiorspaces more
comfortable
during travel
Interior/exteriorcomponents

Growth areas

Provide safety toBEV users andother vehicle
occupants
Safety systemproducts

New businesses/products(hydrogen tanks, materials recycling)

Social value(degree of contribution to safety, comfort, and decarbonization)

11

6. Action for Growth Strategy Execution• Leverage strategic alliances and IP strategies to secure a competitive advantage.
• Press ahead with restructuring to expand priority businesses, regional operations, andcustomer base.
Strategic alliances• Deepen alliances in the safety systems business totarget regions and customers.
• Pursue joint development and collaboration to expand
the interior/exterior business for BEVs.
• Execute a partner strategy to commercialize
upstream/downstream operations in the materials
field.

Business restructuring• Downsize or pull out of low-profit businesses toshift resources into growth businesses.
• Implement exit strategies for fuel systemcomponents such as global, centralized production.

Strategic reinforcement ofdevelopment and IP• Build a structure for developing products that match
market needs in priority regions (North America,India, and China).
• Pivot from protecting development outcomes throughpatent filings to constructing a patent network thatgenerates profits.
• Assess and analyze information on IP to explore its
potential application to new businesses and usage
cases beyond automobile components.

Manufacturing innovation• Make smart factories a reality to double productivity(digital transformation (DX), low-outlay automation).
• Develop materials recycling technology andinnovative production technology to help achievecarbon neutrality.

12

7. Invigoration of People and Organizations• Revitalize the company to implement the 2030 Business Plan (i.e., invigorate our people andorganizations).
• Be highly sensitive to changes in our operating environment, foster a dynamic corporate
culture, and develop talent.
Strengthening of organizational structure(transition to dynamic polymer-likeorganization)• Draw out the individuality, vitality, and strengths of eachindividual and bring together creativity and potency throughorganic bonding.
• Strengthen connections with internal and externalorganizations.
• Customize structure to flexibly adapt to environmental
changes.
• Make our management team the catalyst, get work done
faster, and maximize results.
Self-fulfillment for eachindividual(embrace change without fearof failure)
Enhancement of employee
engagement(establish safe spaces andstages upon which to shine)
Management styletransformation

Strategy and execution speed
improvements(sensitivity and swift responses tochanges in environment)• Enhance strategic planning and speed up decision-making
by establishing a CxO (chief officer) system (executestrategy, and launch lead organizations for BEVs andrecycling).
• Adopt a management approach based on regional
autonomy to better serve priority markets.
• Tap the enthusiasm and energy of each region by setting
up CoEs*.
* Propagate the CoE (center of excellence) concept totranslate the strengths of each region into globalsuccess.
Examples: Thailand’s low-cost, energy-saving
production automation technology
Techniques for developing and promoting
locally recruited personnel in China andNorth America

138. Financial Objectives and Cash Allocation• Aim to grow sales by more than the market, and focus on profit growth to achieve an ROE
that exceeds our cost of equity.
• Strategically allocate cash generated after securing sufficient funds for capital investment
and returning value to shareholders.

■ Financial objectives
Revenue¥1,200.0 bn

Operating profit¥100.0 bn

Operating profit ratio

ROE8%10%■ Cash allocation (cumulative from FY2023 to FY2030)
Operatingcash flow¥650.0 bn

Invest in people andaccelerate R&D

Assumesachievement ofan operating
profit ratio of
8% by FY2030

Balance sheet
improvement¥50.0 bn

Capitalinvestment¥350.0 bn(within scope ofdepreciation)(Carbon neutrality
investment)

Priority businesses and regions(safety systems and interior/exterior businesses; North
America, India, and China)
Restructure our business portfolio by strategically allocating
resources to new forms of mobility, decarbonization, nonToyota sales, etc.
Strategicinvestment(including M&A and alliances)¥250.0 bn• Enhance efficiency inutilization of noncurrent assets andinventories• Reduce crossshareholdings, etc.

Additional returns
to shareholders

Strategic allocation
Strategically allocate cash in
response to our operating
environment and growth opportunities

Dividends¥100.0 bn

Maintain adividend payout
ratio of 30% orhigher14

9. Financial Policy• Endeavor to increase our value as an enterprise by supporting growth through balancing growthpotential, financial soundness, and efficiency.
• Strengthen our balance sheet using TG-ROIC as a metric as we strive to deliver an ROE of 10%.

Growth potential (profit growth)

Efficiency

Priority investment in high-growth, high-profit fields(R&D/capital investment)① Strategic investment in line with
2030 Business Plan

(asset efficiency and capital efficiency)

Efficient administration of businesses
with attention paid to cost of capital① Efficient balance sheet management

Growthpotential② Alliances and M&A for inorganic
growth• More efficient use of non-current assets
and inventories• Reduction of cross-shareholdings

Operating profit¥100.0 bn

Enterprise valueenhancement

Soundness
Consolidated
monthly sales

Balance of growth,soundness, andefficiency② Returns to shareholders that reflect
capital efficiency

Efficiency
ROE
TG-ROICSoundness
Maintain sufficient funds and funding
capacity to respond flexibly to any
investment opportunity① Maintain cash on hand
② Secure flexible means of funding (interest-bearing liabilities)

10%
20% *• Steady and continuous dividend increases• Flexible acquisition of treasury shares③ Reduction of cost of equity• Proactive disclosure of financial andnon-financial information• Diversification of shareholder base(focus on increasing individual shareholders)* TG-ROIC =Operating profit
Non-current assets + Inventories

A simplified, easier-to-use version of the typicalformula15

Disclaimer◆ Notice Regarding Forecasts
These materials are for the purpose of providing information to investors andare not intended to represent a buy or sell recommendation. Statements
regarding future forecasts contained in these materials are based on targets
and forecasts and do not represent definite promises or guarantees.
These materials should be used with an awareness that the Company’s
actual business results could differ materially from the Company’s current
forecasts.
Statements regarding industries, etc., have been prepared based on various
types of data deemed to be reliable.
However, the Company cannot guarantee the absolute accuracy andintegrity of this data. We provide these materials on the assumption thatclient investors use their own judgment and assume responsibility whenutilizing these materials in every instance. The Company assumes noresponsibility in any instance.
◆ Notice Regarding Accounting Standards
Toyoda Gosei adopted the International Financial Reporting Standards(IFRS) in the first quarter of FY2018.