Long-Term Business Plan and GLOBAL 2020 VISION August 3, 2011 - - PowerPoint PPT Presentation

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Long-Term Business Plan and GLOBAL 2020 VISION

August 3, 2011

Investor Relation Group E-mail: ttc_ir@pp.toyota-tsusho.com Tel: +81-3-4306-8201 Fax: +81-3-4306-8818

Inquiries to:

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Notice on Forward-Looking Statements

◆ The presentation material includes “forward-looking statements” such as those pertaining to the strategy and management plan of Toyota Tsusho Corporation and its group companies, which are not historical facts. The forward-looking statements are based on expectations, estimates, and forecasts available at the current moment, and necessarily include risks and uncertainties. Accordingly, the information on the business environment, future performances, business results, and financial standings of the Company explicitly or implicitly expressed in the forward-looking statements could differ materially from the actual results. The Company undertakes no obligation to revise or update publicly any forward-looking statement for any reason. ◆ The presentation material is not intended to be the basis for an offer or solicitation to buy or sell any security. In making a decision on investment, etc., prospective investors may not rely

• n the information in this presentation

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Contents

◆ Toward the Realization of VISION 2015 ◆ Financial Policy ◆ GLOBAL 2020 VISION Page P 4 - 12 P13 - 17 P18 - 23

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Toward the Realization of VISION 2015

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VISION 2015 and Long-Term Business Plan

『 『 VISION 2015 VISION 2015 』 』

『 『Long Long-

• Term Management

Term Management Policy Policy』 』

March 2016 Target ＝VISION 2015

March 2011 Results

Automotive Non- automotive

Automotive Non- automotive Synergy

50 50 50 50 ： ：

March 2010 Results

Third pillar (Non- automotive)

Automotive

Second pillar (Non- automotive)

Fourth pillar (Non- automotive)

People; Toyota Tsusho Group Way; Business Foundation

Create next-generation businesses in different business areas (＝product divisions) for further dramatic advances

◆ Target sales and income balance of 50% from automotive and 50% from non-automotive businesses ◆ Seek to be among trading houses with highest Seek to be among trading houses with highest profitability and best financial standings profitability and best financial standings (in terms of (in terms of ROE, DER, etc.)

Five years after their formulation, the goals of VISION 2015 are in the Long-term Business Plan

Long-term business plan for this fiscal year ＝Target year of VISION 2015

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PL 60：40 BS

Net sales

Operating income

Net income

Total assets Net assets

ROE

Net DER

March 2007 Results March 2011 Results 6,212.7 110.0 77.2* 2,462.2 626.5 15.7％ 1.2 65.0

(Billion yen)

5,743.6 85.2 47.1 2,436.2 667.3 8.0% 1.0 78.0 March 2012 Plan 5,800.0 86.0 47.0 1.0

2-year total 250.0

2,450.0 700.0 70：30 65：35 7.7%

Others

March 2010 Results 5,102.2 55.5 27.3 2,274.5 650.2 4.9％ 1.0 83.0 70：30

Automotive : Non-automotive

* Includes ¥19.0 billion tax reduction from merger. Actual net income: ¥58.2 billion.

Review of Progress to Date and Plan for Fiscal Year Ending March 2012

Benchmarks

Financial

New investments

Make steady investments while maintaining financial soundness

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Net income

March 2016 Target

ROE

Net DER

Automotive : Non-automotive

100.0 billion 12~15% 50：50

Numerical Targets of Long-Term Business Plan

1.5 times or less (excluding goodwill)

Aim for a balanced earnings structure by the fiscal year ending March 2016

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Results in Core Business Areas

Areas where we have an advantage have become apparent

Knock-down production

Automotive Non-automotive

Distributor & dealer business Automobile sales finance Tire installation business Lithium Compounds Nanotech materials Power generation business

Rig chartering business

Iodine/Silica sand

Practical clothing manufacturing and sale

Food resources

(Paprika production, tuna farming, etc.)

Mobile Digital content e-Commerce Metal processing business Rare earths

Storage batteries, etc.

Construction machinery manufacturing and sale

Parts distribution Metal recycling Bioplastics Bioethanol

Gas development

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Key Measures for the Long-Term Business Plan

■ Steady harvesting of existing investments and acceleration of new investments ■ Focused allocation of resources (make value chain oriented investments in areas where the Company can leverage its strengths) ■ Efficiency improvements for a more profitable operating structure ■ Acceleration of global expansion and enhancement of human resource development

The fiscal year ending March 2012 will be a year of acceleration and transformation to achieve the goals of the long-term business plan

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60.0 65.0 83.0 78.0 （39.0） （21.0） （41.0） （22.0） （20.5） （24.0） （61.0） （57.5） 250.0

Amount of Investment

(Billion yen) Automotive （58.0） Non-automotive （7.0）

65.0 （190.0） （60.0）

March 2007 March 2012 and 2013 (Plan) March 2008 March 2009 March 2010 March 2011

Key Policies for the Fiscal Year Ending March 2012

1．(1) Aggressive Acceleration of Investment

Accelerate further investment in non-automotive fields

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Accelerate investment in upstream and downstream areas to restructure the value chain

Key Policies for the Fiscal Year Ending March 2012

1．(2) Main Areas of Investment in the Next Two Years

Automotive Natural gas Rare earths Lithium Grains Other Non-automotive Development of coil centers Development of tire installation business HEV/EV business Other Recycling Distribution network Bio- and renewable energy Electric power Other Dealer and peripheral businesses Lifestyle Health/Nursing care/ Medical Food-related Other Upstream (Resource-related) Midstream

(Trade, manufacturing & processing)

Downstream (Retail)

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Key Policies for the Fiscal Year Ending March 2012

• 2. Organizational Restructuring to Expand New Business Creation

Strengthen linkage between product strategies and functions to create new businesses

Until March 2011 From April 2011 Metals

Machinery & Electronics

Automotive Energy & Chemicals Produce & Foodstuffs

Consumer Products, Services & Materials

Global Strategic Integration

Metals Automotive

Produce & Foodstuffs

Consumer Products, Services & Materials Chemicals & Electronics Machinery, Energy & Project Global Production Parts & Logistics

Administrative Realize synergy between the logistics and automotive parts businesses Expand the Machinery, Energy & Project business model Respond to fading boundaries between materials industry and electronics field Increase efficiency by integrating functional support divisions

Goals of Organizational Restructuring

Administration

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Financial Policy

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About Our Financial Strategy

① Working Capital

・ Limit working capital turnover to minimum required (cut immoderation, waste and unevenness) ⇒Set targets every year (PDCA)

Working capital Fixed assets Short-term funding Long-term funding Shareholders’ equity ② Fixed Assets

・ Accumulation of well- sselected investments

③

・Improve Toyotsu Value Achievement (TVA), an internal benchmark, for efficient deployment of financial resources ・Promote risk asset management based on improved asset efficiency (Details on next page)

④ Interest-bearing Debt

・Funding to match asset characteristics ・Stable, low-cost funding ⇒ ・Global commitment lines ・Region-by-region CMS

⑤ Shareholders’ Equity

・Emphasis on cost of equity ・Proactive investment while improving financial soundness ・Returns to shareholders

・ROE ・Emphasis on net debt- to-equity ratio (DER)

Basic Concepts of Our Financial Strategy

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Risk Management Policy

◆ Risk Asset Managem ent Policy Risk Asset Managem ent Policy 1）Keep total risk within a sustainable range (RA≦RB) 2）Secure earnings to justify risk taken (Min.R/R≧Cost of equity)

RA (Risk assets) about ¥400 billion RB (Risk buffer; mainly net worth) about ¥550 billion

RA：RB ratio (RA/RB) ⇒ about 0.73 R/R (Risk/Return): After-tax ordinary income/RA⇒about 16%

March 31, 2011

Risk Asset Management (RAM)

With investments expected to increase in each business area to achieve the goals of the long-term business plan and vision, efficient use of resources will be even more important.

Therefore, we will prioritize risk assets allocated to new businesses and review risk assets in existing businesses to speed up execution of strategies.

Evolution of Risk Management

・Promotion of integrated risk management ・Continuation and enhancement of qualitative risk management in business execution (internal controls, compliance, etc.) ・Promotion of creation of a consolidated risk management system

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Financial Targets

Average ROE of 12 Average ROE of 12-

• 15%

15%

• ver medium
• ver medium-
• to

to-

• long term

long term

Maintain a low debt level that allows us to keep an “A” rating even when conducting large-scale M&A ⇒ Emphasis on net DER as an indicator of financial soundness

Equity

Net income exceeding equity cost ⇒ Emphasis on ROE as an indicator highly correlated with equity cost

Debt Maintain Maintain net DER

net DER (excluding

(excluding goodwill) goodwill) at at 1.5 times

1.5 times or less

• r less

◆ Build a financial structure for sustained growth through reinvestment of profits

Numerical Financial Targets

We will realize our numerical financial targets by achieving the goals of the long-term business plan.

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28 30 26 28 16 15.6% 22.7% 20.5% 20.8% 20.8%

March 2008 March 2009 March 2010 March 2011 March 2012 Forecast

Cash dividends per share Consolidated payout ratio

（Yen / Share）

Dividends are linked to consolidated earnings, with a target consolidated payout ratio of 20%

Shareholder Return Policy

Basic Dividend Policy:

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GLOBAL 2020 VISION

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Commercial spirit Real places, Real things, Reality Team power

Fundamental Philosophy Vision Long-term and Annual Plans The Toyota Tsusho Group Way

The Toyota Tsusho Group’s Four-tier Conceptual Hierarchy

Clarify and share the targets and signposts that Toyota Tsusho Group employees should reach

• ver the next decade

It is imperative that we identify the next milestone It is vital that we flexibly adapt to an environment in flux

Align our long-term business plan that commenced from April 2011 to the goals of our VISION 2015 How can we take full advantage of current and future changes? How will we uncover new trading company functions to meet the needs of a new era?

Why establish a vision now?

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Toward what goals will we advance over the next decade?

The Toyota Tsusho Group’s raison d’etre is a product of its past that transcends the present extending into the future. Based on a corporate philosophy that encapsulates the Group’s established principles and goals, it is our responsibility today to bring to fruition our ideal image of ourselves and vision. Maintaining an unwavering sense of responsibility Leading the Toyota Group Generating new value as a creation-oriented company Garnering

• ur customers’ trust

The Toyota Tsusho Group’s ideal image of itself

Corporate Philosophy Living and prospering together with people, society, and the globe, we aim to be a value-generating corporation that contributes to the creation of a prosperous society.

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Where should we channel our priorities and focus as we work toward our ideal image of ourselves and vision?

The Toyota Tsusho Group Way

Commercial spirit Real places, Real things, Reality Team power

The Toyota Tsusho Group’s

ideal image of itself

Harnessing our E.D.G.E

Breakthrough

Evolution Diversity Globalization Expertise

Strengthening

• ur corporate culture

Link, expand, create

Co-creation

Strengthening the growth cycle

Create Expand Link

In adopting an all-inclusive approach, we will lead the Toyota group and take up the challenge of linking and expanding our collective efforts to create new value in harmonious co-existence.

• 1. Link our efforts to each company within the

Toyota group, industry, people, and society

• 2. Expand our automotive value chain business

know-how

• 3. Create new business opportunities

Breaking through the shell of convention by harnessing our E.D.G.E, we will stride steadfastly toward our ideal image of ourselves and vision. Both as individuals and as an organization we must break free from stagnation. Exceeding individual capacities, we must take personal ownership and responsibility for promoting innovative change.

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Results in Core Business Areas

Areas were we have an advantage have become apparent

Knock-down production

Mobility Life & Community

Distributor & dealer business Automobile sales finance Tire installation business Lithium Compounds Nanotech materials Power generation business

Rig chartering business

Iodine/Silica sand

Practical clothing manufacturing and sale

Food resources

(Paprika production, tuna farming, etc.)

Mobile Digital content e-Commerce Metal processing business Rare earths

Storage batteries, etc.

Construction machinery manufacturing and sale

Parts distribution Metal recycling Bioplastics Bioethanol

Gas development

Earth & Resources

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In which business fields will we strive for further growth as we work toward realizing our ideal image of ourselves and vision?

Non- automotive Automotive Non- automotive Automotive

2010 2020

A business field that contributes to the evolution

• f next-generation

automobiles

TRY 1

『GLOBAL 2020 VISION』

Realizing a balanced 1:1:1 business portfolio across three operating fields

In the life and community field, we will help build a prosperous society as a value- generating corporation. To this end, we will redouble our efforts to create businesses that deliver wide-ranging value. In this manner, we will endeavor to better serve people and society in the life and community field. In the earth and resource field, we channel our energies toward promoting increased expansion and growth. By creating new value utilizing methods unique to the Toyota Tsusho Group, we will directly confront global issues encompassing food, resources and the natural environment.

Life & Community Earth & Resources

In the mobility field, we will anticipate change in the automobile sector. Recognizing the deepening links between automobiles, people and society, together with the associated

• pportunities that can be expected to arise, we will contribute to business growth and the
• ngoing evolution of a next-generation mobility culture.

Mobility Mobility

A business field that contributes to further improvements in living conditions A business field that helps solve global issues

Life & Community Earth & Resources

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Overview of the GLOBAL 2020 VISION

Fundamental Philosophy Long-term and Annual Plans

The Toyota Tsusho Group Way

Commercial spirit Real places, Real things, Reality

Team power

Vision

The ideal image and vision

TRY-1

Breakthrough & Co-creation

Achieve TRY-1 over the Next 10 Years

A company that recognizes its responsibility toward

ensuring a sustainable global environment and industry

A company that will spearhead the Toyota Group,

actively leveraging its know-how cultivated in the automotive fields and seeking out new challenges with a robust frontier spirit

A company that consistently generates new value

staying ahead of the times

A company that instills a strong sense of confidence

and trust, providing peace of mind and safety to its customers

Each and every member of the Toyota Tsusho Group is

dedicated to exploring unlimited horizons and creating new value in harmonious coexistence; placing particular emphasis on business growth in the three fields (Tri Fields) of Mobility, Life & Community; and realizing a balanced 1:1:1 business portfolio by generating synergies.

In our efforts to secure a top ranking we will endeavor to create

and develop a workplace environment that is both motivating and rewarding to employees. We will also work diligently to secure a leading presence and standing in an increasing number of countries and regions and create No. 1 businesses through processes that realize a Tri-1 (1:1:1) business portfolio.

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