Long-Term Business Plan for the Fiscal Year Ending March 2017 May - - PowerPoint PPT Presentation

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Long-Term Business Plan for the Fiscal Year Ending March 2017

May 11, 2012

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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• 1. About the Long-Term Business Plan

for the Fiscal Year Ending March 2017

• 1. About the Long-Term Business Plan

for the Fiscal Year Ending March 2017

• 2. About Financial Policy and Risk Management Policy
• 3. About Dividends

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• Shift to an aging society with low birthrate (Japan)
• Revolution in technology and materials
• Food shortages, increased demand for resources
• Change in major players driving the economy
• Increased awareness of environmental issues and regulation
• Expansion of HV, EV markets
• Ongoing yen strength
• Energy issues
• Population growth in emerging countries

Orientation of Long-Term Management Policy for the Fiscal Year Ending March 2017

【VISION 2015】 Aim to develop new pillars of profit with a focus on non-automotive areas and to build a balanced profit structure with the automotive business (core business)

Changes in the business environment “GLOBAL 2020 VISION” was established to accelerate the building of non-automotive businesses and to make progress in strengthening global strategy and creating business in addition to dealing with diversified and complex customer needs and revolutionary new technologies. The completion of VISION 2015 in March 2017 is the first step toward the realization of GLOBAL 2020 VISION

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Numerical Targets of Long-Term Business Plan for the Fiscal Year Ending March 2017 Net income

March 2017 Target

Aim for balanced growth while maintaining a sound financial position

ROE Net DER

¥120.0 billion 12-15% 1.5 times or less

(excluding goodwill)

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Net Income Targets for the Fiscal Year Ending March 2017

March 2012 results March 2012 actual value March 2017 target （66.2） 82.0 47.5 47.5 34.5 （58.0） 74.0 26.5 60.0 60.0

Temporary factors ■Main negative adjustments

・Gain on sale of assets ・Gain on transfer of benefit obligation relating to employees’ pension fund, etc.

■Main positive adjustments

・Reversal of deferred tax assets, etc.

120.0 (Billion yen)

Non-automotive areas Automotive area

Figures in parentheses are actual net income after amortization of goodwill

34.0 52.0 （70.0） 86.0 March 2013 forecast

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Important Policies Toward Realizing the Long-Term Business Plan

■ Innovate the business model Horizontal development of existing business model (new clients, new regions) Build new business model ■ Accelerate new investment Business domains important for each of the three areas of focus Business domains where we leverage our strengths to aim for the

• No. 1 position

■ Develop new markets Important countries (India, Brazil, others) Important regions (Africa, Middle East, Latin America, others)

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Mobility Life & community Earth & resources

Investment Plan for the Next Two Years

Retail business (medical/ long-term care), etc. Iodine Rare earths Manufacturing, assembly, parts distribution Dealer business Electric power (IPP) Gas Renewable energy Lithium Recycling HEV, EV Bio Fertilizer Electronic materials Grain processing and feed Storage batteries, etc.

Investment budget for fiscal years ending March 2013 and March 2014

¥250 billion Major investment areas

Technoparks *The amount for each area has not been established CKD

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Policies to Achieve Targets (Automotive Area)

◆ Concern over declining profitability of existing business

・Parts exports from Japan decreasing due to local sourcing ・Automobile retail profit margins falling due to intense competition ・Decreasing volume of materials due to smaller, lighter vehicles ◆ EV/HEV technology innovations and shift to new materials ◆ Expanding markets in emerging countries

Changes in environment

March 2012 actual value March 2017 target

60.0 47.5

8% annual growth

Deepen (explore and strengthen functions), broaden (develop outside the Toyota Group) and horizontally develop (expand along with the Toyota Group) Toyota-related business to build an even more stable foundation for profit.

Results to date and future plans

Metals Global logistics Automotive Major results to date

・Steel centers ・Aluminum smelting business ・Parts logistics ・Tire assembly (Europe, North America, Asia) ・Technoparks (India, Thailand, Indonesia, others) ・Dealer, distributor business ・CKD (Egypt, Pakistan) ・Handle business transfers to other countries

Major future plans

・Steel centers (other manufacturers) ・Steel centers (other industries) ・Parts logistics (other companies,

• ther regions)

・Tire assembly (VW, Nissan, others) ・Technoparks (other emerging countries) ・Dealer, distributor business (emerging countries) ・CKD (emerging countries) ・Increase business transfers to other countries ・New business (used cars, etc.)

(Billion yen)

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Policies to Achieve Targets (Non-Automotive Area)

Changes in environment Company policy

・Growth of global population and food shortages Grain, agriculture area ・Higher resource prices and increased awareness of environmental issues and regulation Recycling business ・Electric power supply concerns due to nuclear accident Renewable energy, gas ・Acceleration of aging society and low birthrate in Japan Medical, long-term care area

Changes in environment

Results to date and future plans Earth & resources area Life & community area

Major results to date

・Rare earths (India, Vietnam) ・Iodine (Chile) ・Lithium (Argentina) ・Wind power generation (making Eurus Energy Holdings Corporation a subsidiary) ・Gas (Australia) ・Electric power (U.S., Canada) ・Metal recycling (Green metal), etc. ・Electronic materials (acquisition of Elematec Corporation) ・Paprika, tuna farming business ・Biopet/ethanol/polyester ・Flour milling business, etc.

Major future plans

・Renewable energy (solar, geothermal) ・General recycling ・Develop upstream and downstream businesses for iodine and lithium, etc.

・Retail business (medical/long-term care)

・Grain/grain processing/feed, etc. → → → →

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Non-Automotive Area: From Investment to Profit (Post-Tax)

¥57.0 billion ¥5.0 billion

(8.7%)

¥6.5 billion

(11.4%)

¥76.0 billion

• ¥1.5 billion

(-1.9%)

Investment amount (*)

Operating investments ・Electric power (North America, Canada) ・Fukusuke Corporation ・Topics Group, etc. Investments under development or in preparation ・Elematec Corporation ・Australia gas project ・Chile/iodine, etc.

* Excluding investments for production capacity increases, etc., associated with existing businesses

Post-tax profit profit

March 2012 (result) March 2017 (forecast)

Major funded investments ¥133.0 billion ¥3.5 billion

(2.6%)

¥14.0 billion

(10.5%)

Total

¥7.5 billion

(9.9%) Investments approved but not yet funded Future new investments

¥60.0 billion ¥200.0 billion(*) ― ―

¥6.0 billion (10.0%) ¥14.0 billion (7.0%) Profit from existing investments (last 3 years)

Total

¥260.0 billion ―

¥20.0 billion (7.7%)

Profit from future new investments

Figures in parentheses are return on investment post-tax profit/value of investment

(*) ¥200.0 billion is the total of future new investments that are expected to contribute to profit in the fiscal year ending March 2017

・・>A ・・>B ・・>C

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Policies to Achieve Targets (Non-Automotive Area)

March 2012 actual value 26.5 40.0 March 2017 target 60.0 14.0

Profit from existing investments ＋10.5 （3.5→14.0） Elimination of losses ＋ 2.0 Others ＋ 1.0 Profit from future new investments (p. 10-C）

The non-automotive area is harvesting profit from past investments and accelerating new investments to build the second and third pillars of profitability. +13.5

6.0

Profit from approved but not yet funded investments as of March 2012 (p. 10-B)

(P.10-A)

Net income before amortization of goodwill

(Billion yen)

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• 1. About the Long-Term Business Plan

for the Fiscal Year Ending March 2017

• 2. About Financial Policy and Risk Management Policy
• 2. About Financial Policy and Risk Management Policy
• 3. About Dividends

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Plan for Next Fiscal Year and Medium-to-Long-Term Quantitative Outlook

PL BS Net sales Operating income Net income(*) Total assets Net assets ROE Net DER March 2011 Results New investments 5,743.6 85.2 62.8 2,436.2 667.3 8.0% 1.0 78.0 6,700.0 115.0 86.0 3,100.0 820.0 11% 1.1 March 2017 assumption 9,600.0 200.0 120.0 1.0 4,200.0 1,200.0 13% March 2012 Results 5,916.7 92.4 82.0 2,837.4 751.7 10.7% 1.0 115.0 March 2013 Plan

Aim for growth while balancing growth, efficiency and soundness.

Continue at ¥250 billion over two years

(*) Net income before amortization of goodwill (Billion yen)

Benchmarks

Financial

Others

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◆ Risk Asset Management Policy Risk Asset Management 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 ¥470 billion

RB

(Risk buffer; mainly net worth) about ¥580 billion

RA：RB ratio (RA/RB) ⇒ about 0.78 R/R (Risk/Return): After-tax ordinary income/RA⇒about 15%

＜as of March 31, 2012＞

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

・Build a risk management system based on strategic organizational units ・Promote the improvement of risk profitability and the strategic allocation

• f resources

Risk Management Policy

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• 1. About the Long-Term Business Plan

for the Fiscal Year Ending March 2017

• 2. About Financial Policy and Risk Management Policy
• 3. About Dividends
• 3. About Dividends

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Dividend Policy

Previous dividend policy

Linked to consolidated business results, consolidated dividend payout ratio 20%

New dividend policy

Linked to consolidated business results, consolidated dividend payout ratio 20%-25%

In response to shareholders’ expectations for dividends, the Company reviewed its dividend policy and will handle dividends flexibly, keeping in mind the changing economic environment and the progress of its investment plans.

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44 26 16 42 28 23% 21% 21% 22% 22% March 2009 March 2010 March 2011 March 2012 March 2013 Forecast

Cash dividends per share Consolidated payout ratio

（Yen / Share）

Dividends and Forecast for the Fiscal Year Ending March 2013

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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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