Toyota Industries Corporation Business Report FY ended Mar. 2016

Financial Overview

(Japanese GAAP, in millions of JPY)
FY ended Mar. 31, 2016 FY ended Mar. 31, 2015 Rate of change (%) Factors
Overall
Sales 2,228,944 2,166,661 2.9 -
Operating income 127,970 117,574 8.8 -
Ordinary income 185,398 170,827 8.5 -
Net income attributable to owners of the parent 183,036 115,263 58.8 -
Automotive Division
Sales 1,045,782 1,050,713 (0.5) 1)
Operating income 33,348 35,957 (7.3) -

Overall
-Broke all previous performance records in terms of sales, operating profit, ordinary profit, and net profit.

Automotive Division
1)
-Despite sluggish sales in Japan, as well as in Latin America, sales grew in North America. As a result, total sales worldwide were on par with those of the previous fiscal year.

Vehicle Business
-Sales increased by 4.6% year-on-year. Even though unit sales of the Toyota "Vitz" and "RAV4" fell, a hybrid version of the "RAV4" was launched.

Engine Business
-Sales decreased by 17.6% year-on-year. Even though the Company launched production of the GD diesel engine, sales of the KD diesel and AR gasoline engines fell.

Air-Conditioning Compressor Business

-Sales increased by 5.6% year-on-year, resulting from an increase in sales overseas such as North America, Europe and China.

Electronics Parts, Foundry and Others
-Sales decreased by 13.4% year-on-year because of the decreased production volume.

Recent Development in Japan

-The Company started production of a new diesel engine at its Higashichita Plant in Handa City, Aichi Prefecture, Japan in June 2015. The new "1GD-FTV" is a 2.8-liter direct-injection turbo diesel engine. The Company jointly developed the new diesel engine with Toyota Motor Corporation. The new 1GD-FTV diesel engine has improvements in thermal efficiency and environmental performance over a conventional diesel engine. The new engine is mounted on the partially redesigned "Land Cruiser Prado" that was launched by Toyota Motor on June 17, 2015. (From an article in the Nikkan Jidosha Shimbun on June 23, 2015)

-The Company has developed a new ESB20 electric compressor for car air-conditioning systems, DC-DC converter, rear inverter, and AC inverter for use in hybrid vehicles. These products will be installed in the new Toyota "Prius". Compared with the ES14 electric compressor installed on the current "Prius", the small, lightweight ESB20 electric compressor improves cooling capacity by 30% and reduces electric consumption by 8%. The new DC-DC converter is 50% smaller and 60% lighter than the Company’s conventional converter for the current "Prius". The rear inverter adopts a forced air-cooling system and provides wider flexibility in layout. In addition, the 1500W AC inverter offers a 30% reduction in size compared to the Company’s conventional products. (From a press release on October 29, 2015)

Awards

-The Company received "Superior TNGA (Toyota New Global Architecture) Promotion Award". (From an article in the Nikkan Jidosha Shimbun on April 28, 2015)


Review of Mid-term Management Plan (FY Mar. 2013 - FY Mar. 2016)

-Even though expenses increased from making heavy investments, overall sales and operating profits were in line with expected results.

Comparison of FY Mar. 2016 result and Mid-term Management Plan

(Unit: in 100 millions of JPY)
FY ended Mar. 31, 2016
(Actual Result)
FY ending Mar. 31, 2016
(Mid-term Plan)
Achievement (%)
Sales 22,289 22,300 99.9
Operating Income 1,279 1,300 98.3
Capital Expenditure (Accumurated) 7,800 - -
ROA (%) 7.3 5.0 -
ROE (%) 20.8 10.0 -

Outlook for FY ending Mar. 2017

(Japanese GAAP, in millions of JPY)
FY ending Mar. 31, 2017
(Forecast)
FY ended Mar. 31, 2016
(Actual Result)
Rate of change(%)
Sales 2,200,000 2,228,944 (1.3)
-Automotive Division 1,095,000 1,045,782 4.7
Operating income 120,000 127,970 (6.2)
Ordinary income 177,000 185,398 (4.5)
Net income attributable to owners of the parent 120,000 183,036 (34.4)

Outlook for FY ending Mar. 2017 of Automotive Products

(Japanese GAAP, in millions of JPY)
FY ending Mar. 31, 2017
(Forecast)
FY ended Mar. 31, 2016
(Actual Result)
Rate of change(%)
Complete vehicles 535,000 480,000 11.4
Engines 160,000 158,200 1.1
Compressors 330,000 324,600 (3.7)
Foundry parts, Electronic components 70,000 64,800 7.9

*Sales categorized based on customers' business lines.

>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)

Business initiatives toward "Vision 2020"

Solution: Materials Handling Equipment (Lift truck)
-Aim for further growth by market share increase and expansion of value chain.
-Introduction of new lift trucks with excellent environmental performance developed centered on 3Es (Environment, Ecology, Energy).

  • Fitted with in-house developed clean diesel engine and turbocharger on internal combustion lift truck.
  • Fitted with in-house developed motor on electric lift truck which demand is growing especially in developed countries.
  • Increase of feasibility test of fuel cell lift truck.


Key Components: Car Air-conditioning Compressor
-Aim further sales increase backed by more stringent fuel efficiency regulations
Unit sales target in FY ending Mar. 2021: 40 million units (Result in FY ended Mar. 2016: 30.37 million units, that is 32% increase within 5 years)

  • Further enhance performance of variable displacement type and sales expansion activities leveraging its product appeal. (for gasoline type)
  • Realize high product appeal of Electrically-Driven Compressors (for all electric driven cars such as HEVs, PHEVs, EVs and FCVs)
  • Further improve production and capabilities including productivity of production bases outside Japan, requiring less support from mother plant in Japan.


Mobility: Engine (Diesel Engine)

  • Started production of GD diesel engine for IMVs (Innovative International Multi-purpose Vehicle) at the Company's Indian subsidiary, Toyota Industries Engine India Pvt. Ltd. (March 2016)
  • Consolidate Toyota Group’s diesel engine development and production to the Company in the future.

R&D Expenditure

(in millions of JPY)
FY ended Mar. 31, 2016 FY ended Mar. 31, 2015 FY ended Mar. 31, 2014
Overall 65,440 47,785 46,326
-Automobiles 40,588 25,955 27,385

R&D Facilities

-The "Research & Development Center", which is located in Kyowa, Obu City, Aichi Pref., undertakes the advanced development of fundamental technologies which will be the keys to the future products of each division, and advanced research for the development of new products for new businesses as well as development of materials and other technologies that will come to serve as the common foundation for all divisions.

Development theme (Example)

  • A wide variety of functional parts for use in fuel cells
  • Non-contact power supply technologies for use in clean logistics
  • Super smooth coatings for inside car air-conditioning compressors
  • Three dimensional fabric reinforced composite technologies

Product Development

Automobile

  • New type diesel engine
  • Turbocharger
  • Electrically-Driven Compressors for hybrid vehicles
  • Next generation model of Car Air-conditioning Compressors
  • Power supply equipment for hybrid vehicle
  • New charging stand for PHVs and EVs


Plastic window

-The Company announced that it has developed a plastic quarter window and a plastic rear window, and will supply these products for the Toyota "86GRMN". The windows are 50% lighter than conventional products due to the use of polycarbonate materials. In addition, the quarter window offers a high level of scratch resistance with a new hard-coating technology, while the rear window features a hot-wire defogger. (From a press release on February 24, 2016)


Capital Expenditure

(in millions of JPY)
FY ended Mar. 31, 2016 FY ended Mar. 31, 2015 FY ended Mar. 31, 2014
Overall 154,236 179,978 157,382
-Automobiles 36,182 88,815 72,566

Breakdown in Capital Expenditures (Automotive Division)

(in millions of JPY)
Unit FY ended Mar. 31, 2016 FY ended Mar. 31, 2015 FY ended Mar. 31, 2014
The Company 18,491 30,318 20,925
Toyota Industries Engine India Private Limited
(Bangalore, India)
3,544 - -

Michigan Automotive Compressor, Inc.
(Michigan, U.S.)

2,866 6,323 11,039

Toyota Industries Compressor Parts America, Co.
(Georgia, U.S.)

2,307 10,230 16,248
Tokaiseiki Co., Ltd.
(Shizuoka Pref., Japan)
2,107 3,795 2,237
TD Automotive Compressor Georgia, LLC
(Georgia, U.S.)
1,209 2,980 4,095
TD Automotive Compressor Indonesia
(Bekasi, Indonesia)
1,128 7,960 4,208

The Sixth Environmental Conservation Plan

-The Company announced that it has mapped out its Sixth Environmental Conservation Plan that runs through March 2021. The Company intends to set up a model production line that emits zero CO2 emissions in accordance with its long-term target of achieving zero CO2 production by 2050. The sixth phase plan includes development of environmentally friendly manufacturing technologies that will lead to reducing CO2 emissions per product by 26% from FY 2005 globally. At the same time, the Group plans to reduce factory wastes in Japan by 27%. (From an article in the Nikkan Jidosha Shimbun on March 22, 2016)

Planned Capital Investment (Automotive Business)

(As of Mar. 31, 2016)
Company/ Plant
(Location)
Equipment to be installed Planned amount of investment (millions of yen) Project period
From To
Companies included in consolidated financial statements
Hekinan Plant
(Aichi Pref., Japan)

Facilities for manufacturing gasoline and diesel engines

13,000 Apr. 2016 Mar. 2017
Nagakusa Plant
(Aichi Pref., Japan)

Facilities for manufacturing passenger vehicles

10,097 Apr. 2015 Mar. 2017
Kariya Plant
(Aichi Pref., Japan)

Facilities for manufacturing automobile air-conditioner compressors
Facilities for manufacturing textile machinery

7,700 Apr. 2016 Mar. 2017
Higashichita Plant
(Aichi Pref., Japan)

Facilities for manufacturing casting products used in engines
Facilities for manufacturing diesel engines

5,000 Apr. 2016 Mar. 2017
Obu Plant
(Aichi Pref., Japan)

Facilities for manufacturing compressor components used in automobile air-conditioners

3,914 Apr. 2015 Mar. 2017
Higashiura Plant
(Aichi Pref., Japan)

Facilities for manufacturing compressor components used in automobile air-conditioners

1,500 Apr. 2016 Mar. 2017
Anjo Plant
(Aichi Pref., Japan)

Facilities for manufacturing in-vehicle electronic devices

1,000 Apr. 2016 Mar. 2017
Kyowa Plant
(Aichi Pref., Japan)

Facilities for manufacturing in-vehicle electronic devices
Facilities for manufacturing press dies

500 Apr. 2016 Mar. 2017
Subsidiaries in Japan
Tokaiseiki Co., Ltd.
(Shizuoka Pref., Japan)

Facilities for manufacturing automotive components

1,800 Apr. 2016 Mar. 2017
Subsidiaries outside Japan
Michigan Automotive Compressor, Inc.
(Michigan, USA)
Facilities for manufacturing compressor components used in automobile air-conditioners 4,600 Apr. 2016 Mar. 2017
TD Deutsche Klimakompressor GmbH
(Sachsen, Germany)
Facilities for manufacturing compressor components used in automobile air-conditioners 1,900 Apr. 2016 Mar. 2017
TD Automotive Compressor Indonesia
(Bekashi, Indonesia)
Facilities for manufacturing compressor components used in automobile air-conditioners 1,500 Apr. 2016 Mar. 2017
Toyota Industry (Kunshan) Co., Ltd.
(Jiangsu, China)
Facilities for manufacturing casting products used in engines
Facilities for manufacturing industrial vehicles
1,500 Apr. 2016 Mar. 2017
Yantai Shougang TD Automotive Compressor Co., Ltd.
(Shandong, China)
Facilities for manufacturing compressor components used in automobile air-conditioners 1,200 Apr. 2016 Mar. 2017
Toyota Industries Engine India Private Limited
(Bangalore, India)
Facilities for manufacturing engines 1,000 Apr. 2016 Mar. 2017