Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	Rate of Change (%)	Factors
Overall
Sales	1,218,399	1,079,497	12.9	-Sales went up year-on-year due to growth in vehicle production in North, Central, and South America and an increase in exchange gains.
Operating income	28,823	25,302	13.9	-Despite some negative factors such as fluctuating product prices and rising R&D expenses, operating income increased year-on-year. Some major contributing factors to the rise were growth in production and sales and the effects of the Company’s rationalizing efforts.
Ordinary income	40,294	33,914	18.8	-
Net income	12,610	15,792	(20.1)	-

Factors
<Japan>
-Sales totaled JPY 661,403 million, up 6.3 percent year-on-year. Although vehicle production decreased from the previous year when demand was driven by the government's eco-car incentive program, sales were boosted by an improvement in product mix.
-Operating income reached JPY 8,300 million, up 44.7 percent year-on-year thanks to an improvement in product mix and effects of the Company's rationalization efforts.

<North, Central and South America>
-Sales were JPY 214,252 million, up 21.3 percent year-on-year due to growth in vehicle production and an increase in exchange gains.
-The Company post an operating loss of JPY 3,441 million. Despite greater expenses for preparing production lines to make new products, the amount of operating loss, however, decreased JPY 52 million year-on-year due to larger production volume.

<Asia/Oceania>
-Sales totaled JPY 322,795 million, up 15.9 percent year-on-year due to growth in vehicle production and an increase in exchange gains.
-Operating income reached JPY 29,036 million, up 3.1 percent year-on-year, being supported by growth in vehicle production and an increase in exchange gains.

<Europe/Africa>
-Sales reached JPY 86,366 million, up 43.2 percent year-on-year, due to growth in vehicle production volumes.
-The Company continued to post an operating loss, but the amount of loss decreased by JPY 1,293 million from the previous year's figure to JPY 4,852 million due to larger production volume and rationalization efforts.

2020 Vision and 2015 Mid-term Management Plan

-The Company mapped out its new mid-term management plan that covers from April 2011 through March 2016. It aims to achieve a quantum leap during this five-year period, which follows the Company's "second founding" period between April 2007 and March 2011. Following are four major goals for the new "structural reform period" through March 2016.

Main Points
1.Developing leading-edge technologies toward creating new business
-Acquiring outstanding technological expertise to develop products that best suit the needs of each market and to expand the scope of the Company's business

2. Accelerating global business expansion especially in emerging markets
-Gaining advantages over its competitors by developing and producing low-priced products that meet customer needs

3. Reorganizing business structure to expand customer base
-Reorganizing business structure to develop and sell products that meet the needs of various customers

4. Establishing lean, highly efficient, and high value-added operations in Japan
-Pursuing extremely efficient operations on model lines in Japan. Developing and producing high value-added products.

Financial targets (goals set on April 17, 2012)　 
1. Sales and operating income targets on a consolidated basis

	FY ending March 2016  (targets)	FY ending March 2021  (targets)
Sales	JPY 1,300 billion	JPY 1,600 billion
Operating income	JPY 65 billion	JPY 80 billion
Operating profit margin	5%	5%

2. Sales ratio by customer
-The Company aims to expand its presence in the global market by acquiring new customers and winning new programs, while maintaining the same level of sales to Toyota, its major customer. It also plans to increase production overseas, especially in Europe and emerging markets.

Sales ratio by customer	FY ending March 2016  (targets)	FY ending March 2021 (targets)
Toyota	90%	70%
BMW, Daimler, GM, VW and other customers	10%	30%

New Seat Assembly Line in Poland

-In 2013, the Company started production on a new seat assembly line in Poland for two BMW models: the i3 electric car and the i8 plug-in hybrid vehicle. This is the first time that the Toyota-affiliated supplier will provide seats to the German automaker. The new production line is based on BMW’s quality control method, which requires every component and process to be inspected during the production stage. This is completely different from Toyota’s quality control system, which places importance on testing and quality prior to the launch of mass-production. Therefore, only sample inspection is used on Toyota vehicles. (From an article in the Nikkan Jidosha Shimbun on December 19, 2013)

Restructuring European Business

-The Company announced that it has started a restructuring program to bring its European business back to profitability by the fiscal year ending March 2017. In order to improve the profit structure of the European business, which has been worsening due to a decrease in demand for new cars, the company will reorganize its production facilities, which includes the closure of underperforming plants. As part of this project, Boshoku Automotive Europe GmbH plans to close its interior parts plant in Geretsried in the south of Germany by the fiscal year ending March 2016. In addition, Toyota Boshoku intends to review manufacturing processes to improve production efficiency and reduce the number of failures at all manufacturing sites in Europe. Meanwhile, the company also hopes to earn a  profit in the European business by winning more orders. (From an article in the Nikkan Jidosha Shimbun on December 14, 2013)

Chinese Business

<Joint Venture>
-In 2013, Heyuan Toyota Boshoku Automotive Parts Co., Ltd., which is a joint venture between Toyota Boshoku (China) and Guangzhou Automobile Group Component Co., Ltd. , started commercial production on October 18, 2013. (From news releases issued by multiple sources on December 12, 2014)

<New Plant>
-On October 18, 2013, the Company held an inauguration ceremony at its new automotive seat cover plant in Heyuan, Guangdong province, China. The new plant can supply seat covers for 230,000 vehicles per year. The total investment into the plant was approximately JPY 400 million. The new plant had already started production of seat covers in September for the Camry assembled by GAC Toyota. Previously, Camry seat covers were manufactured at a plant belonging to Guangzhou Intex Auto Parts, which is one of Toyota Boshoku’s joint ventures with Guangzhou Automobile Group Component Co., Ltd. and located in Guangzhou city. As Guangzhou is an area in China where the presence of various automobile industries is concentrated, shifting a production base to Heyuan allows Toyota Boshoku to hire workers at a relatively lower cost. (From an article in the Nikkan Jidosha Shimbun on October 22, 2013)

-In 2013, the Company announced that it will set up a new company in July to produce vehicle interior components in Shenyang City, Liaoning Province, China. Shenyang Toyota Boshoku Automotive Parts Co., Ltd., which will be its thirteenth production base in China, is scheduled to start production in 2016. The new Chinese unit will apparently supply the components to BMW's joint venture plant. It will be a wholly owned subsidiary of Toyota Boshoku (China) Co., Ltd., Toyota Boshoku's regional headquarters in China, with a capitalization of 140 million yuan or approximately 2 billion yen. It will hire 70 employees at the start of the production and produce headliners and door trims. (From an article in the Nikkan Jidosha Shimbun on Mar. 30, 2013)

New Plant in Thailand

-The Company will start local production in Thailand by the autumn of 2014. In November 2013, it will establish its  subsidiary, Boshoku Automotive (Thailand) Co., Ltd.,in Rayong Province where many global automotive manufacturers have their plants. The new plant is scheduled to start production in October 2014. Toyota Boshoku will shift production for automakers that are outside the Toyota group to the Thai plant. The total investment is JPY 1.8 billion. In the medium-term, the Thai plant will also handle seat components for its new customers. The 14,000-square-meter plant will be built on a site that is approximately 64,000 square meters. The plant is expected to create 80 new jobs in fiscal year 2016. (From an article in the Nikkan Jidosha Shimbun on August 29, 2013)

Reorganizing Operations in Turkey

-Toyota Boshoku Corporation has reorganized its automotive interior system production in Turkey. TB Sewtech Turkey Ltd. was established as a Toyota Boshoku subsidiary to produce seat covers concurrently with an existing plant. The subsidiary has recently started manufacturing seat covers for the new Turkey-built Toyota Corolla. Toyota Boshoku expects that a partial relocation of labor-intensive seat cover production closer to the new Toyota plant (about 70km away) will reduce labor costs and increase accessibility to human resources. With intent to make TB Sewtech the base to supply seat covers to Europe, Toyota Boshoku will expand its customer base and product lineup. (From an article in the Nikkan Jidosha Shimbun on July 3, 2013)

Converting TB Kawashima into Subsidiary

-In 2013, the Company announced that it would make TB Kawashima Co., Ltd. its subsidiary by acquiring TB Kawashima's 20,000 new stocks through third-party allocation of shares by July 1. The acquisition cost will be 1.285 billion yen, and Toyota Boshoku will increase its ownership in TB Kawashima to 56.7% from current 39%. This will strengthen the partnership between Toyota Boshoku's automotive seat business and TB Kawashima's fabric business, enhancing their competitiveness. TB Kawashima USA Inc., TB Kawashima's wholly owned subsidiary in the U.S., will also become a subsidiary of Toyota Boshoku on this occasion. (From an article in the Nikkan Jidosha Shimbun on May 29, 2013)

Establishing Production Joint-Venture in Pakistan

-In 2013, the Company announced that it will set up a new joint venture in Pakistan with a Pakistani automaker, Thal Limited, and Toyota Tsusho Corporation in August this year. While Toyota Boshoku has been manufacturing automotive seat frame parts destined for Pakistan at its plants in Thailand and other countries, it is planning to localize production by utilizing Thal's plant. The new joint venture, which will be called Thal Boshoku Pakistan (Private) Limited, will be Toyota Boshoku's first manufacturing site in the country. It will be owned 55 percent by Thal, 35 percent by Toyota Boshoku, and 10 percent by Toyota Tsusho, with its headquarters located within the premises of Thal in the city of Karachi. (From an article in the Nikkan Jidosha Shimbun on May. 10, 2013)

Establishing Plant in Laos

-In 2013, the Company announced that it will establish a new plant in Savannakhet Province, Laos by April 2014. This is the first time for the company to set up a manufacturing base in the country. Plans include transferring part of cut-and-sew processes for seat covers to the new Laos factory from Toyota Boshoku's Gateway Plant in Thailand, which will undergo an expansion project to increase capacity. The seat covers manufactured at the new Laos plant will be supplied to the Thai facility, starting in April 2014. Toyota Boshoku plans to utilize the new plant as a satellite production facility to maintain its production volume and achieve cost reduction. With an investment of approximately 500 million yen, the new plant will be able to produce seat covers for 200,000 vehicles a year. (From an article in the Nikkan Jidosha Shimbun on Apr. 9, 2013)

Contract

-In 2013, the Company said it has won a first supply award from BMW's Chinese operations. The announcement was made by the company's president Shuhei Toyoda at a press meeting held in Toyota City, Aichi Prefecture on January 23. Toyota Boshoku will supply seat backboards for the BMW 5 series built in China. The seat products will be manufactured at a new, dedicated plant Toyota Boshoku is going to establish in Tianjin, China by March 2014. This is the first time for the Japanese supplier to set up a China factory devoted to serving the German automaker. (From an article in the Nikkan Jidosha Shimbun on Jan. 24, 2013)

Entering into Motor Cpre Business for Hybrid Vehicles
-In 2013, the Company announced that it has entered into the motor core business for hybrid vehicles. The company has developed and commercialized the new technology by leveraging its expertise in precision stamping technology used in producing seat recliners. It has already established an integrated production system consisting of die making up to mass production at its Sanage Plant in Aichi Prefecture. The facility, which has the capacity of producing 200,000 units a year, has already been supplying the motor cores for the hybrid systems of the new Toyota Crown since December last year. Previously, Mitsui High-tec, Inc. was virtually the sole supplier of motor cores for Toyota's hybrid systems. (From an article in the Nikkan Jidosha Shimbun on Jan. 17, 2013)

Outlook for FY ending Mar. 31, 2015

(in millions of JPY)

	FY ending Mar. 31, 2015 (Forecast)	FY ended Mar. 31, 2014 (Actual Results)	Change	Factors
Overall
Sales	1,200,000	1,218,399	(1.5)	-
Operating income	27,000	28,823	(6.3)	-
Ordinary income	29,000	40,294	(28.0)	-
Net income	12,000	12,610	(4.8)	-
Sales by segment
Japan	640,000	661,403	(3.2)	-
North, Central and South America	240,000	214,252	12.0	-
Asia/Oceania	310,000	322,795	(4.0)	-
Europe/Africa	90,000	86,366	4.2	-

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

R&D Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012
Overall	40,189	36,321	32,543

R&D Structure

-Complete product development in areas where customers are located, leaving cutting-edge and advanced R&D activities to be carried out in Japan.

Japan	-The Sanage Technical Centre (Aichi Pref., Japan) -Oguchi Development Centre (Aichi Pref., Japan) -Kariya Development Centre Research Laboratories (Aichi Pref., Japan)
North, Central and South America	Kentucky, USA
China	Shanghai, China
Asia/Oceania	Bangkok, Thailand
Europe/Africa	Zaventem, Belgium
Design studio	Milan, Italy

R&D Activities

<Japan>
-The Company developed new sports seats by using its "foam in place method" where urethane is injected into metal molds before the seat cover is formed. The new seat is featured on the Lexus IS F Sport.

-Toyota Boshoku Corporation and Toyota Central R&D Labs., Inc. jointly developed an ultra high-strength bioplastic alloy by mixing a fully plant-derived resin and a petroleum-based resin. The new bioplastic alloy offers the world's highest levels of impact strength, which is even higher than that of a polycarbonate composite plastic. If the new material could be applied as a practical business solution, it would most likely be used for various automotive components requiring high levels of strength and rigidity.

<Europe and Africa>
-The Company was chosen as a front and rear seat developer for the BMW i3. It was the first time for the Company to win a seat business from a European automaker. Products developed by the Company included plastic frames for front seat back as well as seat covers.

Interior package featuring advanced noise-control technology
-In 2013, the Company co-developed improved soundproof technology for interior components with Autoneum Holding Ltd. of Switzerland and Nihon Tokushu Toryo Co., Ltd. The joint-venture is scheduled to begin in July 2012. Autoneum and Nihon Tokushu Toryo have combined their expertise to improve the clarity of conversations among passengers in a moving vehicle by 20%. The two companies are committed to developing soundproof components that reduce engine and wind noise in the passenger compartment that result from the addition of electric-power assist technologies. Toyota Boshoku is also partnering with Tokai Rubber Industries, Ltd. and Tokai Chemical Industries, Ltd. to improve ride comfort, safety and interior convenience. The company plans to do this by leveraging the conductive rubber and magnetic induction foaming technologies of their partners. (From an article in the Nikkan Jidosha Shimbun on Jun 19, 2013)

Expanding Chinese Operations

-In 2013, the Company announced its plan to move and expand its Shanghai regional headquarters, Toyota Boshoku (China) Co., Ltd., to strengthen its R&D development functions in China. With an investment of approximately 2 billion yen, the Japanese supplier plans to start construction of its new head office and R&D center in May, which will become operational in July 2014. Toyota Boshoku intends to establish the regional structure integrating all the stages from product design to evaluation at the new facilities. (From an article in the Nikkan Jidosha Shimbun on Mar. 1, 2013)

Capital Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012
Total	51,116	36,805	37,583

-The Company invested mainly to develop new products and rationalize and upgrade production facilities.

<Japan>
-The Company invested JPY 16,888 million mainly to prepare production lines for new products, rationalize and upgrade production facilities, and establish its Tajimi Technical Center.

<North, Central, South America>
-The Company invested JPY 8,902 million mainly to prepare production lines for new products and rationalize and upgrade its production facilities.

<Asia/Oceania>
-Ｔhe Company invested JPY 20,516 million mainly in preparing production lines for new products, rationalizing and upgrading production facilities, and establishing the headquarters and R&D Center for Toyota Boshoku (China).

<Europe/Africa>
-Ｔhe Company invested JPY 4,808 million mainly to prepare production lines for new products and rationalize and upgrade its production facilities.

New Facilities

(As of Mar. 31, 2014)

Name	Location	Type of facility and activities	Planned investing amount (in millions of JPY)	Start	Finish
Sanage Plant	Aichi Pref. Japan	Manufacture of new types of seats and door trims; maintenance and renewal of existing facilities	6,819	Apr. 2014	Mar. 2015
Kariya Plant	Aichi Pref. Japan	Manufacture of new types of air filters; maintenance and renewal of existing facilities	2,011	Apr. 2014	Mar. 2015
Shenyang Toyota Boshoku Automotive Parts Co., Ltd.	Liaoning, China	New plant construction, New production lines to make door trims	4,008	Jan. 2014	Dec. 2014