outline of consolidated results for the first half of fy2015 (year ending march 31, 2016) ·...

Outline of Consolidated Results for the First Half of FY2015

(Year ending March 31, 2016)

November 4, 2015

1

Contents

1. Outline of Consolidated Results for FY2015 1H P. 2

2. Revision of Full-Year Consolidated Forecast for FY2015 P. 10

3. Achieving Long-Term Business Plan Targets P. 17

4. Supplementary Materials P. 26

1. Outline of Consolidated Results for FY2015 1H

2015/3上期実績

2016/3上期実績

2015/3上期実績

2016/3上期実績

金属

グローバル部品・ロジスティクス

自動車

機械・エネルギー・プラントプロジェクト

化学品・エレクトロニクス

食料

生活

-2%-70.8

3

-11%-7.9

71.9194.3

953.5

670.7

1,008.1

987.4

467.2

2.9

7.8

15.8

23.9

9.8

17.0

4,284.04,354.8

74.366.4

646.1

498.8

943.1

216.372.6

991.1

914.211.2

19.7

10.1

15.7

11.21.72.42.0

Net sales: -70.8

Sales decreased mainly in the Machinery, Energy & Project Division and the Metals Division due to lower market value and the effect of fiscal period alignment in the previous fiscal year

Operating income: -7.9

Operating income would have increased slightly absent the effect of fiscal period alignment in the previous fiscal year, foreign exchange translation effect and the non-recurring loss on valuation of inventories

Consolidated Results for First Half of FY2015 (Billion yen)

Net sales Operating income

MetalsGlobal Parts & LogisticsAutomotiveMachinery, Energy & ProjectChemicals & ElectronicsFood & AgribusinessConsumer Products & Services

FY2014 1H Results

FY2015 1H Results

FY2014 1H Results

FY2015 1H Results

74.3

66.4

-2.5

-10.1

+3.6

+1.1

Positive and Negative Factors behind YoY Change in Operating Income

YoY Reaction

• Fiscal period alignment -2.5

Non-recurring Factors

• Loss on valuation of inventories -6.2

• Allowance for doubtful receivables in Venezuela -2.1

• Aluminum premium -1.8

Forex Translation Effect

• Forex effect +5.6• Offsetting forex losses

-2.0

Demand/Trading Volume, Other

• Demand/trading volume+5.0

• Automobile sales -1.6• Automobile production

-0.4

YoY Reaction


Forex Translation

Effect

Demand/ Trading

Volume, Other

4

FY2014 1HResults

FY2015 1HResults

(Billion yen)

5

Status of Automotive Business (Production)

Global Parts & Logistics Division Results

Automobile production-related businesses have stable earnings fundamentals absent non-recurring factors

Metals Division Results

(Billion yen) FY2014 1H FY2015 1H

Operating income 23.9 19.7

Adjust-ments

Forex translation effect -3.5 -2.8

Fiscal period alignment -0.7

Aluminum premium 1.8

Other 0.1

Adjusted operating income 19.7 18.8



Adjust-ments

Forex translation effect -0.5 -2.2


Allowance for doubtful receivables in Venezuela 0.4 0.8

Other -0.4


Toyota’s Car Production Volume

(Thousand units) FY2014 1H FY2015 1H Change

Japan 1,599 1,561 -38Overseas 2,893 2,872 -21Total 4,492 4,433 -59

6

Toyota Tsusho Retail Unit Sales

Automotive Division Results

Status of Automotive Business (Sales)

(Units) FY2014 1H FY2015 1H Change

Asia & Oceania 10,876 11,399 523

China, Taiwan & Hong Kong 25,000 25,748 748

Central & South America 13,314 11,025 -2,289

Middle East & Southwest Asia 2,414 3,241 827

Europe & Africa 13,400 11,091 -2,309*1

Russia & Eastern Europe 21,898 15,330 -6,568*2

Total 86,902 77,834 -9,068



Adjust-ments

Forex translation effect 0.0 -1.7


Allowance for doubtful receivables in Venezuela 0.3 2.0

Other -0.9


We are expanding the automotive value chain in regions in which we can make the most of our strengths

*1. Includes dealer consolidation in Europe (-1,411)*2. Before effect of alignment of fiscal period in FY2014 (5,477)

(Excluding CFAO)

2015/3上期実績

2016/3上期実績

2015/3上期実績

2016/3上期実績

2Q

1Q

-19%-15.9

Consolidated Results for First Half of FY2015

7

Ordinary income: -15.9Decreased due to lower operating income and other factors including lower investment income recognized using the equity method, primarily in the Metals Division

Net income attributable to owners of the parent: -16.5Decreased JPY 16.5 billion year on year due to loss on cancellation of contract, loss on valuation of securities and investments, and provision for doubtful receivables

189373

-41%-16.5

Net income(Attributable to owners of the parent)

82.3

66.4

23.7

40.2

35.4

37.3

31.0

44.910.812.921.3

18.9

(Billion yen)

Ordinary income

FY2014 1H Results

FY2015 1H Results

FY2014 1H Results

FY2015 1H Results

Mar. 31, 2015

Current assets2,769.2

PPE/Intangibles1,764.4 Net assets

1,304.4

Current liabilities2,061.7

Long-term liabilities1,167.4

Sept. 30, 2015

Current assets2,702.6

PPE/Intangibles1,715.9

Current liabilities1,985.6

Long-term liabilities1,197.3

Net assets1,235.5

Mar. 31, 2015 Sept. 30, 2015 Change

Total assets 4,533.6 4,418.5 -115.1Net worth 1,125.5 1,068.6 -56.9Net worth ratio 25% 24% -1%Net interest-bearing debt 1,233.5 1,287.3 53.8

Net DER 1.1 times 1.2 times 0.1 timesCurrent ratio 134% 136% 2%

Balance Sheets

8

(Billion yen)

Net cash provided by operating activities 73.0

Income before income taxes and minority interests 51.3

Depreciation 55.9Working capital -3.8

Cash Flows

9

-8.7

-96.3 -94.1

-21.1

Net cash usedIn operating activities -8.7Income before income taxes and

minority interests 87.3Depreciation 53.2Working capital -91.4

73.0

FY2014 1H FY2015 1H

Net cash used in investing activities -94.1

Automotive related -31.4NovaAgri -27.5Electric power business -25.0Africa business -5.0

Net cash used in investing activities -96.3

Automotive related -31.9Electric power business -20.0Resource business -5.0Africa business -5.0

-105.0

(Billion yen)

Net cash provided by (used in) operating activitiesNet cash used in investing activities

Free cash flow

2. Revision of Full-Year Consolidated Forecast for FY2015

Assumptions of Forecast for the Fiscal Year Ending March 2016

11

Benchmark FY2014 Results

FY2015 Initial

Forecast

FY2015 RevisedForecast

Exchange rate

１ USD JPY 110 JPY 115 JPY 119

１ EUR JPY 139 JPY 125 JPY 133

Toyota Motor's automobile production

8.95 million units

9.12 million units

9.12 million units

2015/3通期実績

2016/3通期予想

2016/3通期修正

金属


自動車



食料

生活

--

Variance with Initial Forecast by Division (Net Sales)

12

2,070.0

FY2014 Results

2,150.0

1,270.0

1,000.0

1,948.1

1,961.0

1,306.5

8,400.08,663.4 8,400.0

500927.5

2,000.0

160.0

1,947.5

1,300.0

160.１410.4 450.0

210

1,970.0

1,000.0

1,300.0

1,540.0

160.0430.0

Factors in Revised Sales Forecast

Metals Lower automobile production in Japan

Global Parts & Logistics In line with initial forecast

Automotive In line with initial forecast

Machinery, Energy & Project

Increased petrochemical product trading volume

Chemicals & Electronics Lower demand in Australasia and China

Food & Agribusiness Lower grain prices

Consumer Products & Services In line with initial forecast

(Billion yen)

FY2015 Initial Forecast

FY2015 Revised Forecast


2015/3通期実績

2016/3通期予想

2016/3通期修正

金属


自動車



食料

生活

Variance with Initial Forecast by Division (Operating Income)

13

33.0

22.8

33.0

154.0

50.0

158.0

54.3

22.3

6.45.4

-3%-4.0

36.4

21.0

20.5

33.0

6.06.0

169.4

22.0

47.0

32.0

25.0

29.04.06.0

Factors in Revised Operating Income Forecast

Metals Lower non-ferrous metal premium pricing

Global Parts & Logistics

In line with initial forecast (positive forex effect)

Automotive Slowdown in African markets

Machinery, Energy & Project Increase in machinery trading volume

Chemicals & Electronics

Loss on valuation of inventories, increase in electronics trading volume

Food & Agribusiness Lower grain trading profitability

Consumer Products & Services In line with initial forecast

(Billion yen)


FY2014 Results

FY2015Initial Forecast


2015/3通期実績

2016/3当初予想

2016/3通期修正

2015/3上期実績

2016/3当初予想

2016/3通期修正

下期

上期

-12%-19.0

Variance with Initial Forecast (Ordinary Income & Net Income)

14

213

70.0

-50%-35.0156.2

35.0

67.5

66.4

73.9

139.0

82.3

23.740.2

27.3

158.0

72.6

11.3

Net income(Attributable to owners of the parent)

Ordinary income

(Billion yen)

FY2014 Results


FY2015Revised Forecast

FY2014 Results



2H

1H

Non-Recurring Factors Included in Revised Forecast

15

Net Income (Attributable to Owners of the Parent)

Category Project 1H Results 2H Forecast

Resourceprojects

Canada gas -6.2Australia gas -8.0India rare earths -4.0

Subtotal -6.2 -12.0Approx. -18.0

Non-resourceprojects

Europe scrap -11.2Valuation losses on overseas listed equities -6.4

Write-downs at affiliates, etc. -10.0Subtotal -17.6 -10.0

Approx. -27.0

Tax effect10.0

Subtotal 10.0 0.0Approx. 10.0

Full-year total Approx. -35.0

(Billion yen)

Shareholder Returns Policy

2016/3当初計画

2016/3修正予想

35.0

70.0Non-recurring factors

included in revised full-year forecast

2016/3特殊要因を除く当期純利益

70.0

Interim (2Q) Year-end(Forecast)

Annual(Forecast)

Cash dividends per share JPY 31 JPY 31 JPY 62

+35.0

16

We still plan to pay annual dividends of JPY 62 for the fiscal year ending March 2016 as we announced at the beginning of the fiscal year

(Billion yen)

FY2015Initial Plan

FY2015Revised Forecast

FY2015 Net Income absent


3. Achieving Long-Term Business Plan Targets

18

Reflects stagnant resource prices

Realizing scrap and build

Prioritize improved financial condition and increased earnings

Quickly monetize and assess past investments

Reconfirm fundamentals in core businesses

Continue investing (selectively invest in businesses in which Toyota Tsusho is competitive within the scope of operating cash flow)

Background for Revised Results

Background for Revised Results

Revised Results

Assessing businesses by rigorously managing the investment cycle

Toyota Tsusho Action Plan

19

Major Past Investments (Past 5 years)

Bring major projects of concern to an end during the current fiscal year and move to quickly monetize these projects

Investment Category & Main Projects Objectives Investment

(Incl. Capex)

CFAO Drive Africa Strategy Approx. 230

AutomotiveIncrease overseas production, expand dealer network, used vehicle and after-market businesses, and rare metals (lithium, etc.)

Approx. 210

Non-Automotive

Electric Power

Renewable energy, development of various electric power generation businesses including gas-fired electric power generation in North America

Approx. 470Electronics Generate synergy among four main electronics

subsidiaries

Grain Restructure value chains centered on NovaAgri

Resources(Gas & Coal)

Eliminate additional development expenses andminimize risk exposure

Chemicals Invest to leverage strength in areas including iodine and superabsorbent polymers, etc.

Total Approx. 910

(Billion yen)

20

Automotive Business Forecast (Due to Lower Oil Prices)

Automobile market growth⇒Linkage with higher production⇒Build more facilities (Mexico, China, etc.)⇒Captured demand for other makes

Economic growth and recovery in U.S. and India, etc.

Use of new materials & technologies Expanding demand for large automobiles

(especially in North America)

Positive Factors

Negative Factors

Sluggish economies in resource-producing countries

Currency risk in emerging countries

Lower demand for eco cars

Appropriately respond to accelerating production reforms

Preparing peripheral businesses for shift to sales growth in the future

Sales and Market ForecastFlat market expected over next 1-2 years

Million units

2014 Results

2015Forecast

2016 Forecast

2021 Forecast

Global market 87.71 87.97 89.92 103.54

*Certain data from Global Automotive Industry Yearbook 2015; FOURIN, Inc.

21

Automotive Business: Markets and Factors Driving Earnings Growth

Mobility Domain

Operations That Complement Automobile Sales

(Global Parts & Logistics and Automotive Divisions)

Expand transaction volume for genuine parts and parts retail

Used vehicles and sales finance

Use of New Materials & Technologies(Metals, Automotive and Chemicals & Electronics

Divisions)

Lithium development for next-generation automobiles

Create infrastructure for hydrogen automobiles

Move to Increase Overseas Production(Metals, Global Parts & Logistics, Machinery, Energy

& Project, and Chemicals & Electronics Divisions)

New facilities at Mexico Plant, Guangzhou expansion, etc.

Respond to modularization

Expand Regions Served and Brands Handled(Automotive Division)

Africa Strategy (West: Toyota; East: VW) Hino Trucks, Yamaha Motors

22

Life & Community Domain: Markets and Factors Driving Earnings Growth

Life & Community Domain

Challenge

Grain Value Chain(Food & Agribusiness Division)

Stable upstream procurement Stable overseas supply to Southeast Asia,

etc. centered on four silos

Africa Business Development(All Divisions)

CFAO’s network and connections multiplied by the Toyota Tsusho Group’s strengths, experience and distribution expertise

Pharmaceuticals, consumer products, and durable goods

Electronics Business(Chemicals & Electronics Division)

Strengthen sales and procurement capabilities in Japan and overseas through collaboration among four Group companies

Aim to become a global player in the growing electronics component market

23

Earth & Resources Domain: Markets and Factors Driving Earnings Growth

Earth & Resources Domain

Exercise the Group’s capabilities in diverse types of electric power generation

Renewable Energy(Machinery, Energy & Project Division)

Investigate the electric power transmission business

Surplus power storage and sales (hydrogen, storage batteries, etc.)

Electric Power Generation Business(Machinery, Energy & Project Division)

Construct electric power generation business value chains

Further diversify types of power generation, including, solar, water and geothermal

Investment Stance and Operating Cash Flow

24

Operating Cash Flow

Investment in FY2015 1H

We are investing within the scope of operating cash flow, and are building an excellent asset portfolio

Investment Amount

AutomotiveCapex (CFAO)

31.4Automobile production facilities in North America

Non-Automotive

Solar and wind power generation business (Eurus)

77.3NovaAgri acquisition

Capex (CFAO)

Total 108.7

Cash provided by investing activities 14.6

Net cash used in investing activities 94.1

(Billion yen)

79.863.7

124.1 133.9

169.1

73.0

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 1H

25

Stronger Investment and Loan Process

Stronger Investment and Loan Process

Exhaustive Strategic Discussion at the Monthly Investment Strategy Meeting

Rigorously apply quantitative standards

Establish priorities at corporate and divisional level

Project replacement (prioritize allocation of management resources)

Allocate corporate personnel to investment projects over JPY 10 billion

4. Supplementary Materials

23.9

19.7

-0.7

-1.4

FY2015 1H: Reasons for Changes in Operating Income


Demand/Trading Volume

27

-1.4

-0.7Fiscal Period Alignment

Other

Forex Translation Effect・Forex effect +2.3・Offsetting forex losses -3.0

Other・Aluminum premium -1.8

Metals Division

Fiscal Period Alignment• Effect of fiscal period

alignment in previous fiscal year -0.7

Demand/Trading Volume・Automobile production -0.9

(Billion yen)

FY2014 1HResults

FY2015 1HResults

9.811.2

+1.8

-0.3



Allowance for Doubtful

Receivables


28

-0.5

+0.7 -0.3

Fiscal Period Alignment

Other

Forex Translation Effect・Forex effect +1.3・Offsetting forex losses +0.5

Global Parts & Logistics Division



Allowance for Doubtful Receivables・Venezuela receivables -0.4

Other• Newly consolidated

subsidiaries -0.5

(Billion yen)

FY2014 1HResults

FY2015 1HResults

17.0

15.7

+1.7


29

-0.9

-1.6

-0.6


Automotive Division

+0.1

Demand/Trading Volume・Retail -2.4・Exports +0.8



Allowance for Doubtful Receivables・ Venezuela receivables -1.7

Other• Newly consolidated

subsidiaries +0.2

(Billion yen)

FY2014 1HResults

FY2015 1HResults


Allowance for Doubtful

Receivables



Other

7.8

10.1+1.4


30

-1.2+2.2


Machinery, Energy & Project Division

-0.1



Other・Lower resource prices

Demand/Trading Volume・Automotive machinery +2.2

(Billion yen)

FY2014 1HResults

FY2015 1HResults


Demand/Trading Volume Fiscal Period

AlignmentOther

15.8

11.2

+0.3


31

-7.0

+2.6

-0.5

Forex Translation Effect・Forex effect +0.8・Offsetting forex losses -0.5

Chemicals & Electronics Division Fiscal Period Alignment• Effect of fiscal period alignment in previous

fiscal year -0.8• Alignment of Elematec’s fiscal period +0.3

Demand/Trading Volume・Electronics related Other

• Loss on valuation of inventories -6.2

(Billion yen)

FY2014 1HResults

FY2015 1HResults




Other

2.9

1.7

-0.6 +0.5 -0.5-0.6


32

Food & Agribusiness Division

Forex Translation Effect・Forex effect -0.1・Offsetting forex losses -0.5

Other・M&A related expenses, etc.

(Billion yen)

FY2014 1HResults

FY2015 1HResults


Demand/Trading Volume Markets/Prices

Other

2.0

2.4+0.4

+0.2


Textile Related

Markets

Other

33

Consumer Products & Services Division

-0.2

(Billion yen)

FY2014 1HResults

FY2015 1HResults

Toyota Tsusho’s Resource Interests

Type Project Name LocationOur

Share Status Operator Comments

Gas

WheatlandCBM Project

Canada(Alberta) 32.5% Production

(since 2012)Encana(67.5%)

ATP651P CBMProject

Australia(Queensland) 15% Production

(since 2015)BG Group(62.6%)

Bass Gas Project Australia(Victoria) 11.25% Production

(since 2006)Origin

(42.5%)

Otway GasProject

Australia(Victoria) 5% Production

(since 2007)Origin

(67.2%)

Coal

Integra Australia(New South Wales) 15% －－

Oakbridge Australia(New South Wales) 5% Production

(since 1994)Glencore

(78%)

Resource LocationOur

Share Status Partner Comments

Iodine Chile (Santiago) 25.5% Production(since 2012)

ACF Minera S.A.(74.5%)

180,000 mt(Gross iodine shipment capacity)

Lithium Argentina (Jujuy) 25% Production(since 2014)

Orocobre(66.5%) Lithium carbonate 17,500 t/year

Rare earths India (Orissa)－

Preparing to conclude

contract

Indian Rare Earths Limited

Not a concession, but the right to extract a mix of rare earth chlorides

34

© 2013 35

Inquiries:

Investor Relations Group

E-mail [email protected]

Tokyo

TEL +81-3-4306-8201

FAX +81-3-4306-8818

◆ This presentation contains “forward-looking statements” about the strategies and plans of Toyota Tsusho Corporation and its Groupcompanies that are not historical facts. These forward-looking statements are subject to a number of risks and uncertainties thatcould cause the Group’s actual or implied operating environment, performance, results, financial position, etc. to differ materiallyfrom the information presented here, which is based on assumptions and beliefs in light of information currently available to themanagement at the time of publication. The Group assumes no obligation to update or correct these forward-looking statements.

◆ This presentation is not intended to solicit, offer, sell or market securities, and should not be the sole basis for making investmentand other decisions.

outline of consolidated results for the first half of fy2015 (year ending march 31, 2016) ·...

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