Toyota Boshoku : FY2024 (Year ending March 2024) Business Briefing

FY2024 (Year ending March 2024)

Business Briefing

May 24, 2024

Toyota Boshoku Corporation

1

Introduction

Steadily implementing the Plan toward realizing the Vision

Looking into the future, we will create

tomorrow's automobile interior spaces that

will inspire our customers the world over.

Become a company as the Interior Space Creator which contributes

in solving social issues while expanding product range and

customer base

Vision

As an interior system supplier, become a company

that serves as "Home" and secures

competitiveness that can surpass global suppliers

2025

Target

2030

Target

2

Introduction

Change in external environment

Rising expectations for comfortable

vehicle interior space

2030 Target

Become a company as the Interior Space Creator which contributes in solving social issues while expanding product range and customer base

TB's strengths

Technologies for products closest to users

Technology development

Global deployment capabilities

MONOZUKURI

Abundant global human resources

HITOZUKURI

Financial targets for 2030

Revenue: 2,200 billion yen

Operating profit: 150 billion yen

Operating profit margin: 7%

DOE: 3% or more

(Dividend payout ratio around 30% is considered)

Equity ratio：around 50%

(USD: 135.00)

Non-financial targets for 2030

E: Scope 3 emissions reduction rate

Down 30% (compared to FY2020)

S: Ratio of female managers

5%

1. Degree of implementation of the Code of Conduct

90%

(Excerpts from representative target)

Strength as a member of the Toyota G

Lacking abilities are mutually complemented within the Group.

Corporate Strategy

Establish competitiveness (in (i) technology development, (ii) MONOZUKURI, and (iii) sales) and

management foundation (development of people, organizations, and culture)

3

Progress of 2030 Mid-term Business Plan

CONTENTS

1. Financial results and targets
2. Regional issues
3. Enhancing planning & proposals capability and R&D capability
4. Strengthening MONOZUKURI competitiveness
5. Strengthening sales capability
6. Strengthening management foundation

4

1. Financial results and targets

Toward achieving the 2030 mid-term targets, eliminate current profitability

issues and accelerate advance investment for the future.

				(100 million yen)
	FY2024 results	FY2025 forecasts		2030 targets
Revenue	19,536	19,800		22,000
Operating profit	786	750		1,500
Operating profit	4.0%	3.8%		7.0%
ratio
DOE	3.7%	3.4%		3% or more
(Dividend payout ratio)	(27.6%)	(34.0%)		(Around 30% is considered)
Equity ratio	39.8%	-		Around 50%
Exchange rate	（USD:145.00）	（USD:145.00）		（USD:135.00）

5

1. Financial results and targets - Cash Allocation toward 2030

2030 Mid-term Business Plan

Strategically allocate the created cash to growth investment, strengthening of management foundation, shareholder returns, etc. to achieve sustainable growth

(Forecast for 5 years from FY2027 to FY2031)

(100 million yen)

Maximizing operating C/F

Achieving the 2030 Target by carrying out management strategies

Improving asset efficiency Reducing cash in hand Reducing cross-shareholding etc.

• Assuming operating profit margin of 7% is achieved in FY2031

Cash in

Operating C/F*7,500

(Before deduction of R&D

espenses 3,000)

＋α

Balance sheet improvement

Depreciation costs

3,000

Cash out

Growth investment

6,000

Strategic allocation

2,000

Return to shareholders

1,500

Repayment of interest-bearing

debts, etc. 1,000

R&D expenses 3,000

• Focus investment on electrification and initiatives to become an Interior Space Creator, as well as creating new businesses

Flexible reallocation according to change in external environment

Capital investment 3,000

• Accelerate enhancement of competitiveness through MONOZUKURI innovation and sales expansion activities

Strategic investment 1,500 (alliances, etc.)

Strategic allocation in view of management environment, etc.

Additional shareholder returns 500

Keeping long-termsustainable dividends (Dividend payout ratio around 30% and DOE 3% or more)

6

1. Financial results and targets - Cash Allocation toward 2030

Initiatives started in FY2024-25

Start growth investment toward 2030, with alliances and share buybacks as soon as possible

(Total of FY24 results and FY25 forecasts)
Maximizing operating C/F	Cash in

Cash out

R&D expenses 103.3 billion yen

• Profit improvement (The Americas, China)
• Receiving new orders from Non-Toyota(Europe, India, Indonesia)
• Enhancing planning & proposals capability and R&D capability and strengthening
  MONOZUKURI competitiveness
• Expanding existing businesses and creating new businesses based on human capital management

Improving asset efficiency

• Reducing cross-shareholding

Operating C/F*

(Before deduction of R&D

expenses)

＋α

Balance sheet improvement

Growth investment

Strategic allocation

• ISC, multi-pathway, creation of new businesses
• Personnel investment

Capital investment 165.3 billion yen

• New sites
  (TBWK*1, Guangzhou Xiaohudao, new logistics base in Japan)
• Strengthening MONOZUKURI competitiveness (autonomation, DX)
• Sales expansion for new customers, new businesses (electrification, airplanes)

Strategic investment 36.3 billion yen

•	Alliances (seat device business) 16.3 billion yen
	(TB Hirose, TB Seiko, SID*2, TBDI*3)
•	Share buybacks 20.0 billion yen

11	Number of stocks held
10
	9
			7	Depreciation costs
2020	2021	2022	2023	2024 (FY)

Return to shareholders

Repayment of interest-bearing

debts, etc.

• DOE 3% or more

• U.S. financial health improvement (elimination of Japan-U.S.

interest rate difference)

*1 TBWK: Toyota Boshoku Western Kentucky

*2 SID: Shiroki Indonesia

*3 TBDI: Toyota Boshoku Device India

7

2. Regional issues - The Americas

• Promote profit improvement and cost reduction activities at America region

FY24 Profit and loss of America region

Decline in profitability in the Americas, where the scale of sales is large

Actions to improve profit in the Americas

1. Setting up BR America Support Office to support improvement efforts

(3) Profit management

Deploying TBKY's improvement initiatives within the region

(100 million yen)

Conventional support

to enhance financial health

9,500
	4,800	2,400	2,800
		1,300
Japan	Americas	China	ASEAN	Europe

	Sites
U.S.	TBA
Canada	TBKY

Supporting production preparation for new products, mass production, and frontline capabilities

BR America

Support Office

Strengthening relations and providing support not only in MONOZUKURI field but also in profit management and Hoshin management to increase value

(2) Expanding improvement activities

Controlling

company

TBA

Deployment

TBKY

	TBIN
TBIL	TBWK

	Broad deployment	North America
within America region	and other 4
sites
TBCA	TBSMX
	South America
	3 sites

TBIN

TBIL

Expanding range of improvement

TBKY activities results (Dec. 2023 to Mar. 2024)

	TBDN
Operating	TBTN
loss recorded	TBMS
	SAI

Mexico

Brazil

Suppliers

TBKY

LaborCost

Equipment

costsreduction

Restructuring & logistics

Expenses

Customers

* Based on FY2024 estimated result as the standard (%)

FY2024	FY2024	FY2025
Estimate	Result	Profit Plan

Operating

loss

Operating loss

recorded

Argentina	VA	Profit	Hoshin
management	management

・Gross marginal profit improved

・Productivity improved

・Recovery of selling prices ・Logistics improved ・Productivity improved

8

2. Regional issues - China

Actions toward strengthening competitiveness in the Guangzhou region

Profit and loss of China region	Xiaohudao new plant (operation start scheduled in Oct. 2024): Creating "smart factories" by improving logistics efficiency and promoting DX
	Deployment to other sites to strengthen earnings structure of the China region

Operating profit margin is declining due to	1. Improving logistics efficiency
intensifying competition
	(1) Elimination of external warehouses
	(44,000 m2)

2 Improving efficiency by promoting DX

Automation + TPS

Added value per person

		(2) Improving transportation efficiency
2,500	8.7%

Digitization of things	＋	Intellectualization ＝
and information

Productivity improvement

+10％

7.8%

Suppliers

Transportation cost

100 Down 31%

Changing the way people work

Now

FY2027

2,000

6.8%

1,500

×

External

warehouses

×6 locations

		69
	Now	FY2027

• Streamlining of supply chain logistics
  

• Automated transport by AMR

Autonomous driving and transportation robot

Guangzhou Intex Auto Parts

Optimal vehicle assignment plan

Dollies

1,000

Guangzhou

area

HQ plant		Xiaohudao new plant

Customers

Automated

• Optimizing drive routes / Increasing loadingefficiency

AMR

• Flexibly choosing optimal routes

500

• Automation

• IoT network

Scheduled to be completed in Sep.

2024

0

FY23 FY24 F25（Forecast）

Revenue (100 million yen)

Operating profit ratio (%)

Automated operating noise inspection

• Manpower saving and stable inspection accuracy

				Real-time
Operation		Automated
Inventory			Analysis		Improvement
			Visualization of data
Equipment

• Expediting decision making and accelerating improvement

9

3. Enhancing planning & proposals capability and R&D capability - Promoting technology strategies

Promote technology strategies based on three pillars: Interior Space Creator, multi-pathway, and creation of

new businesses

[Interior Space Creator]

Promote introduction of technologies to

expand product fields (identify technologies for acquisition or for collaboration with other companies)

Door modules		Relax & safety seat
		Heat management
Monitor		system
Illumination		Interior control
Filter (CAF)		NV package
Instrument		Console
panels	Audio

Focus shifting from hardware to control,

software, and interior systems

Propose solutions for the entire interior space based on collaboration within Toyota Group

[Multi-pathway]

Promote a product strategy for unit parts that keeps up with diversifying car manufacturing

FC (fuel cell) vehicles FC separator

volume

BEV

HEV

High-rate LiB

Production

Intake manifold

Cylinder head cover

ICE (internal combustion engine) Air cleaner

2020

2022

2024

2026

2028

2030

Motor core

Hydrogen power system

Keep warm

Output

FC

Hydrogen tank

(storage alloy)

Cooling

LiB

*

FC: Fuel Cell

*

LiB: Lithium-ionBattery

[Creation of new businesses]
Promote a commercialization strategy toward
creating new businesses
Creation of new energy
		2025
		Creation of	2040
Development of		new
technologies to increase	businesses	Contribute
food production			to solving
			social
Creating recyclable		issues
materials
			Time
Formulate a	Establish a system	Action plan for
strategy for creation	for creation of new	commercialization
of new businesses		businesses	of new businesses

[Intellectual property strategy]

10