Toyota Tsusho 201303 2Q Shacho Eng

7/29/2019 Toyota Tsusho 201303 2Q Shacho Eng

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Business Development in Africa

November 1, 2012

Investor Relation Group

E-mail: [email protected]

Tel: +81-3-4306-8201 Fax: +81-3-4306-8818

Inquiries to:



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Toyota Tsusho’s Vision & Overseas

Regional Strategy

Africa follows the four key areas in scale Discovery and expansion planned in the three business areas

North and

Central

America

Asia Pacific

Central Asia

Aimed at strategies and execution within the four key regions of Asia and Oceania, China, Europe, and North and Central AmericaAdditional focus on emerging countries and resource-rich countries in other regions with operations directly managed

by the head office

Achievement of a balanced “1:1:1” business portfolio across the three operating fields of the GLOBAL 2020 VISION

Europe

MobilityMobility

Life &Life &

CommunityCommunityEarth &Earth &

ResourcesResources

China

Africa

*Circle size reflects scale of net sales as of fiscal year ending March 31, 2012

Middle East

South America



3

Explosive Population Growth(1 billion people in 2010 2 billion people in 2050)

Marked Economic Growth(10-year forecast: 5.2% growth in Sub Sahara vs.

3.3% globally)

Plentiful Resources(Extensive undeveloped resources and energy)

Accelerated Resource

Development(Crude oil, copper, diamonds, rare metals)

Expanding Middle-IncomeDemographic

(Per capita GDP above $3,000:

65 million people in 2012 100 million people in 2015)

Basic Infrastructure Creation(Basic development of roads, electricity, water, etc.)

Accelerated Motorization(2010: 1.45 million vehicles 2016: 2.0 million vehicles*)

*Toyota Tsusho estimate for car market based on GDP growth prediction by IMF

Potential in Africa

Rising Standards of Living(Income per capita: $800 in 1980 $2,900 in 2016)

The final emerging region after China, Southeast Asia and Central and South AmericaOpportunity for business expansion



Initiatives in AfricaInitiatives in Africa



5

History of Business Development in Africa

1933

1933 Alexandria Branch opened; cotton trading began

Alexandria Branch opened; cotton trading began

1991

1991 Minority investments in automobile distributors in Kenya, Angola, Zambia and Zimbabwe

Minority investments in automobile distributors in Kenya, Angola, Zambia and Zimbabwe

2000

2000 First headquarters for Africa, TOYOTA TSUSHO AFRICA (PTY) LTD., established

in South Africa

First headquarters for Africa, TOYOTA TSUSHO AFRICA (PTY) LTD., established

in South Africa

2001

2001 Transfer of business of U.K. company Lonrho plc. in Kenya, Angola, Zimbabwe, Zambia andMalawi

Transfer of business of U.K. company Lonrho plc. in Kenya, Angola, Zimbabwe, Zambia andMalawi

2008

2008 Investment in drilling of marine gas fields in Egypt

Investment in drilling of marine gas fields in Egypt

2011

2011 Order received for Kenya’s largest geothermal energy project

Order received for Kenya’s largest geothermal energy project

Track record of about 80 years of business development in Africa

2009

2009 Car leasing company established in Kenya and Mauritius

Car leasing company established in Kenya and Mauritius

1964

1964 Exports of completed vehicles from Japan to East Africa began

Exports of completed vehicles from Japan to East Africa began



6

9 Automobiles

9 Logistics business

Energy plant-related/ Chemical products

Farm mechanization business

Geothermal energy

Eastern

Africa

Eastern Africa Portfolio

Southern Africa PortfolioCountries with investments in

Toyota distributors (7 countries)

Other Toyota business-

transferred countries (17countries)

9 Automobiles

9Toyota parts SCM business (South Africa)Agriculture (Zambia, Mozambique)

Logistics business

SouthernAfricaCountries with investments in

Subaru distributors (1 country)

Electric power plantEgypt

Northern Africa Portfolio9Automotive business portfolio

○ Non-automotive business portfolio

⑪

Diversified development of the automotive and non-automotive businesses, largely in easternand southern Africa.

Current Business Development in

Africa



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Parent company export domainParent company export domain 16.0 billion16.0 billion

Import, export & wholesale by regional subsidiariesImport, export & wholesale by regional subsidiaries 53.0 billion53.0 billion

Steel sheet processing businessSteel sheet processing business 6.0 billion6.0 billion

Sales of automobiles & parts; after-sales serviceSales of automobiles & parts; after-sales service 55.0 billion55.0 billion

Focus on the automotive business Expand the non-automotive business in the future

JapanJapan

South AfricaSouth Africa

South AfricaSouth Africa

South Africa, Angola, Kenya, etc.South Africa, Angola, Kenya, etc.

130.0 billion130.0 billionTotalTotal

Employees Expatriates 34; National Staffs 2,393; Total 2,427 ＊as of March 31, 2012

Number of Bases 8 bases

Net Sales in Africa by Business,

Employees and Bases*Net sales for the year ended March 31, 2012Net Sales by Business

＊as of March 31, 2012



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New Developments in Africa

Region where former Toyota Tsusho is strong + Strong business of former Tomen Geothermal energy business in Kenya

Region where former Tomen is strong + Strong business of former Toyota Tsusho Automobile production in Egypt

We are promoting business development to extend TRY 1 in Africa, which is a key region

New Businesses

Toyota distributors, etc.

Automotive area is the base

Geothermal energy

businessOlkaria No. 1 and No. 4

(Approx. 280MW – equivalentto 25% of Kenya’s electric

power generation)

Electric power plants, etc.

Non-automotive area is

the base

K e n y a

E g y p t

Small-scale CKDproduction business

Joint venture with

Toyota Motor Corp.

Fortuna assembly (production of 3,000 units annually)

Automotive Area

Automotive Area

Non-Automotive Area

Non-Automotive Area

S yn e r g y ( t r u s t i n gr e l a t i on s h i p s , p e r s on al c onn e c t i on s , e x p e r i e n c e

, e t c . )

Existing Businesses

＋

＋



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Results in Kenya:

1. Automotive business

Automobile distributors

Used car sales

Car Leasing

2. Non-Automotive BusinessOrder for geothermal power generation PJ

Results in Kenya:

1. Automotive business

Automobile distributors

Used car sales

Car Leasing

2. Non-Automotive Business

Order for geothermal power generation PJ

Comprehensive agreement concluded

with government of Kenya

Comprehensive programs in the areas of automobiles,power generation and energy, oil and minerals,environment and agricultural industrialization.

Comprehensive agreement concluded

with government of Kenya

Comprehensive programs in the areas of automobiles,power generation and energy, oil and minerals,

environment and agricultural industrialization.

Establishment of Eastern Africa regional headquarters(planned for November 2012)

Establishment of Eastern Africa regional headquarters(planned for November 2012)

Kenya

Tanzania

Uganda

Rwanda

Burundi

1. Integrated management of inventory in theautomotive business

2. Promotion of business expansion in the EAC*,centered on Kenya

* EAC (East Africa Community): A community formedby countries in eastern Africa. Current members areKenya, Uganda, Rwanda, Burundi and Tanzania.

1. Integrated management of inventory in theautomotive business

2. Promotion of business expansion in the EAC*,centered on Kenya

* EAC (East Africa Community): A community formedby countries in eastern Africa. Current members areKenya, Uganda, Rwanda, Burundi and Tanzania.

New Developments in Eastern Africa

The branch in Nairobi, Kenya is now a subsidiary. As a result, it is the regional axis forinitiatives in Kenya and EAC.



Investment in CFAOInvestment in CFAO



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Operations include automobile distributor business, pharmaceutical wholesale business, beverage production, and sales business.

Largest French trading company specialized in Africa

Overview of CFAO

The major strength is a network covering all regions of western Africa.

CFAO

Corporate

Overview

Established: 1887 Countries with operations: 32 countries + 7 French overseas possessions

Employees: 10,100 (as of Dec. 31, 2011) Group companies: 121 (Sales offices: 261)

Net sales: €3,124 mil (as of Dec. 31, 2011) Stock listing: Euronext (listed 12/2009)

Automobile Distributor/Dealer Business

Division (60% of net sales)

Pharmaceutical Division

(28%)

Industries Division

(8%)

IT Division

(4%)

Automotive Business Operations Non-Automotive Business Operations

Toyota

17

countries

GM

7

countries

Nissan

9

countries

Isuzu

7

countries

Suzuki

19

countries

■Distribution rights for more than 20 brands in 32 countries

Management of supply and demand with optimum efficiency at the

centralized inventory yard in Belgium

Does business with 450pharmaceutical companies,handles about 20,000products. Wholesales to5,000 pharmacies in 27countries in western Africa.

OEM production of Heineken and CocaCola in Rep. of Congo, No. 1 share.

OEM production andsales of Yamaha andPeugeot motorcycles.

• IT consultingbusiness

• PC-relatedequipmentsales

• Office designconsultingbusiness (incl.installation of facilities suchas elevators)



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CFAO Net Sales(Share by division)

CFAO Operating Income

(Share by division)

1,487

121

Unit: € Million

1H

1H

Unit: € Million

Changes in CFAO Financial Results

Following the Lehman Shock, steady growth in sales and earnings even amid the financial crisis in Europe

Automobile

56%Pharmaceutical

29%

Industries

11%

IT 4%

Automobile

52%Pharmaceutical24%

Industries

11%

IT 2%



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CFAO is moving forward with three businesses – Equipment (centered on automobiles), Health Care and

Food & Consumer Goods – under its 3 Pillar Strategy.

EQUI PMENT

GROWTH

STRATEGY

HEALTH

CARE

FOOD &

CONSUMER

GOODS

CFAO Business Strategy

Strategy closely matches Toyota Tsusho’s GLOBAL 2020 VISION TRY 1

CFAO focuses on three businesses similar to Toyota Tsusho’s TRY 1 strategy

Life &

Community

Earth &

Resources

Mobility

Use a powerful business

foundation and expand TRY 1

businesses in Africa

・

・



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Business Expansion from Investment in CFAO

MobilityEarth &

Resources

Life &

Community

Rapid development & expansion in the emerging market of

Africa (current 25 countries 48 countries/54 countries) ○ ○ ○

Accelerated development of the distributor/dealer business ○

Multi-brand car distribution and Pharmaceutical distribution

businesses as the result of the acquisition of CFAO (21 brands

car distribution and wholesales to 5,000 pharmacies)○ ○

Medium- to long-term business discovery and foundation

building in non-automotive domains (foundation building inresource and infrastructure development business) ○ ○

C l R l i hi i h



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Key Development Region: Eastern and Southern Africa

(Southern and eastern Africa = Toyota)

Toyota handled (17countries)

Non-Toyota handled (32countries)

32 Countries Handled by CFAO (Automobile Division)25 Countries Handled by Toyota Tsusho(Toyota domain + South Africa/ Subaru)

Key Development Region: Western Africa

(Western Africa = Toyota, etc.; Eastern Africa= non-Toyota)

Internal operations and investments:8 countries

(South Africa: investment in Subarudistributors)

Internal operations andinvestments: 32 countries

(Toyota: 17 countries/Non-Toyota:32 countries)

Vehicles handled for all 21 brands

71,200 units (fiscal 2011)

Vehicles handled for all brands

* Toyota + 1,000 Subaru units = 20,000units

Handling of Toyota vehicles: 17 countries

10,260 units (2010) 12,722 units (2011)

Handling of Toyota vehicles: 24 countries

17,800 units (2010) 19,135 units (2011)

Countries with investments in

Toyota distribution (7 countries)

Other Toyota business-transferred

countries (17 countries)

Complementary Relationship with

CFAO in the Automotive Business

Countries with investments in

Subaru distribution (1 country)

Toyota Tsusho CFAO

The two companies handle approx. 91,000 units in 48 countries (includes Toyota in 40 countries) Area development



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CFAO’s Pharmaceutical Wholesale

BusinessPharmaceutical wholesale & logistics business: No. 1 share of pharmaceutical wholesale business in AfricaManufacturers handled: 450 companies Sales network: 20 countries in Africa and 7 French overseas possessions

Products handled: Approx. 20,000 varieties Shipments: Daily to approx. 5,000 pharmacies/hospitals in 27 countries

Pharmaceutical manufacturer (mainly European manufacturer)

+ OEM production in Algeria

Consolidated inventory for Eurapharma business(EPDIS of France/Continental Pharmaceutique)

Pharmacies/hospitals in each country, etc.

Eurapharma distributors

(20 countries in Africa + 7 French overseas possessions, etc.)

Weekly orders

Daily orders & deliveries

Human Resources

Experts in many areas

Etc.

Financial Strength

Stable finances

Network

Global network of bases

Personnel network

Logistics Know-How

Know-how cultivated inToyota Group

Infrastructure

Logistics warehouses,information systems

Toyota Tsusho will contemplate support and cooperate with CFAO by providing ToyotaTsusho’s resource and know-how

Supportand

cooperation



17

Schedule of TOB

July August September October November December January

29.8%purchasingcontractconclusion

29.8% purchasingimplementation

TOB (takeoverbid) applicationto AMF

(France’sFinancialServicesAgency)

Approval of application from

AMF

Announcement

of result

Announcement

of result

European CommissionAnti-CompetitionClearance

TOB planned for completion by end of December if all goes smoothly.

▲Nov. 1, 2012Implemented Planned implementation

Acceptance Period Reopened Acceptance Period



Risk Management &Risk Management &

Numerical Financial TargetsNumerical Financial Targets



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Basic Policy for Financial StrategyBasic Policy for Financial Strategy

Basic PolicyAim to maintain a sound financial balance and generate stable growth

Sound Financial BalanceBased on the concept of Asset Liability Management:1. Align funding with asset class

1) Employ shareholders’ equity and long-term debt as capital for long-term investments

2) Maintain appropriate balance between shareholders’ equity and long-term debt (net DER ≦ 1.5)

2. Maintain balance between risk asset scale and risk buffer

Risk Asset ≦ Risk Buffer

Growth1. Growth in consolidated net income:

¥66.2 billion (result for fiscal year ended March 31, 2012) ⇒ ¥ 120.0 billion (target for fiscal year

ending March 31, 2017)

2. Increase in ROE

10.7% (result for fiscal year ended March 31, 2012) ⇒ 12%-15% (target for fiscal year ending March 31, 2017)



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Planned Post-TOB Financial Indicators

Performance

Indicators

March 31,

2010

Results

March 31,

2011

Results

March 31,

2012

Results

March 31,

2013

Forecast*

March 31,

2017 Target

Net income ¥27.3billion ¥47.1billion ¥66.2billion ¥70.0billion ¥120.0billion

Net

DER0.96 0.98 1.05 1.30

1.50 or

less

ROE 4.9% 8.0% 10.7% 10.5% 12-15%

RA:RB 0.74 0.73 0.88 1.18 Under 1.0

*Numbers may change depending on the result of the TOB.

• Indicators for March 31, 2013 will worsen temporarily as a result of equityinvestment in CFAO

• However, increased earnings and asset amortization will enable achievementof all indicators for March 31, 2017



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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

on the information in this presentation.



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Toyota Tsusho 201303 2Q Shacho Eng