Toyo Tire : Progress of Medium-Term Business Plan and Sustainability Management (Script text)

February 14, 2023

Toyo Tire Corporation

Progress of Medium-Term Business Plan

and Sustainability Management

(Presentation scripts)

Page2: Goals under MTP

First, let me speak on the progress of the Medium-Term Business Plan, "Mid-Term '21 Plan (MTP)."

When we announced MTP in February 2020, we made it clear that we would "leverage our strengths to grow even stronger," "turn to our advantage the things we don't have," and "embrace change and drive progress."

I went on to explain that those three ideas should strengthen Toyo Tire's unique ability to respond to changes in this unpredictable business environment both quickly and flexibly through collaboration among our global organization.

Out of this strong desire to reach these goals, we keep a close eye on the social trends that might affect us and discuss their implications on a daily basis, immediately taking whatever action is necessary to address issues that we face and stimulate growth without delay, without being bound by precedents or conventional approaches.

Page3: Progress of MTP - Key Performance Indicators

This slide shows where we are now at the end of FY2022 vis-à-vis the quantitative targets laid out in MTP.

After the head start in the first year of MTP, the numbers temporarily "ducked" in FY2022. In FY2023, we plan to bring our performance back on track for robust income growth to achieve the level of operating income that we aim for by FY2025.

If you take a look at the bottom left of the slide, our ROE now stands at 16%, which is above our target of 12%. As for the dividend payout ratio, in line with the policy laid out in MTP, that is, "achieving over 30% based on net income after one-time extraordinary profits and losses while maintaining stable payments," we will make growth investments, investments necessary for business continuity, and shareholder returns in a balanced manner.

Let me move on to talk about the progress of our growth strategies for each business function.

Page4: Progress of MTP - R&D /Sales (North America)

Shown on this slide is the progress of our R&D and sales strategies in North America, our single most important market.

We are witnessing steady progress in our strategy of supplying Toyo Tire's unique products, including our hallmark large-diameteroff-road tire series, via the tight-knit sales network there. Coupled with the strong appeal of two of our painstakingly nurtured established brands, Toyo and Nitto, this strategy has proven successful, granting us the fifth largest sales share in North America in 2021.

In response to the ongoing transition to electric vehicles (EVs), we are expediting R&D of off-road tires for EVs, preparing for the supply of competitive tires in tandem with the development and sales of such vehicles.

Furthermore, we are honing our technological prowess through participation in motorsports events, while also organizing brand pitches and direct marketing to users through SNSs, thus maintaining close communication with the market. By launching a series of unique new products, which we hope will create excitement and surprise that exceed customer expectations and satisfaction, we will further polish our brands to attain high levels of income.

Page5: Progress of MTP - R&D /Sales (Other Markets/Original Equipment)

Let me turn to the European, Japanese, and Asian markets.

In Europe, our new plant in the Republic of Serbia became operational. In the past, we shipped our tires to Europe from Japan and Malaysia. Now that we can produce tires for local consumption in Europe, we will make an arrangement that allows us to shorten lead time and respond to the demand in the European market promptly and flexibly. It should give momentum to our new customer acquisition and accelerate the growth of our European business. Furthermore, we will support racing teams to increase public recognition of our brands in a bid to further enhance our presence in the European market.

In Japan, we have completed reorganizing sales and distribution bases as originally scheduled and realigned our organizational structure this past January. Having taken a hard look at the market trends, we forged ahead with flexible sales strategies: in 2022, Toyo Tire became the first in this industry to raise selling prices and launched a series of high-performance products.

In Asia, we expedited the brand switch-over from Silverstone, whose plant was closed at the end of June 2021, to the Toyo brand to supply high-value- added products.

For the original equipment market, we are trying to boost our brand recognition by supplying tires to auto manufacturers' flagship models.

Page6: Progress of MTP - Production and Supply

My final topic about MTP is progress in our production and supply strategies.

Last year saw the opening of our new plant in the Republic of Serbia, our first production base in Europe. Having started production in July 2022, the Serbia plant should reach its five-million-unit annual production capacity in the latter half of 2023. With a state-of-the-art production equipment and production system, it achieves highly efficient production, promoting local production for local consumption in Europe and ensuring the stable supply of passenger tires to the North American market.

Now that the production setup has been established at the Serbia plant, the U.S. plant will focus on boosting its WLTR production capacity.

In Japan, we will refurbish the bases of our "mother factory" by replacing obsolete equipment. By having the Serbia plant cater to the European market, rather than shipping from Japan, the Japan plant will focus on the stable supply of high-value-added products in Japan.

The Malaysian plant, on the other hand, will further increase production efficiency by integrating production bases following the closure of the Silverstone plant and focus on the production of strong Toyo-branded tires to maximize income.