Toyota Boshoku : Report 2021

TOYOTA BOSHOKU REPORT

2021

2 0 2 0 . 4 . 1 - 2 0 2 1 . 3 . 3 1

On publishing the Toyota Boshoku Report

The Toyota Boshoku group continues to hand down its founding spirit of "for the world and for people" and is engaged in operations that are a step ahead of the times. We are already actively involved in CSR1 activities and have contributed to the achievement of the SDGs.2 In line with a changing world, since March 2019 we have accelerated the shift from CSR to CSV3 management. In July 2020, we defined as our materiality the identification of important issues to be resolved through our business operations from among a variety of social issues and the approach we adopt to resolve them. In November 2020, we announced our 2025 Mid-Term Business Plan, which incorporates measures to realize our materiality.

This report describes the group's approach to the future and the action we are taking based on the 2025 Mid-Term Business Plan. Additionally, in order to update and disclose information on the origins and characteristics of the group, the structure of the report has been organized into chapters in accordance with the Management Concept shown in the figure below. We regard this report as a tool for deepening constructive dialogue with our stakeholders. We encourage you to read the report and provide us with your honest feedback about the group.

1 Corporate Social Responsibility

2 Sustainable Development Goals

3 Creating Shared Value

Management Concept

Principles

of Toyoda

Corporate Philosophy

Code of Conduct

TB Way

Vision

Toyota Boshoku Group's Materiality

Mid-term Business Plan
Business Plan	Revenue Plan	Resources Plan
Annual Global	Annual	Annual
Hoshin (Policy)	Profit Plan	Personnel Plan

Principles of Toyoda

Toyota Boshoku's company belief, which stipulates the founding spirit of Sakichi Toyoda, "for the world and for people," as our daily motto

Corporate Philosophy

Our philosophy, which has been converted into easily understood phrases in order to ensure that the Principles of Toyoda are widely practiced among our company members and clarified as the value provided to our stakeholders

Code of Conduct

A guide to the basic conduct we expect in our business activities

TB Way

Our management beliefs, values, and behavioral principles in concrete terms

Vision

The company we aim to become, based on our values and philosophy

Toyota Boshoku Group's Materiality

In order to realize the Vision, the approach we adopt to resolve the important issues we have identified to be prioritized through our business operations from among a variety of social issues

Mid-term Business Plan

A plan that shows in detail how we will work toward realizing our materiality

01 TOYOTA BOSHOKU REPORT 2021

CONTENTS

1. On publishing the Toyota Boshoku Report
2. CONTENTS / Editorial policy
3. About the Toyota Boshoku group

05Management Concept

-With "for the world and for people" as our starting point-

06 Philosophy

07 The path of value creation

09 The identity of the Toyota Boshoku group (management resources)

11 Value creation process

13 Market changes and outlook

14Vision

-Our desired status for the future-

15 Vision

1. Message from the President

1. Message from the CFO

27 Special Feature 1 MOOX-an autonomous driving mobility service space designed for MaaS

31 Special Feature 2 Formulation of 2025 Environmental Action Plan

33 Disclosure of information in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD)

34Materiality

-Accelerating the shift to CSV management-

1. Materiality formulation process

1. Materiality at a glance

1. Materiality penetration initiatives

42Mid-Term Business Plan

-Action plan to realize materiality-

1. Overview of business planning

1. Review of 2020 Business Plan

1. Overview of new Mid-Term Business Plan

1. Priority Action

1. Priority Action

1. Priority Action

1. Priority Action

1. Strategy by Business

1. Messages from Outside Directors

1. List of KPIs

72Governance

-Establishing a resilient global management foundation-

73 Corporate Governance

79 Directors, Audit & Supervisory Board Members and Operating Officers

81 Compliance / Risk Management

84Financial / Corporate Information

1. 10-YearFinancial Summary

1. Financial Review

1. Consolidated financial statements

1. Business Domains

1. Investor and Corporate Information

Editorial policy

Scope of reporting

The information in this report applies to the Toyota Boshoku group in Japan and other regions throughout the world. However, the scope of reporting differs for each initiative.

Information disclosure in this report is carried out using the following reporting definitions:

Toyota Boshoku group: Japan, The Americas, Asia & Oceania, China and Europe & Africa regions

Toyota Boshoku: Toyota Boshoku Corporation

Japan region: Toyota Boshoku Corporation and Japan affiliates

Outside Japan: The Americas, Asia & Oceania, China and Europe & Africa regions

The scope for some items is stated on the respective pages.

Period covered by the report

This report contains performance data for fiscal 2021 (from April 1, 2020 to March 31, 2021). Some information on activities outside this period is also included.

Reference guidelines

• IIRC International Integrated Reporting Framework (International Framework)
• Ministry of Economy, Trade and Industry's Guidance for Integrated Corporate Disclosure and Company-Investor Dialogues for Collaborative Value Creation
• GRI Sustainability Reporting Standards (GRI Standards)
• ISO 26000
• Environmental Reporting Guidelines 2018
• Environmental Accounting Guidelines 2005

Importance and completeness

This report focuses on information of particular importance and has been edited so as to be easy to read and understand. Further information is disclosed on our website. (https://www.toyota-boshoku.com/global/)

Broad
			Website
audience
Target				Report
Narrow
Outline / Figures	Content	Details / Data

Cautionary statement with respect to forward-looking statements

This report contains forecasts and expectations that relate to future plans and strategies in addition to the expected financial results of Toyota Boshoku Corporation and the Toyota Boshoku group. These statements are not based on actual results from the past. Rather, they are estimates based on assumptions and opinions that have been formed by the Company from the information available at the time of writing. They also involve risks and uncertainties relating to economic trends, the severe competition affecting the automobile industry and changes in global demand, taxation regulations, laws, systems, natural disasters, and other matters. Accordingly, actual results may differ from the Company's forecasts.

Numerical values of financial results

The numerical values of financial results have been rounded off in this report.

TOYOTA BOSHOKU REPORT 2021		02

About the Toyota Boshoku group

The Toyota Boshoku group primarily manufactures and sells automobile-related parts such as seats, interior components including door trims, exterior components such as bumpers, and unit components including air filters and stack manifolds. Utilizing the technologies we have cultivated through the development and production

of automobile seats, we have expanded our business fields, including entering the aircraft and railway seat business. We aim to become a supplier that is trusted and chosen

by customers.

Three product businesses

Seat Business		Interior & Exterior Business
Automobile Seats		Interior Components
Non-automobile Seats	Exterior Components
Business revenue	893.1 billion yen	Business revenue 250.5 billion yen

Unit Components Business

Filter products

Plastic parts for internal combustion engine (ICE)

Fuel cell-related products

Electric powertrain-related products

Business revenue	89.3 billion yen

Four regions

TOYOTA BOSHOKU EUROPE

TOYOTA BOSHOKU			TOYOTA BOSHOKU
AMERICA
			(CHINA)	TOYOTA BOSHOKU
		TOYOTA BOSHOKU ASIA

Number of company members

50,899

Number of companies

98

									(including Toyota Boshoku)
	The Americas	Europe & Africa	Asia & Oceania		Japan
Affiliates	20 companies		10 companies	43 companies (including China)		24 companies
company members	12,855	5,185		17,339			15,520
Number of
Revenue	246 billion yen		82.6 billion yen	324.2 billion yen		699.6 billion yen

(down 9.8% year-on-year	)	(down 6.5% year-on-year	)	(down 2.9% year-on-year	)	(down 8.9% year-on-year	)
272.9	246.0		88.3	82.6		333.8	324.2		768.3	699.6
FY2020	FY2021		FY2020	FY2021		FY2020	FY2021		FY2020	FY2021

Notes:

1 Revenue of each region is before deduction of internal sales 2 Revenue in FY2021 has been affected by reduced production resulting from the coronavirus pandemic

03 TOYOTA BOSHOKU REPORT 2021

As of March, 2021

Revenue

Operating profit ratio

ROE

1,272.1	4.5	10.0
billion yen	%	%

Total equity	Ratio of equity attributable	Dividend payout ratio
to owners of the parent

369.6	39.6	27.0
billion yen	%	%

CO2 emissions

Waste generation (Japan)

48.1	16.0	40.4	1.83	16.4	1.53
t-CO2/1,000 unit	t-CO2/1,000 unit	t/1,000 unit	t/1,000 units
(FY2011)	% reduction	(FY2021)	(FY2011)	% reduction	(FY2021)

R&D expenses	Number of patents registered	Number of trees planted
(cumulative)

41.8	546	330		530
thousand trees	thousand trees
(FY2016)	+200	(FY2021)
billion yen
			thousand trees

TOYOTA BOSHOKU REPORT 2021		04