Fiscal Year 2011 First Half Result and Full Year Plan · Fiscal Year 2011 First Half Result and ... but experienced a decrease of 10% compared to last year on a yen basis. - The Company’s

Fiscal Year 2011

First Half Result and Full Year Plan

October 31, 2011

TOTO

This notice has been translated from the original notice in Japanese.

In the event of any discrepancy, the original in Japanese shall prevail.

2

1．Financial Result for First half of FY2010

2．FY2010 Full Year Financial Plan

Contents

3．Topics of FY2010

1) Domestic Housing Equipment Business

2) Overseas Housing Equipment Business

3) New Domain Business

4) Promotion of the TOTO V Plan 2017

The Company’s income and profit increased.

Sales of new products released last year have continued to be strong.

Sales of both domestic and overseas housing equipment increased, and the Company

achieved a cost reduction that exceeded the target specified in its business plan.

[Domestic Housing Equipment Business] - Sales of new products released last year have continued to be strong, and this has greatly

contributed to the company’s increase in income and profit.

- The production and sale of products, which were disrupted by the effects of the Great East Japan

Earthquake, have returned to normal levels.

- Thanks to strong demand recovery for new housing starts after the earthquake, sales for new

housings increased by 11% compared to last year.

- Sales for remodeling decreased by 1% compared to last year. This was due to a decrease during the

first quarter that was caused by a downturn in consumer confidence that exceeded the increase

seen in the second quarter.

[Overseas Housing Equipment Business] - The Company achieved an increase in income and profit despite the increased value of the yen.

- In the United States, despite sluggish demand, the Company maintained the same level of sales as

last year on a dollar basis, but experienced a decrease of 10% compared to last year on a yen basis.

- The Company’s business in China has continued to boom, with sales increasing by 20% compared

to last year, despite concerns over a decline in economic growth due to a decrease in interest rates.

[New Domain Business] - As a result of a fall in demand, sales decreased compared to last year in both the ceramics and

environmental materials businesses. 3

2Q, FY2011 Result

■Financial Summary

2Q, FY10 YoY Difference

ResultPlan

(July 29)Result (%)

+6.6

(+3%)

+4.2

(+212%)

+4.8

(+329%)

1.4Recurring Profit

Operating Profit

6.2

Net Profit

Extraordinary Loss

4.0

-2.7

-2.2

4.0

-0.5

2Q, FY11

Net Sales 211.9

6.11.9

205.3 210.0

+5.7

+1.3-0.9

3.02.0

※Y billion, rounded down

2Q, FY2011 Result

4

achieved both sales and profit increase

■Financial result

5

0

2

4

6

8

＜Operating Profit＞

Domestic H.E. 0.7 5.4

(Remodeling) 2.4 4.5

(New Housing) -1.6 0.9

Overseas H.E. 3.0 3.3

New Domain -0.9 -1.3

Others -0.8 -1.3

169.1 174.0

27.6 30.7

8.3 7.0

0

50

100

150

200

250

2Q,FY10 2Q,FY11

Others

New Domain

Overseas H.E.

Domestic H.E.

205.3

New Housing

50.9

(+11%)

( )= YoY difference

(+3%)

New Domain Others

0.1

Others 0

New Housing

56.6

(+11%)

Remodeling

117.4

(-1%)

211.9

2Q,FY10 2Q,FY11

1.9

6.1

(+3%)

(-16%)

Remodeling

118.2

Increased in sales and target,

as new housing business and overseas business achieved robust growth

■Sales and profit by business segment


2Q, FY2011 Result

2Q,FY10

Sales Sales YoY

(%)

Restroom Products Total 68.8 68.4 -1%

Fittings ±0%

Bathrooms +12%

Modular Kitchens/Basins +9%

Bath/Kitchen Products Total 90.7 96.2 +6%

Others Totatl 14.4 14.2 -1%

Total(Before adjustment) 174.0 178.9 +3%

Domestic H.E. Total 169.1 174.0 +3%

2Q,FY11

※2

※1

※2: Internal sales or sales transferred between different segments

※1: TOTO has corrected the second half financial results as a result of the sales and profit from Marblight products being transferred from the “Modular Kitchens/Basins” category to the “Others” category from this fiscal year

6

■Sales per products in domestic housing equipment

2Q, FY2011 Result


In Local Currency In Japanese Yen($ million, rounded down) (JPY billion)

Americas 2Q,FY10 2Q,FY11 YoY 2Q,FY10 2Q,FY11 YoY

Net Sales 97.4 96.5 -1% 8.62 7.79 -10%

Operating Profit 0.9 -2.0 - 0.08 -0.16 -

(Exchange rate JPY/US$) 88.48 80.73

(Billion Chineseyuan, rounded down) (JPY billion)

China 2Q,FY10 2Q,FY11 YoY 2Q,FY10 2Q,FY11 YoY

Net Sales 1.00 1.25 +25% 13.03 15.63 +20%

Operating Profit 0.25 0.28 +8% 3.34 3.44 +3%

(Exchange rate JPY/RMB) 13.03 12.47

($ million, rounded down) (JPY billion)

Asian & Oceanian Region 2Q,FY10 2Q,FY11 YoY 2Q,FY10 2Q,FY11 YoY

Net Sales 57.2 75.2 +31% 5.06 6.07 +20%



(€ million, rounded down) (JPY billion)

Europe 2Q,FY10 2Q,FY11 YoY 2Q,FY10 2Q,FY11 YoY

Net Sales 8.7 10.6 +22% 0.94 1.24 +32%

Operating Profit -7.9 -3.5 - -0.85 -0.41 -

(Exchange rate JPY/Euro) 107.81 116.84

(JPY billion)

2Q,FY10 2Q,FY11

Result Result YoY

27.67 30.75 +11%

3.03 3.34 +10%

TOTAL

7

■Sales and profit per region in Overseas housing equipment

2Q, FY2011 Result

Continue to be strong Chinese business

led the overseas business to grow in sales and profit

Positive Usual Cost Reduction +2.6 +2.7

Factors V Plan Cost Reduction +1.5 +1.2

Increase in New Housing Sales +1.8 +0.3

Increase in Overseas Sales +0.3

Others +1.8 -0.2

Negative Decrease in Remodeling Sales

Factors Increase in material price

V Plan investment -0.7

Increase in labor cost -1.7

Increase in general products/Decrease in sales price -0.2

Total

-1.5

-0.2

+2.0

2Q,FY11

Plan

+3.9

+0.2

+0.6

-1.0

-0.1

2Q,FY11

Result

-0.3

+4.2

Cost Reduction

Cause of Increase/Decrease

-0.9

+4.1

(7/29)

8

exceeded 2.2 billion yen from the plan, and achieved 4.2 billion yen of operating profit

with V plan cost reduction and other SG&A cost reduction(included in others category)

■Cause of increase/decrease of operating profit

2Q, FY2011 Result


Change to the operating income target for the first half of the year

due to the effects of the earthquake

Plan for 2Q FY2011

announced on April 29

Earthquake’s effects on parts

supply

No parts available

Supply of some products stopped

Faster recovery of supply than expected

Restoration of the supply system Full operation

Remodeling Decrease in consumer confidence Strong demand immediately after supply starts Recovery of demand

(Sales: -4% in Q1 to +2% in Q2)

New housing No parts available and operations

shutdown Quick start of operations and strong demand

Steady recovery In particular, an increase of 5% in

operating income in new house construction

V Plan Delays in progress due to stop of supply Progress in V Plan for production thanks to

the quick supply recovery

Increase in volume in accordance with

the demand recovery

Overseas Slight increase due to yen appreciation

and weak market demand

Slight increase due to yen appreciation and

weak market demand (no revision)

Slight increase due to yen appreciation

and weak market demand (no revision)

9

Fiscal Year 2011: Second Quarter Results

-1.5 billion 0

Plan for 2Q FY2011

announced on July 29

Results for 2Q FY2011

+5.5 billion yen

+2.1 billion yen

4.0 billion

6.1 billion

10



Contents






The Company plans to increase income and profit.

Addition to the recovery of domestic new housing market,

the Company will also accelerate cost reductions.

[Domestic Housing Equipment Business] - Although the impact of new products released last year has weakened, the Company plans to

increase income and profit by increasing demand and enhancing sales measures.

- New housing sales are expected to increase by 10% due to a strong demand (8% increase in the

second half) for new houses.

- The Company plans to increase remodeling sales by 3% annually, 6% in the second half

through demand creation activities using showrooms.

[Overseas Housing Equipment Business] - The Company plans to increase income and profit despite the increased value of the yen.

- The Company also plans to greatly increase sales in China and other Asian countries.

- Although there are no signs of an upturn in demand in the United States or Europe,

the Company will enhance sales network for future.

[New Domain Business] - In the environmental construction materials business, the Company plans to increase profit by

accelerating its overseas development.

11

FY2011 Plan

■Financial Summary

FY10 YoY

Result Former Plan Revised Plan (%)

+26.5

(+6%)

+6.0

(+43%)

+6.7

(+48%)

FY11

-5.7 -1.0

13.0+6.9

(+135%)

+1.9

Net Sales 460.0

20.014.0

455.0

17.5

433.5

Recurring Profit

Net Profit

Extraordinary Loss -3.8

12.0

Operating Profit

20.518.013.8

5.1

12

Plan drastic increase in profit

with the strong demand, sales promotion, and cost reduction

FY2011 Plan

■Financial Plan ※Y billion, rounded down

361.0 373.1 378.8

55.7 65.0 65.016.5

16.7 16.0

0

100

200

300

400

500

Others

New Domain

Overseas H.E.

Domestic H.E.

0.0 4.0 8.0

12.0 16.0 20.0

Domestic H.E. 11.0 13.9 17.1

(Remodeling) 11.5 13.2 14.4

(New Housing) -0.5 0.7 2.7

Overseas D.E. 7.2 8.4 8.0

New Domain -2.1 -2.0 -2.5

Others -2.1 -2.8 -2.6

433.5 455.0

New Housing

113.0

(+17%)

New Housing

117.1

(+4%)

Remodeling

256.0

(+3%)

Others 0.2

New Domain New Domain

New Housing

123.8

(+10%)

Remodeling

255.0

(+3%)

460.0

FY10 Result

FY11 Plan

FY11 Plan

(Jul.29)

14.0

17.5 20.0

810 thousands 830 thousands (+2%) 840 thousands (+4%) …New housing starts (Jan-Dec)

800 thousands 830 thousands (+3%) 830 thousands (+3%) …New housing starts on delivery base

(+5%)

(+1%)

Remodeling

248.0

FY10

Result

FY11

Former Plan(Jul 29)

FY11

Revised Plan

＜Operating Profit＞

(+0.4%)

(+17%)

New Domain

16.0

13

Revised domestic new housing sales target

as revision of forecast in domestic new housing starts

FY2011 Plan

■Sales and profit by business segment ※Y billion, rounded down

( )= YoY difference

Others 0.2

Others 0.2 (-3%)

FY10

Sales Sales YoY

(%)

Restroom Products Total 143.4 148.0 +3%

Fittings +1%

Bathrooms +11%

Modular Kitchens/Basins +5%

Bath/Kitchen Products Total 192.8 203.5 +6%

Others Total 34.5 36.5 +6%

Total (Before adjustment) 370.8 388.0 +5%

Domestic H.E. Total 361.0 378.8 +5%

FY11 Plan

※2

※1

14

FY2011 Plan

■Sales per products in domestic housing equipment


※2: Internal sales or sales transferred between different segments

※1: TOTO has corrected the FY10 financial results as a result of the sales and profit from Marblight products being transferred from the “Modular Kitchens/Basins” category to the “Others” category from this fiscal year

15

Sales increase slightly but profit decrease in Americas

as there are no signs of an upturn in demand.

In China, launch of new plant in Shanghai is going well and

plan continuous increase in sales and profit

FY2011 Plan

■Sales and profit per region in Overseas housing equipment

In Local Currency In Japanese Yen($ million, rounded down) (JPY billion)

Americas FY10 FY11 FY10 FY11

Result Plan YoY Result Plan YoY

Net Sales 194.9 201.3 +3% 15.88 15.50 -2%

Operating Profit 3.5 -4.6 - 0.29 -0.35 -


(Billion Chineseyuan, rounded down) (JPY billion)

China FY10 FY11 FY10 FY11


Net Sales 2.25 2.76 +22% 27.73 33.10 +19%


(Exchange rate JPY/RMB) 12.30 12.00

($ million, rounded down) (JPY billion)

Asian & Oceanian Region FY10 FY11 FY10 FY11


Net Sales 127.6 181.8 +43% 10.40 14.00 +35%

Operating Profit 14.9 15.6 +5% 1.22 1.20 -2%


(€ million, rounded down) (JPY billion)

Europe FY10 FY11 FY10 FY11


Net Sales 16.0 21.8 +37% 1.72 2.40 +40%

Operating Profit -17.0 -6.4 - -1.83 -0.70 -

(Exchange rate JPY/Euro) 107.90 110.00

(JPY billion)

FY10 FY11

Result Plan YoY

55.73 65.00 +17%

7.29 8.00 +10%

TOTAL

Positive Usual cost reduction +4.6 +4.6

Factors V Plan cost reduction +3.4 +2.6

Increase in Remodeling sales +2.4 +2.8

Increase in New housing sales +3.4

Increase in Overseas sales +0.8 +1.1

Negative Increase in material prices

Factors V Plan investment

Increase in labor costIncrease in general products/Decrease in sales price

Others

Total +3.5

-2.6

-2.3

-2.2

-0.4

-1.3

FY11

Revised Plan

FY11

Former

Plan

+7.2

+1.2

Cost Reduction

Cause of Increase/Decrease

-2.5

-3.4

-0.6

-0.3

+6.0

+8.0

-1.8

(7/29)

16

Plan 6.0 billion yen of increase in operating profit by increase of sales and cost reduction

FY2011 Plan

■Cause of increase/decrease of operating profit


Increasing income by increasing profits:

- Increase in Remodeling sales … YoY increase of 6%

Increase in demand (YoY increase of 4% expected for the second half in the remodeling business)

Generation of demand through showroom events (enhancement of customer information services on fairs)

- Increase in New housing sales … YoY increase of 8%

Increase in demand (YoY increase of 7% in housing demand )

Enhancement of proposal services for housing companies

12.1 billion yen

13.9 billion yen

Result for 2H

FY2010

Operating income plan for the second half of Fiscal Year 2011

17

Note: Changes in the cost rate

Since the start of V Plan 2017, we have been

working to reduce cost so as to develop a corporate

base that can generate profits.

Plan for 2H

FY2011

It has been a year since the last time we released new large-size products. We will achieve the financial plan goals for the second half of Fiscal Year 2011 by implementing

measures to increase profits and to reduce costs.

Operating income plan for 2Q, FY11

Despite a decrease in profit from the release of new products, we will achieve the plan’s goals, namely, to increase income for the second half of the fiscal year by increasing profits and decreasing costs.

Replacement rate of major products released in August 2010

Financial Plan for Fiscal Year 2011

2H FY2010

2H FY2011

Sanitary

ware 55% 100%

Bathroom 70% 100%

Kitchen 40% 100%

- Increase in the replacement rate of new products and increase in sales

Increase in the replacement rate of products released in August 2010

Enhancement of proposal services for products to be released in February 2012

- Increase in Overseas business sales

… YoY increase of 22X%

Strong demand in Asia, including China

Increase in profits through the further promotion of the V Plan:

- Cost reduction through reorganization of logistics process

Reduction by 350 million yen through distribution network reorganization, etc.

FY09 FY10 FY10

Ratio of cost to sales 65.3% 63.0% 62.7%

FY10 FY11

1H ¥5.0 ¥5.0

2H ¥5.0 ¥5.0

Full Year ¥10.0 ¥10.0

18

■Dividend

Plan 5 yen in the second half, and 10 yen in the full year

FY2011 Plan

19



Contents







Shiga Plant operational Tohoku Region demand

Opening of the Ishinomaki Collaboration Showroom

There has been strong demand for the 4.8-liter toilet released in August 2010. There is likely to be a

further increase in demand for home renovation during the second half of the year.

In the Tohoku region, which was seriously affected by the

earthquake, as there is a strong need for home renovation and

new house construction, the number of visitors to showrooms

in the region has increased by 30% compared to last year.

Against this background, the TDY* companies and Noritsu

jointly opened the Ishinomaki Collaboration Showroom.

We will strive to meet the demanding requirements of

customers and construction companies in the Tohoku region.

* TDY: TOTO, DAIKEN and YKK AP Compression molders Kiln

Some production lines came into operation two months ahead of schedule to meet the strong demand for TOTO’s Purest series products.

- Reduction in CO2 emissions

Reduction of 5,740 tons/year in CO2 emissions achieved by the use of high-efficiency kilns (roller hearth kilns)

- Most advanced facilities

Introduction of a production and traceability management system that uses bar codes and RFID tags

- Manufacturing efficiency

Improvement in efficiency of mold change procedures through automation (2 hours reduced to 18 minutes)

20

21

2) Overseas Housing Equipment Business: China

■Business Environment in China

・Reinforce retail sales channels – organization and development Newly establish a Channel Development Section within the Sales Dept. to enhance organizational structure

and aid development of secondary distributors . Accelerate store openings in secondary cities

■Sales Measure -1

0

100

200

300

400

500

600

09年度 10年度 11年度

360 420

500

二次販売店数

Dealer

Dealer

Dealer

Secondary distributor






Maintain the current

50-store level

Add more stores

No. of secondary distributors

FY2009 FY2010 FY2011

Distribution

Channel in China

- There is steady demand for TOTO’s products despite the effects of monetary restraints and

the decrease in real-estate trading.

- Thanks to the smooth start of operations at the Eastchina No. 2 Plant, supply efficiency has

improved to a level sufficient to meet the strong demand.

In order to meet the strong demand, we will reorganize sales stores, which

provide contact with our customers, and will enhance our sales strategy.

Beijing

Chengdu Shanghai

Canton

22

・Increase recognition of TOTO – Increase flagship showrooms

1) Flagship showrooms owned by dealers

・Continue to open flagship showrooms of 800 ㎡ or more

・Expand sales base to inland areas and the northeast region

2) Flagship showrooms owned by TOTO

・Make presentations on our unique technologies

・Display ideal luxury bathroom spaces to communicate our brand image

NEOREST 間（JEN）

Hong Kong

Company showrooms

Opened in 2010

To be opened in 2011

■Sales Measure -2

2) Overseas Housing Equipment Business: China

In order to maintain and improve TOTO’s brand image, we will expand our

flagship showrooms and advertise our products’ advantages along with our

services in dealer/franchise showrooms offering new living spaces.

Business environment in the United States

Sales policies

- Opening of the Technology Center (Within the TOTO U.S.A. head office plant)

Clients: TOTO sales agents, water works companies, etc.

Instructors: TUS technical support members

Programs: Lectures using actual products on the features of products

and their installation and maintenance

Exploring new markets while also increasing the marketability of

products and improving the quality of services in the United States

Lecture session Products used in

training

Product strategy

- Enhancement of proposal sales services

- We continues to face a difficult business environment due to the prolonged economic

recession and the increased value of the yen.

Vivian series

2) Overseas Housing Equipment Business: U.S.A.

Developing partnerships and promoting activities aimed at obtaining

orders for prestigious projects in order to quickly increase brand

recognition and establish our business in Brazil.

Expanding the lineup of products other than sanitary ware, including the release of

a new faucet series in September 2011

- Active investment in the development of new markets

23

Business environment

- Vietnam

- Thailand

- India

- Taiwan

Despite local variations in the business environment, we achieved overall

increases in income and profit.

- Effects of flooding

Our affiliated faucet manufacturers were affected by

the flooding. We have a sufficient stock of products to

meet demand until the end of this year.

We will examine the possibility of alternative

production in Japan, depending on future

developments.

- Despite the signs of a market downturn and heightened

risk, there continues to be strong demand for TOTO

products.

- There continues to be a strong market demand for

construction across the country, especially of large

luxury hotels.

- In urban areas, due to the development of retail

networks in districts around sales agents’ showrooms,

there is an increase in the sales of products that meet

diverse individual needs.

- In order to increase TOTO’s brand recognition, we

displayed our products in Vietbuild Ho Chi Minh 2011,

which was held in Ho Chi Minh City in July.

- Similar to last year, we displayed

products that make full use of TOTO’s

environmentally friendly technologies

at aceTECH 2011, India’s largest

construction exhibition.

- We opened showrooms in Bangalore

and Hyderabad in July in order to

establish TOTO’s identity as a high-

class brand.

- Middle East - Despite delays in some of our projects, there continues

to be strong demand for TOTO products.

- There is an increasing interest in environmentally

friendly products.

2) Overseas Housing Equipment Business: Asia and Oceania

24

25

■Sales Measures

・Promote product displays in showrooms

・Strengthen product proposals with suite products

・Deliver products to prominent facilities such as

five star hotels

・Don’t see recovery in market

・Aggressively develop market to increase the TOTO brand recognition

■Product strategy

・Drive best suitable strategies in every region.

・Launched MH Suite series for Europe market,

unveiled at the trade show, ISH

held in Frankfurt in March, 2011

2) Overseas Housing Equipment Business: Europe

■Business Environment in Europe

We are working to promote the development of products that meet local needs,

including developing and offering kitchen and bathroom products for the

European market.

MH Series

3) New Domain Businesses

Ceramics

Environmental business materials: global development of activities to establish TOTO’s brand

identity / Ceramics: production has recovered to a level exceeding that before the earthquake

Environmental building materials

- We concluded a Hydrotect license contract with Alcoa

Inc. (U.S.A.), one of the world’s largest aluminum

producers.

At the AIA 2011 National Convention held

in May (New Orleans, U.S.A.), Alcoa

released a new product, an aluminum

panel construction material made by using

Hydrotect.

-40

-20

0

20

40

60

80

100

120

Net sales

Operating

profit

9.52

-1.00

8.87 9.30

-1.50 -1.52

- Hydrotect products adopted by an increasing number of

major house manufacturers in Japan

Hydrotect tiles are being adopted by an increasing number of

major house manufacturers, including PanaHome and Misawa

Homes, thereby contributing to increases in sales.

-40

-20

0

20

40

60

80

100

120

5.52

-1.70

7.71 6.70

-1.00 -0.64

Although the market as a whole is entering a temporary correction

phase, there is likely to be an increase in demand in the high-end

market targeted by TOTO.

- Activities during the first half of the year

- Business environment

Through the V Plan’s Manufacturing Innovation initiative, we have

increased the efficiency of the production lines at the Nakatsu No. 2

Plant and Ibaraki Plant, which re-entered operation after the

earthquake. As a result, we achieved reduction in costs and an

increased profit level.

- Activities during the second half of the year

We promoted the sale of optical communication-related products,

for which there has been strong demand since the first half of this

year. We also promoted proposal for the sale of bonding capillaries

and luminous tubes in overseas markets.

Optical communication-

related products Bonding capillaries

Result for

FY2010 Plan for

FY2011

Result for

FY2009 Result for

FY2010

Plan for

FY2011

Result for

FY2009

Net sales

Operating

profit

12 (Billions

of yen) 10

8

6

4

2

0

-2

-4

12 (Billions

of yen) 10

8

6

4

2

0

-2

-4

26

0

20

40

60

80

100

4) Promotion of TOTO V Plan 2017

V Plan results and future plans

V Plan is being implemented according to schedule in terms of both activities

and effects.

Results for FY2010 2.8 billion

yen

Plan for FY2011 3.4 billion

yen

Case 1: Marketing and supply chain innovations

The effects of V Plan are forecast to exceed

6 billion yen from 2010–2012

6.2

billion

yen

2 product

models

1) Creation of platforms (for new

products)

2) Color integration

14 product

models

- Initiative for reducing home toilet inventory

Changes in home toilet inventory*

36%

decrease

20%

decrease

Until 2011 After

Platforms

After

Color integration

* Include only integrated product models

White

#NW1

Pale white

#N11

White

#NW1

27

V Plan horizontal axis

Manufacturing

innovation

1.1 billion yen

■Creating common platforms

for Washlet valves and other

products:

0.5 billion yen

■Reorganization of

manufacturing sites:

0.3 billion yen

Supply chain

innovation:

1.8 billion yen

■Purchasing innovation:

1.4 billion yen

■Logistics innovation,

reorganization of the logistics

network, etc.:

0.4 billion yenManagement

resource

innovation:

0.5 billion yen

Major activities/effects

Case 2: Supply chain innovation

The simplification of the network route reduced warehousing and shipment

lead time and also increased the loading rate.

- Reorganization of the logistics network: creation of a distribution system using our company’s

logistics center

Logistics center

Distributor terminal Relay terminal

Customers

Key terminal

Key terminal (1) Elimination of terminal use

(2) Integration of routes

Single route

<Sorted by destination>

Creation of a half-day work

system (a.m.: warehousing;

p.m.: shipments)

Logistics lead time

Reduced from 6 to 3 days (For deliveries from Kyushu to Kanto)

Effect: 350 million yen/year

Started in April 2011

Direct shipment from plants

Aft

er

Bef

ore

Manufacturing

plants

Manufactur

ing plants

4) Promotion of TOTO V Plan 2017

V Plan results and future plan

Logistics center

Customers

28

■ TOTO included in the Dow Jones Sustainability Index (DJSI World)

TOTO’s environmental initiatives are highly thought of and are the subject of global

attention.

■ Bilateral credit

TOTO was chosen for the DJSI Asia Pacific for two consecutive years, 2009 and

2010. This year, TOTO was chosen for the DJSI World, the highest ranking index, for

its various ESG (environment, society and governance) activities.

* Jointly proposed and implemented with Kitakyushu City, Mitsubishi UFJ

Morgan Stanley Securities Co., Ltd. and Meiji University

TOTO proposed to the Ministry of the

Environment (the Global Environment Centre

Foundation)* an initiative to verify the amount

of CO2 emission reductions due to the spread of

water-saving products in Dalian, China.

TOTO’s initiative was eventually adopted by

the Ministry.

We started a feasibility survey* in

Dalian, China for the world’s first

trial in trading carbon credits for

water savings.

Out of about 2,500 companies around the world that were

surveyed, 342 companies were chosen for this year’s DJSI

World. Financial instruments of the total amount of

approximately 6 billion dollars are traded based on this

index.

4) Promotion of TOTO V Plan 2017: Green Challenge

Bilateral credit scheme

Japan

- Kitakyushu City

- Mitsubishi UFJ

Morgan Stanley

Securities Co., Ltd.

- Meiji University

- TOTO

Spread of water-saving

housing equipment China (Dalian City)

Carbon credits

earned

Reduction

in CO2

emissions

Objective of the current survey:

Verification of reductions in

CO2 emissions

29

This presentation material contains forward-looking statements based on

assumptions, estimates and plans as of October 31, 2011.

Actual performance may differ materially from these forward-looking statements

due to risks and undermined factors arising from changes in the world economy,

competition and foreign currency exchange rates.

Documents

Fiscal Year 2011 First Half Result and Full Year Plan · Fiscal Year 2011 First Half Result and ... but experienced a decrease of 10% compared to last year on a yen basis. - The Company’s