Toto fy2011 6months_results

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

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

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■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

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■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)

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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)

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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

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1．Financial Result for First half of FY2010

2．FY2010 Full Year Financial Plan

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.

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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 result ※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)

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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

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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

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■Dividend

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

FY2011 Plan

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.

Toto fy2011 6months_results

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