CHANGE for 2016 Articulating clear performance targets that reflect our long-term vision Promoting the strategic transformation of our four fundamental portfolios Group Performance Results and Targets Billions of yen FY2011* FY2016 Net sales 791.0 1,300 2,000 Operating income 35.3 100 200 Operating margin (%) 4.5 8 10 Net income 13.8 60 120 Operating income to total assets (ROA) (%) 4.6 8 10 Net income to shareholders equity (ROE) (%) 4.8 12 15 * Excluding the impact of the standardization of accounting periods. Basic Policies 1. Press forward with growth strategies in green chemistry, healthcare and overlapping domains 2. Advance and expand existing by broadening scope and adding depth 3. Bolster R&D aimed at fostering new 4. Enhance implementation of strategies through organizational reforms 5. Promote decisive, ongoing efforts to reform cost structure Teijin s New Medium- to Long-Term Management Vision Key Aspects of CHANGE for 2016 Secure profitable sustainable growth In addition to outlining basic policies that reflect our long-term vision, CHANGE for 2016 articulates clear performance targets and growth strategies and sets forth a comprehensive plan of action. Guided by CHANGE for 2016, we will focus on three key domains green chemistry, healthcare and overlapping domains identified through an analysis of global macro trends and of our competitive advantages. With the aim of evolving as an organization that creates value for customers through technologydriven innovation, we will press forward with efforts to transform our four fundamental portfolios (business, geographic, technology and human resources), a crucial growth strategy. We will also work to reinforce global cost competitiveness. Through these efforts, we will strive to secure profitable sustainable growth. Performance targets include net sales and operating income of 1.3 trillion and 100 billion, respectively, in fiscal 2016 and 2.0 trillion and 200 billion by around fiscal 2020. Refining and strengthening key Teijin Group domains and business fields Macro trends Population growth Falling birth rates and aging of society Increasing consumption of fossil fuels Rising CO2 emissions Market needs Greater energy and resource efficiency Increased material and spiritual affluence Safety and security Clean energy Health and comfort Key domains Sustainable transportation Information and electronics Safety and protection Environment and energy Green chemistry Overlapping domains Pharmaceuticals Home healthcare New healthcare Advanced medical Bioplastics Proprietary to be reinforced High-performance Polymerization Composites Forming Advanced molding, film fabrication, processing Surface treatment, laminating Environmental, biotechnology Nanoparticle production, nanoscale control Membrane filtration Biotechnology Pharmaceuticals and healthcare Drug discovery, design and evaluation of medical devices Medical Creating value for customers through technology-driven innovation 3
Providing optimal solutions through a practical framework Provide solutions that respond effectively to the needs of end users * A framework for strengthening development and sales capabilities to provide the solutions our customers seek Amass a solid base of expertise regarding finished products Solutions platform* Marketing Reinforce responsiveness in diverse markets Create a specialized team to oversee core projects Development Advance efforts to develop high-performance and product lines Invest purposefully in R&D personnel Strengthen downstream Expand facilities for product evaluation Capitalize on alliances Providing optimal solutions 1 Create a solutions platform From our traditional business model, which principally emphasizes the supply of upstream, we will evolve toward a business model that focuses on providing optimal solutions. As a framework for this metamorphosis, we will create a solutions platform that leverages our technological and sales prowess to provide the solutions Provide increasingly competitive solutions our customers seek. Concurrently, we will streamline our organization. In our, we will gradually integrate core subsidiaries and functional companies. We will also place all R&D personnel under the direction of the Chief Science and Technology Officer to facilitate the concentrated allocation of technological expertise. These constructive changes are designed to reinforce and expand our technological foundation, as well as to rally our sales capabilities. Realigning and simplifying our business groups to create a solutions-oriented organization Aramid Fibers Carbon Fibers and Composites Polyester Fibers Advanced Fibers and Composites Polyester fibers for industrial applications Plastics Films Electronics Materials and Performance Polymer Products Medical and Pharmaceuticals Fiber Products Marketing IT Polyester fibers for apparel Trading and Retail IT New Business Development New Business Development 4
Transforming our business portfolio Focusing on promising growth Business Fundamental Technology portfolios Geographic Business categories and investment policies Core strategic New for incubation Stable-profit Allocation of investment Businesses targeted for investment Advanced fibers and composites New electronics Advanced medical Electronics and performance polymer products IT Fiber products FY2009 FY2011 Investment stance Prioritize and focus investment (including in major M&A activities) Selectively concentrate investment in growth FY2012 Sales in promising growth 13% 18% 10% New electronics Transforming our geographic portfolio 2% Advanced fibers and composites 25% New Advanced medical Focusing on emerging economies and Asia FY2011* 0.8 trillion FY2016 1.3 trillion 2.0 trillion Sales by region 25% 30% North America and Europe 35% Emerging economies and Asia Japan * Excluding the impact of the standardization of accounting periods. Human resources 2 Transform our four fundamental portfolios Business: Taking into account market potential, competitive advantages and profitability, we will promote the decisive allocation of management resources to accelerate the expansion of promising growth. Geographic: We will emphasize assertive investment in emerging economies and Asia and by focusing on growth drivers in each region. Technology: Our objectives here will be to reinforce existing and acquire new processing thereby boosting our ability to provide solutions further down the supply chain and to integrate and healthcare, furthering the creation of new healthcare, notably advanced medical. Implement growth strategies Human resources: We will focus on securing, fostering and positioning talented individuals irrespective of nationality, ethnicity, age or gender to accelerate the diversity of the Teijin family and facilitate the effective implementation of strategies. Transforming our technology portfolio Focusing on solutions Materials Synthesis and polymerization of raw Design and manufacturing Preliminary processing Spinning, film fabrica ation, surface treatment Strengthen midstream and downstream Secondary processing Finishing Additional high-value-addedh-value-add processing Molding, device manufacturing Reinforcing existing and acquiring new to integrate and healthcare Existing Technologies to be reinforced or acquired Technologies to be reinforced or acquired Existing Drug ry discover R& &D Foster new that integrate and healthcare Clinical development Commercialization Research related to the control of chemicals and manufacturing 5
Expanding operating income in the high-performance and healthcare through fiscal 2020 Net Sales Operating Income ( trillions) ( billions) 2.0 200 New electronics 20 LiB separators Printable electronics 0.8 1.3 FY2011* FY2016 High-performance Other 0 35.3 5.4 26.4 16.6 (13.1) FY2011* * Excluding the impact of the standardization of accounting periods. 100 30 55 28 (15) FY2016 2 Entry into aramid fibers markets in emerging economies Increase in sales of new drugs 75 80 55 (30) Thermoplastic CFRP for automotive applications Increase in new applications for aramid fibers Increase in sales of new drugs Expansion of home healthcare New healthcare Other Elimination and corporate 3 Growth drivers Growth between now and fiscal 2016 will be driven by the expansion of our lineup of new pharmaceuticals and of advanced fibers. From fiscal 2016 on, our results will also be powered by thermoplastic composites for automotive applications, new electronics and new healthcare, among others. Novel gout and hyperuricemia treatment febuxostat is currently sold in more than 20 markets, including Japan, North America and several European countries. With recognition of the drug s efficacy growing, we are continuing to build a global network and have already signed exclusive distributorships for the drug covering 117 countries and territories. We are now preparing for launch in several new markets, including the People s Republic of China (PRC), Turkey and Mexico, and anticipate annual sales of the drug will eventually peak at over 100 billion. Our aramid fibers business continues to see solid growth. The elimination of bottlenecks is facilitating continuous increases in production capacity. With sales expected to strengthen, particularly for automotive applications, ballistic protection products and fiber optic cables, we are currently considering expanding our production facilities in emerging economies and Asia. Global marketing of febuxostat for hyperuricemia and gout Adenuric Uloric Feburic Febuxostat: Aiming for annual sales of at least 100 billion (Distributorships covering 117 countries and territories) Countries and territories in blue are where Teijin has exclusive distribution agreements for febuxostat. As of June 30, 2012 6
Core business areas in five key fields Key fields Core business areas 2012 2016 2020 Sustainable transportation Information and electronics Safety and protection Environment and energy Automobiles Aircraft Printable electronics Displays and touch screens Intelligent IT solutions Materials that enhance safety Infrastructure-related Green and energy Pharmaceuticals Home healthcare Business areas that fuse key Friction, tire reinforcement, others Solar cells Structural Flexible displays, others Web-based Protective clothing, ballistic protection Seismic and foundation reinforcement Innovative LiB separators Recycling systems, environment-friendly Global marketing of drugs in three therapeutic areas: Bone and joint disease; respiratory disease; and cardiovascular and metabolic disease (drug for treating hyperuricemia and gout) Global expansion Rehabilitation devices Advanced fibers and composites New Stable-profit Glazing (windows) Thermoplastic CFRP Nanosilicon inks Next-generation solar cells New drugs (for atrial fibrillation, others) Advanced medical, new healthcare Having perfected that reduce the time required for molding thermoplastic carbon fiber reinforced plastic (CFRP) to less than one minute, in December 2011 we signed an agreement with General Motors Company of the United States to collaborate in the development of thermoplastic CFRP for use in mass-produced GM vehicles. We will continue to promote collaboration in this area with automakers in Japan and overseas. In the promising area of lithium-ion battery (LiB) separators, we developed two innovative products that boast dramatically improved heat resistance, which enhances capacity and safety and extends lifespan. Focus on five key fields We have secured the approval of several leading battery manufacturers and in June 2012 commenced operations at our new LiB separator production joint venture in the Republic of Korea (ROK). Next-generation printable electronics facilitate the production of semiconductors and other electronic circuits by printing electroconductive inks directly onto substrates, significantly streamlining fabrication processes. We are currently promoting development efforts targeting the markets for semiconductors, solar cell and thin-film transistors. Another focus is new healthcare including regenerative medicine and tissue repair that leverage our and healthcare. Thermoplastic CFRP Attracting considerable attention for its ability to lower vehicle frame weight Teijin reduce molding time to less than one minute LiB separators Coating for both aramid and fl uorine compound coatings facilitate a signifi cant increase in LiB capacity, as well as ensure outstanding safety (prevents e batteries from exploding) and a long lifespan. Dramatically improves heat resistance and durability Facilitates a coating speed fi ve times faster than that of conventional Printable electronics Materials manufactured using a groundbreaking silicon nanoparticle technology. Streamlines semiconductor fabrication processes and signifi cantly reduces semiconductor fabrication costs 7