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Notice of Revision to Earnings Forecast

Feb 6, 2009

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Toyobo Co., Ltd. (“Toyobo”), in view of recent earning trends, has revised downward its forecasts.
1.Revision of Forecasts
(1) Consolidated Forecasts
Year ending March 31, 2009

Millions of Yen Yen
Net Sales Operating
Income
Ordinary
Income
Net Income Net Income per Share
Previous Forecast (A)
(Announced on
November 5, 2008)
410,000 20,000 15,000 (5,000) (7.16)
Revised Forecast (B) 375,000 15,000 8,000 (8,500) (12.18)
Change (B-A) (35,000) (5,000) (7,000) (3,500)
Percent Change (%) (8.5) (25.0) (46.7)
<Reference>
Year ended
March 31, 2008
431,417 27,075 21,049 4,698 6.73

(2) Non-Consolidated Forecasts
Year ending March 31, 2009

Millions of Yen Yen
Net Sales Operating
Income
Ordinary
Income
Net Income Net Income per Share
Previous Forecast (A)
(Announced on
August 25, 2008)
220,000 13,000 9,000 1,000 1.43
Revised Forecast (B) 210,000 9,000 6,000 (3,000) (4.29)
Change (B-A) (10,000) (4,000) (3,000) (4,000)
Percent Change (%) (4.5) (30.8) (33.3)
<Reference>
Year ended
March 31, 2008
259,780 19,250 19,318 3,508 5.03

 

(3) Reasons for Revision
The business environment has becoming increasingly harsh since November 2008, with global economic conditions leading to a rapid shrinking of demand, and appreciation of the yen to a level that exceeded expectations. The Toyobo Group has managed to maintain solid earnings performance in such businesses as packaging films and the high-performance fiber “DYNEEMA,” as well as in the medical and environmental fields, but sales have declined significantly in the automotive and LCD display materials fields. Toyobo has already begun to implement far-reaching cost cuts and other countermeasures, but expects full-year sales and earnings to fall below previous estimates, and has revised its forecasts accordingly.

 

Note: Forecasts have been prepared based on information available at the time of the release of this report. Actual results may vary from forecasts for a variety of reasons.

2. Revision to Dividend Forecast
(1) Revision

Dividends per Share
Record Date 2nd Quarter Year-end Total
Yen Yen Yen
Previous Forecast
(Announced on
November 5, 2008)
5.00 5.00
Revised Forecast 3.50 3.50
Year ended
March 31, 2008
5.00 5.00

 

(2) Reasons for the Revision
Toyobo considers providing returns to shareholders to be one of its highest priorities. Our basic policy is to continually provide a stable dividend, determined in a comprehensive consideration of profit levels, financial position (retained earnings), and investments necessary for expansion.
As noted in the preceding section, Toyobo is forecasting a net loss for the subject fiscal year. This is due primarily to losses incurred from restructuring of the Textiles business, the final stage of which is being implemented during the subject fiscal year, and so is a temporary occurrence. Nevertheless, operating income and ordinary income have been severely affected by the impact the deterioration in the global economy has had in the automotive and LCD materials fields since November 2008, and we expect these earnings figures to decline substantially.
Toyobo has taken the decline in performance seriously, and has already retracted a portion of the compensation paid to Board members. We plan to widen the scope and amount of these reductions from April 2009, cutting compensation to Board members and executive officers by 20% to 30%.
Further, to realize as quickly as possible an earnings structure able to withstand such contraction of the business scale, Toyobo has already begun implementing a far-reaching, company-wide cost-cutting program aimed at trimming ¥10 billion in expenses through streamlining of fixed manufacturing costs, lowering of variable costs, cuts in administrative overhead and revision of capital expenditures. The R&D program is also being revised to prioritize research themes better able to withstand fluctuations in the market, and the early production of results. Nevertheless, we expect business conditions will continue to be difficult, and are not anticipating a rapid recovery.
In consideration of these circumstances, Toyobo is lowering its year-end dividend forecast by ¥1.50 per share from the previous forecast, to ¥3.50 per share.

For more information
Toyobo Public Relations Group
pr_g@toyobo.jp

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