[Company analysis] Toto Ltd. (TOTO)

「Toto Ltd. (TOTO)」is a company that manufactures and sells housing equipment and equipment, headquartered in Fukuoka Prefecture. They mainly handle sanitary ware related to toilets. The name "TOTO" is an abbreviation for "Toyo Toki," which is the company name at the time of its founding. At present, they hold 60% of the Japanese market share. The number of consolidated employees is approximately 33,431.

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is JPY million, as of 2019

Company name	Toto Ltd.
Company name (Japanese)	TOTO
Date of establishment	Tuesday, May 15, 1917
Headquarters location	〒802-8601 福岡県北九州市小倉北区中島2-1-1
Capital	35,579
Consolidated sales	586,086
Consolidated operating profit	40,167
Consolidated total assets	574,960
Consolidated capital	346,658
Capital adequacy ratio	60.3%
Consolidated number of employees	33,431

 

 

 

2. Summary and Features

 
「TOTO」was founded in 1917, under the name「Toyo Toki Comapany(東洋陶器株式会社)」as a part of Moriura zaibatsu(森村財閥). At this time, they set up their head office in Kitakyushu, Fukuoka Prefecture, which is close to the Chikuho coal field, which produces abundant coal. But at the same time, its location is close to Moji Port, which opened in 1899, so it is easy to procure high-quality soil from the Korean Peninsula. 

Until the time of its founding, the sanitary ware market was almost non-existent, so there were many problems in its business activities. In the first place, since the thing called the flush toilet was right just introduced to Japan, the awareness of the sanitary ware products handled by「TOTO」was extremely low. Therefore, in order to expand the market, they started with producing sanitary ware instruction papers for distribution to high income people and inns. And this is the beginning of the publishing department of today's「TOTO」.

Until this period, the business scope of this company was "manufacturing and sales of pottery", so tableware production was also an important business for「TOTO」. In particular, they succeeded in producing hard pottery in 1926 and expanded sales in Japan. In addition, due to the decrease in European pottery production capacity by the World War I, they exported coffee cups and plates to the United States and the United Kingdom. However, with the modernization of housing in Japan, it became possible to run a business with only sanitary ware, which is the main business of「TOTO」, so they decided to teminate the tableware business in 1969. From that time, this company initiated to concentrate only sanitary ware related to toilets.  

In 1978, this company experienced the drought in Fukuoka. So they released a water-saving toilet bowl in 1978 and continued to improve it. As a result, this development became the standard specification of the current「TOTO」 water-saving toilet bowl. In 1980, a water-saving bidet also was released for the first time in the world.

Recently, in response to the emergence of「LIXIL」, which handles housing life generally through business integration, they have formed a tie-up with「Daiken Corporation(大建工業)」and「YKK AP」in the remodeling business. Frankly speaking, the relationship with this「LIXIL」and「TOTO」is unique. This is because「INAX」,which is the predecessor of「LIXIL」," was also founded in 1924 as a subsidiary of Morimura Zaibatsu, just like「TOTO」. Under the Morimura zaibatsu, this relationship is sometimes called as "competitive coexistence".

 

 

 

3. Major Business

 

■ Sanitary ware business
  
■ Ceramics business

■ Environment and building materials business

 

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated sales		567,305	592,301	586,086
Consolidated operating profit		47,446	52,602	40,167
Consolidated total assets		553,996	566,132	574,960
Consolidated net assets		306,053	342,219	346,658
Breakdown of sales	Sanitary ware in Japan	423,310	425,609	425,133
	Sanitary ware in China	61,385	71,966	63,539
	Sanitary ware in Asia・Oceania	28,676	31,656	31,803
	Sanitary ware in America	28,462	30,784	31,329
	Sanitary ware in Europe	3,724	3,587	3,778
	Ceramic business	12,506	20,030	22,174
	Environment and building materials business	8,975	8,404	8,069