豐田汽車 (TM) 2012 Q4 法說會逐字稿

Hello, everyone. Welcome to our financial result conference call for the fiscal year to March 2012. I am [Tomasco Tavichi] from the Accounting division of Toyota Motor Corporation.

Our speaker today is Takahiko Ijichi, Senior Managing Officer in charge of the Accounting Group of Toyota Motor Corporation. He's joined by Miss Kelko Morita, our interpreter.

The agenda of our conference call is as follows. First, Mr. Ijichi will discuss the highlights of Toyota's financial results, and then Miss Morita will read out the presentation on his behalf. This will take about 10 minutes.

The presentation will be followed by a Q&A session, in which you are welcome to ask questions. We expect the entire call to last about 60 minutes.

Please note that the presentation contains forward-looking statements that reflect our plans and expectations from which our actual result may be materially different.

For your information, a complete cautionary statement concerning forward-looking statement is printed on page 2, and a complete cautionary statement concerning insider trading on page 3 of our presentation material; and both statements can be downloaded from our Internet home pages.

May I also remind you that Mr. Akio Toyoda, President of Toyota Motor Corporation, made a speech on our financial result earlier today, which you can find in the same Internet home pages.

Now I would like to hand it over to Mr. Ijichi.

(interpreted) Good morning and good afternoon. My name is Ijichi. Thank you very much for joining us for this conference call, despite your occupied schedules today.

The fiscal year ended in March 2012 was characterized by an extremely harsh and adverse business environment, as testified by production decrease due to Great East Japan Earthquake, floods in Thailand, and appreciation of the yen. But that notwithstanding, we were able to secure operating income of JPY355.6 billion through Company-wide profit improvement activities.

For fiscal year ending in March 2013, we aim to secure operating income of JPY1 trillion through new product introduction and further profit structure improvement.

Improvements are steadily progressing toward the achievement of strong earnings foundation, as enunciated in our Global Vision, and the details of that will be explained in the presentation to be read out from hereon.

Let me read the presentation on behalf of Mr. Ijichi. And first, I would like to discuss Toyota's financial results for the fiscal year to March 2012.

Please look at slide number 6. Our consolidated vehicle sales for the year increased by 44,000 units, to 7,352,000 units compared to last year, despite the negative impact from the Great East Japan Earthquake and the Thai floods.

In Japan, sales increased by 158,000 units, as in the second half, we experienced a strong recovery of lost opportunities due to the Earthquake.

In North America, on the other hand, sales decreased by 159,000 units, due mainly to lack of vehicle supply caused by the Japan Earthquake in the first half.

In Asia, although IMV sales were particularly affected by the supply disruption due to the Thai floods, Etios sales in India were strong. As a result, sales increased, year on year to mark a new record.

As summarized in slide number 7, our consolidated financial performance for the fiscal year to March 2012 resulted in net revenues of JPY18.5836 trillion, operating income of JPY355.6 billion, pre-tax income of JPY432.8 billion, and net income of JPY283.5 billion.

Next, using slide 8, I would like to explain the major factors impacting net income year on year. Net income decreased by JPY124.6 billion to JPY283.5 billion compared to the last fiscal year.

The left side of slide 8 shows the major factors that impacted operating income. Although increased vehicle sales and cost reduction efforts, including the Company-wide VA activities, contributed positively, operating income decreased compared to the last fiscal year, due to negative factors, namely the yen's continued appreciation, the Japan Earthquake, and the Thai floods.

The next slide summarizes the quarterly results of operating income. As you can see in slide number 9, operating income ratio has been improving since the Japan Earthquake, despite the yen's continued appreciation year on year. This confirms not only the progress of our recovery from Japan Earthquake, but also the fruit of developing better cars on a Company-wide basis starting to enhance vehicle sales and profits and result in our recent financial performance.

Next with slide 10, I would like to explain our consolidated operating income for the year by region.

In Japan, operating loss decreased compared to last year despite yen appreciation, the Japan Earthquake, and the Thai floods, as a result of cost reduction efforts.

In North America, operating income decreased due to lower levels of vehicle sales and financial services' profits than last year. Also in Asia, and in the Central and South America, Oceania and Africa region, operating income decreased due to the Japan Earthquake and the Thai floods, as well as initial investment and new hiring related to expansion of businesses.

Next, let me discuss our operating income for financial services, and please refer to slide number 11 for that.

Operating income, excluding swap valuation gains and losses, decreased by JPY31 billion to JPY289.8 billion compared to last year. This was due to reduced lending margin, due to declining lending rates, mainly in the United States. Going forward, we plan to maintain stable earnings from financial services while applying adequate risk controls.

Let me now move on to slide 12. Equity in earnings of affiliated companies decreased year on year by JPY17.3 billion to JPY197.7 billion, in reflection of decreased earnings of affiliated companies in Japan and China due mainly to the Japan Earthquake.

Slide 13 summarizes our unconsolidated financial results for the year. We resulted in net revenues of JPY8.2411 trillion, operating loss of JPY439.8 billion, ordinary income of JPY23 billion, and net income of JPY35.8 billion.

With regard to the year end dividend, we plan to propose JPY30 per share at the ordinary general shareholders meeting next month. The full-year dividend will, therefore, be JPY50 per share, including the interim dividend of JPY20 per share.

We regard dividend as our most important means to return value to shareholders. While ensuring our dividend policy to reflect our assessment of the Company's long-term financial stability, earnings results and investment plans, we would like to meet our shareholders' expectations.

Next, I would like to discuss our outlook for the fiscal year ending March 2013. Please look at slide number 16.

With regard to our consolidated vehicle sales for the current fiscal year, we expect a significant increase, particularly in North America and Asia, as we recover from the supply shortage in the last fiscal year.

As we expect the effect of new model launches in each country, we intend to reach 8.7 million units, up 1.348 million units by comparison to the fiscal year to March 2012.

In Japan, a substantial increase in vehicle sales should be driven by new models such as Aqua, while the demand continues to recover from the Earthquake and stimulated by the eco-car subsidies and other measures.

Outside Japan, we intend to actively promote vehicle sales, utilizing our new products as well as our competitive lineup of hybrid vehicles and IMVs.

Please look at slide number 17. Based on the assumption of the foreign exchange rates of JPY80 to the dollar and JPY105 to the euro, our forecast of consolidated financial performance for the current year are net revenues of JPY22 trillion, operating income of JPY1 trillion, pre-tax income of JPY1.160 trillion, and net income of JPY760 billion.

Now please look at slide number 18 for the analysis of our operating income forecast by comparison to the last fiscal year. We are aiming to achieve operating income of JPY1 trillion by launching attractive new [model] products, and strongly pursuing cost reduction together with our suppliers.

As we discussed in Toyota Global Vision of March 2011, Toyota has been aiming to establish a cycle of developing better cars, which should increase sales, and consequently profits, to be reinvested in developing even better cars.

Our business foundation to support this cycle is now steadily improving towards the earnings structure, as defined in Toyota Global Vision.

Finally, our forecast of CapEx depreciation expenses and R&D expenses are as shown in slide number 19. Both CapEx and R&D expenses are expected to increase due to the full model changes of our core models that are in pipeline. Besides, we will continue to invest actively and strategically into the areas of our priority, such as the next generation eco-cars, and emerging markets, while ensuring further efficiency.

This concludes the presentation, and thank you very much for your attention.

Portions of this transcript that are marked (interpreted) were spoken by an interpreter present on the live call. The interpreter was provided by the Company sponsoring this Event.