豐田汽車 (TM) 2013 Q4 法說會逐字稿

Hello, everyone.

Welcome to the financial results conference call for the fiscal year 2013.

I am [Nomkas Takano], from the Accounting division of Toyota Motor Corporation.

Today, we have Mr. Takuo Sasaki, Managing Officer in charge of the accounting [room] of Toyota Motor Corporation; and [Miss Keiko Morita], our interpreter, with us.

The agenda of today's conference call is as follows.

First, Mr. Sasaki will briefly discuss the highlights of Toyota's earning results; then Miss Morita will take over the rest of the presentation.

This will take about 10 minutes.

After the presentation, you are welcome to ask questions.

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

A complete cautionary statement concerning forward-looking statements is included on page 2 of today's presentation material, and a complete cautionary statement concerning insider trading is included on page 3. Both statements can be downloaded from our Internet homepages.

Besides, the President of Toyota Motor Corporation, Mr. Toyoda's speech also can be downloaded on the same homepages.

Now, I'd like to turn the call over to Mr. Sasaki.

Hello, everyone.

Thank you for joining us today.

This is Takuo Sasaki.

I'd like to discuss Toyota's financial results for the fiscal year to March 2013.

Please see slide 5. Our consolidated vehicle sales for the year increased by 1,519,000 units to 8,871,000 units compared to last year.

All regions posted an increase in vehicle sales year on year, due to the lack of vehicle supply in the last year caused by the great East Japan earthquake and the Thai floods.

Additionally, vehicle sales increased by 208,000 units in Japan, largely due to the recovery of the market, driven by the eco-car subsidies.

In North America, vehicle sales grew strongly by 597,000 units, thanks to the popularity of our core models, such as Corolla and Camry, in a solid new car market.

In Asia, vehicle sales also increased significantly as we utilized the opportunities resulting from the market growth in Thailand and Indonesia, in particular.

Our consolidated financial performance for the fiscal year to March 2013 resulted in net revenues of JPY22,064.1 billion; operating income of JPY1,320.8 billion; a pre-tax income of JPY1,403.6 billion; and a net income of JPY962.1 billion.

This represents improvement of both revenues and earnings from the last fiscal year.

Now, I'd like to hand the rest of today's presentation over to Miss Morita, our interpreter.

Next, using slide 7, I would like to explain the major factors impacting net income year on year.

Net income increased by JPY678.6 billion to JPY962.1 billion compared to last year.

The left side of slide 7 shows the major factors which impacted operating income.

Operating income increased substantially due to increased vehicle sales in all regions, cost reduction activities through collaboration with our suppliers, and the correction of yen appreciation in the second half of the fiscal year.

Next, with slide 8, I would like to explain operating income for the full year by region.

In Japan, operating income increased as a result of the Company wide profit improvement activities, such as a high level of cost reduction and increased vehicle sales, with an additional impact from the correction of the strong yen.

In North America, operating income improved due to increased vehicle sales and cost reduction despite the one-off negative impact from the settlement costs related to the US class-action litigation and other proceedings, which we announced in December.

In Asia, operating income reached a new record level against the backdrop of strong vehicle sales.

Next, please look at slide 9 for Financial Services.

Operating income excluding interest rate swap valuation gains and losses was JPY286.2 billion, maintaining practically the same level as the last fiscal year.

Operating income was affected by the reduced reversal of provisions in the United States.

However, this was offset by an increased lending balance as a result of the expansion in new financing transactions, particularly in emerging markets.

Please look at slide 10.

Equity in earnings of affiliated companies for the full year increased by JPY33.8 billion to JPY231.5 billion by comparison to last year.

This was mainly due to the strong financial performance of the affiliated companies in Japan.

Slide 11 summarizes our unconsolidated financial performance for the year.

Financial results were net revenues of JPY9,755.9 billion; operating income of JPY242.1 billion; ordinary income of JPY856.1 billion; and net income of JPY697.7 billion.

For the first time in five years, we posted a positive operating income.

Let me move onto slide 12.

With regard to the year-end dividend, we plan to propose JPY60 per share at the Annual General Shareholders' meeting next month.

The full-year dividend will, therefore, be JPY90 per share, including the interim dividend of JPY30 per share.

This represents an increase by JPY40 per share compared to the last fiscal year.

We regard dividends as our most important means to return value to shareholders.

While ensuring our dividend policy reflects our assessment of the Company's long-term financial stability, earning results, and investment plans, we would like to meet our shareholders' expectations.

Now I would like to move on to discuss our outlook for the fiscal year ending in March 2014.

Please look at slide 14.

With regards to our consolidated vehicle sales for the current fiscal year, we expect 9.1 million units; up 229,000 units from the previous fiscal year.

In Japan, we expect an improvement in consumer sentiment, precipitated by the anticipation of economic recovery.

However, we forecast that our vehicle sales will decline by 159,000 units year on year due to a weaker demand for new cars after the expiry of the eco-car subsidies.

However, we expect an increase in vehicle sales outside Japan, supported by the US market, which appears to remain solid, and the new product launches which we are planning for emerging markets.

Please look at slide 15.

As a result, and also based on the assumption of the foreign exchange rates of JPY90 to $1 and JPY120 to EUR1, our consolidated financial performance forecast for the current fiscal year is net revenues of JPY23,500 billion; operating income of JPY1,800 billion; pre-tax income of JPY1,890 billion; and net income of JPY1,370 billion.

Now please look at slide 16, for the analysis of our operating income forecast by comparison to the last fiscal year.

R&D and other expenses are expected to increase to support future development of always better cars.

Nevertheless, we plan to maintain and improve our profit structure through cost reduction activities, such as the Company wide VA, and through efficient marketing activities.

Finally, our forecasts of CapEx, depreciation expenses, and R&D expenses are as shown in slide 17.

Both CapEx and depreciation expenses are expected to increase in yen terms as translation from foreign currencies is affected by the weaker yen compared to the last fiscal year.

We plan to exercise adequate control to maintain the last year's level in original currencies.

On the other hand, we will continue to invest actively and strategically into research and development in order to enhance Toyota's true competitiveness, and to realize its sustainable growth in the long term.

This concludes my presentation on the financial results for the fiscal year to March 2013.

Thank you very much for your attention.