豐田汽車 (TM) 2014 Q4 法說會逐字稿

Hello, everyone.

Welcome to the financial results conference call for the fiscal year 2014.

I am [Novakas Takano] from the accounting division of Toyota Motor Corporation.

Today, we have Mr. Tetsuya Otake, Managing Officer in charge of the Accounting Group of Toyota Motor Corporation, and Ms. [Keiko Morita], our interpreter with us.

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

First, Mr. Otake will briefly discuss the highlights of Toyota's earning results, and then Ms. 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 this statement.

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 of the statements can be downloaded from our Internet home pages.

Besides, the President of Toyota Motor Corporation, Mr. Toyoda's speech also can be downloaded from the same home pages.

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

Hello, everyone.

Thank you for joining us today.

This is Tetsuya Otake.

I'd like to discuss Toyota's financial results for fiscal year ended March 2014.

Let me begin with slide 5. Our consolidated vehicle sales for the fiscal year increased by 245,000 units year on year to 9.116m units.

While sales in Asia decreased, sales in areas such as Japan, North America, Europe and the Middle East grew solidly.

This was a result of the launches of attractive new models in each country and region in our effort to deliver better cars, and a flexible marketing program, executed in collaboration with our dealers.

Please see slide 6. Our consolidated financial performance resulted in net revenues of JPY25,691.9b, operating income of JPY2,292.1b, pre-tax income of JPY2,441b, and net income of JPY1,823.1b.

Now I would like to hand the rest of today's presentation over to Ms. Morita, our Interpreter.

(Interpreted).

Next, using slide 7, I would like to explain the major factors contributing to the increase of operating income by JPY971.2b year on year.

Despite the increased expenses including the cost related to the agreement with the US Attorney's office for the Southern District of New York that we disclosed in March, operating income increased due to the impact of yen depreciation, cost reduction activities with our suppliers, and marketing efforts such as increased vehicle sales.

Please take a look at slide 8. Compared to our February forecast of JPY2,400b, our actual operating income for the fiscal year was JPY107.9b less.

This is due to the expenses of about JPY200b, related to the agreement with the US Attorney's office and the ending of production in Australia.

Our profit improvement activities nevertheless progressed steadily through cost reduction and marketing efforts.

Next with slide 9, I would like to explain operating income for the fiscal year by region.

In Japan, sales increased by 86,000 units to 2.365m units.

This was due to the improving economic sentiment, a strong demand prior to the consumption tax increase, and the positive customer response to Corolla hybrid, which was launched in August last year and our new models, such as [Aryo], Noah and Roxy.

Operating income for Japan was JPY1,510.1b, up JPY933.8b as a result of favorable foreign exchange rates in addition to our cost reduction and other profit improvement activities, which more than offset the increase in R&D and other expenses.

In North America, where new car demand remained solid, sales increased by 60,000 units to 2.529m units, driven by RAV4, Lexus IS and Tundra in particular.

Operating income excluding the swap valuation gains and losses was JPY341.5b, up JPY152.7b compared to the previous fiscal year.

Increased vehicle sales and cost reduction efforts among other factors contributed to the growth of operating income year on year.

In Europe, new models, such as Corolla and RAV4 as well as hybrid models such as Auris and Yaris, drove the sales increase of 45,000 units to 844,000 units.

Operating income was JPY58.2b, up JPY31.7b year on year thanks to increased vehicle sales and cost reduction efforts.

In Asia, sales were down by 75,000 units year on year affected by weaker sales in Thailand and India, where demand shrank and competition increased, despite increased sales in Indonesia, particularly of the new AGYA.

Operating income in Asia was JPY395.7b, up JPY19.6b from the previous fiscal year, secured mainly as a result of cost reduction efforts which offset the impact of declined sales.

In the other regions -- this is slide 13 -- vehicle sales increased significantly in the Middle East and Central and South America in particular, to reach 1.769m, up 129,000 units compared to the previous fiscal year.

Operating income was JPY42.5b, down JPY91.1b despite increased vehicle sales, due to the negative impact from the change in exchange rates of the local currencies and from the cost relating to the ending of production in Australia.

Next, please take a look at slide 14 for financial services.

Operating income excluding swap valuation gains and losses for the fiscal year increased by JPY30.7b to JPY316.9b year on year.

This was mainly due to increased lending balance and translational impact of foreign currencies which more than offset the negative impact from decreased lending margins.

Please refer to slide 15.

Equity in earnings of affiliated companies for the fiscal year was JPY318.3b, up JPY86.8b from the previous year.

This was mainly thanks to strong earnings maintained by our affiliated companies in Japan and China.

For your information, the fiscal year-end of our affiliated companies in China is December.

Equity in earnings of these companies for the fiscal year to March 2014 therefore reflected their earnings from January to December 2013.

Let me move on to slide 16.

With regard to the year-end dividend, we plan to propose JPY100 per share at the annual general shareholders' meeting next month.

The full-year dividend will therefore be JPY165 per share including the interim dividend of JPY65 per share.

This represents an increase by JPY75 per share compared to the previous fiscal year.

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

In order to develop a long-term trusted relationship with our shareholders, we plan to pay dividends stably and sustainability in consideration of our annual earnings results, investment plan and cash reserves, among other factors.

Please take a look at slide 17.

As was announced on March 26, we plan to purchase and cancel our shares subject to the approval of the proposed disposition of our shares to establish Toyota Mobility Foundation for the purpose of social contribution at the annual shareholders' meeting next month.

We intend to return value to our shareholders through the reduction of the shares issued and outstanding by 30m shares.

We will continue to flexibly consider share buybacks as an option to increase shareholder return in the context of long-term capital efficiency.

Now I would like to move on to discuss our outlook for the current fiscal year ending in March 2015.

Please take a look at slide 19.

With regard to our consolidated vehicle sales for the current fiscal year, we forecast 9.1m units, almost flat year on year.

In Japan, we expect a sales decline by 155,000 units from the previous fiscal year because of the impact of the consumption tax increase.

We will however continue to stimulate demand by introducing attractive new models, especially with superior fuel efficiency and through flexible market programs in response to the ongoing market trends.

In overseas markets, vehicle sales are expected to exceed the sales of the previous fiscal year, despite uncertainty in some emerging markets thanks to the solid outlook of the market in North America.

Please look at slide 20.

Our foreign exchange rate assumption for the current fiscal year is JPY100 to the US dollar and JPY140 to the euro.

Based on this, our forecast of consolidated financial performance for the current fiscal year is net revenues of JPY25,700b, operating income of JPY2,300b, pre-tax income of JPY2,390b and net income of JPY1,780b.

Now please look at slide 21 for the analysis of our operating income forecast in comparison to the previous fiscal year.

As Akio Toyoda, our President, clarified, the current fiscal year is the year in which Toyota takes the first step forward towards sustainable growth.

We plan to make investment to enhance our competitiveness in areas of advanced and cutting-edge technologies, develop human resources, implement [C&GA], and reform operational mechanisms in pursuit of further innovation.

With regard to the profit improvement activities for this fiscal year, our current plan is to achieve JPY40b.

We are determined to maintain and improve a strong earnings structure through uncompromising efforts across the Group.

Finally, please take a look at slide 22 for our forecast of CapEx, depreciation expenses and R&D expenses.

We intend to carry out CapEx and invest in R&D actively and strategically, which will contribute to the enhancement of true competitiveness.

This concludes our presentation of our financial results for the fiscal year ended March 2014.

Thank you very much.

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.