豐田汽車 (TM) 2015 Q1 法說會逐字稿

Hello everyone. Welcome to the financial result conference call for the fiscal year 2015 first quarter. I am [Nobukatsu 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 earnings result 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 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 of the statements can be downloaded from our Internet home pages.

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

Hello everyone. Thank you for joining us today. I'm Tetsuya Otake. It's my pleasure to brief you on Toyota's financial result for the three months from April to June 2014.

Let's start with slide 5. Our consolidated vehicle sales for the first quarter increased by 9,000 units to 2.241m units compared to the same period last year thanks to robust sales in North America, Europe and the Middle East despite declined sales in Japan and Asia.

Please turn to slide 6. Our consolidated financial performance for the first quarter resulted in net revenues of JPY6,390.6b, operating income of JPY692.7b, pre-tax income of JPY771.8b and net income of JPY587.7b.

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

Next, using slide 7, I would like to highlight the major factors which impacted operating income year on year. In addition to cost reduction efforts and favorable foreign exchange rates valuation gains and losses, mainly from interest rates swaps were positive factors. Change in model mix and increase in expenses on the other hand impacted negatively. As a result, operating income increased by JPY29.3b compared to the first quarter of the last fiscal year.

Now I would like to discuss operating income for the first quarter by region. Please look at slide 8. In Japan although new models such as the Nova, Voxy, Harrier and Vitz drove sales overall vehicle sales decreased by 20,000 units compared to the first quarter of the last fiscal year to 506,000 units in response to the consumption tax rise. Operating income decreased by JPY90.1b to JPY365.9b as a result of decreased vehicle sales and weaker model mix offsetting the positive effect of foreign exchange rates and cost reduction.

Please look at slide 9. In North America, against the backdrop of solid demand for new cars vehicle sales increased by 21,000 units year on year to 710,000 units driven by the RAV4, the Corolla and other core models. Operating income excluding swap valuation gains and losses was JPY149.7b, up JPY46.1b compared to the first quarter of the last fiscal year. This was thanks to marketing efforts including increased vehicle sales and cost reduction efforts.

In Europe, on slide 10, vehicle sales increased by 14,000 units year on year to 207,000 units as a result of strong sales of the Corolla, Auris and Camry in particular. Operating income was JPY10.8b, up JPY5.6b year on year thanks to increased vehicle sales as well as cost reduction efforts.

In Asia, on slide 11, despite increased sales of the Agya and Yaris, overall vehicle sales were down 9,000 units year on year to 385,000 units as a result of decline in sales in Thailand as the local new car demand continued to be depressed. Nevertheless, operating income reached JPY110.3b, up JPY6.2b year on year supported by cost reduction efforts and favorable foreign exchange rates.

As shown in slide 12, operating income for the other regions was down by JPY8.4b year on year to JPY34b due to reduced vehicle production in Venezuela and South Africa and depreciation of the local currencies.

Next please look at slide 13 for financial services. Operating income excluding swap valuation gains and losses for the first quarter was JPY82b, up JPY3.8b compared to the same period of the last fiscal year. This was mainly due to increased lending balance and the translational impact of foreign currencies, which more than offset the negative effect of slightly decreased lending margins.

Please refer to slide 14. Equity in earnings of affiliated companies for the first quarter was JPY105.3b, up JPY15.3b year on year. This was primarily due to strong earnings maintained by our affiliated companies in China. Please note that the fiscal year end of our affiliated companies in China is in December. Therefore equity in earnings of these companies for the first quarter of this fiscal year reflects their earnings from January to March 2014.

Now I would like to move on to discuss our outlook for the current fiscal year ending in March 2015. Please look at slide 16. Having factored in decline in sales in Asia, the Middle East and other markets as well as solid sales in North America, we maintain our May forecast of consolidated vehicle sales for the full year at 9.1m units. While paying close attention to the conditions in each market and responding with flexible marketing measures, we plan to stimulate demand with the launch of the new Lexus NX and RC as well as other attractive products.

Now please look at slide 17, which summarizes our forecast of consolidated financial performance for the full year. As mentioned in the second footnote, we revised our foreign exchange rate assumptions to JPY100 to the US dollar and JPY135 to the euro from July onwards. As a consequence, our ForEx rate assumptions for the full year are now JPY101 to the US dollar and JPY136 to the euro.

Given that our first quarter results were in line with our forecast at the beginning of the year and also that our outlook of consolidated vehicle sales remains unchanged, we maintain our earnings forecast as previously announced. At the same time we remain committed in maintaining and strengthening our business foundation by ensuring to offset to increased fixed costs with cost reduction and marketing efforts. As shown in slide 18, we also maintain our forecasts of CapEx, depreciation expenses and R&D expenses as before.

Back in May when announcing the previous fiscal year's results, our President Akio Toyoda stressed that this fiscal year would be a deliberate period of slow growth in which Toyota lays the foundation for its future.

For example, one of our plans is to establish a new headquarters for North American operations to achieve region-led speedy and efficient management. With the first group of employees relocating to Plano in Texas from this summer, we're making progress towards establishing One Toyota in North America.

As we announced in June, we're also preparing for production and sales of fuel cell vehicles, an important stepping stone for our future growth. Their launch will be first in Japan within this fiscal year and in the United States and Europe in around the summer of 2015.

With regard to our TNGA initiative for ever better cars, we're developing a variety of models which adopt all new platforms, engines and transmissions incorporating the TNGA concept. Our plan is to launch these models one after another from 2015 and to have them reach a considerable number by 2020.

In addition to these initiatives to reform our organization, technologies and work processes we plan to improve the competitiveness of our human resources steadily. We will continue to focus on medium to long term future and undertake necessary initiatives for sustainable growth.

This concludes the presentation on the financial results for the first quarter of the fiscal year to June 2014. Thank you very much for your attention.