Toyota Motor Corporation

Thank you very much for joining us today despite your occupied schedule. We would like to start the Toyota Motor Corporation's financial result announcement for the period ending in March 2022. First of all, let me introduce to you the members present for this briefing. Executive Vice President, Chief Financial Officer, Kenta Kon. Executive Vice President, Chief Technology Officer, Masahiko Maeda.

Chief Communication Officer, Jun Nagata.

And Accounting Group Chief Officer, Masahiro Yamamoto. Now, ladies and gentlemen, first of all, Yamamoto will share with you the overview of the financial results. Hello, everyone. Thank you for joining us today. I am Masahiro Yamamoto. We would like to express our heartfelt appreciation to our customers around the world who chose us, as well as our shareholders, dealers, and suppliers who support us. We would like to express our sincerest gratitude to all the stakeholders. I sincerely apologize for the inconvenience caused to our customers due to the recent production volume reduction. We will work hard to deliver our product as soon as possible. First, let me explain the summary of our performances for the fiscal year ended March 2022. Under the production constraint due to the spread of COVID-19 and semiconductor shortages, dealers, suppliers, and production sites have all worked tirelessly in order to deliver as many cars as possible to customers. Despite soaring materials prices and increase in expenses for the investment in new business fields, We achieved growth in revenue and profits thanks to cost reduction and marketing efforts. This is attributable to the improvement of our revenue structure, which we have been working on for a long time towards one that is not dependent on foreign exchange rates and volumes. As for the forecast, we have set our production volume assumption to an appropriate level, having safety and security as our top priority. We expect a decrease in our operating income due to unprecedented increases in materials and logistics costs. However, we'll continue with our future investments and promote our various activities. As for the shareholder return, the year-end dividend is 25 yen per share and maintain a steady increase. Share purchases will be up to 200 billion yen, including 100 billion yen set aside to enable more flexible share repurchases than before while considering share price levels. Let me explain our performance for the fiscal year ending March 2022. Consolidated vehicle sales for the period was 8.23 million units, which was 107.6% of the consolidated vehicle sales for the same period of the previous fiscal year. Toyota and Lexus brand vehicle sales was 9.512 million units, 104.7% of the sales of the same period of the previous year. The ratio of electrified vehicles was 28.4%. The consolidated financial results for this fiscal year were sales revenue 31,379,000,000 yen, operating income 2 trillion 995.6 billion yen, income before income taxes 3 trillion 990.5 billion yen, and net income of 2 trillion 850.1 billion yen. I would like to explain the factors that impacted operating income year on year. First, the effects of foreign exchange rates increased operating income by 610 billion yen. Second, cost reduction efforts decreased operating income by net of 360 billion yen. This consisted of 280 billion yen increase due to cost reduction efforts and 640 billion yen decrease due to the impact of soaring material prices. Third, marketing efforts increased operating income by 860 billion yen, largely due to the increase in sales volume and improved earnings in the financial services business. Finally, an increase in expenses decreased operating income by 220 billion yen. As a result, excluding the overall impact of foreign exchange rates and swap valuation gains and losses and other factors, operating income increased by 280 billion yen year on year. As shown here, the operating income for each region increased year on year in all regions. This is largely due to the impact of foreign exchange trades, cost reduction, and marketing efforts. Next, let me explain our business in China as well as the financial services business. As for business in China, both the operating income of consolidated subsidiaries as well as our share of profit of equity method affiliates increased mainly due to the impact of foreign exchange and marketing efforts. Regarding the financial services business, Operating income excluding swap valuation gains and losses for the fiscal year increased year on year, largely due to the increase in the lending balance and margins. Next, let me explain the return to shareholders. We plan to make a year-end dividend of 28 yen per share. We'll continue to aim to pay stable and sustainable dividends while maintaining and improving upon our consolidated dividend payout ratio in the medium to long term in order to reward shareholders. who hold their shares over the medium term. As for share repurchases, we set the maximum limit to 200 billion yen, including 100 billion yen set aside to enable more flexible share repurchase than before while considering share price levels. Aiming at enhancing capital efficiency, we plan to implement share repurchases in a flexible manner, taking into account various factors, including Investment and growth dividend levels cash in on 10 and share price levels.