Toyota Motor Corporation

Ladies and gentlemen, thank you very much for joining us despite your occupied schedules. We would like to start the financial results announcement for the fiscal year ended March 2024. My name is Irie of Public Affairs Department. I will be serving as a moderator. First of all, Executive Vice President and Chief Financial Officer Yoichi Miyazaki will explain the overview of the financial results.

Miyazaki is my name, CFO of TMC.

Thank you very much for getting together for this session today. We would like to express a heartfelt appreciation to our customers around the world who chose us, as well as our shareholders, dealers, and suppliers who support us. We will now explain the summary of the financial results for the fiscal year ended March 2024. For many years, we have been committed to product and region-based management. Thanks to the support and cooperation of many stakeholders, including employees as well as suppliers and dealers, The actual operating income was 5.35 trillion yen for the fiscal year ended in March 2024. The operating income forecast for the fiscal year ending March 2025 is 4.3 trillion yen after a total of 2 trillion yen in investments for the future to maintain the profit structure from the previous fiscal year and to increase the attractiveness of the automotive industry as a whole and to grow together with all stakeholders. Investments for the future of 2 trillion yen includes 380 billion yen in investment in human resources and 1.7 trillion yen in investment in transforming the company into a mobility company. As for shareholder returns, we will increase the year-end dividend to 45 yen per share, an increase of 10 yen compared to the previous year, and set the annual dividend at 75 yen, totaling over 1 trillion yen. We set aside 1 trillion yen as the maximum limit of share repurchases and will cancel 520 million shares equivalent to 2 trillion yen worth of treasury shares. So let me explain the summary of our performances for the fiscal year ended March 2024. Consolidated vehicle sales for this fiscal year was at 9,443,000 units. which was 107.0% of consolidated vehicle sales for the previous fiscal year. Toyota and Lexus vehicle sales were 10,309,000 units, which was 107.3% of such sales for the previous fiscal year. Sales volumes increased, except in Japan, which was affected by the consumption suspension of shipments by Taihatsu Motor Company and Toyota Industries Corporation. Also, we increased the sales of electrified vehicles, mainly HEVs, with electrified vehicles constituting 37.4% of total sales. Consolidated financial results were sales revenues of 45 trillion 95.3 billion yen, operating income of 5 trillion 352.9 billion yen, income before income taxes of 6,965,000,000 yen, and net income of 4,944,000,000,000 yen. I would like to explain the factors which impacted operating income year on year. First, the effects of foreign exchange rates increased operating income by 685 billion yen. Cost reduction efforts outweighed the impact of soaring materials prices, resulting in an increase in operating income of 120 billion yen. Marketing efforts increased operating income by 2 trillion yen due to an increase in sales volume of mainly hybrid vehicles, improvement of sales mix due to strong sales in high-margin vehicles, and price revisions mainly in North America and Europe. An increase in expenses decreased operating income by 380 billion yen due to an increase in labor costs and investments in areas such as digitalization. Other factors increased operating income by 202.9 billion yen. As a result, excluding the overall impact of foreign exchange rates, swap valuation gains and losses, and other factors, operating income increased by 1 trillion 740 billion yen year on year. By geographical region, operating income increased in many regions. Operating income increased in Japan year on year, mainly due to an increase in exported vehicles. North America, Europe, and Asia also saw an increase year on year, mainly supported by price revisions based on product competitiveness. Our business in China, as well as our financial services business, which I will describe here, as for our business in China, due to steady demand for HEVs, which is our strength, we have maintained Toyota and Lexus sales volumes. The operating income of consolidated subsidiaries increased year-on-year, mainly due to marketing efforts, including price revisions, while our share of profit of investments accounted for by the equity method decreased year-on-year, mainly due to an increase in selling expenses. Regarding our financial services business, operating income excluding swap valuation gates and losses for this fiscal year decreased year-on-year, largely due to the decrease in margins.