Toyota Motor : FY2021 1Q Financial Results (with transcripts)

First and foremost, we would like to convey our deepest condolences to those who have lost loved ones to COVID-19 and wish all those who have been affected by the virus a speedy recovery.

We also wish to extend our sincere gratitude to the healthcare professionals and officials who are on the front lines for their tireless work.

We also 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.

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Please note that we have adopted IFRS beginning from the first quarter of the fiscal year ending March 2021. Therefore, the consolidated financial results and forecasts in this presentation are calculated in accordance with IFRS.

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Consolidated vehicle sales for the first quarter ended June 2020 was at 1 million 158 thousand units, which was 50% of such sales for the first quarter of the previous fiscal year.

This was a result of decreased sales in all regions due to the spread of COVID-19.

Toyota and Lexus vehicle sales was at 1 million 706 thousand units, which was 69% of such sales for the first quarter of the previous fiscal year.

It has exceeded our assumption as of May in which we have expected it to be approximately 60% of the first quarter of the previous fiscal year.

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Consolidated financial results for the first quarter of this fiscal year were:

Sales revenues of 4 trillion 600.7 billion yen, Operating income of 13.9 billion yen, Pre-tax income of 118.2 billion yen

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Net income of 158.8 billion yen.

We succeeded in securing operating income despite a drastic decline in vehicle sales.

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Regarding the factors that impacted operating income year on year:

First, the effects of foreign exchange rates decreased operating income by 75 billion yen.

Second, cost reduction efforts increased operating income by 10 billion yen.

Third, the effects of marketing activities decreased operating income by 810 billion yen, largely due to the decrease in sales volume caused by the spread of COVID-19.

Finally, a reduction in expenses increased operating income by 75 billion yen.

As a result, excluding the overall impact of foreign exchange rates, swap valuation gains and losses and other factors, operating income decreased by 725 billion yen year on year.

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As for operating income for each region, operating income decreased year on year in all regions largely due to the decrease in sales volume caused by the spread of COVID-19.

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As for our China business, operating income of consolidated subsidiaries increased by 20.2 billion yen year on year to 55.8 billion yen thanks largely to marketing efforts.

Our share of profit of investments accounted for using the equity method was up 9.5 billion yen year on year to 41.2 billion yen thanks largely to marketing efforts.

Regarding Financial Services, operating income excluding swap valuation gains and losses for the fiscal year was down 34.9 billion yen year on year to 70.9 billion yen. This was mainly due to an increase in allowance for doubtful accounts.

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Now, let us move on to discuss the outlook for the full fiscal year ending March 2021.

With regard to our consolidated vehicle sales, we have increased our forecast compared to our assumption as of May by 200 thousand units to 7.2 million units.

Regional sales breakdown is as stated in the presentation.

As for Toyota and Lexus vehicle sales, we anticipate that vehicle sales will increase by 300 thousand units compared to our assumption as of May to 8.3 million units.

Regarding the recovery of Toyota and Lexus vehicle sales, we have assumed that sales will gradually recover to previous year levels, starting from approximately 85% in July to September, approximately 95% in October to December and approximately 105% in January to March 2021.

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Regarding the full-year consolidated financial performance, we have left unchanged our forecasts of sales revenues and operating income that were announced in May 2020. While we expect an increase in consolidated vehicle sales, we have left those forecasts unchanged given, for example, the possibility that the business environment will change significantly depending on such factors as the future spread of COVID-19 and the state of its containment.

We anticipate pre-tax income of 890.0 billion yen and net income of 730.0 billion yen.

While strengthening TPS and refining costs at all levels, we remain committed to thoroughly reshaping ourselves into a mobility company and to continue to steadily sow seeds for the future despite the uncertainty.

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