Toyota Motor : FY2024 Financial Results (with transcripts)

FY2024 Financial Results

Toyota Motor Corporation

May 8, 2024

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.

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Cautionary Statement with Respect to Forward-Looking Statements and Caution Concerning Insider Trading

This presentation contains forward-looking statements that reflect Toyota's plans and expectations. These forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause Toyota's actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. These factors include, but are not limited to: (i) changes in economic conditions, market demand, and the competitive environment affecting the automotive markets in Japan, North America, Europe, Asia and other markets in which Toyota operates; (ii) fluctuations in currency exchange rates (particularly with respect to the value of the Japanese yen, the U.S. dollar, the euro, the Australian dollar, the Canadian dollar and the British pound), stock prices and interest rates; (iii) changes in funding environment in financial markets and increased competition in the financial services industry; (iv) Toyota's ability to market and distribute effectively; (v) Toyota's ability to realize production efficiencies and to implement capital expenditures at the levels and times planned by management;(vi) changes in the laws, regulations and government policies in the markets in which Toyota operates that affect Toyota's automotive operations, particularly laws, regulations and government policies relating to vehicle safety including remedial measures such as recalls, trade, environmental protection, vehicle emissions and vehicle fuel economy, as well as changes in laws, regulations and government policies that affect Toyota's other operations, including the outcome of current and future litigation and other legal proceedings, government proceedings and investigations; (vii) political and economic instability in the markets in which Toyota operates; (viii) Toyota's ability to timely develop and achieve market acceptance of new products that meet customer demand; (ix) any damage to Toyota's brand image; (x) Toyota's reliance on various suppliers for the provision of supplies; (xi) increases in prices of raw materials; (xii) Toyota's reliance on various digital and information technologies, as well as information security; (xiii) fuel shortages or interruptions in electricity, transportation systems, labor strikes, work stoppages or other interruptions to, or difficulties in, the employment of labor in the major markets where Toyota purchases materials, components and supplies for the production of its products or where its products are produced, distributed or sold; (xiv) the impact of natural calamities, epidemics, political and economic instability, fuel shortages or interruptions in social infrastructure, wars, terrorism and labor strikes, including their negative effect on Toyota's vehicle production and sales; (xv) the impact of climate change and the transition towards a low-carbon economy; and (xvi) the ability of Toyota to hire or retain sufficient human resources.

A discussion of these and other factors which may affect Toyota's actual results, performance, achievements or financial position is contained in Toyota's annual report on Form 20-F, which is on file with the United States Securities and Exchange Commission.

Caution concerning Insider Trading

Under Japanese securities laws and regulations (the "Regulations"), subject to certain exceptions, any person who receives certain material information relating to the business, etc. of Toyota which may be contained in this document is prohibited from trading in Toyota's shares or certain other transactions related to such shares (as set forth in the Regulations) until such material information is deemed to be made public. Under the Regulations, material information is deemed to be made public when (i) such material information is notified to a stock exchange and is disclosed by ways of electromagnetic means as prescribed by the ordinance of the Cabinet Office (posting on the TDnet (Timely Disclosure Network) information service ) or (ii) twelve (12) hours have elapsed since a listed company, such as Toyota, disclosed such material information to at least two (2) media sources as prescribed by the Regulations.

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2

FY2024 Financial Results Summary

We plan to accelerate investments in human capital for the future and growth, by leveraging our strong performance.

FY2024 actual

FY2025

forecast

Long-standing "product and region based management" has borne fruit, achieving a higher level of profitability.

・Thanks to the support of all stakeholders, including suppliers and dealers ・Operating income: FY2024 actual 5.35 trillion yen

With maintain the profit structure,

investment for the future to achieve sustainable growth with our many stakeholders. Total investment of 2 trillion yen.

・Operating income: 4.3 trillion yen

・Human capital investment: 380 billion yen (of which 300 billion yen for suppliers and dealers).

…To enhance the attractiveness of the automotive industry, provide support for supplier/dealer labour costs and invest in improving the environment for employees

・Invest in transforming toward a mobility company: 1.7 trillion yen

…Materializing the multi-pathway strategy (BEV, Hydrogen etc.)

Creating a foundation for Software Defined Vehicles (SDV), done in the Toyota way

Return to

Share-

holders

Policy of rewarding long-term shareholders

・Dividend: Year-end 45 yen (+10 yen), Full-year 75 yen (+15 yen), Exceed 1 trillion yen in total

・Treasury stock: Set aside a repurchase limit of up to 1 trillion yen; retire 520 million shares,

equivalent to 2 trillion yen (market value as of March 31, 2024)	3

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, with 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 investments in human capital and 1.7 trillion yen in investments 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.

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FY2024 Financial Performance

4

First, let me explain the summary of our performances for the fiscal year ended March 2024.

4

Consolidated Vehicle Sales

(thousands of vehicles)

10,000

8,000

6,000

4,000

2,000

0

Reference (retail)

	8,822	9,443	107.0%	Japan
	1,993
	2,069	96.3%	N. America
		2,816	117.0%	Europe
	2,407	Asia
	1,192	115.7%
	1,030	Other
	1,751	1,804	103.0%	Central and
	South America,
				Oceania,
	1,565	1,638	104.6%	Africa,
	The Middle East, etc.
'22.4-'23.3	'23.4-'24.3	YoY

Toyota and Lexus Vehicle Sales	9,610		10,309		107.3%
Electrified Vehicle [%]	2,849	[29.6%]	3,855	[37.4%]	135.3%
HEV	2,720		3,594		132.1%
PHEV	88		141		160.3%
BEV	38		117		310.1%
FCEV	3		4		111.3%
Total Retail Vehicle Sales	10,558		11,090		105.0%

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Consolidated vehicle sales for this fiscal year was at 9 million 443 thousand units, which was 107.0% of consolidated vehicle sales for the previous fiscal year.

Toyota and Lexus vehicle sales were 10 million 309 thousand units, which was 107.3% of such sales for the previous fiscal year.

Sales volumes increased, except in Japan, which was affected by the suspension of shipments by Daihatsu Motor Co. and Toyota Industries Corporation.

Also, we increased the sales of electrified vehicles, mainly HEVs, with electrified vehicles constituting 37.4% of total sales.

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Consolidated Financial Summary

(billions of yen)

Sales Revenues

Operating Income

Margin

Other Income

Share of Profit (Loss) of Investments Accounted for Using the Equity Method

Income before Income Taxes

Net Income Attributable to Toyota Motor Corporation

'22.4-'23.3

37,154.2

2,725.0

7.3%

943.7

643.0

3,668.7

2,451.3

'23.4-'24.3

45,095.3

5,352.9

11.9%

1,612.1

763.1 *

6,965.0

4,944.9

Change

+7,941.0

+2,627.9

+668.4

+120.0

+3,296.3

+2,493.6

Margin

FOREX Rates

US $

€

6.6%

1. yen

1. yen

11.0%

1. yen

1. yen

+10 yen

+16 yen

* Regarding Japan: 413.1 (+134.4 year on year), China: 268.9 (-36.0 year on year), Other: 81.0 (+21.6 year on year).

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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 trillion 965.0 billion yen and

Net income of 4 trillion 944.9 billion yen.

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Analysis of Consolidated Operating Income

(billions of yen)	Excluding the overall impact of foreign exchange
	rates and swap valuation gains/losses, etc.： +1,740.0

	Which includes:	+2,000.0	-380.0	+202.9	5,352.9
	Soaring Materials Prices -265.0		Increase or	Other *4
	Cost Reduction +385.0
		Decrease in
	+685.0		Expenses and
2,725.0	+120.0	Marketing	Expense Reduction
Efforts *3
	Cost	Efforts *2

Effects of	Reduction
FOREX
Efforts
Rates *1

'22.4-'23.3

1. yen/US$

1. yen/ €

Operating Income (+2,627.9)

'23.4-'24.3

1. yen/US$

1. yen/ €

*1 Details		*2 Details		*3 Details		*4 Details
Transactional (Imports/Exports)	+590.0	Volume, Model Mix	+980.0	Labor Cost	-225.0	Valuation Gains / Losses from Swaps, etc.	+140.5
- US $	+470.0	Value Chain	+100.0	Depreciation Expenses	±0	End of Vehicle Production in Russia	+99.5
						(One-time Expenses in FY2023)
- €	+145.0	- Financial Services	-60.0	R&D Expenses	+5.0
- Other	-25.0	- Accessories / Spare Parts /	+160.0	Expenses, etc.	-160.0	Impact of Inflation Accounting, etc.	-185.3
Used Vehicle / Connected, etc.
Translational FOREX Impact Concerning	+95.0	Other	+920.0			Other	+148.2	7
Overseas Subsidiaries, etc.

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 HEVs, 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.

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Geographic Operating Income

Operating Income (billions of yen) (excluding Valuation Gains/Losses relating to Swaps, etc.)	[	] Margin	Consolidated Vehicle Sales (thousands of vehicles)

Japan	N. America	Europe	Asia
				Incl. China (excl. investments accounted
				for using the equity method of associates
		2,816（117.0%）		and joint ventures)
2,069
1,993（96.3%）	2,407			1,804（103.0%）
		1,751
			1,030	1,192（115.7%）

Other

1,565 1,638（104.6%）

+1,583.7

		3,486.2
1,902.5	[16.6%]
[10.8%]				+351.3	+159.9
					-73.2
			+450.3
				407.9
							872.7	267.5
						[7.2%]	712.8	194.3
			74.6	524.9	56.6		[10.0%]	[7.7%]
				[8.9%]	[4.4%]
			[0.5%]	[2.9%]	[1.3%]
'22.4-'23.3	'23.4-'24.3	'22.4-'23.3	'23.4-'24.3	'22.4-'23.3 '23.4-'24.3	'22.4-'23.3	'23.4-'24.3	'22.4-'23.3	'23.4-'24.3
Operating Income including Valuation Gains/Losses relating to Swaps, etc. (billions of yen）
1,901.4	3,484.2	-74.7	506.3	57.4	388.0	714.4	865.5	231.3	198.3	8

By geographical region, operating income increased in many regions.

Japan increased year on year mainly due to an increase in exported vehicles.

North America, Europe and Asia also increased year on year, mainly supported by price revisions based on product competitiveness.

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China Business / Financial Services

(Ref.) China Business

Operating Income of Consolidated Subsidiaries (billions of yen)

Share of Profit of Investments Accounted for Using the Equity

Method of Associates and Joint Ventures (billions of yen)

Toyota and Lexus Vehicle Retail Sales (thousands of vehicles)

1,8761,902（101.4％）

194.5	+1.1	195.6
	Marketing

Efforts, etc.

-36.1

305.0 Effects of 268.9

Marketing

Activities, etc.

'22.4-'23.3'23.4-'24.3

Financial Services

Operating Income (billions of yen)

• Excluding Valuation Gains/Losses relating to Swaps, etc.

-8.0

Financial margin

621.7 reduction, etc. 613.6

'22.4-'23.3'23.4-'24.3

Operating Income including Valuation Gains/Losses relating to Swaps, etc. (billions of yen)

437.5	570.0	9

In the next slide, let me explain about our business in China as well as our Financial Services business.

As for our business in China, due to steady demand for HEVs, which is our strength, we have maintained Toyota and Lexus sale 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 using 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 gains and losses for this fiscal year decreased year on year, largely due to the decrease in margins.

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Shareholder Return

10

The next section explains shareholder returns.

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