Toyota Motor Corporation Q2 FY2025 earnings call

• The company achieved operating income nearly on par with the previous fiscal year despite production halts and additional expenses. - Full-year operating income forecast remains 4.300 trillion yen unchanged. - Increased investment in human resources and growth areas to 830 billion yen for the full year. - Interim dividend raised by 10 yen to 40 yen per share, full-year dividend to 90 yen per share. - In the first half, production halts and certification issues affected sales, but electrified vehicle sales were strong. - Plan to recover production volume in the second half, reduce incentives, and expand value chain earnings. - Initiatives include recovering production volume, reducing incentives, expanding value chain earnings, and strengthening work foundation via projects like AREA 35.

Consolidated vehicle sales for the first half ended September 2024 were 4.556 million units, which was 96% of the same period of the previous fiscal year. Toyota and Lexus vehicle sales were 5,029,000 units, 97.2% of sales for the same period last year. Electrified vehicles accounted for 44.4% of sales. Consolidated financial results included sales revenue of 23.2824 trillion yen, operating income of 2.4642 trillion yen, income before income taxes of 2.732 trillion yen, and net income of 1.9071 trillion yen.

• Full-year operating income forecast stays at 4.300 trillion yen. - Consolidated vehicle sales expected to be 9.400 million units in fiscal year ending March 31, 2025. - Full-year financial forecast: sales revenue 46 trillion yen, operating income 4.300 trillion yen, net income 3.570 trillion yen. - Increased investment in human resources and growth areas to 830 billion yen for the full year.

• Impact of production halts and certification issues on sales. - Fluctuations in foreign exchange rates affecting financial results. - Intensifying competition in markets like China impacting profitability.

Q: Relating to certification issues and production volume recovery, how to pursue with work foundation efforts?

A: Yoichi Miyazaki responded about communicating with work sites, going to Gemba, and balancing production recovery with workplace improvements.

Q: About North American business operating income decrease in April-September and outlook for second half?

A: Yoichi Miyazaki explained factors like recalls and one-time expenses in first half, and plans to curtail incentives in second half affecting North American operating income.

Q: Regarding investment in human resources and its permeation in supply chain?

A: Yoichi Miyazaki discussed ongoing efforts in supply chain, challenges like labor shortages, and the need for continuous Kaizen efforts.