Toyota announces results, forecasts 18.4% sales growth in FY2012

by SR on May 9, 2012

Toyota guidance implies profit margins will more than double in FY3/13

Toyota operating profit margins by quarter

  • Toyota management expects sales to soar in FY3/13. I’ll keep this simple and let the pictures do the talking as everybody and his dog will be giving their opinion on Toyota’s results. As you can see from the above chart, Toyota’s sales in the fourth quarter of FY3/12 topped Y5.7trn, the highest level since the July-September quarter of 2008. Nevertheless, operating profit was still well below the levels of 2007 and the first part of 2008; the strong yen will be a major cause of that. Below are the annual figures since 2003. Management expects revenues to rise by 18.4% year-on-year in the March 2013 financial year, taking sales back to Y22trn and to 84% of the March 2008 peak of Y26.3trn. Operating profit, although expected to more than double to Y1trn would only be 44% of the peak recorded in FY3/08.

Toyota annual sales and operating profit

  • Operating margins still low on a historical basis. The two charts below show Toyota operating margins on a quarterly and then on an annual basis. A third chart shows quarterly operating margins in tabular form. All three charts indicate the same problem: there’s a lot of ground yet to be made up. Having said that, I am reassured to see that Toyota is expected such dramatic growth in revenues in percentage terms. It is not unexpected, strictly speaking, because we had a fair idea that growth rates it would be in the double-digits. I would point to auto parts suppliers like Denso, Aisin Seiki and even Toyota Boshoku. Toyota Boshoku in particular is forecasting 4.7% YoY growth in revenues. As I mentioned in a previous note on Denso results, Denso is guiding to +8.4% YoY growth in revenues and Aisin Seiki to +8.5% YoY. All three look too low to me but even based on those revenue growth figures, profit guidance is too low and will have to come up, in my view.

Toyota operating profit margins by quarter

Toyota annual sales and operating profit

Toyota operating profit margins by quarter

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