Bridgestone Corporation · TSE:5108
Bridgestone — Tokyo Motor Show 2003 International Automotive Analysts Conference
57 slides from Bridgestone's conference presentation, Oct 21, 2003
Slide 1: International Automotive Analysts Conference
Tokyo Motor Show 2003 International Automotive Analysts Conference October 21st, 2003 1
Slide 2: Recovery from Crisis
nimGesTone Recovery from Crisis
Slide 3: Bridgestone stock price (yen)
Bridgestone stock price (yen) 3,000 2,500 August 9th 2,000 Firestone Recall 1,500 1,000 500 0 Jul-00 Nov-00 May-00 Jan-00 Mar-00 Sep-00 4
Slide 4: Consolidated Sales Composition by Region (1999)
Consolidated Sales Composition by Region (1999) Europe Others 11% 7% 1999 Sales Japan 2,085.7b yen The Americas 41% 41% 5
Slide 5: Brand Strategy Reconstruction in North America
Brand Strategy Reconstruction in North America Reinforce: Rebuild: 6
Slide 6: Multi-Brand Strategy [1992 - 2000]
Multi-Brand Strategy [1992 - 2000] Associate Brands 7
Slide 7: Multi-Brand Strategy [2001 - Beyond]
Multi-Brand Strategy [2001 - Beyond] Associate Brands 8
Slide 8: North American Consumer Replacement Sales by Brand
North American Consumer Replacement Sales by Brand 1999 = 100 150 100 50 0 2000 2001 2002 2003(F) BS FS Associate Total 9
Slide 9: Reorganization of Americas Subsidiaries
Reorganization of Americas Subsidiaries Bridgestone/Firestone , Inc. 10
Slide 10: Reorganization of Americas Subsidiaries (December 1st, 2001)
Reorganization of Americas Subsidiaries (December 1st, 2001) BSAH Bridgestone Americas Holding, Inc. BFNT BFRC BFDP BFLA North American Retail and Diversified Latin America Tire Operations Commercial Products 11
Slide 11: Settled and Closed Litigation & NHTSA Investigation
Settled and Closed Litigation & NHTSA Investigation Product Liability Lawsuits Most of Serious Cases Settled State Attorney General Investigation October 2001 Settled NHTSA Investigation on Recalled Tires October 2001 Closed Class Action on Recalled Tires July 2003 Tentative Settlement 12
Slide 12: Consolidated Sales & Profit
Consolidated Sales & Profit Net Sales (Billions of yen) Profit (Billions of yen) Net Sales Net Income 2,500 100 90 2,000 80 70 1,500 60 50 1,000 40 30 500 20 10 0 0 (Billions of yen) 1999 2000 2001 2002 2003 (Forecast) Net Sales 2,086 2,007 2,134 2,248 2,280 Net Income 89 18 17 45 78 13
Slide 13: Stock price index vs Nikkei Average
0 20 40 60 80 100 120 140 Dec-99 Feb-00 Apr-00 Jun-00 Aug-00 Oct-00 Dec-00 Feb-01 Apr-01 Jun-01 Aug-01 Oct-01 Index (Stock Price at the end of 1999 = 100) Dec-01 Feb-02 Apr-02 Jun-02 Aug-02 Oct-02 Dec-02 Bridgestone Nikkei Average Feb-03 Apr-03 Jun-03 Aug-03 14
Slide 14: Trust. And Pride
nipGesTone Trust. And Pride 15
Slide 15: Trust. And Pride Serving Society With Superior Quality
The BRIDGESTONE Way Trust. And Pride Serving Society With Superior Quality Founder: Shojiro Ishibashi 1889-1976 16
Slide 16: Bridgestone Management Vision
Bridgestone Management Vision Assert positive leadership in the industry, Become a company that inspires pride. n Strategic business growth with focus on quality n Global Cooperation of Management n Discovering business opportunity in a changing environment 17
Slide 17: Bridgestone Brand Vision
Bridgestone Brand Vision nipGesTone 18
Slide 18: Bridgestone Brand Vision
Bridgestone Brand Vision Brand Statement Our passion for the very best in technology, quality and service is At the heart of our commitment to you wherever you are in the world. Bridgestone wants to inspire and move you. 19
Slide 19: Brand Equity & Product Mix Improvement
Brand Equity & Product Mix Improvement Prestigious Car Approach BS Brand Formula 1 Enhancement Indy Brand Equity in OE CART Improvement OE/REP Tie-In “Highly Product recommendable” in the Magazine Test HP/UHP Repeatability in Sales/Share REP Market Increase 20
Slide 20: Regional Strategies
nipGesTone Regional Strategies
Slide 21: Consolidated Sales Composition by Region
Consolidated Sales Composition by Region Others Europe 9% Europe Others 11% 11% 7% 2002 Sales 1999 Sales 2,247.8b yen The Japan Americas 2,085.7b yen The 41% Americas Japan 44% 41% 37% 22
Slide 22: The Americas
The Americas Restoring profitability of North American tire business 23
Slide 23: Bridgestone Americas Sales & Profit
Bridgestone Americas Sales & Profit 7,631 8,050 8,000 7,532 7,549 7,375 16% Sales/Profit (Dollar in million) 6,000 12% Operating margin(%) 4,000 8% 7.4% 2,000 4% 2.6% 1.4% 1.6% 0 0% 1999 2000 2001 2002 2003(F) -2,000 -4% -3.8% Sales Operating income Operating margin 24
Slide 24: North American Replacement Market Major Brand Mix
North American Replacement Market Major Brand Mix [Bridgestone and Firestone Brands] 100% 50% 0% '99 '00 '01 '02 '03(F) BS FS 25
Slide 25: BFS Retail & Commercial Operations
BFS Retail & Commercial Operations POS: 2,300 26
Slide 26: Europe
Europe Aiming to become one of the top makers in the world’s most progressive auto market 27
Slide 27: Bridgestone Europe Sales & Profit
Bridgestone Europe Sales & Profit 2,080 1,938 1,972 10% 2,000 1,882 1,779 8% Sales/Profit(Euro in million) 1,500 Operating margin(%) 6% 5.1% 5.3% 1,000 3.6% 4% 3.2% 500 2.0% 2% 0 0% 1999 2000 2001 2002 2003(F) Sales Operating income Operating margin 28
Slide 28: Bridgestone Europe Fortifying Program (December 2002)
Bridgestone Europe Fortifying Program (December 2002) Production Capacity Expansion Upgrading Development Capabilities 29
Slide 29: European Replacement Market Product Mix
European Replacement Market Product Mix 100% 50% 0% '02 '03(F) General Use UHP/HP 30
Slide 30: Japan
Japan Retain dominant market share. Focus on brand equity improvement and global support. 31
Slide 31: Japanese Replacement Market Share
Japanese Replacement Market Share '000 ton 140 50% 120 45% 100 40% 80 35% 60 30% 40 25% 20 0 20% 1999 2000 2001 2002 2003(F) PSR Sales TBR Sales PSR Share TBR Share 32
Slide 32: Parent Company Sales & Profit
Parent Company Sales & Profit 800.0 740.6 741.0 765.0 20% 721.9 704.2 16.9% 18% Sales/Profit (Yen in billion) 16.7% 16% 600.0 16.1% 15.8% 14.1% 14% Operating margin(%) 12% 400.0 10% 8% 6% 200.0 4% 2% 0.0 0% 1999 2000 2001 2002 2003(F) Sales Operating income Operating margin *The impact of the fire a
Slide 33: China
China Assert positive leadership in the industry with superior quality and brand equity 34
Slide 34: Production Capacity Expansion
Production Capacity Expansion NEW 35
Slide 35: Sales Channel Expansion
Sales Channel Expansion 36
Slide 36: Tire Production & Supply Strategies
Tire Production & Supply Strategies 37
Slide 37: Bridgestone Group Tire Plants in the World
Bridgestone Group Tire Plants in the World :Tire Plant 45 factories in 23 countries :Tire Technical Center 3 facilities in 3 countries :Tire Proving Ground 9 facilities in 7 countries Tire Technical Center/Tokyo Tire Technical Center/Akron JAPAN Tire Technical Center/Rome 9 Tire Plants 2 Proving Gro
Slide 38: Bridgestone Group Global Tire Sourcing Strategy
Bridgestone Group Global Tire Sourcing Strategy High Performance High Performance Tire High Performance Tire Tire EUROPE JAPAN AMERICAS ASIA General Use Tire General Use Tire Latin America 39
Slide 39: Capital Investment for Global Tire Sourcing
Capital Investment for Global Tire Sourcing (In billions of yen) Poland China 21 Wuxi Spain 12 3 6.5 Shenyang 1 Tianjin Europe North Asia 5 America 2 Costa Rica Japan 5 Japan Latin 24 America 10 Indonesia 1 Thailand Passenger-car Tire Truck and Bus Tire Total investment: 90.5b yen (2003-2006) 40
Slide 40: New Generation BIRD Tire Manufacturing System
New Generation BIRD Tire Manufacturing System Bridgestone Innovative & Rational Development 41
Slide 41: BIRD Summary of Benefits
New Generation BIRD Tire Manufacturing System Bridgestone Innovative & Rational Development Summary of “BIRD” benefits World’s first automated tire production system including tire inspection Adaptability to new kinds of tires and small-lot production Improvements in product quality and heightened p
Slide 42: Financial Highlights
nipGesTone Financial Highlights
Slide 43: Impact of the Fire at Tochigi Plant
Impact of the Fire at Tochigi Plant Composition of Bridgestone Group Global Production Others Others 17% 17% Japan Japan 37% 37% Europe Europe 10% 10% Tochigi Plant Americas Americas Equivalent to approx. 4% 36% 36% of Global Production 44
Slide 44: Impact of the Fire at Tochigi Plant
Impact of the Fire at Tochigi Plant Impact of the Fire (yen in billions) Consolidated Ordinary Sales Net Income Profit 2003 -20 -13 -7 45
Slide 45: Impact of the Fire at Tochigi Plant
Impact of the Fire at Tochigi Plant Previous forecast (2003.8.8) (yen in billions) Consolidated Ordinary Sales Net Income Profit 2003 2,280 145 80 Current forecast including fire incident impact (2003.9.24) Consolidated Ordinary Sales Net Income Profit 2003 2,280 140 78 vs previous year 101% 95% 172
Slide 46: Impact of the Fire at Tochigi Plant
Impact of the Fire at Tochigi Plant Details of Financial Loss (yen in billions) Consolidated 2003 2004 2005- Total Operating expense (13) (14) (27) Extraordinary (3) (3) expense Depreciation (10) (10) Insurance benefit 4 4 Total loss (12) (14) (10) (36) 47
Slide 47: Net Sales & Profits
Net Sales & Profits Consolidated Profit (Billions of yen) Net Sales (Billions of yen) Net Sales Net Income 2,500 100 2,000 80 1,500 60 1,000 40 500 20 0 0 1999 2000 2001 2002 2003 (Forecast) (Billions of yen) Net Sales 2,086 2,007 2,134 2,248 2,280 Net Income 89 18 17 45 78 48
Slide 48: Cash Flow & Net Borrowings
Cash Flow &Net Borrowings billions of Yen 600 526.2 500 400 419.3 288.9 300 200 164.2 100 23.1 0 -100 -95.1 2000 2001 2002 Free Cashflow Net Borrowings 49
Slide 49: Financial Measures for Global Strength
Financial Measures for Global Strength The Americas Capital infusion of US$1.3b from Bridgestone Corp. Partial impairment of assets Europe Capital infusion of EUR400M from Bridgestone Corp. Impairment of existing tire plants (excluding Poznan plant) Basis for consolidated performance recovery 50
Slide 50: Equity Ratio Trends
Equity Ratio Trends 41.4% 38.2% 37.1% 37.9% 40% 34.2% 30% 20% 10% 0% Dec. Dec. Dec. Dec. Jun. 1999 2000 2001 2002 2003 51
Slide 51: Share Repurchase
Share Repurchase March 28, 2003 (Annual Shareholders’ Meeting) Approved purchase of its own shares 35 million shares (4.1% of total outstanding shares) at a maximum cost of 50b yen Improve Capital Efficiency Maximize Shareholders’ Value ROE: +0.5% EPS: +3.4 yen 52
Slide 52: Investment Considerations
Investment Considerations 53
Slide 53: Risk factors in 2003
Risk factors in 2003 n Price Increase of Natural Rubber 26b yen impact due to price increase of natural rubber is reflected. n Increase of Provision for Pension Fund 10b yen equivalent impact by in U.S. is reflected. 5b yen impact in Japan is also reflected. n Litigation Tire related litigation has
Slide 54: Financial Targets
nipGesTone Financial Targets 55
Slide 55: Financial Targets
Financial Targets Improve profitability under solid financial base 1998 2002 Target ROE 15.6% 5.6% 15.0% ROA 5.8% 2.0% 6.0% Net margin 4.7% 2.0% 5.0% Asset turnover x1.2 x1.0 x1.2 Equity ratio 38.1% 37.1% 40.0% 56
Slide 56: Disclaimer
Disclaimer Statements made in this presentation with respect to Bridgestone's current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of Bridgestone. Forward-looking statements include, but are no
Slide 57: Bridgestone - Passion for Excellence
ARIDGESTONE PASSION for EXCELLENCE
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