Bridgestone Corporation · TSE:5108
Bridgestone — H1 2024 Earnings Presentation
43 slides from Bridgestone's earnings presentation, Aug 9, 2024
Slide 1: Summary of Financial Results for 1st Half 2024 & Fiscal 2024 Guidance
Summary of Financial Results for 1st Half 2024 & Fiscal 2024 Guidance Bridgestone Corporation Member of the Board Global CEO and Representative Executive Officer Shu Ishibashi August 9, 2024
Slide 2: Summary of Financial Results for 1st Half 2024
Summary of Financial Results for 1st Half 2024 Progress update on initiatives in 2024 in line with Mid Term Business Plan (2024-2026) Fiscal 2024 Guidance 2/42
Slide 3: Key points of financial results for 1st half 2024
Key points of financial results for 1st half 2024 Profit decrease in Americas business (N. America & L. America), Global performance Revenue Increase which occupies the half of the global revenue, had a huge impact on global vs. prior year Profit Decline performance despite the tailwind from currenc
Slide 4: Summary of financial results for 1st half 2024: Global
Summary of financial results for 1st half 2024: Global Global consolidated 2023 2024 vs. prior year Revenue & adjusted operating profit (B JPY) 1H Results 1H Results (%) Secured the increase revenue vs. prior year with the tailwind from currency exchange, resulting from the continued resilient sal
Slide 5: North America
Summary of Financial Results for 1st Half 2024 –Bridgestone WEST– North America 5/42
Slide 6: 1H 2024: North America summary by business portfolio
1H 2024: North America | Summary of financial results by business portfolio N. America business in total: Increased revenue and decreased profit, below the February guidance Expect recovery in 2H overcoming the worst phase in 1H Revenue 927.0 B JPY 111% of PY Premium tire business Core business Re
Slide 7: 1H 2024: Demand and sales volume, North America passenger car tires
1H 2024: Demand and sales volume results North America | Passenger car tires and high rim diameter tires Demand volume Sales volume Demand volume Sales volume OE 1H 2024 (vs. prior year) (vs. prior year) REP 1H 2024 (vs. prior year) (vs. prior year) 98 BS 95 Member* PS total 101 100 PS total demand
Slide 8: 1H 2024: Demand and sales volume, North America truck and bus tires
1H 2024: Demand and sales volume results North America | Truck and bus tires Demand volume Sales volume Demand volume Sales volume OE 1H 2024 (vs. prior year) (vs. prior year) REP 1H 2024 (vs. prior year) (vs. prior year) Member* 103 BS 108 100 demand TB TB 93 87 Total demand 128 FS 88 Retread 89 83
Slide 9: Latin America
Summary of Financial Results for 1st Half 2024 –Bridgestone WEST– Latin America 9/42
Slide 10: 1H 2024: Latin America summary by region
1H 2024: Latin America | Summary of Financial Results by region L. America business total: Overcoming the worst phase in 1Q in Argentina and in 2Q in Brazil Remain a huge impact of business deterioration against the fiscal guidance despite the improving trend of sales and profitability in 2H Revenue
Slide 11: Europe business
Summary of Financial Results for 1st Half 2024 –Bridgestone WEST– Europe business 11/42
Slide 12: 1H 2024: Europe summary of financial results
1H 2024: Europe | Summary of Financial Results Europe business: Overall Europe business: Sustain underperformance Increased revenue and decreased profit vs. prior year ⇒ Accelerating consideration of further business rebuilding (2nd stage) Initiatives in 2024: Promote fixed cost reduction through
Slide 13: 1H 2024: Demand & sales results Europe, passenger car tires
1H 2024: Demand & sales results Europe | Passenger car tires in total and high rim diameter tires Demand volume Sales volume Demand volume Sales volume OE 1H 2024 (vs. prior year) (vs. prior year) REP 1H 2024 (vs. prior year) (vs. prior year) 102 94 90 102 93 BS PS PS total total FS 76 112 97 85 BS
Slide 14: 1H 2024: Demand & sales results Europe, truck & bus tires
1H 2024: Demand & sales results Europe | Truck & bus tires Demand volume Sales volume Demand volume Sales volume 1H 2024 1H 2024 OE (vs. prior year) (vs. prior year) REP (vs. prior year) (vs. prior year) BS 96 TB 79 80 TB 99 95 FS 102 Demand Significant drop vs. prior year resulting from the continu
Slide 15: Asia & Pacific, India and China
Summary of Financial Results for 1st Half 2024 –Bridgestone EAST– Asia & Pacific, India and China 15/42
Slide 16: 1H 2024: Asia & Pacific, India and China summary
1H 2024: Asia & Pacific, India and China | Summary of financial results Asia & Pacific, India and China segments Revenue 260.5B JPY 95% of PY Increased profit vs. prior year ■ Offset the revenue decline caused by a of OE (PS&TB) demand by 27.8 ensuring improvement in sales mix mainly in PS-REP and t
Slide 17: 1H 2024: Off-the-Road tires sales volume / Specialties
1H 2024: Sales volume results of Off-the-Road tires for mining & construction vehicle / Specialties | Summary of financial results 1H 2024 Sales volume (vs. prior year) Off-the-Road tires for mining & construction vehicle 1H Sales Ultra-large 99 Ultra-large: While demand for minerals remains solid,
Slide 18: 1H 2024: Performance by business portfolio
1H 2024: Performance by business portfolio Premium tire business Core business Revenue 1,441.8 B JPY 100% of PY Global in total 196.0 Adj. Operating 98% 63% 2,176.8 B JPY 30% Solutions business Growth business Revenue portion Profit B JPY of PY Revenue portion 13.6 Revenue Adj. Operating (0.2)% 104%
Slide 19: Reinforce business quality
Progress update on initiatives in 2024 in line with Mid Term Business Plan (2024-2026) Reinforce business quality: Improve management and working & business quality 19/42
Slide 20: Reinforce business quality: Passion for Excellence
Reinforce business quality: Improve management and working & business quality “Passion for Excellence” “Returning to origins” Basic thought: ”Good company quality makes good quality of products and services” 5 concepts: “Master PDCA,” “Use why why analysis (WHY-WHY-WHY),” Reinforce activities in lin
Slide 21: Update on global business cost reduction
Progress update on initiatives in 2024 in line with Mid Term Business Plan (2024-2026) Update on global business cost reduction “Reinforce earning power” 21/42
Slide 22: Global business cost reduction: Balance volume of sales, production and inventory
Global business cost reduction: Balance volume of sales, production and inventory Optimize the balance between the sales and production, ensure reduce fixed cost and lean inventory management • Promote fixed cost reduction aligned with the sales volume: Sales Globally optimized mainly for business
Slide 23: Global business cost reduction: Lean inventory control
Global business cost reduction: Lean inventory control 51.0 B JPY in total Benefit from inventory reduction Promote lean inventory control (units and amount) ⇒ in 2024 (asset reduction) By end of 2024, conduct write-off of non-productive inventory by area and execute optimization of supply chain t
Slide 24: Business cost reduction across the value chain: Overview
Business cost reduction across the entire value chain in global: Overview Global Global procurement business cost reduction amount in total (vs. prior year) 2024 plan Global SCM logistics transformation B-Direct Approx. 65 B JPY Approx. BCMA 34 B JPY Approx. 31 B JPY Shift to Green & Smart Steady on
Slide 25: Global procurement / Global SCM logistics transformation
Business cost reduction across the entire value chain in global: Global procurement / Global SCM logistics transformation Global procurement Business cost reduction amount for global procurement (vs. prior year) Manufacturing cost OPEX Approx. Raw material: 21 B JPY Approx. Reinforce global approa
Slide 26: BCMA / Shift to Green & Smart / On-site productivity
Business cost reduction across the entire value chain in global: BCMA / Shift to Green & Smart / Steady on-site productivity improvements BCMA Business cost reduction amount for BCMA/Shift to Green & Smart/ Introduction and implementation of BCMA at 4 global model plants ー Start Steady on-site pro
Slide 27: Business cost reduction: BCMA roll out
Business cost reduction across the global value chain: BCMA Evolve to the next level by pursuing the essence of manufacturing from Japan, a global core of manufacturing Fusion of real (craft person skill) and digital capability Enable to collect and analyze tire production-related data starting
Slide 28: Update on premium focus
Progress update on initiatives in 2024 in line with Mid Term Business Plan (2024-2026) Update on premium focus “Reinforce earning power” 28/42
Slide 29: Premium focus: Passenger car high rim diameter tires
Premium focus: Passenger car high rim diameter tires *PS: Passenger car tires, OE: Original equipment, REP: Replacement tires In the challenging business environment, continue to maintain a thorough focus on the PS HRD tires where there is a “tailwind“ of demand growth ⇒ Accelerate premium enhance
Slide 30: Premium focus: Passenger car premium tires
Premium focus: Passenger car premium tires Ensure a thorough focus on premium tires linked with the expansion of ENLITEN, “new premium,” on top of the growth in high rim diameter (HRD) tires *PS: Passenger car tires Sales portion of PS premium tires for the year HRD tires (replacement / global) 60
Slide 31: Expansion of ENLITEN for passenger car (original equipment)
Expansion of “new premium in the EV era” ENLITEN for passenger car (original equipment) *OE: Original equipment, REP: Replacement tires Expand OE fitment based on value creation through “ultimate customization” enabled by ENLITEN technology ⇒ Steadily take in REP recursion demand from OE and stren
Slide 32: Expansion of ENLITEN for passenger car (replacement)
Expansion of “new premium in the EV era” ENLITEN for passenger car (replacement) ※PS: Passenger car tires, LT: Light truck & bus tires Strategic product planning for ENLITEN “new premium in the EV era” Expansion plan for PS & LT* replacement tires • Achieve both driving and environmental performance
Slide 33: Reinforce commercial BtoB solutions
Progress update on initiatives in 2024 in line with Mid Term Business Plan (2024-2026) Reinforce commercial BtoB solutions – Toward building the mobility tech business 33/42
Slide 34: Build mobility tech business as strategic business
Reinforce commercial BtoB solutions – Build mobility tech business as “strategic business” Based on the trust with customers and partners, amplify the value of Dan-Totsu products combining real & digital to solve customers’ pain points and contribute to sustainability: Mining & aviation solutions
Slide 35: Reinforcement of mining solutions: Real x Digital
Reinforcement of mining solutions: Real x Digital By reinforcing Dan-Totsu product power (Bridgestone MASTERCORE) as the foundation, take on the challenge of evolving mining solutions based on co-creation with customers ⇒ Towards new value creation with tire durability prediction Real Digital Rein
Slide 36: 2024-2025: Business rebuilding (2nd stage)
Progress update on initiatives in 2024 in line with Mid Term Business Plan (2024-2026) 2024-2025: Business rebuilding (2nd stage) 2025: Strengthening even further 36/42
Slide 37: 2024-2025: Business rebuilding (2nd stage)
2024-2025: Business rebuilding (2nd stage) Global “Tackle past negative legacies squarely without delay” “Strengthening even further in 2025” from “2024 plan” 1st stage 2020-2021 21MBP ― Planned approx. 40% decrease from approx. 160 sites (as of 2019) ⇒ Executed the restructuring of approx. 50 sites
Slide 38: Further transform the shape of Europe business
2024-2025: Business rebuilding (2nd stage) － Europe－ “Further transform the shape of Europe business – integrated & simplified-” Step1 2021 Closure of Bethune plant (PS) “Strengthen further to an even higher level” Reduce fixed cost 2026 Step2 2024 Step3 2024-2025 by transforming the shape of busine
Slide 39: Fiscal 2024 Guidance
Fiscal 2024 Guidance BRIDGESTONE
Slide 40: Fiscal 2024 Guidance
Fiscal 2024 Guidance Negative factors: Revise downwards from • Deteriorate L. America business beyond assumptions (lower than the worst scenario assumed) the February guidance ⇒Strengthen damage control as there are huge negative impacts for the year despite the improvement in the 2nd Half Adj. Oper
Slide 41: Fiscal 2024 Guidance
Strengthen business quality globally and Fiscal 2024 Guidance accelerate “reinforcement of earning power” 21MBP 24MBP Key point of fiscal 2024 Return to a strong Bridgestone Remaining issues guidance announced in August capable of adapting to change New issues • Exchange rate assumptions USD 121JP
Slide 42: IR communication plan
IR communication plan November 11 (Mon) (plan) Summary of Financial Results for 3rd quarter 2024 February 2025 (plan) Summary of Financial Results for 2024 Mid Term Business Plan (2024-2026) Progress Update 42/42
Slide 43: Forward-looking statements 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 not limited t