Mid-Long TermBusiness Strategy Update

November 12, 2020
Global CEO and
Representative Executive Officer

Shu Ishibashi

Communication Plan
Mid-Long Term Business Plan Framework - July 8■ Mid-Long Term Business Plan Framework: Whole picture
Bridgestone 3.0 “Third Foundation”

Mid-Long Term Business Strategy Update – September 15■ Mid-Long Term Business Strategy Update:Technology Innovation
・ Technology Innovation
・ Bridgestone Innovation Park (Phase 1)

Bridgestone Innovation Gallery Opening

1st half financial results announcement – August 7■ 1st half financial results / full-year forecast■ Mid-Long Term Business Strategy Update:Core Business / Growth Business
3rd quarter financial results announcement – November 12■ 3rd quarter financial results / full-year forecast■ Mid-Long Term Business Strategy Update：・ Rebuild earning power

・ HRX* *HRX: Human Resource Transformation- HR and organizational strategy to execute Mid-Long
Term Business Strategy

Mid Term Business Plan – February 2021

■ Mid-term Business Plan Based on Mid-Long Term Business Strategy Framework（2021-2023）■ Looking toward 2030
1/19

Global Mid-term Business Scenario
COVID19
impact

2020

2021

2022

Gradual recovery from 2nd half

Gradual recovery

RecoveryCrisis management

Stage

Rebuild earning power Rebuild earning power■Cash oriented management

Solution business related sales
Tire & Rubber Solutions

A(2019 Actual)

Enablers
forexecution

Transformed“Strong” Bridgestone

Strategic growth investment■“Safety First”

Strategic
Focus

2023

B/C
15%

Process
HRX*1■ Reforms

Reformation of expense and cost structure:

Restructuring of business portfolio (Yr21-22) & manufacturing footprint
Reallocation of resources
Operational excellence: Premium business strategy (EtoE) Strategic growth investment

・ Leaner, flexible to adapt to change
in business environment
・ Core business: Strengthen premium category biz
・ New business portfolio
・ Profitable resilient business structure■ Realize new growth strategy
・ Growth Business :Expansion of solutions business

Growth Business : Retread / Webfleet Solutions

Tire & Rubber Solutions

Global expansion of solutions

Core Competence : Sustainability – Circular Economy Business Model
DX / Innovation(Plan in 2023 as of Oct 2020)

Global KPI(PDCA)
New management index (ROIC, Adjusted Operating Profit and ROE）
Foundation of financial strategy (“Glocal” investment management）
Core Business*2 -culture transformation, Growth Business*2- new culture creation
Fundamental transformation of org. and HR system, Enhancing recruitment & development*1 HRX: Human Resource Transformation*2 Core Business: Tire & Rubber business, Growth Business: Solutions business

2/19

Rebuild earning power

Reformation of expense and cost structure: Expense (OPEX) control under crisis management in 2020

OPEX reduction in 2020 (vs 2019)

Fixed
expense

Crisismanagement（in 2020） Structurereform(mid-longterm)

Major initiatives in 2020, OPEX control[unit: B. JPY]

Fixed

Variable
expenseVolumedown

Structurereform(mid-longterm)

Variable

Crisis management(only in 2020）

Structure reformation(mid-long term）• Furloughs in retail andmanufacturing etc.
• Travel expense, sales promotion
expense reduction under COVID19 impact.
• Voluntary reduction in top
management compensation• Asset sales resulting fromoperational site integration
Etc.

• Strategic restructuring andreviewing compensation strategy,
voluntary separation program inoverseas SBUs
• Office integration, new ways ofworking• Cost efficiency and productivity up
by optimizing sales channels• Revise advertisement andmarketing plan
Etc.

• Optimize logistics to absorb
volume decrease.
Etc.

2019
Actual**Including FX impact

3/19

2020
Forecast• Integration of regional distribution
centers.
• Optimize ocean freight tariffs inlong term.
• Optimize product logistics• Global sourcing, local for local.
Etc.

Business restructuring⇒Fundamental structure reformation

Rebuild earning power

Reformation of expense and cost structure: Continuous expense (OPEX) reduction initiatives
2020

2021
Crisis management

Stage

2022

Rebuild earning power

2023
Transformed“Strong” Bridgestone■ Initiatives to create a leaner OPEX structure throughout the value-chain (E2E)
OPEX

Fixed

■ Strategic reallocation of resources & restructuring of organizations■ Review compensation strategy■ Integration of office facilities based on new ways of working■ Optimize resource allocation for sales promotion activities based on branding strategy■ Review sales channels (wholesale, retail (equity & franchise) ) to identify ways
to improve cost efficiency■ Business restructuring (Yr21-22)

Variable■ Logistics reform based on new sales channel & distribution structure (warehouses, delivery)■ Optimizing product logistics globally (routing among SBUs and managing tariffs)

Initiatives

Accelerating reforms beginning in 2020
Towards a leaner organization, resources and OPEX structure, mainly in Core Business.
4/19

Rebuild earning power

Reformation of expense and cost structure: Continuous expense (OPEX) reduction initiatives- Fixed cost -Reduce fixed OPEX through changes in structure, policies and procedures
and reallocation of resources based on Mid-Long Term Business Strategy

2 years Benefit（Yr20-21）

Approx.

 Review compensation strategy

Oversea SBUs：Implemented in each regions (Yr20~)
Global HQ ：Reviewing management level compensation with organizational changes

 Strategic resource reallocation & restructure of organizations (Leaner and agile)
Oversea SBUs : Voluntary separation program (Yr20~)
Resource reallocation between Core & Growth business, organization changes
Outsourcing and shared servicing of administrative jobs

 Integration of office facilities based on new ways of working：Japan：Offices in Tokyo metropolitan area ・ regional big cities (Yr21~)
Overseas SBU regions: Integration of office facilities(Yr20~)*Planned amount in Yr20-21, excluding one-time expense

Each region will proceed with initiatives to reduce fixed cost, establish leaner structure
5/19*

Rebuild earning power

Reformation of expense and cost structure: Continuous expense (OPEX) reduction initiatives- Integration of office facilities (Japan) -New ways of working

in combination with remote work and working in the offices to optimize value creation and increase engagement and performance.

 Integration of office facilities (January 2021 ~)• Optimizing office space and utilization of owned asset based on expansion of remote work as new normal：
Reduction of rent expense: 800M. JPY (Planned in Yr21), % of owned real estate 55-> 68%
Office sites (Japan) 30% reduction - 47 sites ⇒34 site (-13 sites)
Tokyo metropolitan area
25 sites ⇒16 sites (-9 sites)
Regional big cities（Osaka, Nagoya, Sapporo） 22 sites ⇒18 sites (-４sites)• “Hoteling” work stations, ensuring social distancing, optimizing synergy between group companies and functions• Increasing number of satellite offices by utilizing owned real estate
Avoiding long commuting, securing peace of mind Tokyo metropolitan area 7 sites (＋4 sites) Expansion of remote work

*TQM: Total Quality Management• Activating remote work TQM* : Sharing best practices of value creation & innovation globally through database• Allowance for remote work (Oct. 2020 ~): Supports improvement of home office environment to increase performance (200JPY/ day)
• Revision of commuting expense system (Jan 2021 ～): Flexible plans from which to choose based on ways of working
For remote work: Change from providing commuter pass -> compensating actual commuting expense per day

Realize new ways of working which ensure safety and peace of mind.
Increase performance and value creation opportunities and more efficiently utilize owned facilities.
6/19

Rebuild earning power

Reformation of expense and cost structure: Continuous cost (Production cost) improvement
2020

2021
Crisis management

Stage

2022

Rebuild earning power

2023
Transformed“Strong” Bridgestone■ Initiatives - Entire supply chain (E2E), structural reformation of cost structure
Production
Cost

Initiatives■ Reduction of raw material cost through procurement project initiatives(Global sourcing, centralized procurement, switching to better and more reasonable raw materials）■ Cost reduction by strengthening Dan-Totsu product strategy (Simplification and differentiation)- Commonality ・ Modularity（Share casings / belts between tires – simplification)• E.g. in Passenger tires for Japanese market; # of Casings / Belts module : 30 to 40 (Current) ⇒ 5 (in 2025)• Accelerating activities in Europe / U.S.
- SKU（ ≒ Number of items ）reduction ＝increasing efficiency by simplification■ Improvement in manufacturing

Maximize use of existing equipment, increasing productivity,“To manage manufacturing is to develop people there”■ Restructure manufacturing footprint (Yr21-22)

Accelerating activities across all cost elements globally to create a more efficient cost structure
Resulting in updated production process and systems aligned with Dan-Totsu product strategy
7/19

Rebuild earning power

Reformation of expense and cost structure: Continuous cost (Production cost) improvement- Manufacturing footprint restructure -2 Projects of plant closure are initiated.
France・Bethune plant(Pending works council consultation process)South Africa ・ Port Elizabeth plant(Closure on Nov. 15th, 2020 agreed)Continuous focus on optimization of manufacturing footprint consistent
with Mid-Long Term Business Strategy
8/19

Global Mid-term Business Scenario
COVID19
impact

2020

2021

2022

Gradual recovery from 2nd half

Gradual recovery

RecoveryCrisis management

Stage

Rebuild earning power Rebuild earning power■Cash oriented management

Solution business related sales
Tire & Rubber Solutions

A(2019 Actual)

Enablers
forexecution

Transformed“Strong” Bridgestone

Strategic growth investment■“Safety First”

Strategic
Focus

2023

B/C
15%

Process
HRX*1■ Reforms

Reformation of expense and cost structure:

Restructuring of business portfolio (Yr21-22) & manufacturing footprint
Reallocation of resources
Operational excellence: Premium business strategy (EtoE) Strategic growth investment

・ Leaner, flexible to adapt to change
in business environment
・ Core business: Strengthen premium category biz
・ New business portfolio
・ Profitable resilient business structure■ Realize new growth strategy
・ Growth Business :Expansion of solutions business

Growth Business : Retread / Webfleet Solutions

Tire & Rubber Solutions

Global expansion of solutions

Core Competence : Sustainability – Circular Economy Business Model
DX / Innovation(Plan in 2023 as of Oct 2020)

Global KPI(PDCA)
New management index (ROIC, Adjusted Operating Profit and ROE）
Foundation of financial strategy (“Glocal” investment management）
Core Business*2 -culture transformation, Growth Business*2- new culture creation
Fundamental transformation of org. and HR system, Enhancing recruitment & development*1 HRX: Human Resource Transformation*2 Core Business: Tire & Rubber business, Growth Business = Solutions business

9/19

Foundation of financial strategy to support execution of Mid-Long Term Business Strategy
Drive portfolio management by SBU*1 / business, reviewing and activating financial foundation
New management index “ROIC” to promote Rebuilding earning power.
■ Managing financial evaluation by business portfolio and supporting strategic decisions (incl. management of discontinuing business) If the target business does not meet the established financial criteria, recovery plan to be developed.
If the business does not recover, discontinuation to be considered.
■ Implementing profit improvement activities based on ROIC tree:
ROIC

NPAT

GP margin %OPEX %

Investment capitalturn over• Adding new management KPI based on ROIC tree

CCC

• Strengthen management at the level of each production/
sales entity.

Fixed asset turnover• Investment management by Operational/ Strategic items

Investment management by item

■ Investment management by items ⇒ Enhancing the role of global controller as HQ corporate finance function
Capital investment&
M&A investment• Ensure financial evaluation during the initial stages of planning and execution (ROIC/IRR＞capital cost +risk）• Global prioritization of projects (Alignment with discussion at G-EXCO*2)• Strict tracking and evaluation based on process KPIs (PDCA cycle management)■ Gradual establishment of global financial foundation and accounting foundation to activate above initiatives(Group internal rules, IT infrastructure, organization, etc.）*1 SBU: Strategic Business Unit

*2 G-EXCO: Global Executive Committee

10/19

HRX - HR & Organization strategy as enabler to execute Mid-Long Term Business Strategy

C■ Growth Business: create new culture

Mobility
Solutions

Create structure / working style for solutions biz from scratch.

B Export the new culture to Core Business to make it stronger

Tire Centric
Solutions- Build global organization structures to support solutions business- Focus to ensure “Diversity & Inclusion”

Strategic growth investment■ Core Business: transform cultureA

Tire & Rubber

Value amplified(Spiral up)

Breakaway from existing challenges and make a radical transformation,
while leveraging our unique strength.
- Group global optimization aligned with business strategy- Clarify roles and responsibilities, Increase efficiency in organizations,
Optimize resource allocation and utilization

 Generate resource and flexibly reallocate to Growth Business
Rebuild earning power

Bridgestone unique HRX*:*HRX: Human Resource Transformation

Maximize organization capability (Organization x Talent) for execution of Mid-Long Term Business Strategy
Continuously promote development of diverse and future management talent through their careers

11/19

HRX

Core Business: create culture - Challenges and HRX direction

Existing challenges

HRX direction<Global>• Linkage between business strategy and HR &Organization strategy• Global - local balance, varies by SBU• Management succession / talent• Fixed cost optimization<Global> Group global optimization aligned with business strategy
 Evolve “Global” management• Strengthen the grip to operations and strategy by global management team (Global
EXCO*)*G-EXCO: Global Executive Committee• Clarify global - local strategy and global investment / operation KPIs
• Clarify responsibility of global management (Vice President and above) alignment
with performance pay and incentive system.

 Enhance development of global management talent (BRIDGESTONE NEXT100)<overseas SBU*> *SBU: Strategic Business Unit
 Strategic restructuring, reallocation of resources toward growth Business etc.

<Japan>• Unchanged traditional organization structure andnatureJapanese unique- Seniority, uniformity- Unclear role &responsibility andevaluation criteria

BS unique- Bloated / inefficient org.
- Decision making speed- Silo• Global management talent, management ability• Optimum utilization of diverse HR
12/19<Japan> New HR system(1) Simple and lean organization

Clear roles and responsibilities”Firm, Lean, Quick and Simple” organization and decision making(2) Adopt “Job-focused” employment concept: Position-People-Matching
Clear position / HR requirement, Clear evaluation criteria / process,Elimination of seniority oriented(3) New approach of talent development“Maximize individuality” “Diversity & Inclusion”

HRX

Japan: new HR system (1) organization design

Simple / lean organization + clear roles & responsibilities
 ”Firm, Lean, Quick and Simple” organization and decision-making■ Reduce organization layers from 5 to 3 (Basic design)
Specialist position

Leader position

SeniorOfficer（Individual contributor）

Vice President

Administration /Technology / Digital

Management
supportExecutive Director

Lead Expert

Lead
ExpertDirector

ExpertExpertGeneral Manager

Senior Specialist

SeniorSpecialist

Specialist

Specialist

Executive

Management
Manager
Coordinator
Staff

13/19

• Eliminate Executive-Officer-System• Leader position: reduced by approx. 20%• Senior Officer layer to consist of approx. 20 Vice Presidents: reduced fromapprox. 60 Executive-Officers• One-year assignment for Vice President based on a latter of assignment
clarifying role and responsibility

Senior Officer layer: Head of each business / function and responsible for global mgmt.
Executive layer: Responsible for division strategy building and execution
Management layer: Position (GM or Sec. manager) depending on job responsibility andnumber of team members■ Separate Report-line position and Specialist position• Newly establish Specialist position contributes to business through uniqueknowledge and experience• Flexible resource utilization / position change between the two positions;
Report-line and Specialist⇒Optimize resources
Generate resources by reducing Core Business positions andreallocate to Growth BusinessHRX

Japan: new HR system (2) matching of People with Position

Seek Bridgestone unique hybrid employment system: “Membership” + “Job” employment concept■ Clarify Position requirement and HR requirement and match
People with appropriate Position by also utilizing HR
development and recruitment.
Business
Strategy

Clarify function and organizational abilities,
which is necessary to execute Mid-Long Term Business Strategy

Position Based on business strategy, clarifyrole, responsibility and requirementof each position
 Specify open position
 Provide fair opportunity

14/19

People Clarify and visualize HR
requirement and capability
 Match with position by
utilizing talent development
and recruitment

 Clarify evaluation criteria and process.
 Fair evaluation based on the requirement,elimination of seniority oriented• Managers:- Eliminate evaluation / compensation system based onseniority- Introduce position based promotion, 360-degree
assessment, etc.

• Staff:- Eliminate regular salary increase system- Introduce new evaluation system – outcome and progressbase evaluation

HRX

Japan: new HR system (3) new approach of HR development
Minimize variability• Secure organization (successor) capability⇒ focus on learning general skills

Maximize individuality• Improve individual capability• Customized development⇒ focus on proactive learning

L■ Design development programs based on HR requirement and provide opportunities• Clarify HR requirement based on business strategy• Methods: Programs / opportunities to improve practical ability based on practice (incl. experience on site)【Educate and Train】 × 【Perform and Utilize】• Responsibility of top management to provide development opportunities• Select and develop next-generation management talent – BRIDGESTONE NEXT 100 (NEXT30 in Japan)■ Promote “Diversity & Inclusion”• Develop and recruit diverse talent on Mid-Long Term Business Strategy• Steps to advance female representation at management levels: promote appointment / recruitment of female managers,
building mentor system or other support system as challenges requiring immediate attention

15/19

HRX

Growth Business: create new culture - Solutions business global structure -Global structure – secure global alignment with execution of Mid-Long Term Business Strategy
 Enhance Bridgestone T&DPaaS organization: Global HQ (market viewpoint) / Kodaira (technology base) Global Solutions Committee: manage and promote solutions business in global basis – Report to G-EXCO*1
 Enhance collaboration among innovation sites

EU

U.S.

Japan

Digital Garage*1 G-EXCO: Global Executive Committee*2 SBU: Strategic Business Unit
*3 CoE: Center of excellence

Mobility Lab

Innovation Park
Bridgestone T&DPaaS (Global HQ / Kodaira)- For collaboration with product & solutions strategy and DX

Organization structure by SBU*2 (as CoE*3)

Japan: Accelerate solutions business in JapanEU:- Maximize synergy between Webfleet
Solutions and Tire Centric Solution- Expand and accelerate solutions business
Bridgestone Mobility Solution
Business Unit

Bridgestone Tire Solution Japan
Evolve Mining & Aircraft solutions
Global Mining Solution
Global Aircraft Solution

U.S.:

Organization reform and resource reallocationto accelerate solutions business
New independent retread biz unit
New mobility solution org.

Accelerate solutions business taking advantage of unique market in each region / business,while securing global alignment with execution of Mid-Long Term Business Strategy
16/19

HRX

Growth Business: create new culture - Solutions business global structure -Global structure – secure global alignment with execution of Mid-Long Term Business Strategy

 Strategic partnership / M&A project: exploration of new business opportunities and execution based on business strategy– direct report to Global CEO

EU

Japan

Partnership / M&A org.

U.S.
Partnership / M&A org.

Partnership / M&A specialized organizationin Europe and Americas SBU*s (including exploring activities) *SBU: Strategic Business Unit Explore new business opportunities to accelerate solutions business
Strategic Partnership/
M&A project• Enhance solutions network (incl. E-Commerce)• Maximize synergy with Webfleet Solution / iTrack solutions business + new DX area
• Sustainability area, etc.

 Enhance scouting function through investment in start-ups and venture capitals(Investment: total 5 B. JPY in Japan, Europe and Americas)
 Build global funding system  allocate resource in Mid-Term Business Plan

Collaboration on global project and with specialized organizations to accelerate solutions business
17/19

Global Mid-term Business Scenario
COVID19
impact

2020

2021

2022

Gradual recovery from 2nd half

Gradual recovery

RecoveryCrisis management

Stage

Rebuild earning power Rebuild earning power■Cash oriented management

Solution business related sales
Tire & Rubber Solutions

A(2019 Actual)

Enablers
forexecution

Transformed“Strong” Bridgestone

Strategic growth investment■“Safety First”

Strategic
Focus

2023

B/C
15%

Process
HRX*1■ Reforms

Reformation of expense and cost structure:

Restructuring of business portfolio (Yr21-22) & manufacturing footprint
Reallocation of resources
Operational excellence: Premium business strategy (EtoE) Strategic growth investment

・ Leaner, flexible to adapt to change
in business environment
・ Core business: Strengthen premium category biz
・ New business portfolio
・ Profitable resilient business structure■ Realize new growth strategy
・ Growth Business :Expansion of solutions business

Growth Business : Retread / Webfleet Solutions

Tire & Rubber Solutions

Global expansion of solutions

Core Competence : Sustainability – Circular Economy Business Model
DX / Innovation(Plan in 2023 as of Oct 2020)

Global KPI(PDCA)
New management index (ROIC, Adjusted Operating Profit and ROE）
Foundation of financial strategy (“Glocal” investment management）
Core Business*2 -culture transformation, Growth Business*2- new culture creation
Fundamental transformation of org. and HR system, Enhancing recruitment & development*1 HRX: Human Resource Transformation*2 Core Business: Tire & Rubber business, Growth Business = Solutions business

18/19

Communication Plan
Mid-Long Term Business Plan Framework - July 8■ Mid-Long Term Business Plan Framework: Whole picture
Bridgestone 3.0 “Third Foundation”

Mid-Long Term Business Strategy Update – September 15■ Mid-Long Term Business Strategy Update:Technology Innovation
・ Technology Innovation
・ Bridgestone Innovation Park (Phase 1)

Bridgestone Innovation Gallery Opening

1st half financial results announcement – August 7■ 1st half financial results / full-year forecast■ Mid-Long Term Business Strategy Update:Core Business / Growth Business
3rd quarter financial results announcement – November 12■ 3rd quarter financial results / full-year forecast■ Mid-Long Term Business Strategy Update：・ Rebuild earning power

・ HRX* *HRX: Human Resource Transformation- HR and organizational strategy to execute Mid-Long
Term Business Strategy

Mid Term Business Plan – February 2021

■ Mid-term Business Plan Based on Mid-Long Term Business Strategy Framework（2021-2023）■ Looking toward 2030
19/19

Statements made in this presentation with respect to Bridgestone's current plans, estimates, strategies and beliefs and other statements that are nothistorical facts are forward-looking statements about the future performance of Bridgestone. Forward-looking statements include, but are not limited to,those statements using words such as "believe," "expect," "plans," "strategy," "prospects," "forecast," "estimate," "project," "anticipate," "may" or "might"
and words of similar meaning in connection with a discussion of future operations, financial performance, events or conditions. From time to time, oral or
written forward-looking statements may also be included in other materials released to the public. These statements are based on management's
assumptions and beliefs in light of the information currently available to it. Bridgestone cautions you that a number of important risks and uncertainties
could cause actual results to differ materially from those discussed in the forward-looking statements, and therefore you should not place undue reliance onthem. You also should not rely on any obligation of Bridgestone to update or revise any forward-looking statements, whether as a result of new information,
future events or otherwise. Bridgestone disclaims any such obligation.

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