SX Symposium 2024

Bridgestone’s Sustainability Transformation“Serving Society with Superior Quality”

Build the foundation for sustainable value creation

Bridgestone Corporation
Member of the Board
Global CEO and Representative Executive Officer

Shu Ishibashi
May 24, 2024

Bridgestone Corporate Profile -founded in 1931Global leading company in Tire and Rubber industry
 Financial performancein 2023

Of which, produced andsold in Japan

Japan

Americas

10%level

Approx.

44％ Revenue 26％

4,314
B JPY

（2023）
Europe/Middle
East and Africa
Adj. OperatingProfit

2/21

Approx.

Japan segment includes
businesses ofOff-the-road tires formining vehicles & Aviation
tire and tires for export

480 B JPY

12％

Adj. Operating
Profit Margin

Approx.

Employees(Consolidated)

Approx.

Europe,Middle Eastand Africa

Asia-PacificIndia and China

17％

Global facilities for
production and R&D

130sites

130K people

Americas
Global HQ(Kyobashi, Tokyo)

Asia-PacificIndia and China
Approx.

11%

Business over 150 countries and regions globally

3/21

4/21

5/21

Fundamental to the strategy for sustainable value creation
 Aim to be a new manufacturing and R&D, value creating company
by leveraging strengths as a Japan based company
 Establish competitive advantage

Expansion of solution business- being attentive to customers’ pain points and solving them(Customer value creation – leading to customer successby enhancing customer experience value)

Amplify value
Solutionbusiness
Premium tirebusiness Strong Real

Enhance business quality globally

DigitalAmplify value with Dan-Totsu products at the core
(horizontal x vertical): from “Produce and sell” to ”Use”(on-site capabilities, respect for being on-site as“Genbutsu-Genba”, craftperson skills and Dan-Totsu products)

Bridgestone DNA6/21

Focus on quality

Respect for being
on-siteBeing attentive and supportiveof customer problems

Challenging spirit

Take on challenges to circulate value sustainably

7/21Core business“Produce and sell”

Growth business“Use”

Exploratory business“Renew”

2030 Long Term Strategic Aspiration: Strategic Map

8/21

24MBP (Mid-term Business Plan):
Changes in business environment and clarifying risks
Business environment“Change becomes commonplace”“Transform change to opportunity”

Changes from the time of
the “2030 Long Term Strategic Aspiration” announcement (Aug. 2022)

Geopolitics

Mobility &TechnologySustainability

Tire industry
structure

9/21U.S.: Unpredictable political trends & economic outlook

Toward 2030, and Bridgestone’s 100th anniversary in 2031,
accelerate transformation to a resilient “excellent” Bridgestone

24MBP
Impact on Bridgestone• Increased volatility in global business

Understand risks related to Conflicts and political trends:
Russia – Ukraine, Middle East, China – Taiwan, etc.

• Impact on supply chain and business cost increase

Mobility-related trends:
EV adoption speed softens, but the mid-long term adoption& expansion trend doesn’t change• Pursue “Ultimate Customization” to respond diverse performance fordiverse mobility

Dramatic improvement of AI capabilities• Continue to evolve DX across value chain (From manufacturing and R&D tosolutions)• Strengthen approach to premium & prestige OEMs and premium EVsetc.

Increasing and diversifying social demand for sustainability• Manage cost increases to respond to sustainability

Increasing demand to response nature positive• Strengthen initiatives to respond to sustainability across the value chain

Presence change within the tire industry
Possibility of a restructuring of the tire industry• Reinforce earning power Create good business quality / Create good tires / Create good business /Create new business sowing good seeds for the futurePositioning of 24MBP aligned with the “2030 Long Term Strategic Aspiration” roadmap”Passion for Excellence"

21MBP

27MBP

95th anniversary of founding

90th anniversary of founding

2021

2030 Long Term Strategic Aspiration

24MBP

2023

2024

Return to a strong Bridgestone
capable of adapting to change

2025

Remaining issues &new issues

100th anniversary of founding

2026

2031

True next stage

Become a resilient“excellent”Bridgestone Strengthen new & true glocal portfolio management (by global, business, and area) Reinforce earning power Business shaping scenario - Further focus on value creation
 Start building sustainable premium brand
Tackle past negative legacies squarely
without delay
10/21

Focus on execution and delivering resultsfor immediate issues

Lay foundation for futuregrowth24MBP: “Glocal” Management Concept (Started in 2020)

11/21

24MBP: New & true glocal portfolio management scenario overview - target Aim for more than 10%of ROIC globally

To build a strong Bridgestone and strong business quality / Improve management, working & business quality, and business administration levels– Improve cash conversion cycle
Adj. operating profit margin 8% ≒ Bridgestone’s assumed WACC 5.5% ⇒ No business with ROIC below 5.5% (excl. exploratory business)

Return to a strong Bridgestone
capable of adapting to change

21MBP

Remaining issues &new issues

Build strong Bridgestone &strong business quality

24MBP <Ensure more than 10% of ROIC>

Stage of sustainable growth

27MBPStrengthen the premium tire business- Gain solid position in premium segment -Premium tire businessCore business

Rebuild earning power

Reinforce earning power

Lay foundation for premium
enhancement

Expand premium tires & create “new premium”“New premium”
2nd stage

Focus on solutions that amplifies value of premium tires- Strengthen linkage between premium tire and solution -Solutions business
Growth business

Lay foundation for evolution
with solutions business“Determine“

Focus on retail & service and commercial BtoB solutions- Mobility tech business = Build as strategic business -“Sowing new seeds”- Providing social value and sustainability as the coreExploratory businessDiversified products
business

12/21

Explore technologies

Explore business model
Demonstration / small-scale commercialization phase“Sharply focus on areas where Bridgestone’s core competencies can be leveraged”
Rebuilding & steady growth

Steady growthStage togrow and expand

Explore to commercialize(small & medium scale)

Next stage2030
Become a resilient“excellent”
Bridgestone24MBP: Management focusing on capital cost (Started in 2020)■ Promote “reinforcement of earning power” leveraging ROIC
Remaining issue of 21MBP: ROIC target of 10％ level unachieved

24MBP

Promote “reinforcement of earning power”
and improve capital turnover
Establish ROIC of 10%

Continue on-site (Genbutsu-Genba) ROIC improvement activities leveraging the ROIC tree,
and promote “reinforcement of earning power” across the value chain
ROIC (>capital cost)
2023

8.7%

2026

10% level

Adj. operating profit(after tax)
2023

7.8%

2026

9% level

2023

38.4%

27.2%

Deterioration

2026

40% level

Operating expense ratio
2023

Improvement

Expansion of ROIC target
from “by 6SBUs*2”
to “by 47 areas”

2026

Same as 2023
The Bridgestone Group’s definition of ROIC

Invested capital turnover2023

1.12times

2026

1.15times level*1 Cash Conversion Cycle (CCC)= Days of inventory outstanding＋Days of sales outstanding – Days of payables outstanding*2 6 SBUs = 1) Americas, 2) Europe, Middle East, and Africa, 3) Asia Pacific, India, and China, 4) Japan Tire,
5) Diversified products & Exploratory, 6) Global mining, industrial, construction, aviation tire solutions
 6 Strategic Business Unit

13/21

Gross profit margin

Cash conversion cycle *1
2023

161 days2026

150 days level

Fixed asset turnover
2023

1.63times

2026

1.65 times levelROIC ＝

Adj. operating profit (after tax)
Working capital + Non-current assets(Invested capital)

Adjusted operating profit (after tax): Fixed tax rate of 30%
Working capital: Notes and accounts receivable and otherassets + Inventories – Notes and accounts
payable and other liabilities (FY-end balance)
Noncurrent assets: Non-current assets excluding deferred tax
assets (FY-end balance)

24MBP Business shaping scenario: Further focus on value creation

Create good business quality“Passion for Excellence”(Management, Working & business quality improvement)Create good tires

Create good business“New premium”creation

Create corporate value
through balancing social value and customer value creationand gaining competitive advantage

Create new businesssowing good seeds for the future
14/21

Mobility tech business“strategic business”

New sowing seeds“Exploratory business”

Create good business quality
Improve management quality and working & business quality

1960s

Promoted the modernization of management
and quality management activities

Promoted Deming Planaiming to receive the Deming Application Prize

2024～

Bridgestone DNA - “focus on quality”

Reaffirm and re-penetrate globally

Return to origin

Bridgestone’s unique Deming Plan
Basic thought

Good company quality makes good quality ofproducts and services
5 concepts

Receiving the Deming Application Prize(1968)

Defining the company
code (1968)“Continuous improvement” is our global asset① Master PDCA
② Use why why analysis (WHY-WHY-WHY)③ Promote rational standardization④ Explain by using accurate data
⑤ Control important points

Ensure pursuing of operational excellence globally- Perform steady & agile PDCA while sticking to basics,
Combination of continuous improvement & innovation

15/21

Improve management quality andworking & business quality

Create good business quality Enhance talent creativity

Enhance talent creativity“Reinforce talent investment, increase added value andcreate a virtuous cycle of value creation”

as the axis of value creation
to create a new corporate culture and DNA

Enhance talent creativity/Improve productivity
To enable continuous investment in talent, working on
enhancing talent creativity and improving productivity

16/21

Bridgestone E8 Commitment

Create good business quality

Bridgestone’s DX – Amplify value of Dan-Totsu product & Support productivity and creativity improvement
Faster, easier, and more accurate with larger data

Engineering Chain Feedback to development of “Dan-Totsu product”

2009～

Amplify value“See” & ”Analyze”
technology（Polymer design, composition design）

Tire design knowhow, measured & test data
Visualization of road contact condition
by ULTIMAT EYE®

Craftperson skills

Material

Product development

Manufacturing

2010～

RealContact tosociety & customer

2016 -1980～

Collect tire data
and mobility data

AI-implemented tirebuilding system
EXAMATION®

Digitale.g. Co-creation with JAL
2020 -Increase
productivity
Material informatics（AI utilization & technology
to solve at the micro level)

Global digital talent(Advanced& Intermediate)

17/21

Tire design utilizing simulation

Approx. 1,600 people in 2023,approx. 1,700 people in 2024

Visualize & standardize“craftperson skills”
Promote shift to smart

Increasecreativity

Evolve from wear prediction
to durability prediction model
leveraging unique AI & algorithms

Connect the value chain and link with the solutions business
Amplify value of “Dan-Totsu product”

 To the level of 2,000 people in 2026

Enhance internal training& co-create with partners

Improve productivity & creativity
leveraging generative AI- Improve working efficiency-

Create good tires

Bridgestone’s base technology for “products”

Creation of
corporate value

Enhance value

Reinforcement ofearning power

Ultimatecustomization
Differentiation

Value creation(social & customer value)

FusionGainingcompetitive
advantage

18/21

UP
DOWN

Base technology for
product design“New premium”

Improve product power－
Generate customer delight

Conventional

Elevate all conventional performances, and largely
evolve environmental performance and/orperformance that not only meet the needs & wantsof specific market/customers but further inspires
them (=”sharpen edge”)

Base technology for
manufacturing and R&D

BCMA

Expand performance
spider chart
Sharpen “edge”

FusionCustomization
Module３

Simplification

Reducebusiness cost&environmental
impactReduce cost
Simplify operations in R&D andproduction /Support “ultimate customization”

Customize performance
per market/customer

Simplification
Module２

Module１

Improve efficiency fordevelopment and supply
chain, and reduce costby sharing modules
between products

Create good business / Create new business sowing good seeds for the future
Solutions business Growth business

Retail & service solutions(for passenger car)

Solutions for truck & bus

Mining solutions

Aviation solutions“Co-creation”“Strong Real × Digital“Amplify value of Dan-Totsu products x Amplify trust x Amplify data value
19/21

Building the foundation for sustainable value creation- Placing sustainability at the core of our management and businessContinue to provide social value and customer value
Achieve sustainability targets
 Sustainability target in 24MBP: ”Produce and sell” “Use” “Renew”
Carbon neutrality: Further focus on improvement of “quality incl. scope3
CO2 emission reduction(Scope1,2)Contribution to CO2 reduction(Scope3)

Contributes to reduce CO2 emissions
by more than 3 times
our own CO2 emissions (2026)

Circular economy: Strengthen the circular business model

Sustainability value creation
linked with business shaping scenario
 Premium tire business: ”Produce and sell”

Core business

Foundation forvalue creation towardsustainable growth stage

Create good tire Solutions business

Growth business: “Use”

Create good business

Recycled & renewablematerial ratio
Nature positive: Exploratory business: Recycle business “Renew”

Strengthen initiatives
for sustained use of natural rubber and water resources,
which are directly linked to our business

Create new business sowing good seeds

 Initiatives for reinforcing structure to cope with global
management risk and reducing future risk
% of suppliers setting SBT-equivalent CO2 reduction target* Science Based Target(Scope3)

Risk monitoring related to human rights and continuous improvement

20/21

Lay foundation for
the future growth(CO2 basis)

Create good business quality

New & true glocal
portfolio
management

Value creation process map - 24MBP

21/21

Copyright © Bridgestone Corporation

22/21