Financial Results for Fiscal 2014

Bridgestone Corporation
February 17, 2015

Contents

1. Business and Financial Performance for Fiscal 2014

P.3

2. Consolidated Projections for Fiscal 2015

P.9

3. Management basic approach

P.18

Copyright © 2015 Bridgestone Corporation | Feb.17, 20152

1. Business and Financial Performance for Fiscal 2014

Business Environment Surrounding Bridgestone Group in 2014
Currency Exchange

Estimated Tire Demand
Tire Demand for 2014 : Original Equipment (VS 2013)
Passenger
Radial Tires

Truck and Bus
Radial Tires

Japan

101％

113％

N. America

106％

118％

Europe102％97％

Asia *1

107％

92％

2014

(Ref.)
Fiscal2013

1sthalf

2ndhalf

FiscalUS Dollar

102109

10698

Euro

140

140140130

Raw Materials
Market trend of natural rubber and crude oil (Average)

Tire Demand for 2014 : Replacement (VS 2013)
Passenger
Radial Tires
Japan102％

106％

N. America

105％

110％

Europe102％

104％

Asia *12014

Truck and Bus
Radial Tires

112％*1 Total of Thailand, Indonesia, India, and China*2 The numbers of demand are estimated by Bridgestone Corporation

102％(Ref.)
Fiscal
2013

1sthalf

2ndhalf

FiscalNatural Rubber<TSR20>*(￠/kg)

185

155

170

251

Natural Rubber<RSS#3>*(￠/kg)

218

171

194

279

Crude Oil*source<WTI> : Singapore Commodity Exchange Limited 期近市況価格参照(＄/ｂｂl)100859297*Source : Current Prices for Singapore Commodity Exchange LimitedCopyright © 2015 Bridgestone Corporation | Feb.17, 20154

Consolidated Results for Fiscal 2014
(Yen in billions)

Yen/US dollar rate:

98

106+8

Yen/Euro rate:130

140+10101
138（ReferenceAug 8, 2014
announcement）
2014 Projections

2013
Results

2014
Results

VS PY (%)

Net Sales

3,568.0

3,673.9+33,650.0

Tires

3,036.9

3,093.3+23,080.0

Diversified
Products546.2

601.8+10580.0

438.1

478.0+9475.0（Ratio） 12.3%（Ratio） 13.0%（Ratio）+0.7%（Ratio） 13.0%

Tires

399.4

435.8

+9434.0

Diversified
Products

38.5

42.1

+941.0Ordinary Income

434.7

463.2

+7454.0

Extraordinary Loss (Gain)

94.6(14.5)--Net Income

202.0

300.5

+49293.0

57 yen

100 yen+43 yen

80yen

Operating Income*Figures within parentheses mean minus

Dividends per Share

Copyright © 2015 Bridgestone Corporation | Feb.17, 2015

5

Analysis of Consolidated Operating Income for Fiscal 2014
(Yen in billions)
Raw
Materials
+77.0

500

450
ForeignExch. Gain+45.0

400478.0
438.1
350

Price, Mix,
Volume etc.
(73.1)

SGA
Strategic Depreciation
Products(4.0)
（5.0）

300

2013
Operating Income

+39.9

2014
Operating Income*Figures within parentheses mean minus
Copyright © 2015 Bridgestone Corporation | Feb.17, 2015

6

Financial Results for Fiscal 2014 : Geographic Segments(Yen in billions)

2013
Results

2014
VS PY (%)
Results（ReferenceAug 8, 2014
announcement）
2014 Projections

Japan

1,270.3

1,264.9(0)1,250.0

The Americas

1,651.9

1,768.1+71,720.0

Europe423.3

439.2+4440.0

Other Regions

862.7

841.5

(2)860.0

Consolidated
Net Sales

3,568.0

3,673.9+33,650.0

Japan

219.5

210.1

(4)

201.0

The Americas

156.4

180.2+15174.0

Europe2.0

20.3+895

19.0

Other Regions

80.2

66.8

(17)

82.0

Consolidated Operating
Income

438.1

478.0

+9475.0*Figures within parentheses mean minus
Copyright © 2015 Bridgestone Corporation | Feb.17, 2015

7

B/S and C/F Highlights for Fisical 2014
(Yen in billions)

FY 2013

FY 2014(As of Dec. 31, 2013)(As of Dec. 31, 2014)

VS. Dec. 31, 2013

Total Assets

3,577.0

3,960.9+383.8

Total EquityRatio of total equity to total assets (%)

1,862.9
50.5

2,146.6
52.4+283.6+1.9

Interest-Bearing Debt (Net)

239.6

202.8

(36.8)FY 2013

FY 2014

Cash Flow by Operating Activities
Cash Flow by Investing Activities

471.7(265.2)428.6(305.6)(43.1)(40.4)

Free Cash Flow

206.5

122.9

(83.6)

Capital Expenditure
Depreciation

274.9
176.1

296.3
188.3

+21.4
+12.1

ROA （％）

6.1

8.0

+1.9

ROE （％）

12.7

15.5+2.8

VS. PY*Figures within parentheses mean minus
Copyright © 2015 Bridgestone Corporation | Feb.17, 201582. Consolidated Projections for Fiscal 2015

Business Environment Surrounding Bridgestone Group in 2015
Estimated Tire DemandCurrency Exchange

Tire Demand for 2015 : Original Equipment (VS 2014)
Passenger
Radial Tires

Truck and Bus
Radial Tires

Japan

93％

92％

N. America

102％

102％

Europe102％

102％

Asia *1106％

106％

2013
US Dollar
Euro2014

2015

98106

115

130140136

Raw Materials

Tire Demand for 2015 : Replacement(VS 2014)
Passenger
Radial Tires

Truck and Bus
Radial Tires

Japan98％

98％

N. America

99％

105％

Europe100％99％

Asia *1114％

105％*1 Total of Thailand, Indonesia, India, and China*2 The numbers of demand are estimated by Bridgestone Corporation*source : Singapore Commodity Exchange Limited

Copyright © 2015 Bridgestone Corporation | Feb.17, 201510

Consolidated Projections for Fiscal 2015
(Yen in billions)

Yen/US dollar rate:

106115+9

Yen/EURO rate:

140136(4)2014
Results

2015
Projections

VS PY(%）

Net Sales

3,673.9

3,980.0+8Tires

3,093.3

3,340.0+8

Diversified
Products

601.8

660.0+10478.0

519.0+9（Ratio）13.0%（Ratio） 13.0%（Ratio） - %

Tires

435.8

464.0+6

Diversified
Products

42.1

54.0+28

Ordinary Income463.2

501.0+8Net Income

300.5

319.0+6100 yen

120 yen+20 yen

Operating Income*Figures within parentheses mean minus

Dividends per Share

Copyright © 2015 Bridgestone Corporation | Feb.17, 201511

Analysis of Consolidated Operating Income for Fiscal 2015
(Yen in billions)Exchange rate
Sensitivity (full year)500

USD：4.3bil. Yen
EUR：0.5bil. Yen
450

Raw
Materials
+66.0

SGA
(39.0)

478.0
400

Price, Mix,
Volume etc.
Depreciation Strategic(36.1)(14.0)
Products+27.0

519.0Foreign
Exch. Gain+37.0350

2014
Operating Income+40.92015
Operating Income*Figures within parentheses mean minus
Copyright © 2015 Bridgestone Corporation | Feb.17, 201512

Financial Projections for Fiscal 2015 : Geographic Segments(Yen in billions)

2,000

20%

1,500

15%

1,000

10%

5005%02013
Sales

2014

2015

OP%

1,500

15%

1,000

10%

500

5%

00%
Sales

OP%

2015

OP%

Sales ( billion yen)

20%

2014

(1)

220.0+5＜2015 REP Tire Sales (unit base, vs.PY%)＞
Passenger Radial Tires～+5%

Truck and Bus Radial Tires～+5%

Ultra-large ORR Tires (*1)+5%Large ORR Tires (*1)+10%

(Yen in billions)

2,000

2013

1,250.0(*1)Off-the-Road Radial Tires for Construction and Mining Vehicles(Rubber weight base , including Original Equipment sales)

Americas[North America + Latin America]

2012

VS. PY(%)

Operating Income0%
2012

2015
Projections
Net SalesOP%

Sales ( billion yen )Japan[Japan Tire + Specialty Tire + Diversified Products]

2015
Projections

VS. PY
(%)

1,990.0+13207.0+15Net Sales
Operating Income＜2015 REP Tire Sales (unit base, vs.PY%)＞
Passenger Radial Tires
Truck and Bus Radial Tires～+5%+6%～+10%*Figures within parentheses mean minus
Copyright © 2015 Bridgestone Corporation | Feb.17, 2015

13Financial Projections for Fiscal 2015 : Geographic Segments(Yen in billions)

2015
Projections

VS. PY(%)

2,00020%

1,50015%Net Sales

430.0(2)1,00010%

Operating Income

20.0(2)

5005%

00%
2012

2013
Sales

2014

OP%

Sales ( billion yen )Europe[Western Europe + Eastern Europe]＜2015 REP Tire Sales (unit base, vs.PY%)＞

2015

Passenger Radial Tires+11%～+15%

Truck and Bus Radial Tires+6%～+10%OP%(Yen in billions)

2015
Projections

VS. PY(%)

Net Sales

950.0+13

Operating Income

87.0+30Others
2,00020%

1,500

15%

1,00010%5005%020122013
Sales*Figures within parentheses mean minus

2014
OP%

2015

0%

OP%

Sales ( billion yen )[Asia&Pacific + China + Middle East&Africa + Russia]＜2015 REP Tire Sales (unit base, vs.PY%)＞
Asia
Passenger Radial Tires+11%～+15%
Pacific
Truck and Bus Radial Tires+21%～+25%
China

Passenger Radial Tires+31%～+35%

Truck and Bus Radial Tires+21%～+25%

Copyright © 2015 Bridgestone Corporation | Feb.17, 2015

14

Trend of Net Sales, Operating Income, ROA, ROE

Copyright © 2015 Bridgestone Corporation | Feb.17, 201515

Basic policy for dividends
Basic policy for distributing profits- Retained earnings for future growth investments- Maintaining appropriate financial position- Shareholder returns
・ Consistent enhancement in profitability
・ Improved financial position

Basic policy for dividends
Through comprehensive evaluation of business results, financial condition for
the relevant fiscal period, medium-term earnings forecasts, investment plans,and cash flows, issuing stable dividend payments targeting a consolidated
payout ratio of 20%–40%.
(*)underlined parts : changed from previous policy
2015 projection Dividend/share : 120yen (FY) Pay out ratio : 29.5％
Copyright © 2015 Bridgestone Corporation | Feb.17, 201516

Trend of Dividend・Pay Out Ratio
45%
140(yen per share)40%
120 yen1203％
12035%

10026.1%

22.1%

60

2030%

Pay OutRatio

80

40

29.5%

100 yen

15.8%

16.7%

20%

57 yen14.6%

15%

Dividendper Share

32 yen16 yen25%

20 yen10%

22 yen
5%

00%
Y09

Y10

Y11

Y12

Y13

Y14

2015 FYProjections

Copyright © 2015 Bridgestone Corporation | Feb.17, 201517

3. Management basic approach

Management basic approach
Framework & Priority Issues:To become a truly global company

Ultimate goal

To achieve “Dan-Totsu”

Mission and Foundation

Basic Stance
Reform Tools

Consistent- The Bridgestone Essence- Lean & Strategic （L&S）- Group Global Optimization （GG Optimization ）- SBU Organization- MTP• Cultivating global corporate culture

Priority issues• Developing human resources capable of global management• Upgrading the global management structure

Communication, Teamwork, & Bottom-Up
Copyright © 2015 Bridgestone Corporation | Feb.17, 201519

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 to, those statements using words such as "believe," "expect," "plans,""strategy," "prospects," "forecast," "estimate," "project," "anticipate," "may" or "might" and words ofsimilar 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 beincluded in other materials released to the public. These statements are based on management'sassumptions 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 notplace undue reliance on them. You also should not rely on any obligation of Bridgestone to updateor revise any forward-looking statements, whether as a result of new information, future events orotherwise. Bridgestone disclaims any such obligation.