Business Performance for the Third Quarter of the year Ending December 31, 2014 12 November, 2014
Major Topics Consolidated Business for the Third Quarter of the Year Ending December 31, 2014 (FY2014) Consolidated Business Outlook for the Year Ending December 31, 2014 (FY2014) The forward-looking statement contained in these business forecasts and plans are based on information available at the current time and may contain potential risks and uncertainties. Therefore, please keep in mind that actual results may, due to a variety of factors, differ from those expresses in the forward-looking statements.
Highlights of Consolidated Business for the Third Quarter of the year Ending December 31, 2014 (FY2014) Consolidated As a result of strong sales of replacement tires and stable raw material prices, record highs were achieved for net sales, operating income, ordinary income, and net income. The operating margin reached 11.8%; the capital ratio reached the 35% level. Tire Business As a result of healthy orders for winter tires in Europe in addition to strong sales of high-value-added SUV tires in North America, net sales and operating income increased. DiverTech Business Net sales declined compared to the same period the previous year for anti-vibration rubber and seat cushions for automobiles. Although the thermal insulation segment has been healthy sales, the waterproof materials segment and sluggish sales of anti-vibration rubber for building construction. As a result, net sales of DiverTech business increased while earnings decreased. 3
Consolidated Business Result for the Third Quarter of FY2014 (Millions of Yen) 3Q of FY2014 3Q of FY2013 Amounts % Record-High Net Sales 287,274 268,181 +19,093 +7.1% Operating Income Operating Profit Ratio Ordinary Income Net Income Record-High 34,010 (Ratio) 11.8% Record-High 24,677 (Ratio) 9.2% +9,332 (Ratio) +2.6% +37.8% 32,775 24,247 +8,527 +35.2% Record-High 23,510 6,148 +17,362 +282.4% Forex R a t e US$ 102Yen 95Yen +7Yen 140Yen 125Yen +15Yen Forex Rate Sensibility US$ 0.3 Billion Yen/Year 0.1 Billion Yen/Year * Impact of 1 yen fluctuation on ordinary income 4
FY2014 3Q Factors contributing to the in Operating Income Operating Income ( in Billion) ( in Billion) 40.0 32.0 24.0 16.0 8.0 0 3Q of FY2013 24.7 Production Cost SGA (Excluded AD Expenses) Plant start-up Cost 24.7 3Q of FY2013 (2.2) +9.3 (5.6) +14.9 Decreasing factor AD Expenses (1.4) (1.1) (0.9) +4.3 9.3 Billion Yen Increase in profit Increasing factor Sales Factors +4.8 +5.8 3Q of FY2014 34.0 Forex Rate Raw Materials 34.0 3Q of FY2014 5
Consolidated Business by Business Segment for the Third Quarter of FY2014 Net Sales (unit: Millions of yen) 3Q of FY2014 3Q of FY2013 Amounts % Tire 226,873 208,827 +18,045 +8.6% DiverTec 60,354 59,319 +1,034 +1.7% Others 191 219 (27) (12.8%) Adjustment (144) (185) +40 - Total 287,274 268,181 +19,093 +7.1% Operating Income (unit: Millions of yen) Tire Operating Profit Ratio DiverTec Operating Profit Ratio Record High 3Q of FY2014 Record High 31,743 (Ratio) 14.0% 1,473 (Ratio) 2.4% 3Q of FY2013 Net sales includes sales or transfers of Inter-segment 21,918 (Ratio) 10.5% 2,200 (Ratio) 3.7% Amounts +9,825 (Ratio) +3.5% (726) (Ratio) (1.3%) % +44.8% (33.0%) Others 101 84 +16 +20.2% Adjustment 691 474 +217 - Total 34,010 24,677 +9,332 +37.8% Amount of adjustment of segment profit includes intersegment eliminations. 6
Consolidated Business by Geographic Area for the Third Quarter of FY2014 Net Sales (unit: Millions of yen) 3Q of FY2014 3Q of FY2013 Amounts % Japan 114,723 114,829 (106) (0.1%) North America 118,595 104,065 +14,529 +14.0% Others 53,956 49,286 +4,669 +9.5% Elimination & Corporate Total 287,274 268,181 +19,093 +7.1% Operating Income Net sales includes sales or transfers of Inter-segment (unit: Millions of yen) 3Q of FY2014 3Q of FY2013 Amounts % Japan 25,518 17,305 +8,212 +47.5% North America 8,190 6,491 +1,698 +26.2% Others 3,100 1,148 +1,952 +170.0% Elimination & Corporate (2,798) (268) (2,530) Total 34,010 24,677 +9,332 +37.8% 7
Outline of Consolidated Business Outlook for the Year Ended December 31, 2014 (FY2014) The outlook for full-year results is unchanged from we announced on August 11, 2014. (unit: Millions of yen) Outlook FY2014 FY2013 Amounts % Record-High Net Sales 400,000 370,218 +29,782 +8.0% Operating Income Operating Profit Ratio Record-High 45,500 (Ratio) 11.4% 37,240 (Ratio) 10.1% +8,260 (Ratio) +1.3% +22.2% Ordinary Income Net Income Record-High Record-High 41,500 38,293 +3,207 +8.4% 28,000 11,596 +16,404 +141.5% Forex R a t e US$ 100Yen 96Yen +4Yen 135Yen 128Yen +7Yen * Expected exchange rate in the 2 nd Half of FY2014 Forex Rate Sensibility US$ 0.3 Billion Yen/Year 0.1 Billion Yen/Year * Impact of 1 yen fluctuation on ordinary income 8
(For Your Reference) in the Tire Production (New Rubber Volumes) (Unit 1,000 Ton) FY2012 FY2013 Jan.-Sep. Oct.-Dec. Jan.-Sep. Oct.-Dec. Japan 100.7 34.4 104.1 36.3 Overseas 44.7 14.8 54.6 19.3 G. Total 145.4 49.2 158.7 55.6 FY2014 Jan.-Sep. 103.0 62.5 165.5 Unit:1,000 Ton 180 160 140 120 44.7 54.6 62.5 100 80 60 40 100.7 14.8 104.1 19.3 103.0 Overseas Japan 20 0 FY2012 Jan.-Sep. 34.4 FY2012 Oct.-Dec. FY2013 Jan.-Sep. 36.3 FY2013 Oct.-Dec. FY2014 Jan.-Sep. 9
(For Your Reference) Number of Tires sold by region compared to the previous year Progress compared to previous year whereby prior year =100 (Unit: %) FY2010 FY2011 FY2012 FY2013 3Q of FY2014 OE Total 90 99 122 96 RE Japan 103 89 107 103 RE Overseas Total 100 114 100 107 RE N. America 101 108 93 115 RE Europe 106 79 99 110 RE S.E. Asia 99 306 109 106 Grand Total 99 106 104 104 89 105 108 107 116 103 105 Number of tires in S.E. Asia has drastically increased since FY2011 due to acquisition of Silverstone Company 10
(For Your Reference) Ratio of Tire Sales Quantity by Geographic Area unit:10thousand 4,000 3,500 FY2012 data of Japan is nine months (Apr Dec) only due to changing account period Numerical values for the Bar is the ratio of tire sold by region (%) The number of line graph indicates the ratio of overseas sales (%) 3,000 2,500 2,000 1,500 16.4 22.4 30.1 61.2 15.2 18.7 66.1 14.0 17.2 30.3 30.5 68.8 15.7 19.2 30.5 65.1 13.7 18.8 31.8 67.5 OE RE Japan RE N.America 1,000 500 14.5 2.2 11.0 11.7 11.3 12.2 11.4 12.8 11.1 11.3 RE Europe RE SE Asia RE Others 14.4 13.4 13.8 12.2 12.2 0 FY2010 FY2011 FY2012 FY2013 FY2014 Full-year outlook 11
(For Your Reference) in Primary Material Prices Market Price Trends (US$/bbl) 130 110 Change in Dubai oil and Domestic Naphtha Prices Dubai Crude Oil Domestic Naphtha (thousands of Yen/kl) (USC/kg) 600 90 75 500 Change in Natural Rubber TSR #20 Prices (SICOM) Natural Rubber TSR#20 90 70 60 45 400 300 50 30 200 30 15 100 Price & Impact by Primary Raw Material (Ordinary Income Basis) ( in Billion) R a w M a t e r i a l FY2010 FY2011 FY2012 FY2013 3Q of FY2014 Natural Rubber (101) (76) +84 +70 +58 Product of petroleum (naphtha) (32) (80) +4 +18 (9) Other Raw Materials* +33 (29) (18) +32 +9 Goods Purchased (0) (1) (0) (0) (0) Total (100) (186) +70 +120 +58 * Other Raw Materials includes valuation difference on inventory assets 12
in Interest-Bearing Debt Balance and Capital Ratio ( in Billion) Interest-Bearing Debt Balance (Left Scale) Capital Ratio (Right Scale) (%) 3Q 13
(For Your Reference) Operating Highlights (in the Third Quarter 2014) In order to reinforce management accompanying growth and expansion, the Company has instituted a structure of three representative directors Oct.16,2014 Representative Director, Chairman, Akira Nobuki Representative Director, President, Takuji Yamamoto Representative Director, Executive Corporate Officer, Tetsuya Kuze 14
(For Your Reference) Operating Highlights (in the Third Quarter 2014) Five new products receive 2014 Good Design Award Oct.01,2014 The Good Design Award was established in 1957 as Japan s sole system for comprehensive design evaluation and commendation. The award is presented to superior designs for all types of objects and activities, both tangible and intangible, which are selected by a judging committee comprised of Japan s leading designers, architects, etc. 15
(For Your Reference) Operating Highlights (in the Third Quarter 2014) New tire products for SUVs & pickup trucks were rolled out to the North American markets. Release October Release September Release August 16
(For Your Reference) Operating Highlights (in the third Quarter 2014) NITTO Facebook page achieved over 10 millions fans. Oct.06,2014 17
(For Your Reference) The Delivery service for E-mail Register for Email News Delivery to receive company information by email in a timely fashion. Mail News Contents 1. Press Release 2. IR News Financial Statement Reporting, Announcement of Revised Performance Forecasts, etc 3. Others Environmental Quality Management News For more information, please visit our website http://www.toyo-rubber.co.jp/english/news/mailnews/ 18
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