Financial Report (January 1 ~ June 3, 212) Sumitomo Rubber Industries, Ltd.
Key Subjects 212 2 nd Quarter Financial Results Summary Changes in Scope of Consolidation, Major Affiliated Companies Financial Results Summary 212 Financial Results Projection Financial Results Projection Summary Capex/Depreciation, Tire Production Capacity etc. 1 Changes in Consolidated Subsidiaries Scope of Consolidation Consolidated Subsidiaries 66 (+1) Equity-method affiliates 14 (-2) Unconsolidated Subs. 5 Affiliated companies 9 # of changed Companies Newly included 2 Excluded (1) Newly included - Excluded (2) 2 1-2 SUMITOMO RUBBER DO BRASIL LTDA. Dunlop Hokkaido Co., Ltd. Hiroshima Rubber, Ltd. Kyoshin, Ltd. Srixon South Africa (PTY) Ltd. (Merged with Dunlop Marketing Co., Ltd.) (Merged with Dunlop Tire Chugoku Ltd.) 2
Sumitomo Rubber Group Major Subsidiaries Tire business business Industrial & Other Overall Control Dunlop Tire Sales HQS. OE:Dunlop Goodyear Tires GY brand:goodyear Japan Export:SRI Tire Trading Dunlop (Former SRI ) Hybrid Rubber Products HQS. Sales Manufacture Service Affiliates Domestic wholesale companies (11) Domestic wholesale companies(3) Overseas wholesale company Overseas wholesale company (U.S/EU/Asia/Russia/Thailand/China (Canada/Euro/Asia/Australia /Middle East/Latin America) /China/Hong Kong) Tire Overseas Factories: Indonesia, Thailand, China(Changshu), China(Hunan) Under construction: Brazil Dunlop Retread Service Nakata Engineering SRI USA SRITP (Holding Co.) JV:GDTE,GDTNA Naigai Rubber Tochigi SEI GSGPC,GSGTL Domestic factory: Dunlop Golf Club Overseas Factory: Roger Cleveland Golf Company Tennis ball factory:thailand SRI Engineering, SRI Systems, SRI Logistics Golf Course Wako Tennis Dunlop Home Products Sumigomu Sangyo Hong Kong Sumirubber Zhongshan Sumirubber Sumirubber Vietnam Sumirubber Malaysia 66 Subsidiaries 14 Affiliates 3 Consolidated Financial Results Jan. -Jun. Jan.-Mar. Apr.-Jun. Jan.-Jun. May. 9 th Feb.14 th Sales 166.9 115% +21.9 166.8 18% +12.1 333.7 111% +34. 331. 326. Operating Income (%) 16. (9.6%) 165% +6.3 16.3 (9.8%) 162% +6.2 32.3 (9.7%) 163% +12.5 28. (8.5%) 27. (8.3%) Ordinary Income (%) 17. (1.2%) 161% +6.4 13.3 (8.%) 161% +5.1 3.3 (9.1%) 161% +11.5 27. (8.2%) 25. (7.7%) Net Income 1.1 238% +5.9 6.3 135% +1.6 16.4 184% +7.5 15. 14. Equity Income.2 (.4)..1.2 (.4).2-4
Consolidated Sales / Income (Jan.-Jun.) Jan. -Jun. 4 Sales 35 284.5 253.9 3 25 Ordinary Income 2 17.3 15 17.2 14.3 6.8% 28.8 229.7 2.3 Operating Income 18.8 18.9 % = Ordinary Income / Sales ratio New High 333.7 299.7 32.3 1 8.2 11.1 3.9% 5 2.1 (.6) 1.4 8.9 Net Income '7 '8 '9 '1 '11 '12 (5) (6.9) - (7.6) (1) 5 6.7% 19.8 6.3% 3.3 9.1% 16.4 Net Sales / Operating Income by Industry Segment Jan. -Jun. Jan.-Mar. Apr.-Jun. Jan.-Jun. May. 9 th Feb.14 th Tire 145.3 117% 142.7 17% 288. 112% 285. 28. Sales Industrial & Others 14.7 6.9 18% 97% 17. 7.1 116% 18% 31.7 14. 112% 12% 33. 13. 33. 13. Consolidated 166.9 115% 166.8 18% 333.7 111% 331. 326. Operating Income Tire Industrial & Others Consolidated 14. 1.5.5 16. 166% 211% 88% 165% 13.9 2..4 16.3 146% 391% 1574% 162% 28. 3.4.9 32.3 155% 286% 151% 163% 24.5 3..5 28. 23.5 3..5 27. 6
Consolidated Operating Income by Industry Segment (Jan.-Jun.) Jan. -Jun. 35 3 32.3 25 2 15 1 5 (5) 28. Consolidated Operating Income 19.8 17.3 2.3 14.3 18. Tire 12.8 15.4 7.6 4.1 5.7 3.4 1.4 3.2 1. 1.2.9 1.2.6.9 (2.4).6 Industrial (.6) '7 & Others '8 '9 '1 '11 '12 7 Consolidated Operating Income by Geographic Area(Jan.-Jun.) Jan. -Jun. Sales '7Q2 '8Q2 '9Q2 Japan 217.6 229.3 168.7 35. Asia 18.5 27. 21.2 Other 17.7 28.2 39.9 3. Total 253.9 284.5 229.7 '1Q2 '11Q2 188.8 182.8 37.1 47.7 55. 69.2 28.8 299.7 '12Q2 24.6 54.8 74.3 333.7 32.3 25. 2. 15. 1. 5.. (5.) Japan Consolidated Operating Income 19.8 23.9 17.3 14.3 2.3 13.9 Asia 13.2 11.9 9.9 7.5 1.8 1.6 2.2 2.2 5.2 2.8 3.5 3.7 2.6 (3.7).3.9 Other (.6) '7Q2 '8Q2 '9Q2 '1Q2 '11Q2 '12Q2 8
Overseas Sales (Jan.-Jun.) Jan. -Jun. 15. Overseas Sales 115.2 14.2 17.6 146.5 155.6 17.6 1. 5. North America Europe Asia Other 4.6 34.2 26.9 13.5 46.2 15.5 42.2 36.2 37.1 31.9 26.8 11.8 46. 43.5 4. 17. 52.3 42.4 29.9 31.1 58.1 43.3 39.3 29.9. Sales 253.9 Percentage of Overseas 45% '7Q2 '8Q2 '9Q2 '1Q2 '11Q2 '12Q2 284.5 49% 229.7 28.8 299.7 333.7 47% 52% 52% 51% 9 Consolidated Ordinary Income Walk (Jan.-Jun.) Jan. -Jun..3 2.1.3 2.5 (2.4) '12Q2 (3.4) (3.2) '11Q2 18.9.6 Raw Material Price 14.7 Volume & Mix Natural Rubber 1. Pet. Related (9.9) Others.5 Natural Rubber 1. Pet. Related (8.) Others.6 Direct Costs Fixed Costs Exchange Rate USD 82 8 EUR 115 13 AUD 85 82 11.5 (.4).5(3.3) 3.3 May.9 th Proj 2.6 13.3.5.2 (2.1) (2.5) 1.8 (.1) (.4)(.7)(4.5)Total 8.1 '11 '12 (25.3) 16.5 13.4.9 (.6).5 (2.9) (.3) (1.1).6 (1.6)Total.1 1 FOREX Industrial & Others SGA Other income,loss Equity income Euro / N.A. JV's.6.2
Consolidated Results Projection () Sales Operating Income (%) Ordinary Income (%) Net Income Equity Income 212 715. 67. (9.4%) 61. (8.5%) 32..2 Actual 211 676.9 53.9 (8.%) 49.9 (7.4%) 28.4 2.3 16% 124% 122% 113% May. 9 th 71. 63. (8.9%) 58. (8.2%) 31..2 Jul.-Dec. Aug.9 th 381.3 34.7 (9.1%) 3.7 (8.%) 15.6. 11% 12% 8% (1.7) ROE 15.2% 14.7%.5P 14.8% Interest-bearing debt 27. 274.2 (4.2) 265. 11 Consolidated Sales / Income (27~212 ) % =Profit %, New High 9 715. 65. 8 676.9 567.3 524.5 64.5 9.4% 7 67. Sales 8.% 6 53.9 8.% 7.9% 61. 45.1 47.6 8.5% 5 Operating Income 49.9 4 43.2 7.4% 5.5% 42.5 7.6% 4.2% 28.7 7.% 28.4 3 25.7 32. Ordinary Income 2 19.5 3.8% 2. 21.4 1 14.8 2.4% 1. Net Income 9.1 '7 '8 '9 '1 '11 '12 12
Net Sales / Operating Income by Industry Segment () Sales Tire Industrial & Others Consolidated 212 622. 63. 3. 715. Actual 211 591. 58.4 27.5 676.9 15% 18% 19% 16% May. 9 th 616. 64. 3. 71. Jul.-Dec. Aug.9 th 334. 31.3 16. 381.3 1% 14% 116% 11% Operating Income Tire Industrial & Others Consolidated 6. 5. 2. 67. 48.8 3.6 1.5 53.9 123% 137% 137% 124% 56. 5. 2. 63. 32. 1.6 1.1 34.7 14% 64% 128% 12% 13 Consolidated Ordinary Income Walk (Jul. ~ Dec. ) Jul.-Dec. 15.1 Natural Rubber 14. Pet. Related 1.1 Others..6 (3.9).5 (2.3) (1.1) (.8) (.7) '11 '12 Raw Material Price (7.8) 31. 3.7 Natural Rubber 1.8 Pet. Related (2.9) Others 1.1 Volume & Mix Direct Costs Fixed Costs (.4) (1.7)(1.5)(4.6) May. 9 th 9. (2.9).6.3 (2.2). (.4).6 (1.7)(1.4)(1.9) Total. '1 '11 (29.9) 31.4 9.8 1.7 (2.) (2.9).4 (.4) 2.1 (.6)(2.3) Total 7.3 14 FOREX Euro / N.A. JV's 1.7. Industrial & Others Other SGA Other income, loss Equity income
Consolidated Ordinary Income Walk (212 ) Natural Rubber 24. Pet. Related (8.8) Others.5 '11 49.9 15.7 Raw Material 1.8 Price.2 Volume & Mix Natural Rubber 2.8 Pet. Related (1.9) Others 1.7 Price Natural Rubber (TSR 2) WTI.9 Direct Costs 212 211 212 211 Exchange Rate USD 8 79 EUR 111 1 AUD 82 81 1Q 2Q 3Q 4Q Ave. 4.1 3.68 3.62 3.25 3.64 4.4 86 5.2 98 4.8 14 4.64 1 4.74 ($/kg) 97 76 88 11 11 94 ($/bbl) (3.5) (4.2) Fixed Costs +11.1 1.4.8 Euro / N.A. JV's 2.3.2 (11.) 61. May. 9 th 11.6 1.4 1.1.5 (4.3) (2.5) 1.4.5 (2.1)(2.1)(6.4) Total 8.1 '1 '11 (55.2) 47.9 23.2 2.6 (2.6) (2.4) (2.5) (.7) 1. (.)(3.9) Total 7.4 15 FOREX Industrial & Others SGA Other income,loss Equity income (2.1) (1.) (7.9) '12 Consolidated Ordinary Income Analysis Period 11 1Q 2Q 2H Ordinary Income 1.6 8.3 31. 49.9 vs Pre. Year 7.4 Raw Material.4 (1.5) (.3) (14.8) 7.3 (29.9) (55.2) Price 6.3 1.2 31.4 47.9 Volume & Mix 8.2 5.2 9.8 23.2 Direct Costs..3 (.9).9 (.9) 1.4 1.7 (2.) (2.9) 2.6 Fixed Costs (2.6) Factor FOREX (2.4) Equity income (1.2) (.1) (.5). (1.2) (1.7) (.2) (.6).6 (.4).4 (.4) 2.1 (.6) (2.3) (2.5) Industrial & Others (.7) Other SGA 1. (.) (3.9) 1Q 2Q 12 2H 17. 13.3 3.7 61. 6.4 5.1 (.4) 11.1 (2.5) 3.1 15.1 15.7 1.8 3.9 (3.9) 1.8 1.2 1.3 (2.3).2.5 (.2).6.9 (2.) (.4) (1.1) (3.5) (1.1) (2.3) (.8) (4.2).8 1.3 (.7) 1.4 (.1).4.5.8 (.4). (1.7) (2.1).7 (.2) (1.5) (1.) (1.5) (1.8) (4.6) (7.9) vs May. 9th Proj 1H - 3.4 (2.) 1.4 2..1 (.3) (.9).3.4. 1.2 1.2 2H - (.4) 6.1 (1.) (2.9).3 1.1 (.8) (.3) (.1) - 3. 4.1.4 (.9).4.8 (1.7)..3. (.1) (2.7). 1.1 (1.5) 16
Tire Sales Volume (Comparison %) 211 ACT 212 Jan.-Jun.ACT, Jul.-Dec. 212 May.9th Jan-Mar Apr-Jun Jul-Sep Oct-Dec Jan-Mar Apr-Jun Jul-Sep Oct-Dec Jan-Jun Jul-Dec Domestic O.E. 78% 68% 16% 88% 136% 151% 15% 98% 119% 14% 98% 116% Overseas O.E. 119% 97% 119% 97% 18% 13% 118% 114% 153% 121% 115% 137% 126% Domestic Rep. 112% 12% 19% 1% 19% 11% 93% 11% 15% 1% 96% 12% Overseas Rep. 15% 112% 113% 17% 13% 1% 11% 11% 11% 14% 14% 14% Total 13% 98% 11% 17% 14% 17% 16% 13% 16% 15% 18% 16% 17% Total Tire Sales(units) 21,74 21,74 24,89 26,51 94,88 23,27 22,95 25,57 28,5 99,84 46,83 54,16 1,98 Overseas Rep North America Asia Middle East Europe &Russia 91% 127% 46% 146% 89% 17% 76% 13% 92% 115% 94% 151% 95% 11% 12% 131% 92% 114% 81% 14% 1% 95% 161% 13% 16% 116% 15% 67% 115% 9% 92% 115% 9% 91% 11% 11% 15% 89% 15% 14% 127% 94% 112% 87% 18% 12% 18% 13% 12% 17 Tire Overseas Rep. Volume by Regional Segment Third party overseas Rep Sales by SRI / Foreign Subs. 5 4 3 2 1 units Numbers shown in the bar graph are yoy % by region 117% 112 94 141 111 124 116% 122 115 13 11 131 94% 94 72 9 11 96 121% 117 135 159 17% 14 114 '7 '8 '9 '1 '11 '12 96 126 92 14 81 11% 11 87 89 15 11 N. America S. America Europe & Russia Africa Middle East Asia Oceania Forex($) 118 15 93 88 8 79 (Rates applied for sales) 18
Shareholders' Equity / Interest-bearing debt 35 3 25 2 15 1 5 Shareholders' d/e ratio Equity 275.7 274.2 261.6 272.3 27. 239.6 241.3 227.8 224.2 211.3 187. 189.7 197.7 18.9 1.1 1.5 1.4 1.3 '7/12 '8/12 '9/12 '1/12 '11/12 '12/6 '12/12 Shareholders'Equity Ratio Interest-bearing debt 33.9% 28.3% 3.5% 3.5% 29.4% 31.3% 31.6% 1.4 1.3 1.2 times 2. 1.9 1.8 1.7 1.6 1.5 1.4 1.3 1.2 1.1 1. 19 Cash Flow Jan.-Jun. 5 4 3 2 1 (1) (2) (3) Operating activity 29.8 1.4 (28.4) 16. (13.8) (29.8) 25.4 4.9 (2.5) 34.1 17.1 Free CF (.7) (17.) (23.6) (22.9) Billion 42.9 1.5 (32.3) (4) Investing (5) activity '7 '8 '9 '1 '11 '12 Interest bearing debt 22.4 261.2 282.5 243.3 275.1 272.3 2
Capex and Depreciation Capex 6 53.2 49.6 5 45.3 Tangible Assets only Depreciation 59.3 47.5 4 3 2 1 33.4 31.2 33.6 33.5 32.1 3.8 31.2 26.2 23.2 37.4 29.6 27.5 29.5 19.7 13.7 16.4 '6 '7 '8 '9 '1 '11 '12 Overseas Change in depreciation methods(4.) 21 Tire Production Capacity yoy 11% 19% 19% 15% 14% 15% 16% t/mth 5, 45, 4, 35, 3, 25, 2, 15, 1, 5, 34,17 37,3 4,7 42,65 44,45 46,55 49,45 12 2,4 4,2 2,35 9,15 5,85 1,1 1,15 4,35 4,2 2,45 9,2 5,85 1,1 3,4 5,15 4,2 2,7 9,2 5,9 1,15 3,95 5,95 4,45 2,7 9,35 6, 1,25 5,6 6, 4,45 2,7 9,35 6, 1,35 8,2 6,65 5,1 75 9,35 6,15 1,35 1,5 6 6,65 5,1 75 9,35 6,15 1,35 '6/12 '7/12 '8/12 '9/12 '1/12 '11/12 '12/12 Overseas ratio ' 7 26% ' 8 31% ' 9 34% ' 1 36% ' 11 43% ' 12 46% Thailand China(Hunan) China(Changshu) SURINDO Izumiotsu Miyazaki Nagoya Shirakawa 22
t 6 Tire Production Volume and Operating Ratio 5 4 3 2 1 yoy 14% 19% 19% 84% 124% 18% 16% 94 Operating ratio 97 97 454 417 381 Group production volume 226 186 21 1 st Half 79 382 171 93 474 227 96 514 245 94 546 265 % 1 9 8 7 6 '6 '7 '8 '9 '1 '11 '12 28 Jan.-Sep. Oct.-Dec. Operating ratio 92% Factory temporary shutdown - 2days 29 Jan.-Mar. Apr.-Jun. Jul.-Sep. Oct.-Dec. Operating Factory ratio temp. shutdown 71% 7days 74% 4days 84% - 88% - 21 Jan.-Mar. Apr.-Jun. Jul.-Sep. Oct.-Dec. Operating ratio 9% 94% 94% 96% 5 23 Sales in the Business Results & Projection Golf Clubs Golf Balls Golf Shoes, Accessories & Others Golf goods Tennis goods Licensing income goods business Other business Total 212 2Q Jan.-Jun. 16.2 6.3 4. 26.4 3.5.2 3. 1.7 31.7 211 2Q Jan.-Jun. 13.8 5.6 3.9 23.4 3..2 26.6 1.7 28.3 117% 111% 11% 113% 115% 16% 113% 112% 212 31. 12.2 7.9 51. 6.6.4 58. 5. 63. 24
New Products / New Technology 25 14 12 1 8 6 4 2-2 -4-6 -8-1 -12-14 -16-18 -2 The Influence of Raw mat. Price rise & Raising of Tire Prices ( v.s '2) Raising of Tire Prices Raw mat. Price rise 19.2 (57.6) 28.1 8.9 (8.) Net (38.4) (65.6) Net (37.5) 5.4 22.3 (36.7) (12.3) Net (51.9) 6.4 1. (8.1) 28.6 (73.7) Net (13.3) 69.3 8.9 (3.6) (14.3) Net (35.) 117.2 47.9 (55.2) (159.5) Net (42.3) 128. 1.8 (39.5) 15.7 (143.8) Net (15.8) '3~ '6 '7 '8 '9 '1 '11 '12 26
Market Price: Natural Rubber Naphtha /kl 9 85 8 75 7 65 6 55 5 45 4 35 3 25 2 15 3Q1 US /Kg 55 5 45 4 35 3 25 2 15 1 5 Naphtha Price (prod. in Japan) 4Q1 5Q1 6Q1 7Q1 8Q1 NR SICOM TSR2 (Ave.) NY Crude Oil Price 9Q1 1Q1 451.9 338. 194.6 215.3253. 138.6 62.9 51.5 75.11.4 18.4 12.7 11Q1 12Q1 34.6 ' '1 '2 '3 '4 '5 '6 '7 '8 '9 '1 '11 '12 $/bbl 14 12 55 45 1 8 35 6 25 4 15 2 5 US /Kg 211 212 21 27 26 NR SICOM TSR2 Monthly Move 28 29 24 25 23 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Trend of Raising of tire prices Domestic REP: Whole Sale price for sales co. May. '4 avg. 5% Sep. '5 4 ~ 4.5% Apr. '6 4 ~ 4.5% Feb. '7 5% Apr. '8 5% Sep. '8 5% Mar. '11 7% (TB) May. '11 7 ~ 1% Sep. '11 8% (TB) Overseas REP: '4 3% '5 3% '6 3% '7 3~6% '8 5~1% '9 5~1% '11 5~1% 27 END 28