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1Q 2016 IR Report As of May 2016
Kumho Tire
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Contents
CONTENTS
Ⅰ. 1Q 2016 Earnings Result
Ⅱ. 1Q 2016 Financial Status
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[Unit: 100Mil KRW, %]
2015 4Q QoQ YoY 2015 1Q
7,544 7,842 7,018 -10.5% -7.0%
5,577 (74.9%)
5,799 (73.9%)
5,295 (75.4%)
-8.7% -5.1%
440 (5.8%)
427 (5.4%)
151 (2.2%)
-64.7% -65.7%
134 (1.8%)
-558 (-7.1%)
-131 (-1.9%)
76.5% Turn to
Loss
484 546 546 -0.1% 12.8%
924 (12.2%)
974 (12.4%)
697 (9.9%)
-28.4% -24.6%
1Q16 Earnings Result – Financial Snapshot 2016 1Q
EBITDA
Sales
COGS
Operating
Profit
Ordinary
Profit
Depreciation
2016 1Q
1Q recorded sales of 7,018 100milKRW (-7.0% YoY) and operating profit of 151 100milKRW (-65.7% YoY),
due to 1) decreased production of car makers; 2) one-off cost by labor-management agreement.
IR
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177 158 157
2015 1Q 2015 4Q 2016 1Q
North America
Others
112
132
95
2014 4Q 2015 4Q 2016 1Q
China
Korea
89 88 91
2015 1Q 2015 4Q 2016 1Q
Europe
754 784 702
2015 1Q 2015 4Q 2016 1Q
Global Sales
161 141 148
2015 1Q 2015 4Q 2016 1Q
215
275
211
2015 1Q 2015 4Q 2016 1Q
QoQ -0.6%
YoY -11.3% QoQ 3.4%
YoY 2.2% QoQ -23.3%
YoY -1.9%
QoQ -28.0%
YoY -15.2% QoQ -10.5%
YoY -7.0%
QoQ 5.0%
YoY -8.1%
2016 1Q
- OE sales in Korea and China stagnated with decreased utilization of car makers,
along with decreased China RE sales by severe market competition.
- Sales in EU slightly increased as the market demand and FX rate were favorable.
1Q16 Earnings Result – Regional Snapshot
[Unit: Bil KRW, %]
Note: “Others” Included Kumho Asiana Main Tower Co.,Inc
IR
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5.8% 7.0%
-0.8%
5.4%
2.2%
OPM
754 785
717
784
702
44 55 15
2015 1Q 2015 2Q 2015 3Q 2015 4Q 2016 1Q
Sales Operating Profit
Global
-6 45
2016 1Q IR 1Q16 Sales & Operating Profit - Global
- Sales decreased (-7.0% YoY) with stagnated OE sales in severe market competition, caused by
raw-material tailwind.
- Operating profit decreased (-65.7% YoY) as one-off cost from labor-management agreement.
[Unit: Bil KRW, %] Global 1Q Review
Market Status
Car sales of USA and EU increased with lower oil price, contributing to
favorable RE tire market condition.
In China and Korea market, Hyundai/Kia utilization rate decreased.
Compared to 2015, weak KRW in 1Q16 positively affected.
Results of Kumho Tire (YoY)
Although the market demand in USA and EU was favorable,
RE Sales stagnated with severe competition.
Inventory adjustment of car makers in China market resulted in
OE sales decrease, as tire-supplying car models decrease.
In emerging market, fluctuation of FX rate resulted in weak tire demand.
Extraordinary expense negatively affected operating profit
- Lump sum from labor-management agreement and wage increase
Outlook for the Next Quarter
New plant in Georgia, USA, completed in 2Q16 – M/S increased in US
market expected with reinforced high-inch tire manufacturing.
Additional OE tire supply and contract securement are expected.
New supply for dealers in USA/EU is to contribute sales increase.
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1Q16 Sales & Operating Profit - Korea
7.0% 5.3%
-2.5% -4.2%
3.6%
OPM
601
670
515
610 574
42 36 -26
2015 1Q 2015 2Q 2015 3Q 2015 4Q 2016 1Q
Sales Operating Profit
-13 21
2016 1Q IR
[Unit: Bil KRW, %] Korea
- In Korea, sales decreased (-4.5% YoY) with stagnated OE tire sales, resulted from car makers’
decision to cut production.
- Operating profit decreased (-50.3% YoY) as extraordinary expense of labor-management agreement.
1Q Review
Market Status
Manufactured cars in Korea market in 1Q16: -3.6% YoY
No. of cars sold in Korea market in 1Q16: -5.1% YoY
Domestic sales of car increased with individual consumption tax
discount (+6.9% YoY) – however, export sales of car decreased
(-10.8% YoY) by recession in China and emerging markets.
Results of Kumho Tire (YoY)
RE tire sales volume increased with reinforced consumer promotion
and expansion of distribution channels.
Weak OE tire sales with car makers’ production cut and ASP decrease
with raw-material tailwind.
Weak export caused by 1) decreased orders by market recession;
2) currencies devaluation in countries of Asia and Latin America.
Outlook for the Next Quarter
Sales expansion of highly-profitable product, such as UHP tires,
will be executed.
Securing additional OE tire supply to meet OE sales target.
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1Q16 Sales & Operating Profit - China
186
234
186
242
156
2015 1Q 2015 2Q 2015 3Q 2015 4Q 2016 1Q
Sales Operating Profit
-1.6% 5.7%
-5.2%
17.3%
-6.2%
OPM
42
-3 13 -10 -10
2016 1Q IR
- Sales decreased (-16.4% YoY) with 1) weak export caused by recession in emerging market;
2) weak RE/OE sales in china, cause by sales decrease of cars to which Kumho Tire is supplying.
- Operating profit decreased (-224.1% YoY) with utilization rate decline.
[Unit: Bil KRW, %] China 1Q Review
Market Status
Sales volume of cars in China increased +6.8% YoY, owing to tax
benefits by government policy.
Demand for high-inch tires increased, with rapid growth of MPV
and SUV.
Results of Kumho Tire (YoY)
OE tire sales decreased with the car sales decline that Kumho tire is
supplying, along with ASP decrease.
RE tire sales volume and ASP decreased with severe competition
in China domestic market.
Recession in emerging market and decreased demand for china-
manufactured tires also affected weak sales.
Outlook for the Next Quarter
RE sales volume increase expected with business district development
through subdividing distribution channels.
Preventing delays in providing tires to new car models and stabilizing
supply will be executed.
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2016 1Q IR Regional Sales Breakdown & UHP Tire Sales
■ Regional Sales Breakdown
■ Global Sales Trend of High-inch Tires
Note:
Figures based on tires sales only
Korea North
America China EU
Latin
America ETC Global
2015 1Q 27.5% 19.0% 20.6% 14.4% 5.9% 12.6% 100.0%
2016 1Q 28.2% 17.5% 20.4% 14.7% 5.2% 14.0% 100.0%
Sales ratio of high-inch tires (above 17 inches) continuously increased, showing 36.0% in 1Q16
The portion of high-inch tires is expected to record more than 40%, as new US plant started to operate
and relocation of Nanjing plant is to be completed in 2017
36.0%
2011 2012 2013
20.1%
2014 2010
Note: Units of tires above 17 inches, based on PC/LT tires sales
2016 1Q
The Rest
High-inch Tires
22.7% 25.4% 27.4% 31.7% 35.6%
2015
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Global Production
6,626
7,495
6,561
2015 1Q 2015 4Q 2016 1Q
Korea China Vietnam
Global
817
872 865
2015 1Q 2015 4Q 2016 1Q
11,970 13,169
11,308
2015 1Q 2015 4Q 2016 1Q
2016 1Q
[Unit: 1,000] ■ Global Production in 1Q16: -14.1% QoQ, -5.5% YoY
4,527 4,802
3,883
2015 1Q 2015 4Q 2016 1Q
IR
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Natural Rubber :
Until March, price of natural rubber maintained weak with the recession in China,
then showed rebound along with other raw-materials price rally.
Synthetic Rubber :
Maintenance of synthetic rubber plants resulted in supply shortage and increase
of B/D price. However, the weak trend continued with ongoing global recession.
2,478
2,208
1,941
1,808
1,661 1,617
1,687
1,596
1,402
2,537
2,405
2,431 2,463
2,181
2,023 2,065
1,950
1,799
2,104
2,005 1,940
1,925
1,774 1,687 1,697
1,614
1,498
2014 1Q 2014 2Q 2014 3Q 2014 4Q 2015 1Q 2015 2Q 2015 3Q 2015 4Q 2016 1Q
[USD/ton]
S/R QoQ -7.7%
YoY -17.5%
Total QoQ -7.2%
YoY -15.6%
N/R QoQ -12.2%
YoY -15.6%
N/R
22.5%
S/R
26.6% T/CORD
10.7%
S/CORD
9.8%
C/Black
9.8%
ETC
20.6%
[2016 1Q]
Raw Material
Breakdown
2016 1Q IR Trend of Raw Material Cost
■ Raw material input cost in 1Q16 additionally decreased QoQ, YoY
■ Trend of Raw Material Cost (Based on Input Cost)
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2016 1Q IR Financial Status
(Unit: 100 Million KRW) (1) Income Statement - Consolidated
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2016 1Q IR
(Unit: 100 Million KRW)
Financial Status
(2) Balance Sheet - Consolidated
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2016 1Q IR
(Unit: 100 Million KRW)
Financial Status
(3) Income Statement - Korea
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2016 1Q IR Financial Status
(4) Balance Sheet - Korea (Unit: 100 Million KRW)
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