THE YOKOHAMA RUBBER CO., LTD. Medium-term Management Plan
2024-2026
February 16, 2024
The Yokohama Rubber Co., Ltd.
Masataka Yamaishi
President, Chairman of the Board
I am Yokohama Rubber President Masataka Yamaishi.
My presentation today will include an introduction to our new medium-term management plan.
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Medium-term Management Plan
2024-2026 | |||
1. | Corporate Philosophy | ||
Contents | 2. | YX2023 Results | |
3. | Medium-term Management Plan | ||
3-1) | Business Strategies | ||
3-2) | Sustainability | ||
3-3) | Financial Strategy |
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This slide presents the contents of today's presentation.
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Medium-term Management Plan
2024-2026 | |||
1. | Corporate Philosophy | ||
Contents | 2. | YX2023 Results | |
3. | Medium-term Management Plan | ||
3-1) | Business Strategies | ||
3-2) | Sustainability | ||
3-3) | Financial Strategy |
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Before presenting the new medium-term plan, I would like to briefly present our corporate philosophy.
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1. Corporate Philosophy
"The Founding Spirit"
-
Production business is a social service.
Its purpose is to make people's lives more convenient and enjoyable.
Its aim should be to offer good, useful products at the best value. - The fundamental policy is to deliver quality products unrivaled by any competitors.
-
Management should adhere to the principles of fairness and consideration.
The mission of a fair and honest management is to secure capital, share the fruits of endeavor with its workers, and fulfill its responsibilities to consumers in a fair manner. - A company should make appropriate investments, update its machinery and increase productivity. This is the key to improving efficiency.
- The success or failure of a business depends on how much one is willing to study and with how much determination, in order to improve and grow. Accordingly one must make a great effort.
Corporate Philosophy | Management Policies | |
"To enrich people's lives and contribute to their greater happiness and well-being by devoting our wholehearted energies and advanced technology to the creation of beneficial products"
- Take on the challenge of new technologies to create new value.
- Develop proprietary business fields to expand the scope of business.
- Create a workplace that values, improves and energizes people.
- Deal fairly with society and value harmony with the environment.
Copyright(C) THE YOKOHAMA RUBBER CO.,LTD. | 3 |
Our "Founding Spirit" shown here is based on a cautionary tale by Suekichi Nakagawa, who was the Company's president in 1929 when our Yokohama Plant was opened in what is now Tsurumi-ku, Yokohama City.
Our current corporate philosophy and core management policies shown on this slide were established in 1992, based on this "Founding Spirit." Yokohama Rubber has conducted its activities with a consistent and unchanging spirit for over 100 years and will continue to do so for the next 100 years. The new medium-term plan that I will present today is based on this unwavering corporate spirit.
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Medium-term Management Plan
2024-2026 | |||
1. | Corporate Philosophy | ||
Contents | 2. | YX2023 Results | |
3. | Medium-term Management Plan | ||
3-1) | Business Strategies | ||
3-2) | Sustainability | ||
3-3) | Financial Strategy |
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Before presenting our new medium-term management plan, I would like to present a general overview of the results of our previous plan, Yokohama Transformation 2023 (YX2023).
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2. YX2023 Results | Past results/YX2023 annual targets | YX2023 annual results | ||||||||
Culmination of the past 100 years | ||||||||||
GD100 | GD2020 | YX2023 | ||||||||
(billion yen) | ||||||||||
12000 | 10.1% | 11.0% | ||||||||
9.0% | 9.1% | 9.3% | ||||||||
8.1% | 985.3 | 9.0% | ||||||||
10000 | 7.7% | |||||||||
Business | 7.1% | 860.5 | ||||||||
profit | 6.4% | 7.0% | ||||||||
margin | ||||||||||
8000 | ||||||||||
670.8 | 700.0 | 5.0% | ||||||||
646.3 | 650.2 | 650.5 | 650.0 | |||||||
620.0 | ||||||||||
596.2 | ||||||||||
6000 | 570.6 | 3.0% | ||||||||
Sales | 1.0% | |||||||||
revenue | ||||||||||
4000 | ||||||||||
-1.0% | ||||||||||
2000 | 62.2 | 70.1 | 99.1 | |||||||
Business | 42.3 | 58.3 | 59.3 | 50.1 | 36.8 | 0% | ||||
profit | 50.0 | 60.0 | 70.0 | |||||||
0 | -5.0% | |||||||||
2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |||
Copyright(C) THE YOKOHAMA RUBBER CO.,LTD. | 5 |
During YX2023, which was implemented for three years from 2021 to 2023 as the "Culmination of the past 100 years," we greatly exceeded each year's initial targets for sales revenue and business profit.
Sales revenue in FY2023, the plan's final year, fell short of our target of ¥1 trillion, but we achieved a business profit margin above 10% for the first time ever.
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2. YX2023 Results
YX2023 result | Target | |
Sales revenue | ¥985.3 billion | ¥700 billion |
Business profit | ¥99.1 billion | ¥70 billion |
Margin （%） | 10.1% | 10% |
D/E ratio | 0.63x | 0.4x |
ROE | 9.9％ | 10％ |
ROIC | 5.3% | 7％ |
Cash flow from operations | ¥267.2 billion | ¥250 billion |
（3yr cumulative） | （3yr cumulative） | |
Capital investment | Within scope of depreciation | Within scope of depreciation |
(excluding strategic investments) | (excluding strategic investments) | |
Cash Flow (billion yen) | Interest-bearing debt, total equity, D/E ratio (billion yen/times) | ||||||||||||||||||
Operating CF | Investment CF | FCF | 1,597 | 8,000 | Total equity | Interest-bearing | D/E ratio | 739,396.6 | 3.00 | ||||||||||
1,500 | 828 | 159.7 | debt | ||||||||||||||||
754 | 605 | 754 | 783 | 683 | 614,144.4 | ||||||||||||||
500 | 75.4 | 60.5 | 75.4 | 78.3 | 68.3 | 392 | 6,000 | 525,253.3 | .4 | ||||||||||
39.2 | 2.00 | ||||||||||||||||||
30.7 | 39.7 | 31.7 | 50.4 | 63.8 | -7.1 | 418,189.9 | 4,415.55 | 4,4694 | |||||||||||
-500 | -91.1 | -4.5 | 4,000 | 379,798.8 | 374,740.0 | ||||||||||||||
-29.7 | -43.1 | -43.6 | -27.9 | -46.4 | 338.5 | 335.9 | |||||||||||||
3,385 | |||||||||||||||||||
3,359 | 3,3156.6 | 260.4 | |||||||||||||||||
2,2387.7 | |||||||||||||||||||
-1,500 | 2,604 | 2,399239.9 | 2,078 | 1.00 | |||||||||||||||
-166.5 | 2,000 | 207.8 | 177,772.2 | 0.63 | |||||||||||||||
0.99 | |||||||||||||||||||
-2,500 | -184.3 | 0.83 | 0.39 | ||||||||||||||||
0.34 | |||||||||||||||||||
0.70 | 0.57 | ||||||||||||||||||
0.50 | |||||||||||||||||||
0 | 0.00 | ||||||||||||||||||
-3,500 | -344.0 | ||||||||||||||||||
2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | ||||||||||||
2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | ||||||||||||
2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
Copyright(C) THE YOKOHAMA RUBBER CO.,LTD. | 6 |
As this slide shows, we were unable to reach our targeted D/E ratio, but the higher ratio reflects our acquisition of Trelleborg Wheel Systems. ROE also came in a bit below target at 9.9%. On the plus side, cumulative cash flow from operations during the three years of YX2023 came in above target at ¥267.2 billion.
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2. YX2023 Results: Tire Business Strategy
Global tire market
2020
Consumer tires (PCR・MC）
Passenger Cars, Motorcycles
Consumer tires
Commercial tires（TBR・OR・AG・ID・AC）
Truck & Bus, construction machinery, agricultural machinery, industrial vehicles, aircraft
TBR 2：1 OHT
Commercial tires
TBR １：１ OHT
2023
Consumer tires
Commercial tires TBR 1：2 OHT
Copyright(C) THE YOKOHAMA RUBBER CO.,LTD. | 7 |
This slide shows the result achieved by our Tire Business Strategy during YX2023. In 2020, our consumer tire to commercial tire sales ratio was 3:2, while the global market ratio was an even 1:1. The acquisition of Trelleborg Wheel Systems (TWS) in FY2023 brought at ratio in line with the global market ratio of 1:1.
In addition, the composition of our commercial tire business is now more heavily weighted toward more highly profitable OHT, with an OHT to TBR ratio of 2:1, the
reverse of the global market's 2:1 ratio favoring TBR.
During YX2023, we were able to achieve our grand strategy for the transformation of our Tire Business structure.
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2. YX2023 Results: Consumer Tires - Product & Regional Strategies
Consumer tire growth in each region (billion yen)
Europe | |||||
50 | CAGR | 15％ | |||
2019→2023 | |||||
40 | |||||
30 | |||||
20 | |||||
10 | |||||
0 | |||||
2019 | 2020 | 2021 | 2022 | 2023 |
China
60
40
20
0
Japan | ||||||
150 | CAGR | 4％ | ||||
2019→2023 | ||||||
100 | ||||||
50 | ||||||
0 | ||||||
2019 | 2020 | 2021 | 2022 | 2023 | ||
10％ | Others | |||||
CAGR | 120 | |||||
2019→2023 | ||||||
90 | ||||||
60 | ||||||
30 | ||||||
0 |
North America | CAGR | 17％ | |||
150 | 2019→2023 | ||||
100 | |||||
50 | |||||
0 | |||||
2019 | 2020 | 2021 | 2022 | 2023 |
CAGR 16％
2019→2023
2019 | 2020 | 2021 | 2022 | 2023 | 2019 | 2020 | 2021 | 2022 | 2023 |
High value-added tire growth (Sales units)
ADVAN | GEOLANDAR | ||||||||
vs 2019 | Initial plan 150％ | vs 2019 | Initial plan 115％ | ||||||
135％ | 109％ | ||||||||
2019 | 2020 | 2021 | 2022 | 2023 | 2019 | 2020 | 2021 | 2022 | 2023 |
WINTER
vs 2019 | Initial plan 120％ |
119％ | ||||
2019 | 2020 | 2021 | 2022 | 2023 |
18-inch and larger
vs 2019 | Initial plan 155％ |
159％ | ||||
2019 | 2020 | 2021 | 2022 | 2023 |
Introduced 3 new product lines | Introduced 2 new product lines | Introduced 2 new product lines | Size-expansion: 637 sizes | |
Copyright(C) THE YOKOHAMA RUBBER CO.,LTD. 8 | ||||
This slide summarizes the results achieved by the product and regional strategies implemented in our consumer tire business. Our strategy of pursuing product strategies tailored to each specific regional market resulted in large increases in sales in all regions, as the graphs here illustrate.
During YX2023, we also endeavored to increase sales of our ADVAN, GEOLANDAR and WINTER tires as we aimed to maximize the sales ratio of these high value-added tires. Unfortunately, we fell short of our target ratios for these tires. However, we achieved our target ratio for 18-inch and larger size tires, as we expanded the lineups to 637 sizes during YX2023's three years.
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2. YX2023 Results: Commercial Tires - OHT Business | ||||||||||||||||
OHT production capacity trend (rubber weight) | OHT sales trend (billion yen) | |||||||||||||||
900 | 235.9 | |||||||||||||||
800 | 2,500 | |||||||||||||||
700 | 2,000 | |||||||||||||||
600 | 155.8 | |||||||||||||||
500 | Phase-1 | 1,500 | ||||||||||||||
400 | 108.2 | |||||||||||||||
300 | Visakhapatnam Plant | 1,000 | 68.7 | 70.8 | 65.3 | |||||||||||
(Vizag Plant) | ||||||||||||||||
200 | ||||||||||||||||
500 | ||||||||||||||||
100 | ||||||||||||||||
0 | 0 | |||||||||||||||
2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |||||
Passenger | Trucks | Agriculture | Construction | Earthmover and | Forestry | Lawn Garden | ATV | Material Handling | Truck | Two-wheelers | Rims | |||||
Light Trucks | Bus | Mining | & Turf | UTV | (off-highway) | |||||||||||
Vans | ||||||||||||||||
After TWS joining | ||||||||||||||||
Copyright(C) THE YOKOHAMA RUBBER CO.,LTD. | 9 |
Next, let's look at the results we achieved in commercial tires. We greatly expanded our OHT production capacity and sales, with the acquisition of TWS supplementing the organic growth at YOHT. In addition, we now have the industry's most comprehensive OHT product lineup, which positions us for further growth of our OHT business.
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YRC - Yokohama Rubber Co. Ltd. published this content on 11 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 March 2024 09:45:03 UTC.
