2024-02-16 23:41:04 ET
Bridgestone Corporation (BRDCY)
Q4 2023 Earnings Conference Call
February 16, 2024 1:00 a.m. ET
Company Participants
Shu Ishibashi - Global CEO, Representative Executive Officer
Masahiro Higashi - Global COO
Shida Yoshikazu - Global CCO
Naoki Hishinuma - Global CFO and Executive Director, Global Finance
Conference Call Participants
Shinji Kakiuchi - Morgan Stanley Securities
Tairiku Sakaguchi - Mizuho Securities
Kazunori Maki - SMBC Nikko
Arifumi Yoshida - Citi
Shiro Sakamaki - Daiwa Securities
Presentation
Unidentified Company Representative
I would like to thank all of you for coming to Bridgestone's Financial Results Presentation for 2023. First, I would like to introduce to you the participating members. We have Global CEO, Representative Executive Officer, Shu Ishibashi; Mr. Masahiro Higashi, Global COO; Shida Yoshikazu, Global CCO; and Naoki Hishinuma, Global CFO, and Executive Director, Global Finance. These four members will participate from our side.
I would like to first of all invite Mr. Shu Ishibashi, Global CEO and Representative Executive Officer, to present the summary of financial results for 2023, including review of mid-term business plan '21 to '23, as well as business plans for 2024.
Shu Ishibashi
Hello, everyone. I am Shu Ishibashi, Global CEO. First, I would like to explain the financial results for 2023, and provide review of 21MBP, and business plans for 2024. 2023 was the final year of the 21 MBP, which was announced in February, 2021. Our goal was to become a strong Bridgestone capable of adapting to change. In addition, looking ahead to our next three-year plan, the 24MBP, we have been driving initiatives to lay foundation for premium enhancement and its evolution with the solutions business. However, last year, there was significant decline in truck and bus tires for replacement mainly in North America, Europe, and in China, and we were unable to sufficiently adapt to the change.
In particular, accuracy in demand sales forecast in North America and Europe, as well as weak business and channel foundations in Europe, which were exposed by the challenging business environment remained as issues. Additionally, we consider monitoring signals to respond to change as in the case of the sharp devaluation of currency in Argentina, which negatively impacted our financial results as new issue. As we have not yet returned to a strong Bridgestone capable of adapting to change, our top priority in 2024 is to improve and reinforce business quality.
On the other hand, we have been reinforcing our structure to produce and sell premium tires throughout the 21MBP. And we have completed laying the foundation for premium enhancement. Linkage with the solutions business was partially achieved having firmly confirmed and qualified what to do and what not to do. Unfortunately, financial results for 2023 landed below our full-year forecast announced in February of 2023. Compared to the 2023 targets in the 21MBP, which was announced in February of 2021, with tailwinds for currency exchange, revenue, adjusted operating profit, and net profit amounts, as well as planned dividend all exceeded targets. However, ROIC, our most important KPI, fell below target, leading an issue in improvement of business quality.
Next, I will explain details of our results. Our revenue was approximately JPY 4,300 billion. Although the sales volume declined due to significant demand decline for TB replacement tires in North America and in Europe was large negative factor, we secured increased revenue versus pervious year by achieving sales mix improvement through expanded sales of premium PS replacement tires, sales expansion of ultra-large and large OR tires, and with tailwind from currency exchange. The revenue portion of the solutions business excluding retail tired achieved our target of 20%. Adjusted operating profit was approximately JPY 480 billion, and adjusted operating profit margin was 11.1%....
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Bridgestone Corporation (BRDCY) Q4 2023 Earnings Call Transcript