Mazda Motor Corp. · TSE:7261
Mazda Motor — H1 FY2002 Earnings Presentation
52 slides from Mazda Motor's earnings presentation, Oct 31, 2002
Slide 1: Millennium Plan Status
MAZDA MOTOR CORPORATION MILLENNIUM PLAN STATUS October 31, 2002 1 Millennium Plan Status 10/2002
Slide 2: Presentation Outline
PRESENTATION OUTLINE 1ST Half FY2002 Estimate Full Year Outlook Japan Dealer Mergers & Debt-To- Equity Conversion Millennium Plan Updates ‒ New Vehicle Launch Status ‒ Plant Capacity Changes ‒ Cost Reduction Initiatives ‒ Other Matters Attachments 2 Millennium Plan Status 10/2002
Slide 3: 1st Half FY2002 Overview
1st HALF FY2002 OVERVIEW Volume Targets Essentially Met. Revenue Up YOY 11.7% Substantial YOY Profit Improvement ‒ Operating Profit Up 30% ‒ Net Profit Quadrupled Exceeded All Profit and Return Objectives Versus May Plan ‒ Positive Cost Performance & Weaker Yen Cash Flow Near Breakeven Target Syndic
Slide 4: 1st Half Key Assumptions
1st HALF KEY ASSUMPTIONS B/(W) Than 1st Half May Prior Year INDUSTRY VOLUME (000) Japan 2,780 0.6 % (1.0) % U.S. 8,336 (1.6) (3.0) Western Europe 8,845 (0.2) (4.7) MARKET SHARES (PCT.) Japan 4.6 % (0.6) Pts. (0.3) Pts. U.S. 1.5 0.0 (0.1) Western Europe 0.9 0.0 0.0 WHOLESALES & PROD. (000) Consolidat
Slide 5: 1st Half Financial Metrics
1ST HALF FINANCIAL METRICS Better/(Worse) Than (Billion yen) 1st Half May Prior Year Revenue 1,159.3 29.3 121.1 Operating Profit 14.6 3.6 3.4 Ordinary Profit 9.1 6.1 4.3 Profit Before Tax 7.1 5.1 1.3 Net Income 5.5 3.5 4.2 Return On Sales 0.5 % 0.3 Pts 0.4 Pts Return On Assets 0.3 % 0.2 Pts 0.2 Pts
Slide 6: 1st Half Geographic Revenue
1ST HALF GEOGRAPHIC REVENUE 01 1st Half May October 1,159.3 Total* 1,130.0 1,038.2 853.4 Billion yen Japan 830.1 800.0 438.8 NA 436.1 376.8 130.1 Europe 122.3 80.9 0 200 400 600 800 1,000 1,200 1,400 * Including Inter-Segment Elimination and ROW 6 Millennium Plan Status 10/2002
Slide 7: Geographic Operating Profit
GEOGRAPHIC OPERATING PROFIT (Billion yen) Better/(Worse) Than 1st Half May Prior Year Japan Mazda 8.5 5.5 (0.2) Subsidiaries 9.1 (1.8) (0.6) Total Japan * 16.3 5.2 9.9 North America (7.2) (4.3) (12.3) Europe 2.8 2.8 4.6 Rest Of World 1.8 0.2 0.0 Total ** 14.6 3.6 3.4 * Including Consolidation Adjust
Slide 8: Operating Profit Changes vs Prior Year
OPERATING PROFIT CHANGES 1st Half Compared With Prior Year 28.0 30 25 20 Billion yen 11.6 15 10 3.4 5 0 (5) (10) (7.3) (8.8) (7.4) (15) (12.7) Total Vol & Mix Exch. & Product CR Mktg. Other Oper. FOB Enrich. Exp. Costs 8 Millennium Plan Status 10/2002
Slide 9: Operating Profit Changes vs May Plan
OPERATING PROFIT CHANGES 1st Half Compared With May Plan 8 5.6 5.2 3.6 4.0 1.0 4 0.0 0 Billion yen (4) (8) (12) (12.2) (16) Total Vol & Mix Exch. & Product CR Mktg. Other Oper. FOB Enrich. Exp. Costs 9 Millennium Plan Status 10/2002
Slide 10: Net Debt & Cash Flow
NET DEBT & CASH FLOW Better/(Worse) Than (Billion yen) Prior 1st Half May Year End Cash & Cash 214.3 (18.0) (15.1) Equivalents Borrowing 667.3 13.1 19.0 NET DEBT 453.0 (4.9) 3.9 CASH FLOW (2.1) (2.1) NA Net Debt-To-Equity 260 % 6 Pts 4 Pts Capital Spending 20.6 6.4 0.5 10 Millennium Plan Status 10/2
Slide 11: FY2002 Full Year Forecast
FY2002 FULL YEAR FORECAST 11 Millennium Plan Status 10/2002
Slide 12: Full Year Overview
FULL YEAR OVERVIEW On Track To Achieve May Plan For Revenue, Volume, Profit & Cash Flow Projections Prior To Japan Dealer & Plant Capacity Actions Net Income Projected To Increase To ¥26.5 Billon Due To Dealer Restructuring & Plant Capacity Realignment New Products Off To Good Start. AAI Launch Of M
Slide 13: Full Year Key Assumptions
FULL YEAR KEY ASSUMPTIONS Proj. B/(W) Than FY2002 May Prior Year INDUSTRY VOLUME (000) Japan 5,770 1.2 % (0.8) % U.S. 16,710 1.0 (1.3) Western Europe 16,278 0.5 (4.6) MARKET SHARES (PCT.) Japan 4.9 % (0.3) Pts. 0.3 Pts. U.S. 1.6 0.0 0.0 Western Europe 1.1 0.0 0.2 WHOLESALES & PROD. (000) Consolidate
Slide 14: Full Year Financial Metrics
FULL YEAR FINANCIAL METRICS Proj. Better/(Worse) Than (Billion yen) FY2002 May Prior Year Revenue 2,340.0 90.0 245.1 Operating Profit 51.0 0.0 22.5 Ordinary Profit 37.0 0.0 17.8 Profit Before Tax 31.5 (1.5) 16.0 Net Income 20.0 0.0 11.2 Return On Sales 0.9 % 0.0 Pts 0.5 Pts Return On Assets 1.2 % 0.
Slide 15: Geographic Revenue
GEOGRAPHIC REVENUE FY2001 May October 2,340.0 Total* 2250.0 2094.9 1,763.0 Billion yen Japan 1684.7 1618.7 834.0 NA 788.5 768.4 304.0 Europe 276.3 191.2 0 500 1,000 1,500 2,000 2,500 * Including Inter-Segment Elimination and ROW 15 Millennium Plan Status 10/2002
Slide 16: Geographic Operating Profit
GEOGRAPHIC OPERATING PROFIT (Billion yen) Proj. Better/(Worse) Than FY2002 May Prior Year Japan Mazda 18.0 (10.0) (8.0) Subsidiaries 20.8 0.8 1.5 Total Japan* 32.4 (4.2) 7.9 North America 5.8 2.6 (2.4) Europe 7.9 0.0 6.9 Rest Of World 4.5 0.0 1.2 Total ** 51.0 0.0 22.5 * Including Consolidation Adju
Slide 17: Operating Profit Changes vs Prior Year
OPERATING PROFIT CHANGES Full Year Compared With Prior Year 50 48.2 40 30 22.5 Billion yen 13.9 15.3 20 10 0 (10) (8.8) (20) (26.4) (19.7) (30) Total Vol & Mix Exch. & Product CR Mktg. Other Oper. FOB Enrich. Exp. Costs 17 Millennium Plan Status 10/2002
Slide 18: Operating Profit Changes vs May Plan
OPERATING PROFIT CHANGES Full Year Compared With May Plan 10 5.9 5.3 3.0 5 2.3 0.0 Billion yen 0 (0.6) (5) (10) (15) (15.9) (20) Total Vol & Mix Exch. & Product CR Mktg. Other Oper. FOB Enrich. Exp. Costs 18 Millennium Plan Status 10/2002
Slide 19: Net Debt and Cash Flow
NET DEBT AND CASH FLOW Better/(Worse) Than (Billion yen) Proj. Prior FY2002 May Year End Cash & Cash Equivalents 260.3 30.9 30.9 Borrowing 672.7 (38.1) 13.6 NET DEBT 412.4 (7.2) 44.5 CASH FLOW 40.0 0.0 NA Net Debt-To-Equity 221 % (3) Pts 43 Pts Capital Spending 44.0 4.0 12.6 DIVIDEND PER SHARE 2 - -
Slide 20: Millennium Plan Deliverables
MILLENNIUM PLAN DELIVERABLES METRIC MAY PLAN OUTLOOK Revenue Growth +7% +12% Volume Growth +6% +7% Uncons. Net Income ¥16.0 Billion ¥4.5 Billion Consol. Operating Income ¥51.0 Billion ¥51.0 Billion Consol. Net Income ¥20.0 Billion ¥20.0 Billion ATROS 0.9% 0.9% Consol. Cash Flow ¥40.0 Billion ¥40.0 B
Slide 21: Millennium Plan Deliverables
MILLENNIUM PLAN DELIVERABLES METRIC MAY PLAN OUTLOOK Product Introduce MPV, Mazda Completed & Atenza/Mazda6, New Demio On Track & AAT 1-Ton Pickup. Job #1 For RX-8 and AAI Mazda6 Distribution Japan – Profitable/CF+ On Track Additional Mergers Announced People MBLD3 Completed M21 Leadership Program O
Slide 22: Japan Dealer Actions
JAPAN DEALER ACTIONS 22 Millennium Plan Status 10/2002
Slide 23: Japan Dealer Actions
JAPAN DEALER ACTIONS Dealer Mergers – 42 To 18 Dealers Subordinated Loans Of ¥133 Billion Converted To Equity Objectives ‒ Substantial Operating Improvements ‒ Stabilized Financing In More Severe Banking Environment Financial Impact ‒ Unconsolidated Extraordinary Losses ‒ Consolidated Results Improv
Slide 24: Financial Impact
FINANCIAL IMPACT Projected FY2002 (Billion yen) Uncons. Consol. Operating Profit - (1.0) Ordinary Profit - (1.0) Profit Before Tax (37.2) (2.7) Tax (0.7) 10.8 Net Income (37.9) 8.1 * Reflects Tax Efficiency Within The Group 24 Millennium Plan Status 10/2002
Slide 25: Millennium Plan Updates
MILLENNIUM PLAN UPDATES 25 Millennium Plan Status 10/2002
Slide 26: New Vehicle Launch Status
NEW VEHICLE LAUNCH STATUS Brand Strategy Execution On Track New Products Delivering Brand DNA Global Launch Plan Coordinating Brand And Product Messages Launch Activities Highly Successful Atenza/Mazda6 Beating All Targets Demio Off To A Good Start Zoom-Zoom Communications Highly Effective and Effic
Slide 27: Plant Capacity Actions
PLANT CAPACITY ACTIONS Ujina 2 Closed September 2001. Reduced Japan Capacity By 25%, Or 266K Units, To 788K Units Ujina 1 & Hofu At Or Above Straight- Time Capacity. F Plant Underutilized Added Capacity Required By FY2004 To Support Volume Growth Plan To Close F Plant and Re-Open Ujina 2. Japan Capa
Slide 28: Cost Reduction Initiatives
COST REDUCTION INITIATIVES Commodity-Focused Approach (“ABC”) Cost Reduction Through Total Value Chain – Improved Design, Lower Logistics Costs, Commonization, etc. World-Wide Lowest Cost – Japan, China, Thailand, Others Target 25% Cost Reduction By End – 2004 Present Status On Track 28 Millennium P
Slide 29: Other Matters
OTHER MATTERS Stock Options ‒ Plan To Include Impact In Financial Results As Soon As Permitted By J-GAAP. Impact Less Than ¥0.1 Billon Financial Integrity ‒ Uncompromised ‒ President & CFO Stand Behind Financial Statements ‒ Outside Auditor and Statutory Auditor Assessments Conducted. No Issues 29 M
Slide 30: Wrap Up
WRAP UP Millennium Plan Remains On Track New Products Off To Good Start. NA Mazda6 Launched. RX-8 & Mazda2 Job #1 Before Fiscal Year End Increasing Pressure On Net Revenue and Costs. Delivery Of New CR Targets Mandatory Financing Stable Relationship With Ford Firm Tactical Revisions To Plan Deliveri
Slide 31: 31 Millennium Plan Status 10/2002
31 Millennium Plan Status 10/2002
Slide 32: Attachments 1st Half FY2002
ATTACHMENTS 1ST HALF FY2002 32 Millennium Plan Status 10/2002
Slide 33: Unconsolidated Financial Metrics
UNCONS. FINANCIAL METRICS Better/(Worse) Than (Billion yen) 1st Half May Prior Year Revenue 736.8 6.8 63.3 Operating Profit 8.5 5.5 (0.2) Ordinary Profit 7.4 6.4 (3.5) Profit Before Tax 4.8 0.8 (4.6) Net Income 3.9 0.9 (2.8) Return On Sales 0.5 % 0.1 Pts (0.5) Pts Return On Assets 0.3 % 0.1 Pts (0.2
Slide 34: Japan Volume – 1st Half
JAPAN VOLUME – 1ST HALF 1st Half Over/(Under) FY2002 May Prior Year REGISTERED Industry (000) 1,892 (0.1) % (2.8) % Mazda Market Share 5.6 % (0.9) Pts (0.5) Pts Mazda Retail (000) 107 (13.8) % (9.9) % MICRO Industry (000) 888 2.1 % 3.1 % Mazda Market Share 2.5 % 0.1 Pts 0.3 Pts Mazda Retail (000) 22
Slide 35: U.S. Volume – 1st Half
U.S. VOLUME – 1ST HALF 1st Half Over/(Under) CY2002 May Prior Year Industry (000) 8,336 (1.6) % (3.0) % Mazda Market Share 1.5 % 0.0 Pts (0.1) Pts Mazda Retail (000) 129 (1.4) % (8.5) % 35 Millennium Plan Status 10/2002
Slide 36: W. Europe Volume – 1st Half
W. EUROPE VOLUME – 1ST HALF 1st Half Over/(Under) CY2002 May Prior Year Industry (000) 8,845 (0.2) % (4.7) % Mazda Market Share 0.9 % 0.0 Pts 0.0 Pts Mazda Retail (000) 82 1.2 % (1.3) % Memo: Total Europe 87 1.7 % (2.3) % 36 Millennium Plan Status 10/2002
Slide 37: Canada Volume – 1st Half
CANADA VOLUME – 1ST HALF 1st Half Over/(Under) CY2002 May Prior Year Industry (000) 888 2.7 % 9.8 % Mazda Market Share 4.1 % (0.1) Pts (0.1) Pts Mazda Retail (000) 36 1.0 % 7.1 % 37 Millennium Plan Status 10/2002
Slide 38: Australia Volume – 1st Half
AUSTRALIA VOLUME – 1ST HALF 1st Half Over/(Under) CY2002 May Prior Year Industry (000) 407 0.8 % 8.5 % Mazda Market Share 4.4 % (0.2) Pts (0.3) Pts Mazda Retail (000) 18 (2.3) % 2.8 % 38 Millennium Plan Status 10/2002
Slide 39: Mazda Wholesales & Production
MAZDA WHOLESALES & PRODN (000) 1st Half Over/(Under) FY2002 May Prior Year WHOLESALES Japan 148 (9) 1 North America 101 3 (12) Europe 102 4 28 Rest of World 88 4 2 Total 439 2 19 Memo: Excl. Outsourced Vehicles 392 (2) 17 PRODUCTION Domestic 127 (7) 2 Export 268 8 19 Subtotal Mazda 395 1 21 Purchase
Slide 40: Consolidated Wholesales & Production
CONS. WHOLESALES & PRODN (000) 1st Half Over/(Under) FY2002 May Prior Year WHOLESALES Japan 142 (15) (5) North America 179 5 (5) Europe 91 1 16 Rest of World 86 3 (1) Total 498 (6) 5 PRODUCTION Japan 153 (5) 7 North America 187 (2) 3 Europe 94 2 21 Rest of World 89 4 0 Total 523 (1) 31 40 Millennium
Slide 41: Attachments Full Year 2002
ATTACHMENTS FULL YEAR 2002 41 Millennium Plan Status 10/2002
Slide 42: Key Assumptions
KEY ASSUMPTIONS Proj. Proj. 1st Half 2nd Half FY2002 INDUSTRY VOLUME (000) Japan 2,780 2,990 5,770 U.S. 8,336 8,374 16,710 Western Europe 8,845 7,433 16,278 MARKET SHARES (PCT.) Japan 4.6 % 5.1 % 4.9 % U.S. 1.5 1.7 1.6 Western Europe 0.9 1.2 1.1 WHOLESALES & PROD. (000) Consolidated Wholesales 498 5
Slide 43: Consolidated Financial Metrics
CONS. FINANCIAL METRICS (Billion yen) Proj. Proj. B/(W) Than 1st Half 2nd Half FY2002 May Prior Year Revenue 1,159.3 1,180.7 2,340.0 90.0 245.1 Operating Profit 14.6 35.4 50.0 (1.0) 21.5 Ordinary Profit 9.1 26.9 36.0 (1.0) 16.8 Profit Before Tax 7.1 18.9 26.0 (7.0) 10.5 Net Income 5.5 21.0 26.5 6.5
Slide 44: Unconsolidated Financial Metrics
UNCONS. FINANCIAL METRICS (Billion yen) Proj. Proj. B/(W) Than 1st Half 2nd Half FY2002 May Prior Year Revenue 736.8 793.2 1,530.0 30.0 165.4 Operating Profit 8.5 9.5 18.0 (10.0) (8.0) Ordinary Profit 7.4 5.6 13.0 (12.0) (15.3) Profit Before Tax 4.8 (37.3) (32.5) (57.5) (52.6) Net Income 3.9 (38.9)
Slide 45: Japan Volume – FY2002
JAPAN VOLUME – FY2002 Proj. Proj. Over/(Under) REGISTERED 1st Half 2nd Half FY2002 May Prior Year Industry (000) Sedan 774 826 1,600 11.7 % 11.9 % RV 736 829 1,565 (7.2) (10.1) Other 382 379 761 (2.5) (5.9) Total 1,892 2,034 3,926 0.7 % (1.3) % Mazda Market Share 5.6 % 6.4 % 6.0 % (0.5) Pts 0.3 Pts
Slide 46: U.S. Volume – CY2002
U.S. VOLUME – CY2002 Proj. Proj. Over/(Under) 1st Half 2nd Half CY2002 May Prior Year Industry (000) 8,336 8,374 16,710 1.0 % (1.3) % Mazda Market Share 1.5 % 1.7 % 1.6 % 0.0 Pts 0.0 Pts Mazda Retail (000) 129 141 270 3.8 % 0.1 % 46 Millennium Plan Status 10/2002
Slide 47: W. Europe Volume – CY2002
W. EUROPE VOLUME – CY2002 Proj. Proj. Over/(Under) 1st Half 2nd Half CY2002 May Prior Year Industry (000) 8,845 7,433 16,278 0.5 % (4.6) % Mazda Market Share 0.9 % 1.2 % 1.1 % 0.0 Pts 0.2 Pts Mazda Retail (000) 82 89 171 0.5 % 12.1 % Memo: Total Europe 87 95 182 0.6 % 10.6 % 47 Millennium Plan Statu
Slide 48: Canada Volume – CY2002
CANADA VOLUME – CY2002 Proj. Proj. Over/(Under) 1st Half 2nd Half CY2002 May Prior Year Industry (000) 888 822 1,710 5.3 % 7.1 % Mazda Market Share 4.1 % 4.3 % 4.2 % (0.1) Pts (0.1) Pts Mazda Retail (000) 36 36 72 2.1 % 4.1 % 48 Millennium Plan Status 10/2002
Slide 49: Australia Volume – CY2002
AUSTRALIA VOLUME – CY2002 Proj. Proj. Over/(Under) 1st Half 2nd Half CY2002 May Prior Year Industry (000) 407 423 830 2.4 % 7.5 % Mazda Market Share 4.4 % 5.1 % 4.8 % (0.1) Pts 0.4 Pts Mazda Retail (000) 18 22 40 (1.1) % 15.9 % 49 Millennium Plan Status 10/2002
Slide 50: Mazda Wholesales & Production
MAZDA WHOLESALES & PRODN (000) Proj. Proj. Over/(Under) 1st Half 2nd Half FY2002 May Prior Year WHOLESALES Japan 148 155 303 (16) 16 North America 101 95 196 7 (30) Europe 102 98 200 9 49 Rest of World 88 84 172 6 15 Total 439 432 871 6 50 Memo: Excl. Outsourced Vehicles 392 388 780 1 50 PRODUCTION
Slide 51: Consolidated Wholesales & Production
CONS. WHOLESALES & PRODN (000) Proj. Proj. Over/(Under) 1st Half 2nd Half FY2002 May Prior Year WHOLESALES Japan 142 158 300 (19) 12 North America 179 165 344 21 (3) Europe 91 104 195 7 45 Rest Of World 86 90 176 5 13 Total 498 517 1,015 14 67 PRODUCTION Japan 153 149 302 (17) 16 North America 187 1
Slide 52: 52 Millennium Plan Status 10/2002
52 Millennium Plan Status 10/2002