Mazda Motor Corp. · TSE:7261
Mazda Motor — Q3 FY2012 Earnings Presentation
59 slides from Mazda Motor's earnings presentation, Feb 2, 2012
Slide 1: Fiscal Year Ending March 2012 Third Quarter Financial Results
FISCAL YEAR ENDING MARCH 2012 THIRD QUARTER FINANCIAL RESULTS New Mazda CX-5 Mazda Motor Corporation February 2, 2012 1
Slide 2: Presentation Outline
PRESENTATION OUTLINE Highlights Fiscal Year Ending March 2012 - First Nine Months Results - Full Year Forecast Structural Reform Plan to Reinforce the Framework for Medium- and Long-term Initiatives In Summary 2
Slide 3: Highlights
HIGHLIGHTS 3
Slide 4: First Nine Months Highlights
FIRST NINE MONTHS HIGHLIGHTS First nine months results - Operating loss was ¥54.3 billion, due to historical yen’s appreciation, the Earthquake impact, crisis in Europe and the flood in Thailand. Net loss was ¥112.8 billion due to the provision of valuation allowance for our deferred tax assets - Gl
Slide 5: Full Year Forecast Highlights
FULL YEAR FORECAST HIGHLIGHTS Full year operating loss is projected at ¥40.0 billion and net loss at ¥100.0 billion Bottoming out in the third quarter and expect to achieve positive results in all profit categories in the fourth quarter Global sales projection is 1.25 million units As a first model
Slide 6: Fiscal Year Ending March 2012 First Nine Months Results
FISCAL YEAR ENDING MARCH 2012 FIRST NINE MONTHS RESULTS 6
Slide 7: FY Ending March 2012 Financial Metrics
FY ENDING MARCH 2012 FINANCIAL METRICS Nine Months Total Change FY March FY March YOY(%) (Billion yen) 2012 2011 Amount Revenue 1,418.3 1,717.9 (299.6) (17) Operating profit (54.3) 13.2 (67.5) - Ordinary profit (58.1) 23.1 (81.2) - Profit before tax (66.5) 18.7 (85.2) - Net income (112.8) 2.8 (115.6
Slide 8: Key Data
KEY DATA Nine Months Total Change FY March FY March 2012 2011 Volume YOY(%) Global sales volume (000) Japan 137 153 (16) (10) North America 266 257 9 4 USA 186 174 12 7 Europe 129 155 (26) (17) China 165 186 (21) (11) Other Markets 194 206 (12) (6) Total 891 957 (66) (7) Exchange rate US$ / Yen 79 8
Slide 9: Japan
JAPAN Nine Months Sales Volume (000) (%) / Share 10 153 137 (10)% 100 5 4.4 4.5 New Mazda Demio 13-SKYACTIV For nine months total, sold 137,000 0 0 units. Share was up 0.1 point to 4.5% despite lower industry demand Full Year Sales Volume For three months, posted a year-over- 206 0% 206 year increas
Slide 10: North America
NORTH AMERICA Nine Months Sales Volume (000) (%) / US Share 257 4% 266 4 Canada, Canada, 200 others 83 others 80 2 New Mazda3 100 1.9 1.9 Achieved 266,000 units, up 4% year- USA 174 USA 186 over-year for nine months total, thanks to brisk sales of CX-7, CX-9, 0 0 and incremental sales of Mazda2 Full
Slide 11: Europe
EUROPE Nine Months Sales Volume (000) (%) / Share 155 129 (17)% 2 100 1.2 0.9 Mazda CX-7 Nine months total sales were 0 0 129,000 units, with 0.9% share, due to the impact of economic crisis Full Year Sales Volume and increasing competition in major countries 212 200 182 Sold 31,000 units in Russia,
Slide 12: China
CHINA Nine Months Sales Volume (000) (%) 200 186 / Share 165 (11)% 2 100 1.4 1.2 New Mazda3 Xingcheng Sold 165,000 units for nine months 0 0 total due to the impact of increasing competition and lower Full Year Sales Volume demand of small-sized vehicles. Share was 1.2% 236 0% 236 Expanded product l
Slide 13: Other Markets
OTHER MARKETS Nine Months Sales Volume (000) / Australia Share (%) 206 194 20 200 (6)% 8.1 8.6 100 10 New BT-50 Nine months total volume was 194,000 0 0 units, due to the impact of flood in Thailand and export volume declines Full Year Sales Volume because of yen’s appreciation 277 256 Achieved the
Slide 14: Operating Profit Change
OPERATING PROFIT CHANGE FY Ending March 2012 Nine Months Compared with (Billion yen) FY Ended March 2011 Nine Months Improvement FY Ended March 2011 (Deterioration) 13.2 Vol. & Mix 15 (5) US Dollar (13.5) . Euro (3.1) (25) Other (4.4) Exchange (45) (56.5) Cost Other Improvement Marketing + 10.4 + 5.
Slide 15: Breakdown of Non-Operating and Extraordinary Profit/Loss
BREAKDOWN OF NON-OPERATING AND EXTRAORDINARY PROFIT/LOSS (Billion yen) FY March 2012 Main items Nine Months Exchange loss (5.7) Total (including devaluation of receivables in foreign currencies) Operating profit (54.3) Equity method profit 8.1 Interest paid and received (6.9) Non-operating profit/(e
Slide 16: Fiscal Year Ending March 2012 Full Year Forecast
FISCAL YEAR ENDING MARCH 2012 FULL YEAR FORECAST 16
Slide 17: FY Ending March 2012 Financial Metrics
FY ENDING MARCH 2012 FINANCIAL METRICS FY Ending March 2012 Full Year Change from (Billion yen) 1H 3Q 4Q Full Year Prior year Nov. FCST Revenue 959.2 459.1 631.7 2,050.0 (275.7) (110.0) Operating profit (21.6) (32.7) 14.3 (40.0) (63.8) (40.0) Ordinary profit (30.6) (27.5) 15.1 (43.0) (79.9) (41.0) P
Slide 18: Key Data
KEY DATA FY Ending March 2012 Full Year Change from 1H 3Q 4Q Full Year Prior year Nov. FCST Global sales volume (000) Japan 95 42 69 206 0 (3) North America 182 84 104 370 28 (6) Europe 91 38 53 182 (30) (22) China 107 58 71 236 0 (24) Other Markets 129 65 62 256 (21) (5) Total 604 287 359 1,250 (23
Slide 19: Fourth Quarter Initiatives by Region (1)
FOURTH QUARTER INITIATIVES BY REGION (1) Japan • Enhance sales initiatives mainly with eco-car such as the new Demio and the new Axela equipped with SKYACTIV TECHNOLOGY • Launch the new CX-5 and increase dealer traffic by focusing on carlines with SKYACTIV TECHNOLOGY North America • Improve awarenes
Slide 20: Fourth Quarter Initiatives by Region (2)
FOURTH QUARTER INITIATIVES BY REGION (2) China • Further increase volume by the new Mazda3 sedan and the new Mazda3 hatchback launched in last year • Conduct product enhancement and strengthen the sales initiatives for Mazda6 to increase sales • Further expand sales network (plan to increase to 387
Slide 21: Operating Profit Change
OPERATING PROFIT CHANGE FY Ending March 2012 Full Year Compared with (Billion yen) FY Ended March 2011 Full Year Improvement FY Ended (Deterioration) March 2011 23.8 Vol. & Mix US Dollar (18.0) 20 Euro (8.2) Other (14.3) (5) Exchange (34.7) (30) Cost Other Improvement Marketing + 8.5 + 5.6 Expense F
Slide 22: Operating Profit Change vs November Forecast
OPERATING PROFIT CHANGE FY Ending March 2012 Full Year Compared with (Billion yen) November Forecast Improvement (Deterioration) US Dollar +1.6 . Nov. Pub Euro (2.4) 0.0 Other (0.6) Vol. & Mix (5) Impact of volume decline Cost Exchange Improvement (25) (22.3) Marketing (1.4) Expense 0.0 Other (11.1)
Slide 23: Structural Reform Plan to Reinforce the Framework for Medium- and Long-term Initiatives
STRUCTURAL REFORM PLAN TO REINFORCE THE FRAMEWORK FOR MEDIUM- AND LONG-TERM INITIATIVES 23
Slide 24: Background and Structural Reform Plan
BACKGROUND AND STRUCTURAL REFORM PLAN Background/Environment • Historical appreciation of yen that has persisted for a long time • Deterioration of external environment including unstable economy in major countries due to financial crisis in Europe, the Great East Japan Earthquake, and the flood in
Slide 25: Medium- and Long-term Outlook
MEDIUM- AND LONG-TERM OUTLOOK FY March 2013 - Achieve profitability at all profit levels Revision of Medium- and Long-term Outlook (FY March 2016) Prior New Operating profit ¥170 billion -> ¥150 billion ROS 5% or more -> 6% or more Global sales 1.7 million units -> 1.7 million units * Exchange Rate
Slide 26: Historical Profit Trend Due to Changing External Environment
HISTRICAL PROFIT TREND DUE TO CHANGING EXTERNAL ENVIRONMENT AND BUSINESS STRUCTURE (Billion yen) (Yen) 200 180 Operating Profit 150 160 US$/Yen (Right axis) €/Yen (Right axis) 100 140 50 120 0 100 (50) 80 (100) 60 (FYE 2008 2009 2010 2011 2012 2013 March) US$/¥ 114 101 93 86 78 77 €/¥ 162 144 131 11
Slide 27: Planned Profit Growth
PLANNED PROFIT GROWTH Growth Driver 1. Significantly improve volume and mix with SKYACTIV Ratio of models equipped with TECHNOLOGY SKYACTIV in FY3/2016: 80% 2. Improve costs by accelerating Monotsukuri Innovation 3. Enhance brand value and strengthen sales capabilities through “Tsunagari Innovation”
Slide 28: Structural Reform Plan
- STRUCTURAL REFORM PLAN - (1) Business innovation by SKYACTIV TECHNOLOGY (2) Accelerate further cost improvement through Monotsukuri Innovation (3) Reinforce business in emerging countries and establish global production footprints (4) Promote global alliances 28
Slide 29: Technical Advantage of SKYACTIV
(1) TECHNICAL ADVANTAGE OF SKYACTIV Provide a wide range of customers with environmentally-friendly vehicles which realize evolution of Zoom-Zoom driving performance SKYACTIV (to 2015) Fuel Economy Improvement by Engine (10-15 mode) New-generation gasoline engine SKYACTIV-G + 15% New-generation dies
Slide 30: Business Innovation by SKYACTIV
(1) BUSINESS INNOVATION BY SKYACTIV Drive structural reform by achieving product competitiveness, brand, design and cost structure which can cope with strong yen environment C l a s s - l e a di ng products based on o u t s t a ndi n g e n v i r onm e nt a l a n d s a f e t y p e r f or m a n c e Br
Slide 31: Further Improvement of Brand Value by SKYACTIV
(1) FURTHER IMPROVEMENT OF BRAND VALUE BY SKYACTIV High acclaim in major market immediately after SKYACTIV introductions Evaluations in major markets Market evaluation on SKYACTIV • Brand value and residual value improved in major markets • Won 24 awards1 globally Demio 13-SKYACTIV ALG Residual Valu
Slide 32: Launch of SKYACTIV
(1) LAUNCH OF SKYACTIV As a first model to fully adopt SKYACTIV TECHNOLOGY, the new CX-5 will be launched globally CX-5 fully adopts SKYACTIV TECHNOLOGY New Design Theme “KODO - Soul of Motion” Fuel economy of 18.6km/L (JC08 mode) of the model powered by new-generation highly-efficient diesel engine
Slide 33: Mazda TAKERI
(1) MAZDA TAKERI New-generation Sedan Concept TAKERI Mazda’s new-generation large sedan Drastically improve driving and environmental performance by new-generation clean diesel engine SKYACTIV-D and i-ELOOP, Mazda’s unique regenerative braking system 33
Slide 34: Sales Method Innovation by SKYACTIV
(1) SALES METHOD INNOVATION BY SKYACTIV Realize sales at the price without discount utilizing high brand value “Sales method innovation” – a new marketing strategy with starts with SKYACTIV products Mix of SKYACTIV models • The maker globally promotes Demio Axela 1. text-drive events in major region
Slide 35: SKYACTIV Sales Strategy
(1) SKYACTIV SALES STARTEGY Globally launch models equipped with SKYACTIV TECHNOLOGY building on initial great feedback FY March 2012 FY March 2013 FY March 2014 FY March 2015 FY March 2016 80% Mix of models with SKYACTIV 20% June: From Demio (Japan) February: - Plan to introduce 8 models over the n
Slide 36: Cost Improvement Through Monotsukuri Innovation
(2) COST IMPROVEMENT THROUGH MONOTSUKURI INNOVATION Project to achieve original targets, and aim at improving vehicle costs by 30% The CX-5 can generate profits even at exchange rates of ¥77/US dollar and ¥100/Euro and its variable profit is ¥150,000 better than that of CX-7 Performance Improve Cost
Slide 37: Trend of Cost Improvement
(2) COST IMPROVEMENT THROUGH MONOTSUKURI INNOVATION - TREND OF COST IMPROVEMENT Project to achieve cost improvement of approximately ¥230 billion in total over the 4 years from FY March 2009 Trend of Improvement in Variable Cost Trend of Improvement in Other Fixed (Billion yen) Cost (Billion yen) Va
Slide 38: Additional Initiatives to Counteract Strong Yen
(2) ADDITIONAL INITIATIVES TO COUNTERACT STRONG YEN In addition to present cost improvements, promote changes in cost structure in which we can make profits even in a strong-yen environment Additional Initiatives Improvement in variable cost Improvement in other fixed cost Reinforce Monotsukuri Inno
Slide 39: Achievement and Future Initiatives in Emerging Markets (China)
(3) ACHIEVEMENT AND FUTURE INITIATIVES IN BUSINESS IN EMERGING MARKETS Reinforce business in emerging markets through further initiatives Achievement Future Initiatives Increase sales volume through Establish consistent production and expansion of sales network sales framework • Sales volume (FY 3/2
Slide 40: Achievement and Future Initiatives in Emerging Markets (ASEAN)
(3) ACHIEVEMENT AND FUTURE INITIATIVES IN BUSINESS IN EMERGING MARKETS Reinforce business in emerging markets through further initiatives Achievement Future Initiatives Utilize AutoAlliance (Thailand) (AAT) Thailand: Studying capacity expansion at and reinforce sales network in ASEAN AAT • Thailand:
Slide 41: Establish Global Production Footprints
(3) ESTABLISH GLOBAL PRODUCTION FOOTPRINTS Accelerate to establish production footprints highly resistant to exchange fluctuations FY March 2012 FY March 2013 FY March 2014 FY March 2015 FY March 2016 Overseas 50% production 40% ratio 30% Ratio of overseas sourcing at domestic plants and 30% 25% tra
Slide 42: Reform Profit Structure in North America and Europe
(3) REFORM PROFIT STRUCTURE IN BUSINESS IN NORTH AMERICA AND EUROPE Reform structures to be profitable in North America and Europe even in a strong-yen environment Turnaround by launching SKYACTIV products Reconstruct business in North America Reconstruct business in Europe 1. Effect of fixed cost r
Slide 43: Promotion of Global Alliances
(4) PROMOTION OF GLOBAL ALLIANCES Currently promoting individual business with various partners Various Partners Ford Toyota • Hybrid system • Joint production in technology supply China and Thailand under license Suzuki Nissan • OEM supply of mini • Mutual OEM supply vehicles of vehicles FAW • Cons
Slide 44: Promotion of Global Alliances: Technology Alliances
(4) PROMOTION OF GLOBAL ALLIANCES To reinforce Mazda Brand, strongly promote business and technology alliances 1. Actively pursue alliances for product, technology and production opportunities to increase portfolio, drive efficiencies and share expertise 2. Offer Mazda products and technologies incl
Slide 45: In Summary (1)
IN SUMMARY (1) <FY Ending March 2012> Bottoming out in the third quarter and expect to generate positive results in all profit categories in the fourth quarter with contribution of mainly volume increase Full year operating loss is projected at ¥40.0 billion Wholesales (000) Opr. profit (¥ billion)
Slide 46: In Summary (2)
IN SUMMARY (2) FY March 2013 - Achieve profitability at all profit levels through turnaround by SKYACTIV Medium- and long-term outlook (FY March 2016) Operating profit ¥150 billion ROS 6% or more Global sales 1.7 million units Structural Reform Plan (1) Business Innovation by SKYACTIV TECHNOLOGY (2)
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Slide 48: Appendix
APPENDIX 48
Slide 49: Cash Flow and Net Debt
CASH FLOW AND NET DEBT FY Ending FY Ended Change March 2012 March 2011 from prior (Billion yen) Nine Months Full Year FY End Free Cash Flow (128.7) 1.6 - Cash and Cash Equivalents 236.9 322.8 (85.9) Net Debt (501.5) (370.2) (131.3) Net Debt-to-equity Ratio 155 % 86 % 69 pts Equity Ratio 19 % 24 % (5
Slide 50: Revenue by Geographic Area
REVENUE BY GEOGRAPHIC AREA (Billion yen) 607.8 600 578.0 579.7 560.2 551.1 99.1 69.7 73.1 Other 66.8 74.8 459.1 93.1 96.5 Europe 112.9 125.2 408.1 93.7 63.1 69.1 69.9 North 140.3 175.0 160.5 148.2 63.8 144.8 300 America 143.5 94.3 240.2 269.8 237.7 Japan 220.0 235.2 180.9 182.6 0 1Q 2Q 3Q 4Q 1Q 2Q 3
Slide 51: Revenue by Product
REVENUE BY PRODUCT (Billion yen) 607.8 600 578.0 579.7 560.2 66.8 551.1 Other 61.8 67.2 63.5 56.5 54.7 Parts 53.7 55.6 459.1 53.3 52.4 408.1 54.8 58.4 49.1 47.9 300 Vehicle / Parts for 486.3 462.6 456.9 443.4 overseas 442.1 production 355.2 301.8 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q FY March 2011 FY March 2012 51
Slide 52: Revenue Change (Nine Months)
REVENUE CHANGE FY Ending March 2012 Nine Months Compared with FY Ended March 2011 Nine Months (Billion yen) FY Ending March 2012 1,418.3 FY Ended March 2011 1,717.9 Japan (1)% Overseas (14)% 0% (2)% Total Vol. & Mix Exchange (17)% (15)% (20)% 52
Slide 53: Revenue Change (Third Quarter)
REVENUE CHANGE FY Ending March 2012 Third Quarter Compared with FY Ended March 2011 Third Quarter (Billion yen) FY Ending March 2012 459.1 FY Ended March 2011 560.2 Japan 5% Overseas (20)% 0% (3)% Total Vol. & Mix Exchange (15)% (18)% (20)% 53
Slide 54: Operating Profit Change (Third Quarter)
OPERATING PROFIT CHANGE FY Ending March 2012 Third Quarter Compared with (Billion yen) FY Ended March 2011 Third Quarter Improvement FY Ended (Deterioration) March 2011 1.0 Vol. & Mix 0 Exchange (20) (18.1) Cost Marketing Other Improvement Expense + 1.5 (14.3) (0.2) FY Ending (2.6) March 2012 (40) C
Slide 55: Key Data
KEY DATA FY Ending March 2012 Change from Prior Year 2 3Q 9 months 3Q 9 months Global sales volume (000) Japan 42 137 14 (16) North America 84 266 4 9 Europe 38 129 (9) (26) China 58 165 (16) (21) Other Markets 65 194 (4) (12) Total 287 891 (11) (66) Consolidated wholesales (000) Japan 46 155 16 0 N
Slide 56: Key Data
KEY DATA Change from Nov. FY Ending March 2012 Change from prior year Pub 1H 2H Full Year 1H 2H Full Year Full Year Global sales volume (000) Japan 95 111 206 (30) 30 0 (3) North America 182 188 370 5 23 28 (6) Europe 91 91 182 (17) (13) (30) (22) China 107 129 236 (5) 5 0 (24) Other Markets 129 127
Slide 57: Key Data: Capital Spending, Depreciation, R&D
KEY DATA (Billion yen) 100 Full 91.0 92.0 Year 80.0 Full 71.6 Year 70.0 Nine 69.2 69.9 Months Nine 53.9 51.6 Full 50.2 Months 50 44.7 Year 30.0 Nine Months 0 (FYE March) 2011 2012 2011 2012 2011 2012 Capital Spending Depreciation R&D cost 57
Slide 58: Volume Growth
VOLUME GROWTH Overseas production ratio Global sales volume 50% Overseas (000) production 1,700 ratio Overseas 40% production 1,000 1,000 ratio 30% 900 802 800 Up 60% from FY 700 March 2012 700 (ASEAN) 150 600 500 448 (AEAN) 65 Up 130% 400 from FY March 2012 3000 Developed Emerging Developed Emergin
Slide 59: Disclaimer
DISCLAIMER The projections and future strategies shown in this presentation are based on various uncertainties including without limitation the conditions of the world economy in the future, the trend of the automotive industry and the risk of exchange-rate fluctuations. So, please be aware that Maz