Mazda Motor Corp. · TSE:7261
Mazda Motor — FY March 2019 Earnings Presentation
57 slides from Mazda Motor's earnings presentation, May 2019
Slide 1: Fiscal Year March 2019 Financial Results
FISCAL YEAR MARCH 2019 FINANCIAL RESULTS
Slide 2: Presentation Outline
PRESENTATION OUTLINE Financial Results and Forecast Summary Fiscal Year March 2019 Results Fiscal Year March 2020 Forecast Progress of Key Initiatives Medium-Term Management Policy 1
Slide 3: Financial Results and Forecast Summary
FINANCIAL RESULTS AND FORECAST SUMMARY 【FY March 2019 Results】 Global sales were 1,561,000 units, down 4% year on year - Sales were down from the prior year due to declines in China, the US and Australia despite volume growth in Japan and ASEAN - Crossover SUVs maintained strong sales momentum wit
Slide 4: Fiscal Year March 2019 Results
FISCAL YEAR MARCH 2019 RESULTS 3
Slide 5: FY March 2019 Global Sales Volume
FY MARCH 2019 GLOBAL SALES VOLUME Full Year FY March FY March Change from (000) 2018 2019 Prior Year Feb. Forecast Volume YOY(%) Volume Global sales volume Japan 210 215 4 2% (3) North America 435 421 (14) (3)% (7) Europe 269 270 1 0% 0 China 322 247 (75) (23)% (3) Other Markets 394 409 14 4% 4 Tota
Slide 6: FY March 2019 Financial Metrics
FY MARCH 2019 FINANCIAL METRICS Full Year FY March FY March Change from (Billion yen) 2018 2019 Prior Year Feb. Forecast Amount YOY(%) Amount Revenue 3,474.0 3,564.7 90.7 3% 14.7 Operating profit 146.4 83.0 (63.4) (43)% 3.0 Ordinary profit 172.1 116.8 (55.3) (32)% 6.8 Profit before tax 157.5 108.3 (
Slide 7: FY March 2019 Operating Profit Change
FY MARCH 2019 OPERATING PROFIT CHANGE FY March 2019 Full Year vs. FY March 2018 Full Year Increased marketing Improvement (Billion yen) expenses, reduced OEM supply and KD parts for (Deterioration) China, etc. Includes hike in FY March raw material 2018 prices Investment for US sales Volume network
Slide 8: FY March 2019 Operating Profit Change
FY MARCH 2019 OPERATING PROFIT CHANGE FY March 2019 Full Year vs. Feb. Forecast (Billion yen) Improvement (Deterioration) R&D 100 Feb. Cost Cost Forecast Improvement Results Volume Exchange Other 80.0 & Mix + 3.3 83.0 rates + 1.6 (1.1) (0.1) (0.7) 50 Change from Feb. Forecast 3.0 0 7
Slide 9: Fiscal Year March 2020 Forecast
FISCAL YEAR MARCH 2020 FORECAST 8
Slide 10: FY March 2020 Global Sales Volume
FY MARCH 2020 GLOBAL SALES VOLUME Full Year FY March FY March Change from (000) 2019 2020 Prior Year Volume YOY(%) Global sales volume Japan 215 223 9 4% North America 421 456 35 8% Europe 270 286 17 6% China 247 265 18 7% Other Markets 409 387 (21) (5)% Total 1,561 1,618 57 4% ＜Breakdown＞ USA 287 3
Slide 11: FY March 2020 Financial Metrics
FY MARCH 2020 FINANCIAL METRICS Full Year FY March FY March Change from (Billion yen) 2019 2020 Prior Year Amount YOY(%) Revenue 3,564.7 3,700.0 135.3 0.0 4% Operating profit 83.0 110.0 27.0 33 % Ordinary profit 116.8 125.0 8.2 7% Profit before tax 108.3 117.0 8.7 8% Net income 63.5 80.0 16.5 26 % O
Slide 12: Exchange Rates
EXCHANGE RATES Full Year FY March FY March Change from （Yen） 2019 2020 Prior Year US Dollar 111 110 (1) Euro 128 126 (2) Canadian Dollar 85 84 (1) Australian Dollar 81 79 (2) British Pound 146 147 1 11
Slide 13: FY March 2020 Operating Profit Change
FY MARCH 2020 OPERATING PROFIT CHANGE FY March 2020 Full Year vs. FY March 2019 Full Year Increased wholesale Improvement volume, reduced (Billion yen) marketing expenses, etc. Includes hike in (Deterioration) raw material Investment for US sales network prices reforms, depreciation costs and costs
Slide 14: Progress of Key Initiatives: New-generation products
PROGRESS OF KEY INITIATIVES Global sales launches of all-new Mazda3 ⁃ Sales started in North America in January 2019, in Europe New-generation products in March and Australia in April ⁃ Will be launched in Japan and other markets ⁃ Plan to introduce a model powered by SKYACTIV-X in late 2019 to en
Slide 15: Progress of Key Initiatives
PROGRESS OF KEY INITIATIVES US sales network reform Next-generation brand dealer ⁃ 265 dealers have signed up to invest in becoming next-generation brand dealers; the target is 300 dealers ⁃ Annual sales volumes at the 65 dealers that have completed the changeover are rising steadily ⁃ Focus on im
Slide 16: Medium-Term Management Policy
MEDIUM-TERM MANAGEMENT POLICY 15
Slide 17: 100th Anniversary in 2020, and for the next 100 years
INTRODUCTION 100 th Anniversary in 2020, and for the next 100 years 16
Slide 18: Co-Creating With Others: Mazda's Uniqueness
“Co-Creating With Others” Mazda’s Uniqueness 17
Slide 19: Our Dream: Making Dreams Come True Together
IDEAL FOR 2030-40 OUR DREAM Come True Together Mazda, together with Making Dreams our friends sharing the same dreams, through efforts to break through limitations, will enable all stakeholders to feel alive, proud of their connection with Mazda, and emotionally attached to the brand. 18
Slide 20: Positioning of Medium-Term Management Policy
POSITIONING OF MEDIUM-TERM MANAGEMENT POLICY “Next 6 years” toward ideal for 2030-40 “Next 6 years” to fully introduce the new-generation lineup Ideal for 2030-40 Medium-Term Management Policy Structural Reform (FY March 2020 to FY March 2025) Plan Transform business Structural Reform structure
Slide 21: Structural Reform Plan / Stage 2 Summary
STRUCTURAL REFORM PLAN / STAGE 2 SUMMARY Effect of brand value Per-unit revenue and residual values have improved, though improvement progress varies by market Continued to improve products with Skyactiv technologies/ Investment for brand Kodo Design value improvement Continued upgrade to next-g
Slide 22: Mazda's Strengths and Weaknesses
MAZDA’S STRENGTHS AND WEAKNESSES Strengths Weaknesses Unique products and Economies of scale in technologies sourcing Fixed cost efficiency Well balanced overseas (R&D, capex, business advertisement) Culture of taking on Financial power / difficult challenges funding capabilities Car connectivity, V
Slide 23: External Environmental Factors Affecting Automobile Industry
EXTERNAL ENVIRONMENTAL FACTORS AFFECTING AUTOMOBILE INDUSTRY Diversified spec requirements by market / diversified customer requests CASE (Connected, Autonomous, Shared, Electric) Declining birthrate and aging population, shrinking labor force (Japan) Worldwide social / economic uncertaintie
Slide 24: Medium-Term Management Policy
MEDIUM-TERM MANAGEMENT POLICY Investment in unique products/ customer experience Curb expenses that depreciate brand value Investment in the areas in which we need to catch up 23
Slide 25: Investment for Brand Value Improvement (Customer and Market Diversification)
INVESTMENT FOR BRAND VALUE IMPROVEMENT (CUSTOMER AND MARKET DIVERSIFICATION） Expand the lineup of powertrains, including electric- drive technologies, and advanced technologies to meet the diverse needs of markets and customers Price Increase price zone Current-generation lineup New-generation lin
Slide 26: Investment for Brand Value Improvement (Product)
INVESTMENT FOR BRAND VALUE IMPROVEMENT (PRODUCT） Maturing of Kodo Design Small Architecture - Skyactiv-G/D Upgrade, Skyactiv-X - Mild Hybrid - Independently-developed battery EV (xEVs) Large Architecture - Straight-six Skyactiv-X engine - Straight-six Skyactiv-D (2 -generation diesel engine) n
Slide 27: Investment for Brand Value Improvement (New Technology & Infrastructure)
INVESTMENT FOR BRAND VALUE IMPROVEMENT (NEW TECHNOLOGY & INFRASTRUCTURE） Introduce Mazda Connect 2 with on-board Connected communication device Start connected services Evolve and offer advanced safety Autonomous technologies Deliver Mazda Co-Pilot concept Study participation in sharing bu
Slide 28: Investment for Brand Value Improvement (Sales & Customer Experience)
INVESTMENT FOR BRAND VALUE IMPROVEMENT (SALES & CUSTOMER EXPERIENCE） Strengthen sales network Improve customer experience (CX) 27
Slide 29: Curb Expenses That Depreciate Brand Value
CURB EXPENSES THAT DEPRECIATE BRAND VALUE Maintain and strengthen policy of sales based on communicating product values - Curb marketing expenses - Enhance trade cycle management Further improve quality 28
Slide 30: Investment in Infrastructure
INVESTMENT IN INFRASTRUCTURE Build an optimum production framework that supports local production for local consumption (Start operations at US joint venture plant in 2021) Infrastructure investment and collaboration with other companies and industries for connectivity, sharing business, etc. 29
Slide 31: Investment in Partnership
INVESTMENT IN PARTNERSHIP Promote collaboration with partners, working together on a basis of mutual trust Universities, EV C.A. Spirit Hirojiren educational Corporation institutions, etc. Alliance Suppliers Partners Local Community Cross-industrial Local Government Collaboration 30
Slide 32: Investment in Employees & Work Environment
INVESTMENT IN EMPLOYEES & WORK ENVIRONMENT To maximize employees’ contribution Support diverse work-styles and upgrade HR policies Enhance efficiency through work process reforms and continuous improvement Improve and enhance work environments 31
Slide 33: SDGs & CSR-Related Investment
SDGs & CSR-RELATED INVESTMENT Build a social contribution model that enriches people’s lives Increase investment in environment and safety technologies 32
Slide 34: Direction of Initiatives: Summary
DIRECTION OF INITIATIVES: SUMMARY Effect of brand Improve per-unit revenue by responding to customer and market value improvement diversification Investment for brand value Invest in new-gen products, network, and customer experience improvement Curb expenses that Trade cycle management, and reduc
Slide 35: Medium-Term Management Policy Metrics FY March 2025
MEDIUM-TERM MANAGEMENT POLICY METRICS FY MARCH 2025 Revenue About ¥4.5 trillion Stable earnings Profit ROS* 5％ or higher / ROE 10% or higher *Operating return on sales Capex and R&D: 7-8％ of revenue (on average) Investment Sales network, customer experience, infrastructure, for future employees
Slide 36: Summary: Co-Creating With Others
SUMMARY “Co-Creating With Others” Mazda’s Uniqueness Ideal for 2030-40 Medium-Term Management Policy (FY March 2020 to FY March 2025) Investment in unique products / customer experience Curb expenses that depreciate brand value Investment in the areas in which we need to catch up New-generatio
Slide 37: Mazda Motor Corporation
MAZDA MOTOR CORPORATION 36
Slide 38: Appendix
APPENDIX MAZDA MOTOR CORPORATION
Slide 39: Japan
JAPAN Sales were 215,000 units, up 2% year on year Market share was 4.1%, and registered vehicle market share was 5.2%, up 0.1 points year on year CX-8 Sales of updated CX-5, CX-8 and Full-Year Sales Volume Mazda6 remained strong (000) 2% 215 CX-8 was the best-selling three- 210 row SUV in J
Slide 40: North America
NORTH AMERICA Sales were 421,000 units, down 3% year on year USA: 287,000 units, down 6% year on year - Sedan models continued to face a tough sales environment All-New Mazda3 - Sales of all-new Mazda3 start in earnest from April; transition to Full-Year Sales Volume the new model is on track (0
Slide 41: Europe
EUROPE Sales were 270,000 units, on par with the prior year A 17% year-on-year drop in Mazda3 sales was offset by increased sales of Mazda2 and CX-5, both up 8% CX-3 Sales in Europe excluding Russia were 237,000 units, down 2% Full-Year Sales Volume year on year (000) - Germany: 67,000 units,
Slide 42: China
CHINA Sales were 247,000 units, down 23% year on year Industry demand slowed, mainly due to the US-China trade dispute. Intensified competition caused sales of key models to decline Mazda6 Firmly upheld measures to Full-Year Sales Volume improve “sales quality,” including (000) 322 communicati
Slide 43: Other Markets
OTHER MARKETS Sales were 409,000 units, up 4％ year on year Australia: 110,000 units, down 5％ year on year - Maintained market share on par with the prior year despite declining industry demand and intensifying CX-5 competition - Continued to enhance “sales quality,” Full-Year Sales Volume includ
Slide 44: Revenue by Geographic Area
REVENUE BY GEOGRAPHIC AREA (Billion yen) 926.1 942.1 891.3 873.1 893.5 900 854.5 856.0 802.1 144.5 157.6 161.9 159.3 169.5 Other 148.6 150.7 136.4 188.6 183.1 177.0 179.3 156.6 175.6 178.2 600 Europe 155.8 265.8 299.5 274.8 285.5 300.5 262.3 272.7 North 288.3 300 America 319.6 309.5 Japan 254.2 264.
Slide 45: Revenue by Product
REVENUE BY PRODUCT (Billion yen) 926.1 942.1 891.3 893.5 854.5 873.1 856.0 64.2 900 69.8 802.1 63.8 63.5 63.7 68.6 62.3 69.4 71.3 Other 68.3 65.7 68.2 58.2 67.5 67.7 Parts 61.7 600 Vehicles / 787.7 761.8 806.6 Parts for 682.2 723.3 759.3 745.1 718.9 300 Overseas Production 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Slide 46: Revenue Change
REVENUE CHANGE FY March 2019 Full Year vs. FY March 2018 Full Year (Billion yen) FY March 2019 3,564.7 FY March 2018 3,474.0 Domestic 2% Overseas 2% 8% 4% 3% 3% (3)% (1)% Total Volume & Mix Exchange Rates 45
Slide 47: Revenue Change
REVENUE CHANGE FY March 2019 4th Quarter vs. FY March 2018 4th Quarter (Billion yen) FY March 2019 942.1 FY March 2018 926.1 Domestic 0% Overseas 2% 8% 2% 3% 2% (3)% (1)% Total Volume & Mix Exchange Rates 46
Slide 48: Global Sales Volume and Consolidated Wholesales
GLOBAL SALES VOLUME AND CONSOLIDATED WHOLESALES Fourth Quarter FY March FY March Change from (000) 2018 2019 Prior Year Global sales volume Volume YOY(%) Japan 71 65 (6) (9)% North America 114 101 (13) (11)% Europe 76 73 (2) (3)% China 77 52 (25) (32)% Other Markets 107 100 (7) (6)% Total 445 392 (5
Slide 49: FY March 2019 Financial Metrics (Fourth Quarter)
FY MARCH 2019 FINANCIAL METRICS Fourth Quarter FY March FY March Change from (Billion yen) 2018 2019 Prior Year Amount YOY(%) Revenue 926.1 942.1 0.0 16.0 2% Operating profit 39.3 23.4 (15.9) (40)% Ordinary profit 37.3 31.4 (5.9) (16)% Profit before tax 32.7 28.5 (4.2) (13)% Net income 27.2 26.5 (0.
Slide 50: FY March 2019 Operating Profit Change
FY MARCH 2019 OPERATING PROFIT CHANGE FY March 2019 4th Quarter vs. FY March 2018 4th Quarter Improvement (Billion yen) (Deterioration) Increased wholesale 【Exchange rates】 volume and reduced USD 0.8 EUR （5.0） marketing expenses, etc. CAD （1.6） AUD （4.6） GBP （1.7） Other （4.8） 60 Increased advertisin
Slide 51: Cash Flow and Net Cash
CASH FLOW AND NET CASH FY March 2018 FY March 2019 Change from (Billion yen) Full Year Full Year Prior FY End Cash Flow - From Operating activities 207.8 146.7 - - From Investing activities (160.0) (131.6) - - Free Cash Flow 47.8 15.1 - Cash and Cash Equivalents 604.9 701.6 96.7 Net Cash 107.0 94.6
Slide 52: Global Sales Volume and Consolidated Wholesales
GLOBAL SALES VOLUME AND CONSOLIDATED WHOLESALES Full Year FY March FY March Change from (000) 2018 2019 Prior Year Feb. Forecast Global sales volume Volume YOY(%) Volume Japan 210 215 4 2% (3) North America 435 421 (14) (3)% (7) Europe 269 270 1 0% 0 China 322 247 (75) (23)% (3) Other Markets 394 40
Slide 53: Global Sales Volume and Consolidated Wholesales
GLOBAL SALES VOLUME AND CONSOLIDATED WHOLESALES Full Year FY March FY March Change from (000) 2019 2020 Prior Year Global sales volume Volume YOY(%) Japan 215 223 9 4% North America 421 456 35 8% Europe 270 286 17 6% China 247 265 18 7% Other Markets 409 387 (21) (5)% Total 1,561 1,618 57 4% Consoli
Slide 54: Crossover SUV Ratio
CROSSOVER SUV RATIO （000 units） 1,500 Crossover SUV 34% 39% 46% 12% 27% 29% 49% 21% 1,000 Passenger 500 vehicles, and others - FY March 2012 2013 2014 2015 2016 2017 2018 2019 2020 Global sales 1,247 1,235 1,331 1,397 1,534 1,559 1,631 1,561 1,618 volume （000 units） Results Plan 53
Slide 55: Key Data
KEY DATA (Billion Yen) （Plan） 159.0 （Plan） 150 136.0 134.7 139.0 119.7 104.1 （Plan） 100 95.0 87.0 88.4 50 0 FY March 2018 2019 2020 2018 2019 2020 2018 2019 2020 Capital Depreciation R&D Cost Expenditure Cost 54
Slide 56: Dividend Payment
DIVIDEND PAYMENT Trend of dividends per share Interim dividends 35 35 35 35 Year-end dividends 30 20 20 20 20 15 (Forecast） 10 15 15 15 15 15 1 10 FY March 2014 FY March 2015 FY March 2016 FY March 2017 FY March 2018 FY March 2019 FY March 2020 Results Plan Note) A share consolidation was implemente
Slide 57: 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