Mazda Motor Corp. · TSE:7261
Mazda Motor — FY2008 Earnings Presentation
54 slides from Mazda Motor's earnings presentation, May 12, 2009
Slide 1: FY2008 Results and FY2009 Forecast
FY2008 RESULTS AND FY2009 FORECAST New Mazda3 powered by MZR2.0 DISI i-stop (European model) Mazda Motor Corporation May 12, 2009 1
Slide 2: Outline
OUTLINE Highlights FY2008 Results FY2009 Forecast Initiatives for the Future In Summary 2
Slide 3: Highlights
HIGHLIGHTS 3
Slide 4: FY2008 Highlights
FY2008 HIGHLIGHTS Revenue was ¥2,535.9 billion, operating loss was ¥28.4 billion and net loss was ¥71.5 billion Despite performance improvements we achieved, operating loss slightly deteriorated versus forecast made at February announcement due to devaluation of inventory Global sales volume was 1.2
Slide 5: FY2009 Forecast Highlight
FY2009 FORECAST HIGHLIGHT Revenue of ¥2,030 billion, an operating loss of ¥50 billion and a net loss of ¥50 billion are projected reflecting a challenging external environment which started in the second half of last year Operating profit is forecasted to be positive in the 2nd half Focus on achievi
Slide 6: FY2008 Results
FY2008 RESULTS 6
Slide 7: FY2008 Financial Metrics
FY2008 FINANCIAL METRICS Change from Memo: (Billion yen) Full Year FY2007 FY2008 FY2008 FY2007 Amount Pct. Feb Plan Revenue 2,535.9 3,475.8 (939.9) (27) % 2,550.0 Operating profit (28.4) 162.1 (190.5) - (25.0) Ordinary profit (18.7) 148.5 (167.2) - (15.0) Profit before tax (51.3) 143.1 (194.4) - (20
Slide 8: Cash Flow and Net Debt
CASH FLOW AND NET DEBT Better/(Worse) (Billion yen) FY2008 FY2007 than FY2007 1-3Q 4Q Full Year Full Year Cash flow - Operating C/F (149.0) 81.6 (67.4) 103.0 - - Investment C/F (47.7) (14.1) (61.8) (92.8) - - Free C/F (196.7) 67.5 (129.2) 10.2 - Cash and cash equivalents 144.0 220.7 220.7 223.9 (3.2
Slide 9: Key Data
KEY DATA - Increased investments in advanced technology developments (Billion yen) - Held down investment - Promoted efficiency 114.4 96.0 100 81.8 75.5 75.2 66.5 50 0 FY07 FY08 FY07 FY08 FY07 FY08 Capital Spending Depreciation R&D Cost 9
Slide 10: Key Data
KEY DATA Full Year Change from FY2008 FY2007 FY2007 Global retail volume (000) 1,261 1,363 (102) Exchange rate Yen/US Dollar 101 114 (13) Yen/Euro 144 162 (18) 10
Slide 11: Revenue Change
REVENUE CHANGE FY2008 Compared With FY2007 (Billion yen) Japan (3)% FY08 2,535.9 Overseas (8)% FY07 3,475.8 0% (10)% (7)% (11)% (9)% (20)% (18)% (30)% (27)% Total Vol & Mix Exchange Accounting Standard Change 11
Slide 12: Japan
JAPAN Sales Volume & Share (000 units) (%) 300 256 219 250 (15)% 10 200 8.6 8.6 New Mazda Biante Sales were down 15% due to a 150 reduction in industry demand for registration vehicles 4.8 4.6 5 100 Introduced new Biante mini-van Enhanced sales activities Share in segments Mazda focusing on brand va
Slide 13: North America
NORTH AMERICA Sales Volume & US Share (000 units) (%) 406 347 400 (14)% Canada, other Canada, 4 111 other New Mazdaspeed3 300 107 Introduced new Mazda3 in Canada and Mexico ahead of 200 1.9 2.0 other global markets and 2 gained good reputation USA Sales outperformed or 100 295 USA maintained the ind
Slide 14: Europe
EUROPE Sales Volume & Share (000 units) (%) 400 4 322 327 (2)% 300 New Mazda3 with i-stop 200 1.7 2 Sales outperformed the 1.5 industry demand. Share is 1.7%, up 0.2 points Market share improved in 100 major countries Sales of Mazda2 were strong Dealer inventory adjustment 0 0 exceeded plan FY2007 F
Slide 15: China
CHINA Sales Volume & Share (000 units) (%) 150 135 33% 101 100 2 New Mazda6 Ruiyi 1.4 With continuing strong sales of 1.1 Mazda6 and full contribution of Mazda2 and Mazda3, sales were 50 up 33% on the prior year Share improved 0.3 points to 1.4% Accelerated the action to develop sales network. 221 0
Slide 16: Other Markets
OTHER MARKETS Sales Volume & (000 units) Share in Australia (%) 10 300 273 238 (13)% Mazda2 200 8.0 8 Sales in Australia were 7.5 77,000 units, outperforming the industry. Market share 100 improved 0.5 points and reached a record high at 8.0% Total sales declined 13% due to the lower volume in 0 6 T
Slide 17: Operating Profit Change
OPERATING PROFIT CHANGE (Billion yen) FY2008 Compared With FY2007 Improvement Global sales reduction Deterioration FY2007 US dollar (40.8) 200 162.1 Euro (17.2) Others (44.0) Vol & Mix 150 Product enhancement (18.4) Regulations (0.6) 100 Exchange (86.5) FY2008 50 (28.4) Product CR Material, Marketin
Slide 18: Operating Profit Change
OPERATING PROFIT CHANGE (Billion yen) FY2008 Compared With FY2007 Improvement Deterioration FY2007 200 162.1 Vol & Mix - Reduction of R&D costs 150 - Devaluation of inventory in overseas 100 Higher material cost offset by CR Exchange (86.5) FY2008 50 (28.4) Product CR Material, Marketing etc Expense
Slide 19: Breakdown of Non-Operating and Extraordinary Profit/Loss
BREAKDOWN OF NON-OPERATING AND EXTRAORDINARY PROFIT/LOSS (Billion yen) FY2008 Results Main items Exchange gain 29.1 Operating profit (28.4) Interest paid (14.2) Non-operating profit/(expense) 9.7 Ordinary profit (18.7) Main item Impairment loss (28.3) Extraordinary profit/(loss) (32.6) Profit before
Slide 20: Emergency Measures – Inventory Adjustment
EMERGENCY MEASURES – INVENTORY ADJUSTMENT Inventory reduced more than planned Dealer Inventory Trend in Europe and USA (000 units) 147 150 133 112 114 74 100 Europe 72 Europe Europe 55 58 50 73 61 57 56 USA USA USA 0 '08/03 '08/12 '09/03 '09/03 (Feb Plan) 20
Slide 21: FY2008 Result Summary
FY2008 RESULT SUMMARY Profits declined reflecting sharp deteriorations in the operating environment Operating profit exceeded forecast made at February announcement excluding an inventory devaluation, as performance exceeded expectations Cash flow turned substantially positive level in the 4th quart
Slide 22: FY2009 Forecast
FY2009 FORECAST 22
Slide 23: FY2009 Financial Metrics
FY2009 FINANCIAL METRICS FY2009 Change form FY2008 (Billion yen) 1st Half 2nd Half Full Year 1st Half 2nd Half Full Year Revenue 930.0 1,100.0 2,030.0 (645.5) 139.6 (505.9) Operating profit (60.0) 10.0 (50.0) (120.7) 99.1 (21.6) Ordinary profit (67.0) 7.0 (60.0) (115.5) 74.2 (41.3) Profit before tax
Slide 24: Key Data
KEY DATA - Lower investment relates to new product development, new product lineup is now in place - Effects of flexible production system (Billion yen) - Improve efficiency through “Monotsukuri Innovation” - Accelerate environmental actions 96.0 92.0 100 81.8 75.2 78.0 Tooling cost at overseas subs
Slide 25: Key Data
KEY DATA Full Year Change from FY2009 FY2008 FY2008 (000) Global retail volume Japan 200 219 (19) North America 290 347 (57) USA 208 240 (32) Europe 250 322 (72) China 170 135 35 Other 190 238 (48) Total 1,100 1,261 (161) Exchange rate Yen/US Dollar 95 101 (6) Yen/Euro 125 144 (19) 25
Slide 26: Ratio of Mazda Vehicles Meeting Japanese Tax Incentive Regulations
RATIO OF MAZDA VEHICLES MEETING JAPANESE TAX INCENTIVE REGULATIONS Ratio of Mazda vehicles meeting Japanese tax incentive regulations among registered passenger cars 0％ 770％ 70 60 + 50 48％ 48 48％％ 40 30 20 + 10 0 FY2007 FY2009 Forecast 26
Slide 27: Operating Profit Change
OPERATING PROFIT CHANGE FY2009 Compared With FY2008 (Billion yen) Change from FY08 (21.6) 0 Vol & Mix Global industry decline Others + 66.4 (50) FY2008 (28.4) Marketing FY2009 Expenses (100) Exchange CR + 29.0 (50.0) (89.0) + 68.0 (150) (200) Improvement US Dollar (15.0) Euro (30.0) (96.0) Deteriora
Slide 28: Operating Profit Change
OPERATING PROFIT CHANGE FY2009 Compared With FY2008 (Billion yen) Improvement Change from FY08 (21.6) Deterioration 0 Vol & Mix Others + 66.4 (50) FY2008 (28.4) Marketing FY2009 Expenses (100) Exchange CR + 29.0 (50.0) (89.0) + 68.0 (150) (200) (96.0) Promote Cost Innovation initiatives (250) and ma
Slide 29: To Turnaround to Be Profitable in Second Half of FY2009 (1)
TO TURNAROUND TO BE PROFITABLE IN SECOND HALF OF FY2009 (1) 1,575.5 80 60.7 Revenue 60 930.0 1,100.0 960.4 40 900 Operating profit 20 10.0 (Billion yen) 0 100 volume - Substantial (20) & mix improvement (40) - Cost Innovation initiatives (700) (60) (60.0) - Cost Innovation initiatives (80) - Efficie
Slide 30: To Turnaround to Be Profitable in Second Half of FY2009 (2)
TO TURNAROUND TO BE PROFITABLE IN SECOND HALF OF FY2009 (2) Overview of actions - Production adjustment will end and volume is projected to recover in the 2nd half - Full-scale contributions of the new Mazda3/Axela - Promote Cost Innovation - Accelerate VA/VE, Reinforce suppliers’ business structure
Slide 31: Cash Flow
CASH FLOW Focus on achieving positive cash flow in FY2009 Stock increased due Progress in stock adjustment to drastic market Improved capacity utilization deterioration Consolidated cash flow forecast 67.5 (Billion yen) 10.2 (13.9) (8.3) (174.5) Full Year 1Q 2Q 3Q 4Q Full year FY2007 FY2008 FY2009 3
Slide 32: Initiatives for the Future - Direction of Our Studies
INITIATIVES FOR THE FUTURE - DIRECTION OF OUR STUDIES - 32
Slide 33: Initiatives for the Future
INITIATIVES FOR THE FUTURE Prioritizing emergency measures to respond to rapidly changing operating environment Organized a team to revise mid- and long-term strategies Evaluating and revising existing strategies for each area Will announce revisions of mid-term plan at an appropriate time Report th
Slide 34: Initiatives for the Future – Key Theme
INITIATIVES FOR THE FUTURE – KEY THEME Continue trend of product-led growth. Reinforce environmental actions and activities to respond to a shift to small-size vehicles Continue to pursue synergies with Ford (Product development and production) Maintain and enhance flexible production system Continu
Slide 35: Initiatives for the Future - Environment (1)
INITIATIVES FOR THE FUTURE - ENVIRONMENT (1) Plan to improve average fuel economy of Mazda cars sold globally by 30% Corporate Average Fuel Economy Average Average fuel fuel economy economy improvement improvement rate rate for for cars cars sold sold in in Japan Japan –– 30% 30% 2001 2002 2003 2004
Slide 36: Initiatives for the Future - Environment (2)
INITIATIVES FOR THE FUTURE - ENVIRONMENT (2) Targeted level for units after 2011 50% Fuel Consumption(L/100km) Reduction Rate Mazda Next Gen. 40% Diesel HEVs Full Mazda Mild 30% Next Gen. Gasoline Current Diesel Engine 20% Other improvement areas: • Vehicle weight reduction & 10% resistance reductio
Slide 37: Initiatives for the Future - Environment (3)
INITIATIVES FOR THE FUTURE - ENVIRONMENT (3) Introduction of electric devices – provide to a wider range of customers through gradual introductions i-stop Regenerative braking Hybrid M/G Regene.BRK M/G Regene.BRK ALT TM TM TM Motor Pb Pb Pb Plug-in HEV Battery Battery Battery Battery EV Generator In
Slide 38: In Summary
IN SUMMARY 38
Slide 39: In Summary – Market Share
IN SUMMARY – MARKET SHARE Improved or maintained share in key markets in CY2008 and FY2008 The share in Australia hit the highest level ever in FY2008 Improve or maintain share in key markets in FY2009 Change in Mazda’s FY2001 Changes versus prior year market share FY2007 CY2008 FY2008 FY2009 pts pt
Slide 40: In Summary – Brand
IN SUMMARY – BRAND World Car of the Year More than 500 awards since the 2002 Mazda6 2009 New Mazda3 North American Truck of the Year Japan Car of the Year 2007 New Mazda2, CX-9 2006 MPV,CX-7 2006 MX-5 2008 2005 Mazda5 New Mazda6, MZR series petrol engines Biante MZR-CD series, Mazda’s own clean dies
Slide 41: In Summary – Financial Status
IN SUMMARY – FINANCIAL STATUS Financial structure is improving steadily (Billion yen) (%) Equity Equity ratio 700 27.8% 30% 24.8% 22.9% 600 22.3% 552.2 20% 500 473.4 15.1% 413.1 12.4% 398.0 400 11.1% 9.1% 10.0% 10% 300 267.8 222.6 194.0 200 158.8 172.8 0% 100 0 -10% FY00 FY01 FY02 FY03 FY04 FY05 FY0
Slide 42: In Summary
IN SUMMARY Sales - Improve market shares in key markets reflecting high acclaims for new generation products. Aim to continue to outperform the industry - Continue to reinforce brand-focused sales strategy Finance - Ensure to improve financial strength and secure liquidity - Reduce fixed cost by app
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Slide 44: Appendix
APPENDIX 44
Slide 45: FY2008 4th Quarter Financial Metrics
FY2008 4th QUARTER FINANCIAL METRICS (Billion yen) 4th Quarter Change FY2008 FY2007 Amount Pct. Revenue 448.0 969.5 (521.5) (54) % Operating profit (64.9) 53.7 (118.6) - Ordinary profit (70.8) 58.8 (129.6) - Profit before tax (101.2) 56.8 (158.0) - Net income (100.4) 46.8 (147.2) - Operating ROS (14
Slide 46: Key Data
KEY DATA 4th Quarter FY2008 FY2007 Change Global retail volume (000) 297 388 (91) Exchange rate Yen/US Dollar 94 105 (11) Yen/Euro 122 158 (36) 46
Slide 47: Key Data
KEY DATA 4th Quarter FY2008 FY2007 Change Global retail volume (000) Japan 55 81 (26) North America 76 104 (28) Europe 80 99 (19) China 38 30 8 Other 48 74 (26) Total 297 388 (91) Consolidated wholesales (000) Japan 54 80 (26) North America 71 106 (35) Europe 60 105 (45) China 2 7 (5) Other 38 66 (2
Slide 48: Key Data
KEY DATA Full Year FY2007 FY2008 FY2009 Result Result Plan Share in key markets (%) Japan 4.8 4.6 4.5 USA 1.9 2.0 2.1 Canada 5.2 5.2 5.2 Europe 1.5 1.7 1.6 China 1.1 1.4 1.8 Australia 7.5 8.0 8.2 48
Slide 49: Operating Profit Change
OPERATING PROFIT CHANGE FY2008 Fourth Quarter Compared With FY2007 Fourth Quarter (Billion yen) Improvement 80 FY2007 Deterioration 53.7 Vol & Mix 40 0 (40) Exchange Marketing (97.5) CR Expenses Others Material, Product + 12.7 + 5.4 etc 6.5 Enhancement (80) (32.0) (6.8) FY2008 (6.9) (64.9) (120) Cha
Slide 50: Revenue by Region and by Segment
REVENUE BY REGION AND BY SEGMENT FY2008 Compared With FY2007 By Region By Segment (Billion yen) 3,475.8 2,535.9 3,475.8 2,535.9 (27)% (27)% 3,500 339.4 (33)% 502.5 (42)% 3,000 286.4 872.6 2,500 228.8 Other Other 291.9 (5)% (27)% 272.8 Parts 2,000 640.9 Europe 974.5 1,500 (27)% (30)% 677.3 North 2,68
Slide 51: Operating Profit Change
OPERATING PROFIT CHANGE FY2008 Compared With February Announcement (Billion yen) 0 (5) - Fixed cost reductions - Inventory devaluation at (10) overseas subsidiaries (15) Marketing CR Expenses Exchange + 2.0 Others (20) Vol & Mix 0.0 + 1.5 + 1.0 0.0 (25) Product 0.0 Enhancement Material, Feb Pub etc
Slide 52: Key Data
KEY DATA Full Year FY2009 FY2008 Change Global retail volume (000) Japan 200 219 (19) North America 290 347 (57) Europe 250 322 (72) China 170 135 35 Other 190 238 (48) Total 1,100 1,261 (161) Consolidated wholesales (000) Japan 200 220 (20) North America 273 348 (75) Europe 240 293 (53) China 15 17
Slide 53: Key Data
KEY DATA FY2009 Change from FY2008 1st Half 2nd Half Full Year 1st Half 2nd Half Full Year Global retail volume (000) Japan 96 104 200 (27) 8 (19) North America 150 140 290 (50) (7) (57) Europe 119 131 250 (60) (12) (72) China 84 86 170 21 14 35 Other 94 96 190 (42) (6) (48) Total 543 557 1,100 (158
Slide 54: 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