Mazda Motor Corp. · TSE:7261
Mazda Motor — H1 FY March 2020 Earnings Presentation
73 slides from Mazda Motor's earnings presentation, November 2019
Slide 1: Fiscal Year March 2020 Second Quarter Financial Results
FISCAL YEAR MARCH 2020 SECOND QUARTER FINANCIAL RESULTS
Slide 2: Presentation Outline
PRESENTATION OUTLINE Financial Results/Forecast - Fiscal Year March 2020 First Half Results - Fiscal Year March 2020 Full Year Forecast Medium-Term Management Plan The overseas subsidiaries which apply US GAAP adopted ASU 2014-09 ”Revenue from Contracts with Customers” from the beginning of FY M
Slide 3: Fiscal Year March 2020 First Half Results
FISCAL YEAR MARCH 2020 FIRST HALF RESULTS 3
Slide 4: FY March 2020 Financial Metrics
FY MARCH 2020 FINANCIAL METRICS First Half FY March FY March Change from (Billion yen) 2019 2020 Prior Year Amount YOY(%) Revenue 1,729.0 1,706.6 (22.4) (1)% Operating profit 29.8 25.8 (4.0) (14)% Ordinary profit 53.5 34.0 (19.5) (36)% Profit before tax 49.0 32.7 (16.3) (33)% Net income 23.8 16.6 (7
Slide 5: FY March 2020 Operating Profit Change
FY MARCH 2020 OPERATING PROFIT CHANGE FY March 2020 1st Half vs. FY March 2019 1st Half Effects of reduced 【Exchange rates】 (Billion yen) Improvement marketing expenses USD 1.4 EUR （10.5） and improved per-unit profit CAD （3.7） AUD （10.7） (Deterioration) 80 GBP （2.8） Other （11.2） Volume & mix Exchang
Slide 6: FY March 2020 Global Sales Volume
FY MARCH 2020 GLOBAL SALES VOLUME First Half FY March FY March Change from (000) 2019 2020 Prior Year Global sales volume Volume YOY(%) Japan 103 98 (4) (4)% North America 222 202 (20) (9)% Europe 135 136 1 1% China 133 109 (24) (18)% Other Markets 202 184 (18) (9)% Total 796 731 (65) (8)% <Breakdow
Slide 7: Fiscal Year March 2020 Full Year Forecast
FISCAL YEAR MARCH 2020 FULL YEAR FORECAST 7
Slide 8: FY March 2020 Financial Metrics
FY MARCH 2020 FINANCIAL METRICS Full Year (May Forecast) FY March FY March Change from FY March (Billion yen) 2019 2020 Prior Year May Forecast 2020 Amount YOY(%) Amount Revenue 3,564.2 3,500.0 (64.2) (2)% (200.0) 3,700.0 Operating profit 82.3 60.0 (22.3) (27)% (50.0) 110.0 Ordinary profit 116.1 70.
Slide 9: FY March 2020 Operating Profit Change
FY MARCH 2020 OPERATING PROFIT CHANGE FY March 2020 Full Year vs. FY March 2019 Full Year Improvement (Billion yen) Effects of reduced 【Exchange rates】 (Deterioration) marketing expenses and USD (1.1) EUR （24.4） improved per-unit profit CAD (6.8) AUD （20.8） GBP (7.6) Other （19.2） Volume & 150 Mix Ex
Slide 10: FY March 2020 Operating Profit Change vs May Forecast
FY MARCH 2020 OPERATING PROFIT CHANGE FY March 2020 Full Year vs. May Forecast Improvement (Billion yen) 【Exchange rates】 USD (0.5) EUR （18.0） (Deterioration) CAD (5.7) AUD （15.9） GBP (8.1) Other （15.0） May Volume & Forecast Mix 110.0 Exchange + 0.0 rates 100 Impact of decreased Includes hike in Fix
Slide 11: FY March 2020 Global Sales Volume
FY MARCH 2020 GLOBAL SALES VOLUME Full Year (May Forecast) FY March FY March Change from FY March (000) 2019 2020 Prior Year May Forecast 2020 Volume YOY(%) Volume Global sales volume Japan 215 209 (5) (3)% (14) 223 North America 421 430 9 2% (25) 456 Europe 270 285 15 6% (1) 286 China 247 255 8 3%
Slide 12: Medium-Term Management Plan
MEDIUM-TERM MANAGEMENT PLAN 12
Slide 13: Once-in-a-Century Transformation
ONCE-IN-A-CENTURY TRANSFORMATION Automakers must satisfy the era’s high-level requirements in the areas of CASE all at once and on a global scale 13
Slide 14: Positioning of Medium-Term Management Plan
POSITIONING OF MEDIUM-TERM MANAGEMENT PLAN Sustain Mazda’s uniqueness by “Co-Creating With Others” and enhance brand value Shift to brand value management by offering products and experiences that build a strong and lasting connection with customers Ideal for 2030-40 First stage of Mazda’s nex
Slide 15: Co-Creating With Others: Mazda's Uniqueness
“Co-Creating With Others” Mazda’s Uniqueness 15
Slide 16: 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 16
Slide 17: Medium-Term Management Plan Major Initiatives
Medium-Term Management Plan Major Initiatives 17
Slide 18: Unique Products / Customer Experience
Unique Products / Customer Experience - Investment for brand value improvement - 18
Slide 19: Investment for Brand Value Improvement (New Technologies)
INVESTMENT FOR BRAND VALUE IMPROVEMENT (NEW TECHNOLOGIES) Progressing the “Sustainable Zoom-Zoom 2030” vision to prevail in the era of CASE Steady progress with major technology and product plans for CASE Continuing work on development activities/production preparation Revising introduction ti
Slide 20: Investment for Brand Value Improvement: Shared, Electric, Connected
INVESTMENT FOR BRAND VALUE IMPROVEMENT (NEW TECHNOLOGIES） Introduce Mazda Connect 2 ✔ Done with on-board Connected communication device Start connected services ✔ Done Advance and popularize ✔ Done safety technologies Autonomous Deliver Mazda Co-Pilot Plan to join JAMA testing of automated d
Slide 21: Market Launch of Mazda3
INVESTMENT FOR BRAND VALUE IMPROVEMENT (PRODUCT) Market launch of Mazda3, the first in a new generation of products 21
Slide 22: Market Launch of CX-30
INVESTMENT FOR BRAND VALUE IMPROVEMENT (PRODUCT) Market launch of CX-30, the second in a new generation of products 22
Slide 23: Unveiled MX-30, First Mass-Produced EV
INVESTMENT FOR BRAND VALUE IMPROVEMENT (PRODUCT) Unveiled MX-30, Mazda’s first mass-produced EV, at Tokyo Motor Show; market launch in 2020 23
Slide 24: Lineup Works Together as a Group
INVESTMENT FOR BRAND VALUE IMPROVEMENT (STRATEGY AS A SMALL PLAYER) The whole lineup works together as a group, raising the value of the brand with a consistent image CX-3 CX-30 CX-9 CX-8 CX-5 MAZDA3 MX-30 MAZDA6 MX-5 24 MAZDA2
Slide 25: Wide Range of Powertrains with Minimum Number of Models
INVESTMENT FOR BRAND VALUE IMPROVEMENT (STRATEGY AS A SMALL PLAYER) A wide range of powertrains, including electrification, to meet diverse global needs with the minimum number of models Mazda3 Hatchback SKYACTIV-X SKYACTIV-D 1.8 MILD HYBRID Mazda3 Sedan SKYACTIV-G 2.0 SKYACTIV-G 1.5 AWD 25
Slide 26: Expand Powertrain Lineup to Increase Pricing Coverage
INVESTMENT FOR BRAND VALUE IMPROVEMENT (RESPONDING TO CUSTOMER AND MARKET DIVERSIFICATION) Expand the powertrain lineup, including electrification, and advanced technologies to increase pricing coverage Price Increase pricing coverage Current-generation lineup New-generation lineup 26
Slide 27: Brand Value Improvement (Mazda3)
INVESTMENT FOR BRAND VALUE IMPROVEMENT (MAZDA3) Adopt next-generation functionality/performance, such as CASE Strategic pricing of entry-level and top models in line with the Medium-Term Management Policy Old MAZDA3 Price New MAZDA3 （Axela） Increase Top model pricing coverage Entry model Current
Slide 28: Brand Value Improvement (Mazda3 in US)
INVESTMENT FOR BRAND VALUE IMPROVEMENT (MAZDA3 IN US) Expand pricing coverage by introducing AWD Implement countermeasures for under-performance in mass-market zone from 2020 model year Old MAZDA3 (18MY) New MAZDA3 (19MY) $42 $42 $40 FF $40 FF 〈 transaction Price（k USD）〉 $38 $38 AWD $36 $36 $34
Slide 29: Challenge for Large Products
INVESTMENT FOR BRAND VALUE IMPROVEMENT (CHALLENGE FOR “LARGE” PRODUCTS) The Mazda brand never stops challenging Our next challenge is to offer extremely high-value products at a persuasive price Keep challenging ourselves to strengthen the brand “Large” Price products Increase pricing coverage
Slide 30: Brand Value Improvement (CX-5 in Japan)
INVESTMENT FOR BRAND VALUE IMPROVEMENT (CX-5 IN JAPAN) Add/improve powertrains and offer up-to-date advanced technologies and new designs with annual product updates to upshift sales pricing ￥4,000k ￥3,500k ￥3,000k ￥2,500k Add 2.5L Add 2.5L turbo ￥2,000k Gasoline Diesel Gasoline Diesel Gasoline Di
Slide 31: Challenge for Large Products: Persuasive Price
INVESTMENT FOR BRAND VALUE IMPROVEMENT (CHALLENGE FOR “LARGE” PRODUCTS) A persuasive price given such a high-value product, a price that encourages existing customers to repurchase Adopt a longitudinal layout, straight-six engine and plug-in hybrid technologies to make Mazda products outstanding
Slide 32: Summary of Investment: Monotsukuri Innovation
SUMMARY OF INVESTMENT FOR BRAND VALUE IMPROVEMENT (TECHNOLOGY/PRODUCT) Monotsukuri Innovation Phase 1: Implemented and evolved with current-generation products Bundled product planning, common architecture, flexible production Model-based development (MBD) (Already implemented flexible mixed p
Slide 33: Summary of Investment: Technology/Product
SUMMARY OF INVESTMENT FOR BRAND VALUE IMPROVEMENT (TECHNOLOGY/PRODUCT) Steady progress on development of and investment in main technologies for CASE with some exceptions Market launch of “small” product group as scheduled The “large” product group does not aim to move the brand to an existing
Slide 34: Investment: Sales, Customer Experience, Network
INVESTMENT FOR BRAND VALUE IMPROVEMENT (SALES, CUSTOMER EXPERIENCE, NETWORK) Investment in digital and real-world tools for customers to experience our product/ brand value Investment to free up front-line staff to spend more time with customers Enhance IT in administrative operations Improve
Slide 35: Curb Expenses that Depreciate Brand Value
Curb expenses that depreciate brand value 35
Slide 36: Curb Expenses: Variable and Fixed Marketing Expenses
CURB EXPENSES THAT DEPRECIATE BRAND VALUE (VARIABLE AND FIXED MARKETING EXPENSES) Improve sales quality to curb expenses Innovate the communications of product values to customers (a fusion of digital and real tools) Attempt value communication that connects mass media, interactive media such
Slide 37: Curb Expenses: Quality
CURB EXPENSES THAT DEPRECIATE BRAND VALUE (QUALITY) As automotive technologies become more complex, detect and fix problems early to reduce quality expenses with a focus on prevention of quality issues Prevention A common architecture for software development Expand scope of model-based developm
Slide 38: Investment in Areas in Which We Need to Catch Up
Investment in the areas in which we need to catch up 38
Slide 39: Investment in Infrastructure
INVESTMENT IN INFRASTRUCTURE Construction of new US plant is on track IT investment (MDI※1 II, etc.) ※1 Mazda Digital Innovation Next-gen connected services started in Japan and US (Use driving data and customer information) Sales support system Enhanced IT for MBD and MBR※2 ※2 Model-based
Slide 40: Investment in Partnerships
INVESTMENT IN PARTNERSHIPS EV C.A. Spirit for joint development of EV base technologies Partnership for connectivity fundamentals Begin study of collaboration programs including autonomous driving partnership and vehicle electrification Equity participation in MONET Technologies for joint st
Slide 41: Investment in Environment and Safety
INVESTMENT IN ENVIRONMENT AND SAFETY (PEOPLE, LOCAL COMMUNITY, SDGs, CSR RELATED) Improve work environment for employees IT investment for business efficiency Returns from efficiency gains go to employees Contribution to local community Maximize our people’s contribution 41
Slide 42: Medium-Term Management Plan Financial Metrics
Medium-Term Management Plan Financial Metrics 42
Slide 43: Operating Profit History
OPERATING PROFIT HISTORY Current-generation lineup New-generation lineup Build solid base Strong growth ROS Over 5％ Operating Profit FY Mar FY Mar FY Mar FY Mar FY Mar FY Mar FY Mar FY Mar FY Mar FY Mar FY Mar FY Mar FY Mar 13 14 15 16 17 18 19 20 21 22 23 24 25 Structural Reform Structural Reform P
Slide 44: Sales Volume Plan
SALES VOLUME PLAN Build solid base: Strong growth: First 3 years Latter 3 years Others New-gen “large” products New-gen “small” products Current- gen FY Mar 20 FY Mar 21 FY Mar 22 FY Mar 23 FY Mar 24 FY Mar 25 While maintaining business scale with current-generation products, develop new-generatio
Slide 45: Sales Volume Plan (vs April 2018 Forecast)
SALES VOLUME PLAN (VS APRIL 2018 FORECAST) Sales plan in FY March 2025 vs. April 2018 forecast Others Others New-gen New-gen “large” “large” products products New-gen “small” New-gen products “small” products Current Current-gen -gen April 2018 Forecast Mid-term Management Plan Current-gen New-gen "
Slide 46: Sales Mix by Market
SALES MIX BY MARKET FY March 2020 FY March 2025 Japan Japan Others Others China China North North America America Europe Europe Aim for further growth in the US by starting production at the new US plant and enhancing the sales network 46
Slide 47: Investment for Future
INVESTMENT FOR FUTURE Current-generation lineup New-generation lineup Build solid base Strong growth R&D cost Capex Mexico New US Plant Plant FY Mar FY Mar FY Mar FY Mar FY Mar FY Mar FY Mar FY Mar FY Mar FY Mar FY Mar FY Mar FY Mar 13 14 15 16 17 18 19 20 21 22 23 24 25 Structural Reform Plan Stage
Slide 48: Medium-Term Management Plan Metrics FY March 2025
MEDIUM-TERM MANAGEMENT PLAN 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 (average) Investment Sales network, customer experience, infrastructure, employees for future & work
Slide 49: Lastly: 100th Anniversary in 2020
LASTLY 100 th Anniversary in 2020, and for the next 100 years 49
Slide 50: Mazda Motor Corporation
MAZDA MOTOR CORPORATION 50
Slide 51: Appendix
APPENDIX MAZDA MOTOR CORPORATION 51
Slide 52: Japan
JAPAN Sales were 98,000 units, down 4% year on year Market share was 3.7%, and registered vehicle market share was 4.8%, down 0.4 points year on year CX-30 Sales of Mazda3 exceeded First Half Sales Volume the plan (000) New crossover SUV 103 (4)% 98 CX-30 was introduced in 100 October Skya
Slide 53: North America
NORTH AMERICA Sales were 202,000 units, down 9% year on year USA: 137,000 units, down 9% year on year - Continued to reduce incentives and improve per-unit profit CX-5 - High-grade models of Mazda3 are selling well. Created test drive First Half Sales Volume opportunities so that more (000) cust
Slide 54: Europe
EUROPE Sales were 136,000 units, up 1% year on year Sales in Europe excluding Russia were 121,000 units, up 2％ year on year - Germany: 34,000 units, Mazda3 up 3% year on year First Half Sales Volume - UK: 20,000 units, up 9% (000) year on year - New crossover SUV CX-30 150 135 1% 136 was introdu
Slide 55: China
CHINA Sales were 109,000 units, down 18% year on year The new Mazda3 was introduced in September and its sales will start in earnest from the second half CX-4 Updated Mazda6 was launched First Half Sales Volume in August, leading to an (000) improving sales trend 150 133 Updated CX-4 will be
Slide 56: Other Markets
OTHER MARKETS Sales were 184,000 units, down 9％ year on year Australia: 51,000 units, down 10％ year on year - Maintained market share on par with the prior year despite Mazda3 declining demand and intensifying competition First Half Sales Volume - Reduced incentives on new (000) Mazda3 and conti
Slide 57: Cash Flow and Net Cash
CASH FLOW AND NET CASH FY March 2019 FY March 2020 Change from (Billion yen) Full Year First Half Prior FY End Cash Flow - From Operating activities 146.7 (4.5) - - From Investing activities (131.6) (65.0) - - Free Cash Flow 15.1 (69.5) - Cash and Cash Equivalents 701.6 620.6 (81.0) Net Cash 94.6 (8
Slide 58: Revenue by Geographic Area
REVENUE BY GEOGRAPHIC AREA (Billion yen) 900 872.3 856.7 857.7 848.9 Other 159.3 150.6 141.7 129.1 Europe 156.6 175.6 179.8 184.6 600 North 299.7 263.1 258.8 America 309.7 300 Japan 256.7 267.4 285.2 217.7 0 1Q 2Q 1Q 2Q FY March 2019 FY March 2020 58
Slide 59: Revenue by Product
REVENUE BY PRODUCT (Billion yen) 900 872.3 856.7 857.7 848.9 Other 62.2 69.4 57.6 63.3 Parts 65.7 65.8 66.0 67.5 600 Vehicles / Parts for 744.4 719.8 725.5 728.4 Overseas 300 Production 0 1Q 2Q 1Q 2Q FY March 2019 FY March 2020 59
Slide 60: Revenue Change (6 Months)
REVENUE CHANGE (6 MONTHS) FY March 2020 1st Half vs. FY March 2019 1st Half (Billion yen) 5% FY March 2020 1,706.6 Domestic (1)% FY March 2019 1,729.0 Overseas 3 % 2% 0% (1)% (3)% (5)% Total Volume & Mix Exchange 60
Slide 61: Revenue Change (3 Months)
REVENUE CHANGE (3 MONTHS) FY March 2020 2nd Quarter vs. FY March 2019 2nd Quarter (Billion yen) Domestic 1% 8% FY March 2020 857.7 Overseas 4% FY March 2019 856.7 5% 4% 0% 0% (4)% (5)% (8)% Total Volume & Mix Exchange 61
Slide 62: Global Sales Volume and Consolidated Wholesales (6 Months)
GLOBAL SALES VOLUME AND CONSOLIDATED WHOLESALES (6 MONTHS) First Half FY March FY March Change from (000) 2019 2020 Prior Year Global sales volume Volume YOY(%) Japan 103 98 (4) (4)% North America 222 202 (20) (9)% Europe 135 136 1 1% China 133 109 (24) (18)% Other Markets 202 184 (18) (9)% Total 79
Slide 63: Global Sales Volume and Consolidated Wholesales (Full Year)
GLOBAL SALES VOLUME AND CONSOLIDATED WHOLESALES (FULL YEAR) Full Year FY March FY March Change from (000) 2019 2020 Prior Year May Forecast Global sales volume Volume YOY(%) Volume Japan 215 209 (5) (3)% (14) North America 421 430 9 2% (25) Europe 270 285 15 6% (1) China 247 255 8 3% (10) Other Mark
Slide 64: Global Sales Volume and Consolidated Wholesales (3 Months)
GLOBAL SALES VOLUME AND CONSOLIDATED WHOLESALES (3 MONTHS) Second Quarter FY March FY March Change from (000) 2019 2020 Prior Year Global sales volume Volume YOY(%) Japan 54 59 5 10 % North America 106 103 (4) (4)% Europe 68 69 1 2% China 65 55 (9) (15)% Other Markets 100 92 (8) (8)% Total 392 378 (
Slide 65: FY March 2020 Financial Metrics (3 Months)
FY MARCH 2020 FINANCIAL METRICS (3 MONTHS) Second Quarter FY March FY March Change from (Billion yen) 2019 2020 Prior Year Amount YOY(%) Revenue 856.7 857.7 1.0 0% Operating profit (2.9) 18.8 21.7 - Ordinary profit 11.4 24.9 13.5 118 % Profit before tax 6.3 24.1 17.8 282 % Net income 3.2 11.4 8.2 24
Slide 66: FY March 2020 Operating Profit Change (3 Months)
FY MARCH 2020 OPERATING PROFIT CHANGE (3 MONTHS) FY March 2020 Second Quarter vs. FY March 2019 Second Quarter Improvement Reduced marketing 【Exchange rates】 (Billion yen) expenses and (Deterioration) USD 1.2 EUR （7.1） 50 improved per-unit CAD (2.5) AUD （7.2） profit GBP (2.1) Other （9.0） Volume & Mi
Slide 67: Global Sales Volume and Consolidated Wholesales (1st Half / 2nd Half)
GLOBAL SALES VOLUME AND CONSOLIDATED WHOLESALES (1st HALF / 2 nd HALF) FY March 2020 Change from Prior Year (000) 1st Half 2nd Half Full Year 1st Half 2nd Half Full Year Global sales volume Japan 98 111 209 (4) (1) (5) North America 202 228 430 (20) 29 9 Europe 136 149 285 1 14 15 China 109 146 255
Slide 68: FY March 2020 Financial Metrics (1st Half / 2nd Half)
FY MARCH 2020 FINANCIAL METRICS (1st HALF / 2 nd HALF) FY March 2020 Change from Prior Year (Billion yen) 1st Half 2nd Half Full Year 1st Half 2nd Half Full Year Revenue 1,706.6 1,793.4 3,500.0 (22.4) (41.8) (64.2) Operating profit 25.8 34.2 60.0 (4.0) (18.3) (22.3) Ordinary profit 34.0 36.0 70.0 (1
Slide 69: Exchange Rates
EXCHANGE RATES Change FY March 2020 from May Change from Prior Year Forecast （Yen） 1st Half 2nd Half Full Year 1st Half 2nd Half Full Year Full Year US Dollar 109 106 107 (2) (6) (4) (3) Euro 121 118 119 (8) (9) (9) (7) Canadian Dollar 82 80 80 (3) (4) (5) (4) Australian Dollar 75 72 73 (7) (8) (8)
Slide 70: Crossover SUV Ratio
CROSSOVER SUV RATIO （000 units） 1,500 Crossover SUV 34% 39% 46% 12% 29% 49% 27% 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 1,550 volume （000 units） Results Plan 70
Slide 71: Key Data
KEY DATA (Billion yen) Investment for new generation products, new plant in USA, etc. 150 145.0 139.0 134.7 119.7 Full Full Year 100 Year 88.4 91.0 Full Year 73.8 First 63.5 68.2 50 Half First 43.6 45.3 First 37.8 Half Half 0 * FY March 2019 2020 2019 2020 2019 2020 Capital Depreciation R&D Cost Exp
Slide 72: 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 73: 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