Bridgestone Reports 19% Fewer Tyre Sales during a “Challenging” 2009
Bridgestone Corporation reports that 2009 presented the company with a “challenging” operating environment due to weakened consumer spending and declines in private sector capital investment which counteracted signs of recovery among some exports. However, the Japanese manufacturer states that although the economic recession in Europe and the US continued, some sectors showed signs of stabilisation. A recovery in business climate was observed in China and despite challenging conditions, the business climate in other regions began to show slight signs of recovery. Against such a backdrop, the tyre major achieved net sales of 2,597.0 billion yen (₤18.3 billion), a 20 per cent decrease on the 2008 fiscal year. Operating income, at 75.7 billion yen (₤532.2 million) was 42 per cent down on the previous year and net income, at 1.0 billion yen (₤7.0 million), dropped 90 per cent from 2008. Additionally, during the year Bridgestone recognised as an extraordinary loss 10.6 billion yen (₤74.5 million) in costs linked to its plant closures in Oceania.
During the year, Bridgestone states in its 2009 financial reports, it worked to realise its goal of “becoming the world’s undisputed No. 1 tyre and rubber company in both name and reality.” To meet this end, Bridgestone says it has focuses on increasing the sales of highly competitive products, strengthening supply capacity, improving manufacturing productivity, enhancing technological superiority and effectively utilising management resources.
Net sales derived from tyres amounted to 2,152.9 billion yen (₤15.1 billion), 18 per cent less than in 2008. Operating income from Bridgestone’s tyre business was 75.2 billion yen (₤528.7 million) , a drop of 19 per cent on the previous fiscal year. Bridgestone comments that in the tyre segment it “worked to maximise its sales momentum by introducing appealing new products worldwide, while at the same time improving and expanding strategic production sites around the world in support of respective product domains, particularly those that have been identified as strategic and important to the company’s future growth.”
Unit sales of tyres in Japan were “substantially down” from 2008 due to the “impact of slumping demand”, Bridgestone reports. In Europe, units sales of tyres for passenger cars, light commercial vehicles, trucks and buses were also “substantially” down on fiscal 2008 because of a significant fall in demand, yet a significant increase in unit sales of strategic products, led by run-flat and UHP tyres, occurred in the replacement sector. The company’s North American tyre business saw a major decline in unit sales of consumer and truck and bus tyres, however a “significant” increase in unit sales of strategic products such as UHP and run-flat tyres took place here also. In the specialty tyre business, unit sales of ultra large OTR radials for construction and mining vehicles were “favourable”, exceeding those of the 2008 fiscal year.
In 2010, Bridgestone believes it is likely to “experience challenging conditions” trends in the prices of raw materials remain uncertain despite an economic trend towards recovery. The group is also expected to face “rapid changes in the structures of demand and competition worldwide.” Furthermore, company management predicts that unit sales of tyres in Japan, Europe and North America will increase over the level achieved in 2009. Full-year net sales of 2,830.0 billion yen ( ₤19.9 billion) are anticipated, a figure nine per cent higher than the 2009 result, with an operating income of 94.0 billion yen (₤660.8 million) , up 24 per cent, and a net income of 45.0 billion yen (₤316.3 million) .