Bridgestone profits up 67%

It turns out that 2012 was a good year for Bridgestone Corporation. The Japanese tyre and rubber products manufacturer achieved a 66.8 per cent increase in net income during the period, taking in a healthy 171.6 billion yen (£1.18 billion). This jump in profit was achieved despite sales remaining relatively level; these increased 0.5 per cent to 3,039.7 billion yen (£20.94 billion). Operating income rose 49.5 per cent to 285.9 billion yen (£1.97 billion) and operating margin increased from 6.3 per cent to 9.4 per cent.

Tyre products are the mainstay of Bridgestone’s business and earned the company net sales of 2,557.2 billion yen (£17.62 billion), slightly above 2011 sales. Operating profit from tyres was 260.4 billion yen (£1.79 billion) and the operating margin 10.2 per cent).

The Americas was Bridgestone’s most lucrative region in terms of overall sales (both tyre and non-tyre), increasing 3.28 per cent to 1,330.9 billion yen (£9.17 billion). Unit sales of passenger and light truck tyres in the region remained unchanged compared to fiscal 2011. Total unit sales of tyres for trucks and buses decreased due to a decline in the sales of replacement tyres.

Number two region for sales was Japan, where sales dropped 0.8 per cent to 1,218.7 billion yen (£8.40 billion).  Unit sales of tyres for passenger cars and light trucks grew firmly compared to fiscal 2011. Total unit sales of tyres for trucks and buses decreased due to a decline in sales of replacement tyres.

Sales in Europe (tyre and non-tyre) dropped 15.6 per cent during the year to 348.8 billion yen (£2.40 billion). Unit sales of tyres for passenger cars and light trucks decreased substantially compared to fiscal 2011 due to a decline in the sales of replacement tyres, as well as tyres for trucks and buses.

In Asia Pacific, unit sales of passenger cars and light trucks increased substantially compared to fiscal 2011. Total unit sales of tyres for trucks and buses firmly increased from fiscal 2011. In China, unit sales of passenger and light truck tyres decreased, and unit sales of tires for trucks and buses decreased substantially compared to fiscal 2011.

In the specialty tyre business, unit sales of large and ultra-large off-the-road radials for construction and mining vehicles increased steadily compared to those of fiscal 2011 due to expansion of production capacity.

Referring to the company’s 2012 operating environment, Bridgestone says raw material and feedstock prices, along with the yen, remained high. In the Japanese market demand rose due to rebuilding and rebounding new vehicle sales following the 2011 earthquake, while the US economy seesawed and the European economy continued to suffer from the financial crisis. Asian economic expansion showed signs of a slowdown, particularly in China and India.

Yet Bridgestone views these global uncertainties as no great obstacle. In its 2012 consolidated financial statement, the tyre maker says it will “pursue the ultimate goal of being the world’s undisputed number one tyre and rubber company both in name and reality.” To this end, Bridgestone intends to “be ‘Dan-Totsu’, or the absolute and clear leader in all our industries and a company that is far outperforming its competitors.”

Looking ahead to 2013, Bridgestone projects that demand for original equipment passenger car and truck tyres will remain the same as 2012 in Europe, while replacement passenger car tyre demand will decreased slightly to 99 per cent of the 2012 figure and demand for truck tyres will rise to 104 per cent of last year’s demand. In Japan, passenger car tyre demand is expected to be only 93 per cent of that in 2012 for both the original equipment and replacement segments, while original equipment truck tyre demand should be 101 per cent compared with last year and replacement demand 94 per cent. The company anticipates net sales of 3,550.0 billion yen (£24.46 billion), up 17 per cent year-on-year, operating income of 382.0 billion yen (£2.63 billion), an increase of 34 per cent on 2012, and a 10.8 per cent operating margin.