Sumitomo Rubber Industries reports strong growth in Europe

In the past financial year, Sumitomo Rubber Industries (SRI) significantly increased its sales revenue, and the company’s European business played its part in achieving this result. Overall sales rose 16.0 per cent to 756.70 billion yen (£5.1 billion).

With sales revenue of 648.45 billion yen (£4.3 billion) in the 12 months to 31 December 2017, the company’s ‘Tires’ business accounted for 85.7 per cent of total revenue; sales for this business were up 16.7 per cent compared with 2016.

Sales rose in all regions, and while Europe is SRI’s smallest region in terms of turnover, sales here increased 92.79 per cent to 106.21 billion yen (£711.6 million). This result was helped by the performance of Hampshire-based wholesaler Micheldever Tyre Services Ltd., whose acquisition by SRI was completed early last year. Micheldever achieved turnover of £320 million in 2016, and based on this figure it can be estimated that the wholesaler contributed some 40 per cent to the increase in SRI’s European turnover.

Sales growth didn’t equal increased profit, however – SRI blames “soaring raw material prices” for its lower profits. Business profit decreased 10.6 per cent year-on-year to 66.98 billion yen (£448.8 million) and operating profit was, at 67.45 billion yen (£451.9 million), 8.0 per cent lower than a year earlier. Thanks to a lower tax burden in 2017, profit attributable to owners of parent rose 13.6 per cent to 46.98 billion yen (£314.8 million).

SRI sold a total of 123.5 million tyres last year, 9.6 per cent more than in 2016. Some 66 million of these were replacement market tyres, including around 12 million replacement tyres sold in Europe. The company anticipates total global sales of 130.0 million tyres in 2018, including 70 million replacement market tyres; SRI expects to sell between 13 million and 14 million replacement market tyres in Europe.