Profitable growth for Yokohama Rubber in 2023

In the fiscal year 2023, Yokohama Rubber announced significant increases across key financial metrics, with revenue rising by 14.5 per cent to reach 985.3 billion yen (£5.2 billion), business profit surging by 41.4 per cent to 99.1 billion yen (£523.4 million), operating profit increasing by 45.8 per cent to 100.4 billion yen (£530.3 million), and profit attributable to owners of the parent company climbing by 46.4 per cent to 67.2 billion yen (£354.9 million).

These figures marked record-high full-year performance levels for Yokohama Rubber. The company also achieved its target of raising its ratio for business profit to sales revenue above ten per cent in line with the objectives it outlined in the Yokohama Transformation 2023 (YX2023) medium-term management plan. Yokohama Rubber achieved record sales revenue and business profit in each year of the YX2023 plan, which Yokohama Transformation 2026 (YX2026) has now succeeded.

Successful Tires performance

Robust sales and earnings performance was primarily driven by the Tires segment, where Yokohama Rubber implemented successful strategies to boost sales of high-value-added products such as the global flagship Advan tyre brand and Geolander tyre brand for SUVs and pick-up trucks. Additionally, improvements in product mix, price increases, reductions in raw material costs and logistics expenses, and favourable currency exchange rates contributed to the segment’s growth.

Within the Tires segment, Yokohama Rubber increased both sales revenue and business profit compared to the previous year. Original equipment tyre sales expanded due to the growth in vehicle models equipped with Yokohama tyres in Japan and North America and as the company secured fitments on new vehicle models. These gains more than offset the decline in Japanese automakers’ sales in China. Replacement tyre sales also grew, driven by strong demand for replacement summer tyres in Japan and expanding markets in China, India, and other Asian countries.

Yokohama Rubber experienced a significant uptick in sales revenue in off-highway tyres, particularly for agricultural and industrial machinery applications. However, sales declined in the legacy business of YOHT (Yokohama Off-Highway Tires), which the company handled as the ATG (Alliance Tire Group) segment prior to 2022, due to challenging market conditions in Europe and North America. The overall sales increase in off-highway tires reflected the acquisition of Trelleborg Wheel Systems Holding AB in May 2023. This business now operates as Y-TWS (Yokohama-TWS).

Multiple Business growth

In the Multiple Business (MB) segment, sales revenue and business profit also saw year-on-year growth. While hose & couplings business volume remained stable, industrial products witnessed strong sales growth, particularly in Japanese conveyor belts and marine products, alongside increased sales of replacement fixtures and components for commercial aircraft.

Continued record sales & earnings in 2024

Looking ahead to fiscal year 2024, management anticipates continued record-high levels of sales and earnings, with projected increases across all financial metrics. Additionally, management intends to recommend a dividend increase, reflecting confidence in the company’s future performance and commitment to delivering value to shareholders.