Tyres & Accessories' rankings of the leading tyre manufactures in the world according to tyre turnover, pre-tax profits and operating profit has now published online. First published in our June 2011 print edition, subscribers can view the details of this year's table by clicking more.
Goodyear chairman and CEO Richard J Kramer says that the company has “a clear view of our destination as a business and well-defined strategies for driving value” as it strategises its path back to profit, having posted net losses of $216 million and $375 million in 2010 and 2009 respectively. The company believes that what it terms “seven MegaTrends” over the next five years to a decade will favour its approach, which includes a focus on high-profit segments. The company is holding an investor conference in New York today to discuss how to meet its target of $1.6 billion operating profit – a would-be record for the company – by 2013. The company also announced an operating income target of $450 million in 2013 for the North American Tire segment, as well as improved margins worldwide.
Nokian Tyres states that its sales and operating profit increased “more than expected” in the final quarter of 2010. The company has yet to release its quarter figures, however it estimates whole year sales in 2010 to be approximately 1.055 billion euros, compared with 798.5 million in 2009. Last year’s operating profit is estimated at 215 to 220 million euros, up from 102 million a year earlier. The Finnish tyre maker notes that sales and operating profit “grew clearly” in all its business units, fulfilling previously stated expectations.
India’s MRF Ltd reports net sales of Rs 19,254 million (£258.2 million) in the quarter ended June 30, 2010, an increase of 33.9 per cent compared with the same period last year. The tyre maker recorded an operating profit margin of 9.07 per cent, down from 18.09 per cent, and a net profit margin of 3.20 per cent, down from 8.74 per cent. Net profit in the quarter to June 30 amounted to Rs 615.90 million (£8.3 million) a drop of 51.0 per cent.
Cooper Tire & Rubber Co. continued its strong 2010, posting a 27 per cent increase in sales for the second quarter and a $57 million improvement in net income for the period, reports Tire Review. Cooper posted second quarter sales of $804 million. Net income for the period came in at $44 million, up $57 million versus the same period in 2009.
Following a less than optimal 2009 Kumho Tires has achieved positive results for the second consecutive quarter of this year. The South Korean manufacturer’s revenue increased 34 per cent year-on-year during the second quarter of 2010 to KRW 628.1 billion (£336.1 million), with operating profit reaching KRW 66.9 billion (£35.8 million) and an operating profit margin of 10.7 per cent. Net profit for the three months to June 30 was KRW 53.9 billion (£28.8 million), contrasting with a loss of KRW 113.2 billion a year earlier.
Indonesia’s largest tyre manufacturer, PT Gajah Tunggal Tbk, has reported a 188 per cent increase in net profit during the first half of the current financial year. During the six months to June 30, 2010, the company attained profits of Rp 415 billion (£29.3 million) on the back of revenues equalling Rp 4.8 trillion (£339.8 million), a 27 per cent year-on-year increase. Operating profit jumped 176 per cent to Rp668 billion (£47.3 million) due to a decrease in operating expenses.
Speaking on Trelleborg AG’s performance during the first three months of the year, company president and CEO Peter Nilsson stated “the first quarter of 2010 is showing that we are building a stronger Trelleborg and that we are constantly moving towards growing and profitable segments The implemented action programmes continue to give positive effects and we are gradually growing in to a more efficient structure.”
Trelleborg AB reports that its Trelleborg Wheel Systems division achieved net sales of SEK 2,991 million (₤263.6 million) during the previous financial year, a decrease of 19.3 per cent on its 2008 result. In releasing its figures for January to December, the Swedish manufacturer notes “organic sales declined 26 per cent, exchange-rate effects were 7 per cent and structural changes 0 per cent. Net sales are lower as a result of a significant decrease in demand for industrial tyres and lower agricultural-tyre sales. Demand for agricultural tyres showed some variation in the various sub-segments, where the trend for large dimensions was better in relative terms, but demand for this product group also fell toward year-end.”
(Tire Review) Hankook Tire posted a net profit for the third quarter of the year thanks to increased sales and decreased production costs. For the three months ending 30 September, Hankook posted a net profit of 182.95 billion won (£96 million), up from a net loss of 14.79 billion won a year earlier. Operating profit in the third quarter jumped to 155.94 billion won from 53.86 billion won, while sales rose 14 per cent to 762.09 billion won from 667.75 billion won. Operating profit margin also jumped to 20.5 per cent from 8.1 per cent a year earlier.
Apollo Tyres Ltd’s second quarter 2009/10 results show the company achieved 20.46 billion rupees (£269.8 million; 296.8 million euros; $443 million) of consolidated revenue in the period, up 62 per cent over the same period last year. Operating profit totalled 2.9 billion rupees (£38.278 million; 42.151 million euros; US$ 62.872) more than tripling the 818.3 million rupees the company brought in the year before.
Onkar S Kanwar, chairman, Apollo Tyres, commented: “The steady growth achieved by Apollo Tyres despite rising raw material prices reflects the true spirit of our most valuable asset, the employees. In the quarter under review, higher raw material costs were absorbed by the company in order to protect consumers’ interest. This was possible only because of our continued emphasis on managing costs and efficiencies internally, which began in the first quarter of the last financial year.”
Continental AG’s tyre operations are “doing extremely well,” according to financial analysts. Writing in an investor’s note, Deutsche Bank analysts reported that the tyre business' 11 per cent (combined truck and passenger) operating margin in the first half of 2009 outperformed its rivals.
“Even if the group enjoyed a small 45 million euro positive impact from raw material (compared with a small negative of 19 million euros at Pirelli and a bigger negative of 117 million euros at Michelin), they enjoyed a double digit operating profit margin despite a high 20 per cent volume decline,” the analysts wrote.
Looking forward, Deutsche Bank predicted that the tyre operations will benefit from a positive raw material effect of (200 million euros) and from a volume recovery.
The analysts pointed out that tyre operations produce 48 per cent of Continental AG’s group revenues.
Hankook Tire has reported strong second quarter sales of 1,257.3 billion won (£613.945 million; 715.822 million euros; 1.009 billion), up 10.3 per cent from 1,111.7 billion won (£545.693 million; 637.191 million euros; $893.855 million) in the second quarter of 2008. However, the company also recorded a 239.6 per cent increase in quarterly operating profits, which grew from 79.0 billion won to 144.8 billion won (£71.098 million; 82.944 million; $116.456 million) in the second quarters of 2008 and 2009 respectively.
The Hankook Tire China and Hungary operation saw record-high growth that led to a triple-digit percentage increase in its operating profit figures. In particular, the China operation reportedly recorded a 34.8 per cent sales increase quarter-on-quarter due to an increase in consumer demands and OE supplies, in line with the growing Chinese automotive industry. The Hungary operation showed a 44.6% sales increase year-on-year and resulted in operating profits following growth in the European market and cost efficient production.
In its interim report for the months between April and June 2009, Trelleborg reports that “in a difficult market situation, we have successfully managed to generate a continued strong cash flow and improved our operating margin compared with the first quarter of 2009.” The company also states that effects of its “capacity adjustments” are gradually increasing, although the sense of uncertainty regarding the future remains “great”.
Net sales in the second quarter of 2009 totalled SEK 6.867 million, down 17.5 per cent on the same period a year earlier. Operating profit, at SEK 159 million, decreased 52.8 per cent year-on-year.
Axle Group Holdings reported an operating loss of £3.2 million in 2008, compared with operating profit of £4.2 million in 2007. However, sales from Axle’s National Tyres & Autocare retail chain and its Viking tyre wholesale business grew 13.4 per cent to £153 million. According to the Herald newspaper, Axle Group generated a £3.8 million profit on the sale of properties to another company controlled by chief executive Alan Revie and this is believed to have helped the company achieve a pre-tax profit of £3 million in 2008, down from £5.2m in 2007. The pre-tax profits came off the back of gross profits of £60.5 million in the 2008 (39.5 per cent of sales in 2008). However in 2007, Axle Group made a gross profit of £56.7 million, or 42 per cent of sales.
15 months ago Alan Revie unveiled plans to inject £12 million into the National chain and increase its UK estate from around 200 branches to 320 over five years. However, according to the Herald’s report, the head of the National Tyres auto repair chain appears to have enjoyed a 400 per cent increase in pay in the past year. The newspaper points out that accounts for Axle Group Holdings, which owns National Tyres, show the total emoluments of the highest paid director, soared to £2,126,000 in 2008, from £540,000 in the preceding year. The total boardroom payroll jumped to £4,057,000, up from £1,335,000 in 2007.
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