Bridgestone (5108) Q2 2024 earnings summary

Executive summary

• Revenue for 1H 2024 grew year-over-year, driven by premium tire sales and FX tailwinds, offsetting volume declines and Latin America headwinds.

• Adjusted operating profit declined year-over-year due to Latin America deterioration and lower volumes, despite cost reductions and FX benefits.

• Profit attributable to owners increased year-over-year, aided by a ¥63 billion gain from fixed asset sales in Q2.

• Comprehensive income attributable to owners reached ¥514,707 million, up from ¥417,916 million in the prior year period.

• Americas business bottomed out after a weak 2H 2023, while Latin America faced significant negative impacts.

Financial highlights

• 1H 2024 revenue: ¥2,176.8B (+4% YoY); adjusted operating profit: ¥229.2B (−4% YoY); margin: 10.5% (−0.8pp YoY).

• Profit attributable to owners: ¥199.1B (+9% YoY), including a ¥63B gain from asset sales.

• Gross profit increased to ¥857.2B from ¥809.5B YoY.

• Total assets as of June 30, 2024: ¥5,865.7B; equity ratio: 64.8% (+3.0pp from Dec 2023).

• Free cash flow: ¥108.9B (+¥1.0B YoY); capital expenditure: ¥151.1B (+¥12.8B YoY).

Outlook and guidance

• FY2024 revenue guidance revised to ¥4,410.0B (+2% YoY); adjusted operating profit: ¥490.0B (+2% YoY, −8% vs. February guidance).

• Profit attributable to owners forecast at ¥336.0B (+1% YoY); dividend per share unchanged at ¥210.

• Guidance revision attributed to Latin America deterioration, slower North America growth, and diversified products challenges.

• Latin America business expected to improve in 2H after a challenging 1H; North America recovery anticipated.

• Ongoing focus on cost reduction, inventory optimization, and multi-brand strategy to reinforce earnings.