Bridgestone (5108) Q2 2024 earnings summary

Executive summary

• Revenue for the first half of 2024 increased year-over-year, driven by premium tire sales and FX tailwinds, but adjusted operating profit declined due to deteriorating performance in Latin America and North America TB business.

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

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

• European business remains weak and is undergoing restructuring; Asia, Pacific, India, and China, as well as specialty segments, reported year-on-year gains.

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

Financial highlights

• Consolidated revenue for the first half reached ¥2,176.8 billion (+4% YoY); adjusted operating profit was ¥229.2 billion (−4% YoY), margin 10.5% (−0.8pp YoY).

• Net profit increased to ¥199.1 billion, including a ¥63 billion gain on sales of fixed assets.

• Full-year revenue guidance revised to ¥4,410.0 billion (+2.2% YoY); adjusted operating profit forecast reduced to ¥490.0 billion.

• Dividend per share maintained at ¥210 for FY2024.

• Free cash flow at ¥108.9 billion; capital expenditure increased to ¥151.1 billion.

Outlook and guidance

• Full-year adjusted operating profit forecast revised down by ¥40 billion from February plan due to Americas underperformance.

• Sales and profit still expected to increase year-over-year, but below initial plan.

• Second half expected to benefit from seasonal factors, cost reduction initiatives, and recovery in Latin America and North America.

• 2025 and 2026 targeted for completion of restructuring and return to higher profitability.

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