Bridgestone (5108) Q2 2024 earnings summary

Executive summary

• Revenue grew year-over-year in the first half of 2024, driven by premium tire sales and FX tailwinds, but profit declined due to deteriorating performance in the Americas, especially Latin America, and lower profitability in North America.

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

• Net profit increased year-over-year, aided by a ¥63 billion gain from fixed asset sales in Q2.

• Recovery is expected in the second half, with the worst phase in the Americas believed to be over, though full-year results will fall short of earlier guidance.

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

Financial highlights

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

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

• Free cash flow: ¥108.9B; capital expenditure: ¥151.1B; equity ratio: 64.8%.

• Total assets as of June 30, 2024: ¥5,865.7B; total equity: ¥3,852.5B.

• Basic earnings per share for the first half was ¥290.76, up from ¥266.85 year-over-year.

Outlook and guidance

• Full-year FY2024 revenue forecast revised down to ¥4,410.0B (+2.2% YoY); adjusted operating profit: ¥490.0B; net profit: ¥336.0B.

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

• Dividend per share maintained at ¥210.

• Second half expected to benefit from seasonal factors and cost reduction initiatives, but volatility in the U.S. market remains a risk.

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