Kia (000270) Investor presentation summary

2023 performance and earnings drivers

• Revenue reached KRW 99.8tn in 2023 versus KRW 58.1tn in 2019; operating margin rose to 11.6% from 3.5%.

• In the global customer survey, design gained 13 percentage points and product value 6 points as purchase factors from 2019 to 2023.

• Consolidated ASP rose at a 9% CAGR from 2019 to 2023, reaching KRW 34.8m from KRW 23.0m.

• 2023 COGS ratio was 77%, versus an 81% industry average; R&D was 2.6% of revenue, versus a 4.6% average.

• Inventory declined from 2.5 to 1.0 months of stock from 2019 to 2023; U.S. incentives fell from $2,920 to $1,160.

2024 plan and first-quarter results

• 2024 plan targets wholesale of 3.2m units, revenue of KRW 101.1tn, operating profit of KRW 12.0tn and an 11.9% operating margin.

• Planned operating-profit growth of KRW 0.4tn is driven by volume, mix/ASP and lower material costs, partly offset by FX and incentive pressures.

• 1Q24 revenue increased 10.6% YoY to KRW 26.2tn; operating profit rose 19.2% to KRW 3.4tn and operating margin improved to 13.1% from 12.1%.

• 1Q24 net profit increased 32.5% YoY to KRW 2.8tn; consolidated sales volume declined 1.4% to 725,428 units.

Profitability and powertrain strategy

• Mid- to long-term sustainable operating-margin target is 10%+, supported by cost competitiveness, ICE/HEV profitability and SDV business development.

• HEV strategy combines lineup and volume expansion with system-cost reduction; the target is to achieve double-digit HEV margins.

• EV plan progresses from flagship models to mass-market and full lineups, with an EV profitability target of mid-single-digit margin in 2027 and ICE-equivalent profitability by 2030.

• EV cost plan includes battery and form-factor diversification, next-generation platform development, and lower power-electronics and parts costs.