BRIDGESTONE CORPORATION Q4 FY2025 earnings call

Yasuhiro Morita mentioned fiscal 2025 was year of emergency and crisis management, fiscal 2026 is crucial for transitioning to growth with quality. Key growth priorities: attractive and competitive products and manufacturing with plan to launch over 25 new passenger tire products globally and over 10 new truck and bus tire products in 2026, and new executive structure with 4 technical specialists reporting directly to global CEO; portfolio management to advance improvements to earnings base through portfolio strengthening; reinforcement of brand power globally with focus on motor sports activities. Naoki Hishinuma explained FY '25 financial figures, adjusted OP analysis, results by segment and product, BS and cash flow status, and FY '26 guidance including revenue, adjusted OP, and guidance by segment.

Consolidated global revenue reached JPY 4,429.5 billion with adjusted operating profit at JPY 493.7 billion. By major region: North America sales declined 3% but adjusted operating profit margin improved to 11% due to rebuilding and reorganizing effects; South America profit declined year-on-year, barely breakeven; Europe adjusted operating profit margin reached 5.5%, improvement of over 2 percentage points; Asia, Oceania, India and China revenue decreased 2% but adjusted operating profit reached 11.5%. By product: PS and LT tires profit declined due to cyber incident and struggles in Latin America; TB tires profit and margin improved due to production base reorganization; Specialties profit declined due to lower AG sales and timing impacts; Diversified products business continued steady improvements.

Fiscal 2026 projected revenue JPY 4.5 trillion, adjusted operating profit JPY 515 billion, net profit JPY 340 billion. Aim for higher revenue, profit and profitability across all segments. In APIC, plan higher revenue and profit through expanded replacement tire sales; in Americas, accelerate replacement tire growth, deliver year-on-year revenue and profit growth; in EMEA, plan continued profit and margin improvement. Shareholder returns expect dividends as planned, and share buyback of JPY 150 billion in FY '26 and JPY 450 billion total over 3-year period from FY '24.

Impact of U.S. tariffs reducing profit, sluggish demand in North America, expansion of low-end imports and adverse impact of lower conversion cost efficiency in South America, cyber incident in North America affecting PS and LT tires profit, tough business environment in Latin America, deterioration in diversified product business affecting targets in 24MBP.

Q: Related to growth strategy to regain world's #1, details on product, manufacturing, regions and Firestone revitalization; A: Focus on product and manufacturing excellence, Dan-Totsu technology, enhanced technologies, multi-brand approach, North America as core, Firestone revitalization showing growth.

Q: Breakdown of JPY 71 billion operating expense difference; A: Volume growth JPY 35 billion, price and mix combined JPY 36 billion, including strategic expenses for brand enhancement and IT.

Q: Capital policy balance with growth strategy, dividend and share buyback; A: JPY 150 billion share buyback, 55% midterm equity ratio target, dividend payout ratio target around 50%.

Q: U.S. tariff impact and business cost reduction in 2026; A: U.S. tariff impact JPY 55 billion, business cost reduction through productivity improvement, cost reduction, digital IT and business rebuilding.

Q: CapEx details and investment direction; A: CapEx for production facility renewal, retail business enhancement, factory productivity, premium product enhancement, IT investment, focused in U.S. and Japan.

Q: New executive structure aim and purpose; A: Assigning Chief Officers for prompt decision-making, flattening organization, focusing on technology, portfolio management, business management.

Q: Adjusted operating profit ups and downs; A: Difference due to raw material price changes, natural rubber prices stabilized in 2026 turning positive for business.