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Page 1: FY 2020 First-Half Financial Results Briefing Material€¦ · EUR 120 yen -5 yen RUB 1.6 yen -0.0 yen TSR20* 134 cents -6 cents WTI 46 dollars -9 dollars US$ 108 yen -2 yen EUR 119

FY 2020 First-Half Financial Results

Briefing Material

August 7, 2020

The Yokohama Rubber Co., Ltd.

Page 2: FY 2020 First-Half Financial Results Briefing Material€¦ · EUR 120 yen -5 yen RUB 1.6 yen -0.0 yen TSR20* 134 cents -6 cents WTI 46 dollars -9 dollars US$ 108 yen -2 yen EUR 119

Copyright(C) THE YOKOHAMA RUBBER CO., LTD. 2

Scope of Consolidation, etc.

■Scope of consolidation

Consolidated subsidiaries 119 companies

(2 less than at the end of previous fiscal year)

(Breakdown of change)

-2 company

Japan: -2 company

Tire indirectly owned sales subsidiary

Page 3: FY 2020 First-Half Financial Results Briefing Material€¦ · EUR 120 yen -5 yen RUB 1.6 yen -0.0 yen TSR20* 134 cents -6 cents WTI 46 dollars -9 dollars US$ 108 yen -2 yen EUR 119

Copyright(C) THE YOKOHAMA RUBBER CO., LTD. 3

Profit and Loss (First Half)

Exchange

Rates

US$ 108 yen 110 yen (previous year) -2 yen

EUR 119 yen 124 yen (previous year) -5 yen

RUB 1.6 yen 1.7 yen (previous year) -0.1 yen

TSR20* 123 cents 146 cents (previous year) -23 cents

WTI 37 dollars 57 dollars (previous year) -21 dollars

*SICOM TSR20 1M

2020

Jan.-Jun.

2019

Jan.-Jun.

Sales revenue 247.1 311.1

Business profit*1

(Business profit margin)

2.3(0.9%)

17.2(5.5%)

Operating profit(Operating profit margin)

2.9(1.2%)

25.1(8.1%)

Profit *2 1.3 16.7

ChangeChange

(%)

-64.0 -20.6%

-15.0(-4.6%)

-86.8%

-22.2(-6.9%)

-88.3%

-15.5 -92.5%

*1 Business profit= Sales revenue- (Cost of sales + SG&A expenses)

*2 Profit attributable to owners of parent

(billion yen)

Exchange

rate

impact

Change

excluding

impact of

exchange rates

-3.8 -60.2

-0.7 -14.3

-0.7 -21.5

Page 4: FY 2020 First-Half Financial Results Briefing Material€¦ · EUR 120 yen -5 yen RUB 1.6 yen -0.0 yen TSR20* 134 cents -6 cents WTI 46 dollars -9 dollars US$ 108 yen -2 yen EUR 119

Copyright(C) THE YOKOHAMA RUBBER CO., LTD. 4

Business Segment (First Half)

2020

Jan.-Jun.

2019

Jan.-Jun.

Sale

s re

ven

ue

Tires 166.6 210.1

MB 47.5 59.5

ATG 30.1 37.3

Other 3.0 4.2

Total 247.1 311.1

ChangeChange

(%)

-43.5 -20.7%

-12.0 -20.2%

-7.2 -19.3%

-1.3 -29.9%

-64.0 -20.6%

Bu

sin

ess p

rofit

Tires -2.0 7.5

MB 1.4 4.0

ATG 3.2 5.2

Other -0.4 0.5

Intersegment

eliminations0 0

Total 2.3 17.2

-9.5 –

-2.6 -65.2%

-1.9 -37.3%

-0.9 –

+0 –

-15.0 -86.8%

(billion yen)

Exchange

rate

impact

Change

excluding

impact of

exchange rates

-2.8 -40.7

-0.5 -11.5

-0.5 -6.7

-0 -1.3

-3.8 -60.2

-0.6 -9.0

-0.1 -2.5

-0 -1.9

-0 -0.9

– +0

-0.7 -14.3

Page 5: FY 2020 First-Half Financial Results Briefing Material€¦ · EUR 120 yen -5 yen RUB 1.6 yen -0.0 yen TSR20* 134 cents -6 cents WTI 46 dollars -9 dollars US$ 108 yen -2 yen EUR 119

Copyright(C) THE YOKOHAMA RUBBER CO., LTD.

Factor Analysis of Business Profit

2020 First Half(billion yen)

Factors that boosted

business profit

Factors that reduced

business profit

Tires-8.3

MB/Others-3.5

ATG-1.9

Business profit: -15.0 billion yen (excluding special factor: -13.8 billion yen)2019 2020

Business

profit

for

previous

fiscal year

Businessprofit

for 2020

Fixed cost

Sales volumeRaw material

prices

Exchange rate

difference

Prices/ MIX

ATG

Other

MB

Production costs

17.2

2.3

-0.6 +4.6

-7.5

-1.2+2.3

-1.9

-2.6-0.9

(Breakdown)

Natural rubber +0.1

Synthetic rubber +2.0

Compound agent +1.8

Other +0.7

(Breakdown)

Sales volume -11.9

Variable cost +2.8

US$ 108 yen 110 yen (previous year) -2 yen

EUR 119 yen 124 yen (previous year) -5 yen

RUB 1.6 yen 1.7 yen (previous year) -0.1 yen

-9.1Special factor

+2.0

Special factor

-1.2

5

Page 6: FY 2020 First-Half Financial Results Briefing Material€¦ · EUR 120 yen -5 yen RUB 1.6 yen -0.0 yen TSR20* 134 cents -6 cents WTI 46 dollars -9 dollars US$ 108 yen -2 yen EUR 119

Copyright(C) THE YOKOHAMA RUBBER CO., LTD. 6

Profit and Loss (Quarterly)

Exchange

Rates

US$ 109 yen -1 yen

EUR 120 yen -5 yen

RUB 1.6 yen -0.0 yen

TSR20* 134 cents -6 cents

WTI 46 dollars -9 dollars

US$ 108 yen -2 yen

EUR 119 yen -5 yen

RUB 1.5 yen -0.2 yen

111 cents -41 cents

28 dollars -32 dollars

US$ 108 yen -2 yen

EUR 119 yen -5 yen

RUB 1.6 yen -0.1 yen

123 cents -23 cents

37 dollars -21 dollars

2020

Jan.–Mar.

YoY

Change

Sales revenue 129.1 -20.4

Business profit*1

(Business profit margin)

1.8(1.4%)

-4.0(-2.5%)

Operating profit(Operating profit margin)

1.2(1.0%)

-11.6(-7.6%)

Profit*2 -0.3 -9.4

2020

Apr.–Jun.

YoY

Change

118.0 -43.6

0.5(0.4%)

-11.0(-6.7%)

1.7(1.4%)

-10.5(-6.2%)

1.5 -6.1

2020

Jan.-Jun.

YoY

Change

247.1 -64.0

2.3(0.9%)

-15.0(-4.6%)

2.9(1.2%)

-22.2(-6.9%)

1.3 -15.5

(billion yen)

*1 Business profit= Sales revenue- (Cost of sales + SG&A expenses)

*2 Profit attributable to owners of parent

*SICOM TSR20 1M

Page 7: FY 2020 First-Half Financial Results Briefing Material€¦ · EUR 120 yen -5 yen RUB 1.6 yen -0.0 yen TSR20* 134 cents -6 cents WTI 46 dollars -9 dollars US$ 108 yen -2 yen EUR 119

Copyright(C) THE YOKOHAMA RUBBER CO., LTD. 7

Business Segment (Quarterly)

2020

Apr.-Jun.

2019

Apr.-Jun.

Sale

s re

ven

ue

Tires 79.2 110.0

MB 22.6 30.7

ATG 14.5 18.4

Other 1.7 2.5

Total 118.0 161.6

ChangeChange

(%)

-30.8 -28.0%

-8.0 -26.2%

-3.9 -21.1%

-0.9 -34.5%

-43.6 -27.0%

Bu

sin

ess p

rofit

Tires -1.5 6.0

MB 0.5 2.3

ATG 1.5 2.7

Other 0 0.4

Intersegment

eliminations0 0

Total 0.5 11.4

-7.5 –

-1.8 -79.6%

-1.3 -46.5%

-0.4 -92.2%

+0 –

-11.0 -96.0%

(billion yen)

Exchange

rate

impact

Change

excluding

impact of

exchange rates

-1.8 -29.0

-0.3 -7.7

-0.3 -3.6

-0 -0.9

-2.4 -41.2

-0.3 -7.2

-0.1 -1.8

-0 -1.2

-0 -0.4

– +0

-0.4 -10.5

Page 8: FY 2020 First-Half Financial Results Briefing Material€¦ · EUR 120 yen -5 yen RUB 1.6 yen -0.0 yen TSR20* 134 cents -6 cents WTI 46 dollars -9 dollars US$ 108 yen -2 yen EUR 119

Copyright(C) THE YOKOHAMA RUBBER CO., LTD.

First Quarter (Jan.-Mar.)

Business

profit

for

previous

fiscal yearBusiness

profitfor 2020

5.8

1.8

Fixed cost

Sales

volumeRaw material

prices

Exchange rate

difference

Prices/ MIX

ATG

Other

MB

Production costs

-0.2 +2.3-1.7

-0.6

-1.0 +0.3

-0.7-0.8

-0.6

Business profit: -4.0 billion yen(excluding special factor: -2.8 billion yen)

Business profit: -11.0 billion yen

Second Quarter (Apr.-Jun.)

Businessprofit

forprevious

fiscal year

Businessprofit

for 202011.4

0.5

-0.3 +2.3

-7.4

-6.9 +3.0

+1.9 -1.3-1.8 -0.3

(Breakdown)Natural rubber -0Synthetic rubber +0.9Compound agent +1.0Other +0.3

Fixed cost

Sales volumeRaw material

pricesExchange rate

difference

Prices/ MIX

ATG

Other

MB

Production costs

US$ 108 yen 110 yen(previous year) -2 yen

EUR 119 yen 123 yen(previous year) -5 yen

RUB 1.5 yen 1.7 yen(previous year) -0.2 yen

(Breakdown)

Sales volume -9.6

Variable cost +2.2

Factor Analysis of Business Profit

8

Special factor

-1.2US$ 109 yen 110 yen(previous year) -1 yen

EUR 120 yen 125 yen(previous year) -5 yen

RUB 1.6 yen 1.7 yen(previous year) -0.0 yen

(Breakdown)

Sales volume -2.3

Variable cost +0.6

(Breakdown)

Natural rubber +0.1

Synthetic rubber +1.0

Compound agent +0.8

Other +0.4

Page 9: FY 2020 First-Half Financial Results Briefing Material€¦ · EUR 120 yen -5 yen RUB 1.6 yen -0.0 yen TSR20* 134 cents -6 cents WTI 46 dollars -9 dollars US$ 108 yen -2 yen EUR 119

Copyright(C) THE YOKOHAMA RUBBER CO., LTD. 9

Jun. 30, 2020 Dec. 31, 2019

Current assets 309.2 331.5

Non-current assets 548.0 576.0

Total assets 857.2 907.6

Liabilities 458.9 479.9

Equity 398.4 427.7

Total liabilities and equity 857.2 907.6

Change

-22.3

-28.0

-50.3

-21.0

-29.3

-50.3

Cash and cash

equivalents 39.9 27.9

Interest-bearing debt * 261.3 239.9

Ratio of equity attributable

to owners of parent45.6% 46.2%

D/E ratio 0.67 0.57

+12.0

+21.4

-0.6%

+0.10

(billion yen)

Financial Position

*Interest-bearing debt does not include lease liabilities

Page 10: FY 2020 First-Half Financial Results Briefing Material€¦ · EUR 120 yen -5 yen RUB 1.6 yen -0.0 yen TSR20* 134 cents -6 cents WTI 46 dollars -9 dollars US$ 108 yen -2 yen EUR 119

Copyright(C) THE YOKOHAMA RUBBER CO., LTD.

Changes in Interest-bearing Debt, Total equity, D/E Ratio, and Net D/E Ratio

Total equity (billion yen)*

* Total equity do not include non-controlling interests.

10

D/E ratio

418.9

239.9

0.57

0.51

374.0

260.4

0.70

0.61

379.8

315.6

0.83

0.68

Net D/E ratio

Interest-bearing debt (billion yen)

390.8

0.67

0.5758.3

31.7

261.3

39.9

Cash and deposits (billion yen)

27.9

382.5

249.2

22.1

0.65 0.59

19/6Same period of

previous year

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Copyright(C) THE YOKOHAMA RUBBER CO., LTD. 11

State of Cash Flows

2020

Jan.-Mar.

2020

Apr.-Jun.

2020

Jan.-Jun.

2019

Jan.-Jun.

CF from operating

activities2.7 16.5 19.2 28.6

CF from investing

activities -10.0 -9.0 -19.0 -20.8

Free CF -7.4 7.6 0.2 7.8

CF from financing

activities51.4 -39.0 12.4 -17.2

Closing balance of

cash and cash

equivalents

71.1 39.9 39.9 22.1

Change

-9.4

+1.8

-7.6

+29.6

+17.9

(billion yen)

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Copyright(C) THE YOKOHAMA RUBBER CO., LTD. 12

Earnings Forecast for FY 2020

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Copyright(C) THE YOKOHAMA RUBBER CO., LTD. 13

FY2020 Profit and Loss Projections (Full Year)(Changed from the previous forecast)

Exchange

Rates

US$ 105 yen

EUR 124 yen

RUB 1.5 yen

TSR20* 118 cents

WTI 37 dollars

*SICOM TSR20 1M

2020

full year

(forecast)

2019

full year

(result)

Sales revenue 536.0 650.5

Business profit*1

(Business profit margin)

21.0(3.9%)

50.1(7.7%)

Operating profit(Operating profit margin)

20.0(3.7%)

58.6(9.0%)

Profit *2 12.5 42.0

*1 Business profit= Sales revenue- (Cost of sales + SG&A expenses)

*2 Profit attributable to owners of parent

(billion yen)

ChangeChange

(%)

-114.5 -17.6%

-29.1(-3.8%)

-58.1%

-38.6(-5.3%)

-65.8%

-29.5 -70.2%

Forecasts after July 2020

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Copyright(C) THE YOKOHAMA RUBBER CO., LTD. 14

Full-Year Forecast by Business Segment (YoY)

2020

forecast

2019

result

Sa

les

reve

nu

e

Tires 380.0 451.7

MB 93.0 119.3

ATG 57.0 70.8

Other 6.0 8.6

Total 536.0 650.5

Bu

sin

es

s p

rofit

Tires 12.7 30.8

MB 2.3 8.3

ATG 6.0 10.4

Other 0 0.5

Intersegment eliminations – 0.1

Total 21.0 50.1

(billion yen)

YoY

ChangeChange

(%)

-71.7 -15.9%

-26.3 -22.1%

-13.8 -19.5%

-2.6 -30.3%

-114.5 -17.6%

-18.1 -58.8%

-6.0 -72.4%

-4.4 -42.3%

-0.5 -100.0%

-0.1 –

-29.1 -58.1%

Page 15: FY 2020 First-Half Financial Results Briefing Material€¦ · EUR 120 yen -5 yen RUB 1.6 yen -0.0 yen TSR20* 134 cents -6 cents WTI 46 dollars -9 dollars US$ 108 yen -2 yen EUR 119

Copyright(C) THE YOKOHAMA RUBBER CO., LTD.

Factor Analysis of Business Profit (Full Year)

2020 Full-Year Forecast(billion yen)

Factors that boosted

business profit

Factors that reduced

business profit

Tires-18.1

MB/Others-6.6

ATG-4.4

Business profit: -29.1 billion yen (excluding special factor: -27.9 billion yen)2019 2020

Business

profit

for

previous

fiscal year

Businessprofit

for 2020

Fixed cost

Sales volume

Raw material

prices

Exchange rate

difference

Prices/ MIX ATG

Other

MB

Production costs

50.1

21.0

-0.5 +11.1

-12.3 -1.2+4.5 -4.4

-6.0 -0.6(Breakdown)

Natural rubber +1.3

Synthetic rubber +4.4

Compound agent +4.1

Other +1.4

(Breakdown)

Sales volume -20.2

Variable cost +4.1

US$ 107 yen 109 yen(previous year) -2 yen

EUR 122 yen 122 yen(previous year) -0 yen

RUB 1.5 yen 1.7 yen(previous year) -0.2 yen

-16.0

Special factor

-3.6

15

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Copyright(C) THE YOKOHAMA RUBBER CO., LTD. 16

Cautionary Notes Regarding Forecasts

Forecasts and outlooks included in this material

are based on the judgment of the Company's

management using currently available information.

Actual results and earnings may differ from the

forecasts and outlooks included in the material due

to various risks and uncertainties.

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Copyright(C) THE YOKOHAMA RUBBER CO., LTD.

Reference Material

Page 19: FY 2020 First-Half Financial Results Briefing Material€¦ · EUR 120 yen -5 yen RUB 1.6 yen -0.0 yen TSR20* 134 cents -6 cents WTI 46 dollars -9 dollars US$ 108 yen -2 yen EUR 119

Copyright(C) THE YOKOHAMA RUBBER CO., LTD.

Strong financial base

Credit rating from Japan Credit Rating Agency (JCR)

at July 9, 2020: A+/Stable

Business Foundation

◼Cash flow creation

Free cash flow in first

half of 2020: Positive

Operating CF: ¥218.6 billion

Free CF: ¥102.1 billion

(totals for FY2017-19)

◼Short-term liquidity

Commitment line

from lenders: ¥75.0 billion

Ten-year bond

issued in July: ¥10.0 billion

Solid bank

formation: Reliable

relationships

with lenders

◼Strong Financial position

Net debt/equity ratio: 0.57x

(as of end-June 2020)

Free CF

Operating CF (billion yen)

60.5

82.8 75.4

30.739.7

31.7

FY17 FY18 FY19 FY20 1H

19.2

0.2

v

18/12 19/12 20/3

0.6 months0.5

1.731.7 27.9

71.1

20/6

39.9

1.0

Cash & deposits

Short-term liquidity

(billion yen)

v

Total equity Interest-bearing debt

Net D/E ratio(billion yen)

374.0

260.4

418.9

239.9

390.8

261.3

0.61 0.510.57

18/12 19/12 20/6