Bridgestone raises full year guidance despite “harsh business environment”

Tokyo – Bridgestone Corp. has raised its full year outlook following “significant increases” in both revenue and operating profit year-on-year.

The Japanese tire & rubber group now expects 2022 revenue to come in at Yen3,950 billion (€27.3 billion), up 2.5% from an earlier forecast of Yen3.9 billion, said Bridgestone in its third quarter results 10 Nov.

Adjusted operating profit is expected to come in at Yen470 million, up 4.4% compared to the earlier estimate of Yen450 million.

Bridgestone said the upward revision was made despite the business environment being “volatile and uncertain”.

In addition to the suspension of production in Russia and exports to the country, Bridgestone said it witnessed a significant drop in sales in China due to lockdowns, and the temporary stoppage of operations due to a cyberattack at a subsidiary in the US.

Furthermore, the group also note that an economic slowdown, mainly in the US and Europe was becoming apparent coming into the second half.

Despite the “harsh business environment”, Bridgestone said its “premium business strategy” and “price management” helped it respond to the sharp rise in raw material prices and rising costs from inflation.

Furthermore, the group saw sales of all products, including passenger car/light truck tires, truck and bus tires, and mining and construction tires, exceeding the prior-year levels.

In terms of costs, Bridgestone said it improved profitability by continuing its “expense and cost structure reformation,” which included improvements at a number of manufacturing sites.

“As a result, the group’s business performance over the nine-month period, which included the effects of the weak yen, was marked by significant increases,” it said.

For the fourth quarter, Bridgestone said it envisaged the business environment to remain unfavourable as a result of “a downturn in global tire demand due to the economic slowdown and further acceleration of inflation.”

“However, through continued strengthening of ‘premium business strategy, and ‘price management’ we expect to secure firm profitability,” it added.

Bridgestone finished the first nine months of the year strong, with adjusted operating profit up 19% year-on-year at Yen342 billion, on 28% higher sales of Yen2,977 billion.

The Tokyo group said that the Yen238 million positive effect of price/mix, a Yen36 million effect of higher volumes and a Yen55 million positive impact of currency translation helped offset higher cost of raw materials and operating expenses.

In terms of geographical performance, all regions posted positive developments with Europe, Russia, Middle East, India and Africa seeing a particularly strong 81% growth in adjusted operating profit to Yen58 million, and 27% higher sales of Yen645 million.

In Japan, the group saw adjust operating profit rise 34% year-on-year to Yen88 million, on 22% higher sales of Yen728 million.

Americas region also performed positively posting 28% higher adjusted OP of Yen188 million and a 37% increase in sales to Yen1.43 billion.

China and Asia-Pacific was the only region to register a decline in operating profit, posting a 15% drop in adjusted OP to Yen27 million, on 22% higher sales of Yen338 million.

In terms of products, all segments posted revenue growths of above 30%, led by specialities – including off-road, farm, aviation and mining tires – which saw adjusted OP increase 69% to Yen93 million, on 37% higher sales of Yen401 million.

Truck and bus segment increased sales by 30% to Yen757 million, and adjusted OP by 13% to Yen78.7 million.

Passenger car tire sales rose 32% to Yen1.6 billion, leading to adjusted OP of Yen193 million, up 13% year-on-year.

Over the three months to end of September, Bridgestone said adjusted operating profit rose 28% to Yen136 billion, while sales were 35% year-on-year at Yen1.1 billion.