Bridgestone profits, sales increase in first half

Tokyo – Bridgestone Corp. has reported double-digit growth in both half-year sales and profits, despite increasing pressure on replacement tire markets.

Adjusted operating profit for the first six months grew 15.3% year-on-year to Yen238 billion (€1,502 million), on 11.5% higher sales of Yen2,100 billion, the group reported 9 Aug.

Bridgestone's Tires business posted growth across all three categories: passenger car/light truck; truck & bus; and speciality tires, including off-road, agricultural, mining and aircraft.

The passenger car/light truck segment delivered a 10% increase in adjusted operating profit to Yen118 billion, on 15% higher sales of Yen1,135 billion.

Truck & bus sales improved 2% to Yen508 billion, while adjusted operating profit for the segment climbed 16% year-on-year to Yen47.4 billion.

The speciality tire unit saw the strongest growth in profits, up 26% year-over-year to Yen67 billion, on 17% higher sales of Yen309 billion.

Bridgestone's Diversified Products segment – chemical & industrial products, air springs, sports and cycling – saw 11% growth in profits to Yen5.6 billion, on 11% higher sales of Yen150 billion.

Geographically, Bridgestone reported higher sales in all regions: Japan; Americas; Europe, Middle East, Russia, India and Africa (EMIA); China; and Asia-Pacific.

However, while Japan and Americas reported 62% and 6% increases in operating profit respectively, EMIA saw profits decline 62% to Yen15 billion, due partly to suspension of production in Russia.

China and Asia Pacific also saw profits fall 3% year-on-year to Yen17.3 billion.

Overall profits were impacted by a Yen40 billion impact of lower volumes, and Yen47 billion impact of ‘conversion costs’ across manufacturing sites.

Results were further hit by the Yen46 billion negative impact of raw materials and other costs.

The losses were, however, offset by a Yen153-million gain from favourable pricing trends as well as a Yen47-million tailwind from currency movements.

In terms of demand, Bridgestone said OE tire markets were recovering compared to the year before, with the degree varying across different regions.

In particular, demand for high rim-sized tires is expected to remain “resilient” as the impact of semiconductor chip shortages on automotive production eases.

In the replacement market, the group said demand declined in Europe and North America, primarily due to economic slowdown.

The Japanese group reported a “gradual recovery” in North America, with the trend set to continue during the second half of 2023.

'Sell-out' recovery is also expected in Europe in the second half, “but slower than initial assumptions”, Bridgestone added.

For "sell-in", Bridgestone said it had completed distribution inventory adjustments in North America, but an expected second-half recovery would be slower than previously assumed.

In Europe, distribution inventory levels 'remained high' at the end of the first half, with demand “significantly" lower than at the same stage last year.

Here, Bridgestone said “sell-out recovery remains slow in second half and with distribution inventory adjustments, sell-in will decline versus prior year”.

For the full year, the group will “thoroughly” focus on premium tires, through expanding sales, market-share, mix and price-management of passenger car tires.

In the truck & bus tire segment, Bridgestone it would also focus on premium tires amid a “decline in new-tire sales”.

Bridgestone will also focus on its retreading business in Americas and Japan, to contribute to the overall performance of the segment.

Bridgestone: OE passenger car tire demand forecast 2023