Bridgestone lifts first-half earnings 20% as all regions report sales growth

Tokyo, Japan – Bridgestone has reported a 20% year-on-year increase in first half adjusted operating profit (OP) to Yen281 billion (€1.54 billion), as sales rose 10% to Yen2,321 billion.

The Japanese group saw a stronger second quarter, with revenue up 14% year-on-year to Yen1,208 billion and adjusted OP rising 29% to Yen158.7 billion, Bridgestone reported 7 Aug.

The Tokyo-based rubber & tire group linked the first-half earnings growth to lower cost of raw materials, with a positive contribution of Yen23 billion, and currency effects at Yen20.0 billion.

Furthermore, group results were helped by an Yen11 billion impact of mix and a Yen6 billion impact of volumes while pricing contributed Yen8 billion to earnings.

The gains were partly offset by Yen19 billion in operating expenses, and an Yen18-billion impact from US tariff costs.

For the first half, Bridgestone said its tire business remained the core of the group, with revenue increasing 10% year-on-year to Yen1,536 billion and adjusted OP up 15% to Yen217 billion.

Excluding currency effects, adjusted OP increased by Yen26.3 billion.

The tire business benefited from an “increase in revenue and profit”, with its adjusted operating profit margin recovering to around 14%.

Within the solutions business, which includes Retail and Commercial B2B businesses, revenue increased 9% to Yen735 billion, while adjusted OP rose 34% to Yen61 billion.

Retail revenue increased 8% to Yen545 billion and OP rose 24% to Yen36 billion.

Commercial B2B solutions delivered stronger growth, with revenue up 13% to Yen190 billion and OP increasing 52% to Yen25.6 billion.

Non-tire, ‘Diversified Products’ business reported a 4% year-on-year increase in sales to Yen149 billion, while adjusted OP increased 12% to Yen4.3 billion.

Tire products

By tire products, passenger car/light truck (PC/LT) sales increased 11% in the first half to Yen1,306 billion, while adjusted OP rose 18% to Yen147 billion.

Bridgestone said it continued the “expansion of premium tire sales, including HRD [high rim diametre] tires”, while achieving market-share gains in North America despite declining replacement tire demand.

Truck and bus (TBR) tire revenue increased 8% year-on-year to Yen5223 billion in the first six months, with adjusted OP up 24% to Yen51 billion.

The segment saw sales of both OE and replacement tires increase year-on-year in the second quarter, and was supported by “rebuilding benefits, revenue and profit.”

Furthermore, Bridgestone reported TBR market-share gains in North America, despite declining replacement tire demand.

Speciality tires, covering off-road, aircraft, construction and agricultural applications and motorcycles, delivered a revenue growth of 11% to Yen343.6 billion in the first half.

Segment adjusted OP increased 20% year-on-year to Yen78.9 billion.

Bridgestone linked the growth to higher sales of ultra-large off-road tires for mining, noting that “profitability remained at a high level, supported by favourable raw material costs and FX effects”.

Regional performance

Breaking down performance by region, Bridgestone reported higher first half revenue in all areas.

Japan generated a revenue of Yen634.4 billion, up 5% year-on-year, while adjusted OP jumped 38% to Yen114 billion.

Bridgestone cited higher replacement tire sales, improved price/mix and strong sales of its new Fenssa tire for the growth in the region.

In Asia-Pacific, India and China, first half revenue increased 13% year-on-year to Yen278 billion and adjusted OP rose 6% to Yen31.0 billion.

Here, revenue growth was supported by “continued sales growth” in both PC/LT and TBR tires following first quarter gains.

“Continued lean expense management” and benefits from business rebuilding also contributed to profit growth.

The Americas generated a revenue of Yen1,135 billion, up 11% year-on-year, while adjusted OP increased 12% to Yen103 billion.

In North American, Bridgestone said, demand remained below the prior-year level.

However, new replacement products and the group’s ‘multi-brand strategy’ lifted sales for both PC/LT and TBR tires in the second quarter, resulting in continued market-share gains.

Higher service revenue from the retail business also contributed to the increase in earnings.

In Latin America, Bridgestone said it “secured black-ink” while continuing efforts to strengthen the business and expand sales in a challenging environment.

Europe, the Middle East and Africa recorded the strongest operating profit growth, with revenue up 11% to Yen458.5 billion and adjusted OP increasing 85% to Yen34.1 billion.

The Japanese group said Europe continued to see “expansion of premium tires, mainly HRD tires”, while benefits from business rebuilding drove higher revenue and profit.

Revenue and profit in the Middle East declined because of geopolitical impacts, although the effect on consolidated results was limited.