Hyundai Motor Company. Investor Presentation October 2015

Transcription

1 Hyundai Motor Company Investor Presentation October 2015

2 Table of Contents 1. Executive Summary 2. Key Strengths for HMC 3. Future Strategies 4. Market Update by Region Appendix 1

3 1. Executive Summary

4 Executive Summary Current Outstanding Performance Prudent Future Strategies Strong Performance through the Cycle Value Growth Balanced Sales Growth and Diversified Portfolio Structural Improvement in Core Competitiveness Volume Growth Cost Structure Improvement Superior Performance Relative to Peer Groups Green Car 3

5 2. Key Strengths for HMC

6 1 Strong Performance Through the Cycle Steady Growth in Global Sales (Unit:: 1,000 vehicles) +4.0% and Strengthening Global Market Share 3,239 3,701 4,099 4,392 4,621 4, % 5.6% 5.7% 5.7% 5.7% 4.0% 4.2% Source : Retail sales excluding CKD sales Source : IHS Supported by Relatively Higher Brand value Growth than the Industry 6.6% 9.3% 19.3% Focus on Value Growth Strategy (U$ 5B in B in 14, 108% ) 8.1% 11.2% 24.9% 12.4% 20.0% 14.7% 15.6% and Improving Residual Value of Vehicles 65% 55% 11 th 46.5% 45% 45.8% 7 th 2nd 61.7% 59.8% 59.5% % 39.4% '08 MY '09 MY '10 MY '11 MY '12 MY '13 MY Automaker Value Growth HMC Value Growth Elantra Sonata Santa Fe Source : Interbrand Source : Company Data 5

7 2 Balanced Sales Growth through Global Manufacturing Plants 9 manufacturing plants ( ), 6 R&D facilities ( ), 16 direct sales subsidiaries ( ), sales in more than 200 countries globally H H (Unit: 1,000 vehicles) +9.0% EU % % % 371 China US Korea -0.7% % -1.6% 14. 1H 15. 1H Middle East and Africa India 2,374 2, % LatAm Worldwide (YTD) Czech Plant Russia Plant Source: Company data (Retail sales excluding CKD sales) Turkey Plant India Plant China Plant US Plant Brazil Plant 6

8 2 Balanced Sales Growth by Diversified Business Portfolio Geographically Diversified Portfolio (%) Marketable Product Mix 2 (%) Hyundai Hyundai VW VW Renault Renault Toyota Toyota Honda Honda Domestic North America Europe Asia Others A+B+C D+E+F RV Others Source: Company data for HMC 2014 Global Retail Sales, Competitor information from public filings (2013FY Earnings Results) A+B+C=Compact+Sub-Compact+Mini; D+E+F=Mid-Size+Large+Luxury; RV=SUV+MPV, Others=PUP and others 7

9 3 Structural Improvement (Increased Resilience to FX Fluctuations) Reduced FX exposures by lowering exports from Korea and improving localizations of suppliers at overseas plants. Portion of Exports from Korea Plant Number of suppliers with overseas operations % 30% 30% 28% 25% 24% 25% % 40% % 70% 70% 72% 75% 76% 75% 59% 60% '15. 1H Korea Domestic & Overseas Plant Sales Export from Korea Plant 1st tier suppliers 2nd tier suppliers Source: Company data 8

10 3 Structural Improvement (Utilization) Securing strong operating profit by maintaining high utilization over all production plants in the globe. HMC Global Utilization Trend (Unit: %) H Utilization by Plant (Unit: %) '15. 1H HMC HMMA BHMC HMI HAOS HMMC HMMR HMB Source: Company data 9

11 3 Structural Improvement (Brand Enhancement) Enhancement in Brand Value Awards and Accolades (Unit: US$ in Billions) +15.6% 40 (Ranks) Date Award Title Region Model(s) Car and Drive Pick Brazil HB20 +20% 43 10, Auto Show Debuts of Year U.S. Tucson Car of the Year Russia Solaris +24.9% 53 9, Honest John Awards U.K. Santa Fe % 61 7, Consumer Guide Best Buy U.S. Genesis Best Family Cars of 2015 U.S. Sonata 6, Star Safety Rating Award China ix25 5, Best Engines Award U.S. Tucson FCEV Indian Car of the Year 2015 India i Residual Value Award U.S. Genesis Ranked Top in APEAL U.S. Hyundai Ranked 1 st in IQS(non-Premium) U.S. Hyundai Top Safety Pick+ U.S. Genesis Best Cars 2014 Brazil HB20 Brand value has increased an average of 20% each year, since the implementation of Modern Premium in Transportation Design Award Germany Genesis Family Car of the Year U.S. Santa Fe 10

12 4 Consistent Profitability Relative to Peers HMC has shown the most consistent operating performance relative to competitors during the past few years. Consolidated Operating Margin Trend 10.3% 10.0% 9.5% 9.4% 9.6% 9.9% 8.5% 7.6% 4.8% 6.3% 5.5% 5.7% 5.0% 7.1% 6.0% 6.3% 6.3% 5.9% 5.7% 5.9% 5.5% 4.9% 4.7% 6.3% 5.8% 5.1% 4.4% 11.7% 11.3% 11.3% 10.8% 10.5% 0.9% 2.1% 2.4% H Source: Public Filings Note: Based on Consolidated Financials, Calendarized Financials for Japanese Firms * Hyundai Financials for based on K-IFRS 11

13 3. Future Strategies

14 Sustainable Success Going Forward Key Strategy for Ongoing Growth in Earnings Consistent revenue growth and enhanced profitability to be achieved through structural improvement in product/brand value, balanced capacity expansion and cost structure improvement Value Growth Volume Growth Cost Structure Improvement New Technology Enhanced Product and Brand Value Balanced Capacity Expansion and New Model Launch Higher Cost Competitiveness from Vertical Integration Develop Independent and Distinctive Technology 13

15 1 Value Growth (Product Competitiveness) Sonata and Genesis are experiencing high demand with outstanding specification. Sonata (Mid-size Sedan) Specification Hyundai Sonata ( 15MY) Toyota Camry ( 15MY) Nissan Altima ( 15MY) Displacement 2.4L 2.5L 2.4L Max. Power ,000 6,000 Mileage (City/Highway) 25mpg / 37mpg 25mpg / 35mpg 27mpg / 38mpg Residual Value(rank) 54.2% (1 st ) 48.9% (7 th ) 49.6% (6 th ) Safety (Small Overlap) Top Safety Pick Plus (Acceptable) Top Safety Pick Plus (Good) Top Safety Pick (Acceptable) H US Sales (Growth) 95,821 (YoY 9.9% ) 215,816 (YoY 3.0% ) 172,031 (YoY 2.5% ) H US Incentive 1 U$ 2,729 (YoY 13.5% ) U$ 2,741 (YoY 8.1% ) U$ 4,098 (YoY 34.8% ) Genesis (Mid-luxury) Specification Hyundai Genesis ( 15MY) Audi A6 ( 15MY) BMW 5 Series ( 15MY) Displacement 3.8L 3.0L 3.0L Max. Power Mileage 18mpg / 29mpg 18mpg / 27mpg 20mpg / 30mpg Residual Value 51.3% (1 st ) 49.3% (3 rd ) 45.6% (7 th ) Safety (Small Overlap) Top Safety Pick Plus (Good) - (Good) - (Marginal) H US Sales (Growth) 17,270 (YoY 23.0% ) 11,409 (YoY 4.2% ) 23,581 (YoY 14.6% ) H US Incentive 1 U$ 2,792 (YoY 3.9% ) U$ 4,848 (YoY 1.1% ) U$ 6,655 (YoY 15.0% ) 1. Source : Autodata 14

16 1 Value Growth (Higher Transaction Price) Transaction price of major models in US market has improved with structural improvement. Transaction Price Trend in US Market Compact Sedan (Unit: USD 1,000) Mid-size Sedan Compact CUV Cyl, 2WD Elantra Corolla Civic Sonata Camry Accord Santa Fe Cherokee Equinox Source: PIN data (Annual average transaction price in US market) 15

17 2 Volume Growth HMC s global sales will be increased with capacity expansion and by maintaining high utilization rate. Capacity Expansion and Sales Plan Production Capacity Expansion Sales Plan by Plants (Unit: 1,000 Vehicles) (P) (P) Chg (%) Korea 1,870 1,870 1,870 1,879 1, US China (BHMC) 900 1,050 1,050 1,120 1, India Turkey Czech Russia Brazil Others Overseas 2,780 3,040 3,040 3,083 3, Total 4,650 4,910 4,910 4,962 5, Source: Company data * Above sales figures are based on shipment ** BHMC : Beijing-Hyundai Motor Company / Others : Sichuan-Hyundai Motor Company, Others 16

18 3 Cost Structure Improvement (Platform Integration) Platform integration will reduce development cost and realize greater economies of scale per platform. Platform Integration Integration Schedule Reduction of Model Development Time ~ Integrated Platforms Total No. of Platforms Total No. of Models Avg. of 40 months 19 months Models per Type of Platform Mass Production Niche Market Increasing portion of models with integrated platform Old 38% Old 25% New 75% Old 19% New 81% Old 12% New 88% Small Mid-size Large Coupe Frame SUV LCV Source: Company Data 17

19 4 New Technology (Strategy to Improve Fuel Efficiency) By 2020, HMC will Improve the average fuel efficiency by 25%, securing the product competitiveness in the market 2020 Fuel Efficiency improvement Roadmap Improve powertrain Refresh 70% of current powertrain (7 out of 10 PT lineups will be replaced) Improve performance of Nu for mid seg. and Kappa engines for small seg. sedan Category Current By 2020 Gasoline Kappa, Gamma, Nu, Theta II, Lambda II, Tau New engines Performance Turbo Charger Diesel U, R, A, S New engines Expand engine lineups equipped with turbo-charger Improve current 6 speed and 8 speed transmission Trans -mission 4 spd : Kappa, CVT 6 spd : Gamma, Theta, Lambda DCT 7 spd : Gamma DCT 8 spd : Lambda Increase number of transmissions Improve transfer efficiency Increase number of transmission Reduce weight Increase portion of high-strengthened steel for the chassis of platform (makes vehicle safer and lighter) Apply more weight lightening materials such as aluminum, foamed plastic, and etc. Category Current By 2018 High Strength -ened 33% ~ 52% 48% ~ 62% Expand Green Car lineups Increase Green Car line-up to 22 models Category Current By 2020 New green car technology Aiming to be a 2 nd maker in green car market by 2020 Sonata HEV ( 14.), Sonata PHEV( 15), HEV Exclusive ( 15), EV Exclusive ( 16) HEV 4 Models 12 Models PHEV 0 Models 6 Models EV 2 Models 2 Models FCEV 1 Models 2 Models Total 7 Models 22 Models *Includes Kia Models 18

20 4 New Technology (Green Car Development Roadmap) Mid / Long-term Green Car Development Strategy Combustion Combustion + Electric Electric Green Car Development Trend Establish a flexible platform to swiftly react to market changes Line-up Strategy Expand Green Car line-up to 22 models by 2020 to become the world's 2 nd largest manufacturer of eco-friendly cars New Car Launch New Car Launch Category Current By 2020 Rank 4 th 2 nd Number of Green Cars 7 models 22 models 19

21 4 New Technology (HEV) HMC independently developed and obtained distinctive technology on HEV system. Developing Green Cars: HEV Hybrid Vehicle Strategy Gradual expansion of HEV applied automotives (mid-size, SUV, heavy vehicles) Enhancing fuel efficiency (Top level) Focusing on HEV system improvement and obtaining distinctive components technology Launched Sonata PHEV in 2H 2015 Hybrid Vehicle Parallel Hybrid Drive System Simpler in structure compare with other types of hybrid Electric Motor Powered by advanced lithium-ion battery Sonata HEV Displacement : 2.0l Max. Power : 158 ps Fuel Efficiency : 18.2 km/l New model introduced in 2014 HEV Performance Comparison Specification Sonata HEV Camry HEV Fusion HEV System Power 156 ps 158 ps 143 ps Battery (kwh) Fuel Efficiency (combine) 18.2 km/l 16.4 km/l 17.9 km/l System Parallel System Power Split System Power Split System Source: Company data 20

22 4 New Technology (FCEV) HMC is strengthening reputation as a technology leader through the world s first mass production FCEV. Developing Green Cars: FCEV Fuel Cell Electric Vehicle Assuring FCEV Leading Maker position by participating in the demonstration program Major components are independently developed FCEV Stack The first auto maker to successfully begin series production several years ahead of competitors. Expected Production year HMC Toyota Honda Daimler FCEV Vehicle Tucson ix FCEV Max. distance: 594 km Max. speed: 160 km/h Fuel Efficiency: 30.2km/l Commercial production: Mar 13 Development Roadmap Major Participation in Demonstration Program Phase 1 (- 2006) Develop Stack Technology Phase 2 ( ) Improve Performance Phase 3 (2012-) Commence Small Production Year 2006 Program - Operated Demonstration program in collaboration with Korean Government Santa Fe FCEV Tucson FCEV Fuel Cell Electric Bus Tucson FCEV (2 nd Gen.) Mohave FCEV Fuel Cell Electric Bus (2 nd Gen.) Tucson ix FCEV (3 rd Gen.) Begin production of Tucson ix FCEV Launched Tuscon ix FCEV in California 2004 ~ Participated North America FCEV demonstration program led by the U.S. Department of Energy - Participated FCEV demonstration programs operated by European Government(Norway, Sweden, Denmark, Iceland) - Began to deliver FCEV to city of Copenhagen, Denmark and Skåne, Sweden Began to deliver FCEV to retail customer Source: Company data 21

23 4 New Technology (EV) HMC commenced supplying Blue On test models and is expected to develop mid-size electric vehicle in Developing Green Cars: EV Electric Vehicle Strategy Electric Vehicle Monitoring government policies and market penetration opportunities Participating in the Green Mobility System based on Next-generation Electric Vehicles commissioned by the South Korean government Producing an optimized amount to minimize losses from US ZEV regulation and China s reinforcement policy on EV Obtaining price / technology competency by localizing key components Blue-on EV Battery Capacity : 16.4 kwh Max. distance : 140 km Max. speed : 130 km/h Recharge Time : 6 hours Commercial production: TBD Development Roadmap Launched first domestic Blue On electric vehicle in Sep Localizing Key Components / Obtaining Distinctive Technology Supplied 30 Blue On test models to public institutions / local autonomous entities Supplied extra 256 Blue On vehicles to public institutions in 2011 Expected to launch compact size electric vehicle by 2016 Source: Company data Specification Motor Battery On Board Charger Contents - Highly efficient (Firstly developed in Korea) - Strengthened rigidity for fast rotation minimizing noise - Lithium-ion polymer battery launched - Improvement of Stability : Complex design which considers safety when overcharged or crashed - Charging high-voltage battery through rectifier and by raising voltage of AC power supply to electric transformer - Utilization of Shield system : Preventing noise of electric device from outside 22

24 4. Market Update by Region

25 Korea Sales and M/S Trend (Retail Sales) (Unit: 1,000 vehicles) Market Strategy New Model Launch 1,464 1,474 1,411 1,383 1,462 Sonata (Mar 2014) : Continued effort to increase sales through introduction of new trims including HEV model Grandeur Diesel (Jul 2014) : Add diesel models to large passenger vehicle 45.0% 46.4% 47.3% 46.4% 46.8% Tucson (Mar 2015) : Introduction of new Tucson will help to increase model mix and profitability Industry M/S Avante (Sep 2015) : One of the best selling sub-compact sedan will introduce new model Corresponding Measures on Increase of Imported Vehicle Increase Line-ups Improve technology Enhance Competitiveness Expand Diesel line-ups New SUV model launch will help to increase model mix Diversify power train and green car technology Keep quality standard high preventing recall Test drive for comparison with imported model Develop options for domestic customers '15. 1H Source: KAMA, Company data CV RV Mid + Large PV Small PV 24

26 United States Sales and M/S Trend (Retail Sales) (Unit: 1,000 vehicles) 11, % 12,778 14, % 4.9% 15,600 16, % 4.4% Market Strategy New Model Launch Tucson (2Q 2015) : Introduction of new Tucson will help HMC to gain sales momentum in fast growing SUV segment Elantra (4Q 2015) : One of the best selling sub-compact sedan will introduce new model in 4Q of 2015 Premium PC Sales Industry M/S % 6.3% 16, % 7.8% 7.0% 7.2% 7.1% 5.7% 22, % 5.0% 18,850 19,804 19, , ,193 3,972 3,578 3, '15. 1H Source: Company data RV Mid + Large PV Small PV Genesis Equus Genesis M/S Equus M/S 25

27 Europe Sales and M/S Trend (Retail Sales) (Unit: 1,000 vehicles) 15,332 15,264 13,960 13,771 14,543 Market Strategy Focus on qualitative growth Improve sales capability by strengthening finance services and introduce all new i20 and Tucson 2.4% 2.6% 3.2% 3.0% 2.9% Strengthen product competitiveness by introducing facelift models of i30, i40 and etc. Expand dealer exposure to major cities and improve facilities of existing dealers with applying GDSI Industry M/S Improve brand value through FCEV and participation in WRC Expand Direct Distribution Coverage Direct 69% Indirect 31% Direct 72% Indirect 28% '15. 1H A+B seg C seg RV D seg & Others Source: Company data Direct distribution coverage As of 2011: UK / Spain / Italy / Norway / Czech / Slovakia / Poland Newly established in 2012: Germany / France Start to operate direct distribution in Holland from Jan

28 China Sales and M/S Trend (Unit: 1,000 vehicles) 11,120 11, % 6.2% 16,999 15,165 12, % 6.8% 6.6% Market Strategy New Model Launch ix25 (2H 2014) : B-Segment SUV model, Customized to Chinese market. Sonata LF (1H 2015) : Enhance premium segment volume to cover strong demand growth and to improve brand image Tucson (2H 2015) : C-Segment SUV model. An enhancement of SUV M/S is expected. Industry M/S Customized Chinese Model Sales Trend , Source: Company data * Market demand based on Passenger Vehicle, ** Sales data based on factory sales '15. 1H SUV Mid PV Small PV 1, , (P) ix25 Mistra Global Model Focus on developing new segment and expanding model line up with China customized model 27

29 India Sales and M/S Trend (Retail Sales) (Unit: 1,000 vehicles) 2,309 2,430 2,656 2,461 2, % 15.4% 14.7% 15.4% 16.2% Industry M/S Market Strategy Continue strong sales through competitive model line-up Receive overwhelming response for major models i10 & i20 Won Indian COTY for 2 consecutive years with i10( 13), i20( 14) 11 Enhance brand equity and improve profitability by offering lower incentives than its peers Industry average: $457 HMC average: $196 1 New Model Launch i20 Cross : Target a niche market with SUV style new hatchback model (Crossover seg. market size : k k, 217% ) Creta : B-seg SUV model, customized for Indian customers, Respond to strong demand in SUV market New Model Launch in Verna 16MY i20 Cross Avante 16MY Creta '15. 1H Export Domestic** Source: Source: SIAM, Company data * Market demand based on Passenger Vehicle ** Sales based on factory sales February March April July 28

30 Other Emerging Markets Achieving a consistent sales volume growth over the years. Africa-middle East and LatAm Sales Breakdown by Major Emerging Markets Sales Volume (000 s) and CAGR (%) Asia-Pacific 3.7% LatAm 7.6% Turkey 1.0% Africa-ME % Africa-Middle East 10.4% Korea 14.2% LatAm N. Am. 18.0% +14% Chindia 31.7% Europe 13.4% Source: Company Data, 2014 HMC Global Retail Sales (excludes CKD sales) South America Brazil 29

31 Appendix

32 Balance Sheet (K-IFRS Consolidated) (Billion KRW) Q Q Q Q Q yoy qoq Asset 138, , , , , % 4.1% Current Asset (a) 63,145 62,763 65,026 63,614 64, % 2.1% Liabilities (b) 78,559 79,819 84,605 84,541 88, % 4.4% Current Liability (c) 30,526 31,073 35,180 34,715 36, % 6.1% Debt (d) 48,772 50,143 54,258 53,947 56, % 5.4% Provision 6,759 6,760 6,727 6,703 6, % 1.3% Equity (e) 59,710 61,504 62,621 63,093 65, % 3.6% Capital Stock 1,489 1,489 1,489 1,489 1,489 Capital Surplus 4,130 4,135 4,135 4,135 4,135 Retained earnings 51,854 53,349 54,650 55,682 57,418 Current Ratio (a/c) % % % % % Liability to Equity (b/e) % % % % % Debt to Equity (d/e) 81.7 % 81.5 % 86.6 % 85.5 % 87.0 % EBITDA/Interest Exp x 47.2 x 33.6 x 32.3 x 37.4 x 31

33 Income Statement (K-IFRS Consolidated) (Billion KRW) Q Q Q Q Q yoy qoq Revenue 22,753 21,280 23,574 20,943 22, % 9.0% Gross Profit 4,842 4,520 4,990 4,332 4, % +7.2% Margin (%) SG&A 2,755 2,872 3,114 2,744 2, % 5.4% Portion (%) Operating Income 2,087 1,649 1,876 1,588 1, % 10.3% Margin (%) Income before tax 2,926 2,202 2,130 2,321 2, % 2.1% Margin (%) Net Income 2,350 1,615 1,656 1,983 1, % 9.7% Margin (%) Depreciation Amortization EBITDA 2,727 2,274 2,501 2,248 2,428 32

34 Financial Summary by Division (Billion KRW) Q Q Q Q Q yoy qoq Revenue 22,753 21,280 23,574 20,943 22, % 9.0% Automotive 18,473 17,142 18,973 16,535 17, % 7.8% Finance 2,783 2,567 2,815 2,885 3, % 10.8% Others 1,497 1,571 1,786 1,523 1, % 18.3% Operating Income 2,087 1,649 1,876 1,588 1, % 10.3% Automotive 1,670 1,055 1,630 1,208 1, % 18.1% Finance % 11.1% Others % 82.9% Adjustment % 141.1% 33