The Goodyear Tire & Rubber Company Business Report FY ended Dec. 2014

Business Highlights

Financial Overview 

(in million USD)
  FY ended Dec. 31, 2014 FY ended Dec. 31, 2013 Rate of
change
(%)
Factors
Overall
Net Sales 18,138 19,540 (7.2) 1)
Operating Income 1,712 1,580 8.4 2)


Factor
1) Net Sales
-Net sales for FY ended Dec. 31, 2014 decreased by 7.2% to USD 18,138 million. Major factors are as follows;

  • Unfavorable foreign currency translation of $571 million, primarily in Latin America
  • Lower sales in other tire-related businesses of $407 million, primarily third-party chemical sales in North America
  • A decline in price and product mix of $374 million, primarily in EMEA

2) Operating Income
-Operating income for FY ended Dec. 31, 2014 increased by 8.4% to USD 1,712 million. Major factors are as follows;

  • A decline in raw material costs of USD 553 million, primarily in EMEA and North America.

-In 2014, raw material costs decreased by approximately 9% in tire businesses compared to 2013, primarily driven by a decrease in natural rubber and synthetic rubber prices and cost savings initiatives during 2014.

Outlook for FY ending Dec. 31, 2015
-The Company expects cost savings to more than offset general inflation in 2015. Based on current spot rates, the Company expects foreign currency translation to negatively affect segment operating income by approximately USD 180 million in 2015 compared to 2014.
-Based on current raw material spot prices, for the full year of 2015, the Company expects its raw material costs will be approximately 14% lower than 2014, and it expects the benefit of lower raw material costs to more than offset declines in price and product mix.

Tire Units Sales

-The worldwide tire unit sales in the replacement and OE markets during the period indicated were as follows.

  (in millions of tires)
  FY ended Dec. 31, 2014 FY ended Dec. 31, 2013 FY ended Dec. 31, 2012
North American Tire Replacement tire units 43.0 42.9 44.5
OE 18.1 18.8 18.1
Europe, Middle East and Africa Tire Replacement tire units 43.7 44.2 46.4
OE 16.8 16.6 16.3
Latin America Tire Replacement tire units 13.5 12.4 11.8
OE 3.9 5.5 6.3
Asia pacific Tire Replacement tire units 12.7 12.4 11.7
OE 10.3 9.5 8.9
Subtotal Replacement tire units 112.9 111.9 114.4
OE 49.1 50.4 49.6
Grand total 162.0 162.3 164.0


-In 2014, The decrease in worldwide tire unit sales of 0.3 million units, or 0.2%, compared to 2013, included a decrease of 1.3 million OE units, or 2.6%, primarily in the Latin America consumer business, driven primarily by weaker consumer OE vehicle production in Brazil. Replacement tire volume increased 1.0 million units, or 0.9%, primarily in the Latin America consumer business, driven by overall industry growth.

-The Company expects that its full-year tire unit volume for 2015 will be up 1% to 2% compared to 2014.

New Products

-Globally, the Company launched 17 new consumer tires and 21 new commercial tires in 2014.

Major Contracts

OEM/Brand Model Tire Tire Size
Toyota "Alphard/Vellfire" EfficientGrip 215/65R16 98H
"Esquire" DURAGRIP 195/65R15 91S
"Vitz" EfficientGrip Compact 175/70R14 84S
"Voxy/Noah" DURAGRIP 195/65R15 91S
Nissan "e-NV200" EfficientGrip 185/65R15 92H XL
"X-Trail" Assurance CS Fuel Max 225/65R17102H
Mercedes-Benz

 

"C-Class" EfficientGrip Performance 235/45R19 95V
"GLA-Class" EfficientGrip 235/45R19 95V
Chrysler 2014 "Ram Power Wagon" Wrangler DuraTrac LT285/70R17

R&D Expenditure

(in million USD)
  FY ended Dec. 31, 2014 FY ended Dec. 31, 2013 FY ended Dec. 31, 2012
Overall 399 390 370

 

R&D Facilities

-The Company owns and operates two research and development facilities and technical centers, and eight tire proving grounds.

R&D Activities

-The Company will utilize ash left over from the burning of rice husks to produce electricity as an environmentally friendly source of silica for use in its tires. The Company has tested silica derived from rice husk ash over the past two years at its Innovation Center here and found its impact on tire performance to be equal to traditional sources. Goodyear is negotiating with potential suppliers to purchase rice husk ash silica for use in its tires. (From a press release on September 22, 2014)

Patents

-As of December 31, 2014, the Company owns approximately 2,000 product, process and equipment patents issued by the United States Patent Office and approximately 3,500 patents issued or granted in other countries around the world. The Company has approximately 500 applications for United States patents pending and approximately 2,300 patent applications on file in other countries around the world.

Capital Expenditure

(in million USD)
  FY ended Dec. 31, 2014 FY ended Dec. 31, 2013 FY ended Dec. 31, 2012
North American Tire 282 262 212
Europe, Middle East and Africa Tire 266 332 344
Latin American Tire 152 243 250
Asia Pacific Tire 154 257 286
Corporate 69 74 35
Total 923 1,168 1,127