Bridgestone Business report FY2009

Business Highlights

Financial Overview

(in millions of JPY)
  FY2009 FY2008 Rate of change (%) Factors
Sales 2,597,002 3,234,405 (19.7) -
Operating Profit 75,771 131,550 (42.4) -
Ordinary income 54,457 74,488 (26.9) -
Current net income 1,043 10,412 (90.0) -
Tire Segment
Sales 2,152,965 2,629,150 (18.1) 1)
Operating Profit 75,204 92,756 (18.9) -

Factors
1)
Tire Segment
-Despite the Company's efforts to boost sales by launching new products and enhancing its global production structure with a focus on its strategic areas, revenues decreased from the previous year's result due to falling vehicle sales worldwide as well as negative currency translation resulting from the appreciation of the yen.

<Japan>
- Units sales of tires for both OEMs and the aftermarket decreased year-on-year.

<Americas>
- In North America, unit sales of tires for passenger vehicles, small trucks, trucks and buses to both OEMs and the aftermarket decreased from the previous year's results.

<Europe>
-Unit sales of both passenger vehicle tires and small truck tires decreased from the previous year's results due to a drop in sales in the OEM market.

Contracts

-The Company supplies its Run-Flat tires as original equipment for the NISSAN GT-R SpecV. (From a press release on Jan 30, 2009)

-Bridgestone Corporation is supplying its Run-Flat tires as original equipment for the BMW X6. (From a press release on Feb. 6, 2009)

-Bridgestone Americas Tire Operations (BATO) announced that Bridgestone-brand Run-Flat tires have been selected for the 2009 BMW X5 M and X6 M. (From a press release on Jul 2, 2009)

-The Company has started supplying its eco-friendly tire "POTENZA RE050 ECOPIA" for Daimler's. (From a press release on October 15, 2009)

-The Company announced that its third generation run-flat tire, it newly developed this year has been chosen by Toyota Motor Corporation as OE tire. It will be supplied for the Sienna mini van to be launched in North America in February 2010. (From an article in the Nikkan Jidosha Shimbun on . 4, 2009)

Investment Outside Japan

<Thailand>
-In July 2009, the Company started constructing a new plant in Thailand to manufacture pre-vulcanizaed tread rubber for use in retread tires.

<China>
-The Company will increase its production capacity in Wuxi, China.

<Poland>
-The Company's new tire plant in Stargard, Poland began operating.
>>>See Investmentfor more details

Restructuring

<U.S.A.>
-Bridgestone Americas Tire Operations (BATO) announced that it has made the decision to cease passenger and light truck manufacturing at its LaVergne, Tennessee, USA tire plant due to negative economic conditions. The company will implement a layoff beginning in mid-March 2009. Truck tire manufacturing will continue at LaVergne. (From a press release on Jan. 22, 2009)

<Oceania>
-The Company announced said it will close its two tire manufacturing facilities in Australia and New Zealand. They are operated by Bridgestone Australia Ltd. The plant in Christchurch in New Zealand will be shut down at the end of 2009, and the other in Adelaide in Australia by the end of April 2010. Bridgestone has decided to terminate production at the two sites, citing difficulty in continuing their operations in the midst of an ever increasing global competition.(From an article in the Nikkan Jidosha Shimbun on Oct. 24, 2009)

>>>Financial Forecast for the Next Fiscal Year(Sales, Operating Income etc.)

R&D

R&D Expenditure

(in millions of JPY)
  FY2009 FY2008 FY2007
Overall 85,700 93,200 86,700
Tire Segment 68,600 74,300 68,900

Number of R&D Facilities

  North America Central
& South America
Europe Middle East/
Africa
Asia/
Oceania
Japan Total
Technical Center 1 0 1 0 1 2 5
Proving
Ground
2 2 2 0 3 2 11

R&D Facilities in Japan

R&D Facility Location
Technical Center Chuo-ku, Tokyo
Technical Center for Diversified Products Yokohama, Kanagawa
Bridgestone Proving Grounds Nasushiobara, Tochigi
Hokkaido Proving Grounds Shibetsu, Hokkaido

R&D Facilities Outside Japan

Country City
Technical Center
U.S.A Akron, Ohio
Italy Rome
China Wuxi
Proving Ground
U.S.A Fort Stockton
Columbiana
Mexico Acuna
Brazil San Pedro
Italy Castel Romano
Aprilia
Thailand Nong Khae, Ayutthaya
Indonesia Karawang
China Wuxi

New Testing Facility

-The Company announced that its subsidiary Thai Bridgestone Co. Ltd. had inaugurated a new proving ground in Ayutthaya. The testing facility built at a cost of one billion baht consists of a high speed circuit and test tracks reflecting various road conditions in Thailand and other Asian countries, including roads with specific surfaces. The new proving ground is built in an area of about 530,000 square meters, which encompasses a variety of facilities, including a 3.3-kilometer long high speed circuit track, comprehensive test roads expanding to an area of about 48,000 square meters, test roads specific to check noise, vibration and harshness, as well as maneuvering and wet road performances. (From an article in the Nikkan Jidosha Shimbun on Jan. 27, 2009)

Investment Activities

Capital Expenditure

(in millions of JPY)
  FY2009 FY2008 FY2007
Overall 178,200 275,300 272,300
Tire business (Consolidated) 156,800 247,900 240,800

Investment Outside Japan

<Thailand>
-The Company announced that it will establish Bridgestone Bandag Manufacturing (Thailand) Co., Ltd., a new plant to manufacture pre-vulcanized tread rubber for retread tires in Thailand. Construction is scheduled to begin in July 2009, with a plan to commence production in November 2010. The new facility will implement Bandag's tread rubber production system, becoming the first of its kind in Asia to be set up by Bridgestone. The tread rubber produced at Bridgestone Bandag will be supplied to Japan, China, and other Asian countries. With an investment of 5.2 billion yen, the plant will have the capacity to produce 30 tons of retread materials daily by late 2013. The establishment will allow the company to provide enhanced services to the truck and bus markets including transport business in Asia by offering a comprehensive tire maintenance solution, backed by a complete line of new and retread tire offerings. (From an article in the Nikkan Jidosha Shimbun on July 13, 2009)

<China>
-The Company announced that Bridgestone (Wuxi) Tire Co., Ltd., which manufactures radial passenger tires, will increase by 2011 its daily production capacity by 50 percent to 12,000 tires. In order to meet a projected rise in local demand for these tires in the medium- to long-term perspective, the company intends to invest 98 million dollars in the expansion program. The project will be launched after the company receives approval from the Chinese authorities. (From an article in the Nikkan Jidosha Shimbun on Apr. 14, 2009)

<Poland>
-The Company announced that its new tire plant in Stargard, Poland started operations. The new plant manufactures high-performance truck and bus tires and is scheduled to reach 2,500 units per day by 2010. (From an article in the Nikkan Jidosha Shimbun on May 21, 2009)