fy2020 financial results...cv-japan full-scale decline expected in 2q (yoy 1q-90％, 2q-60％,...

May 26, 2020ISUZU MOTORS LIMITED

Copyright(C) 2020 Isuzu Motors Limited All rights reserved

FY2020 Financial Results

1 Copyright(C) 2020 Isuzu Motors Limited All rights reserved

1. Overview2. Business Status3. FY2020 Financial Results4. FY2021 Full-year Outlook5. Alliance6. Q&A Session

Contents


1. Overview


Overview: Influence of COVID-19 Pandemic

� Limitations to our business will last a long lapse of time. Isuzu shall achieve and maintain both “healthcare of our stakeholders and employees” and “social responsibility” by tackling on 2 measures.

1. As a company supporting the power to “deliver” worldwide, we shall offer vehicle that answer to our customers’ needs.

2. Guarantee stable operation of vehicles by our after-service programs.

� We are forced to face challenges as the demand meets full-impact of the COVID-19 pandemic. On the other hand, even as the new coronavirus ravages throughout the world, the distribution business is constantly moving. Therefore, Isuzu assumes that the recovery in demand shall start sometime in FY2021.

� Isuzu shall reduce costs and seek profit by building a structure to struggle with the crisis.

Latest Initiatives


Overview: FY2020 Consolidated Results� While slowdown in markets became apparent in FY2020, was able to record a 140.6

billion yen profit.� Only minor impact from COVID-19 pandemic in FY2020. Full-scale impact comes

after April 2020 and onwards.

FY2020 FY2019CV-Japan 81 83 -2 -2%CV-Overseas 208 223 -15 -7%

CV Total 289 306 -17 -5%LCV-Thailand 163 163 -0 -0%LCV-Export 148 179 -31 -17%

LCV Total 311 342 -31 -9%Total 600 648 -48 -7%

2,079.9 2,149.2 -69.3 -3%140.6 176.8 -36.2 -20%150.9 189.0 -38.1 -20%81.2 113.4 -32.2 -28%

38 Yen 37 Yen 1 Yen

Changes

Financial Forecast (Bil. Yen)

Global Sales Units (K-units)

SalesOperating IncomeOrdinary Income

Net IncomeDividends


Overview: FY2021 Full-year Outlook� Despite the uncertainty in the markets, Isuzu is determined that it does

matter to present an outlook with certain assumptions.� As Isuzu expects substantial decline in sales units, the forecast for FY2021

includes emergency initiatives to reduce expenses.

FY2021 FY2020CV-Japan 68 81 -13 -16%CV-Overseas 167 208 -41 -20%

CV Total 235 289 -54 -19%LCV-Thailand 108 163 -55 -33%LCV-Export 133 148 -15 -12%

LCV Total 241 311 -70 -23%Total 476 600 -124 -21%

1,700.0 2,079.9 -379.9 -18%50.0 140.6 -90.6 -64%

Changes

Financial Forecast (Bil. Yen)

Global Sales Units (K-units)

Operating IncomeSales


2. Business Status


Impact of COVID-19 and countermeasures

Regions April

JapanSuspended operations atFujisawa Plant(April 13th-17th)

ThailandAll plants temporarilysuspended for 4 weeksstarting from April 13th

KD AssemblyPlants Outside

Japan

Suspended operations in11 plants

Present

Resumed operation from April20th with thorough protectivemeasures

Resumed operation from earlyMay

Suspending operation in6 plants

� Suspended operations at plants in Japan and Thailand in April, but has already resumed operations.

� Japan: To minimize production loss, continue initiatives to prevent future infections.� Overseas: Will decide whether or not to restart operations taking in account of local

government orders, operation status of sales and supply chains.


Assumptions of FY2021 Outlook� Assumptions of recovery in demand and sales units were made in accordance

to the most recent market information available.

*There may be major delays in recovery of markets due to second wave ofCOVID-19 pandemic.

Assumptions of Sales Units

CV-Japan Full-scale decline expected in 2Q (YoY︓1Q-90％, 2Q-60％, 3Q-80％, 4Q-90％)

CV-Overseas Forecasting the worst at 1Q, slight recovery from 2Q onwardsWill still remain at YoY 90% in the latter half of FY2021

LCV-Thailand Low demand will continue till 2Q, but start to recover in 3QWill return to the same level as previous year in 4Q

LCV-Export Same assumptions as CV-Overseas


Mid/South AmericaOceania

AsiaAfrica

EuropeChina

19

33

12

17 1126

7669

10

20

North America

31 29

39 45

44 36

FY19 FY20 FY21

Japan

83 81

68

Global Sales Units-CV

Mid-East

1822

2017

（K-units）

*Details of Global Sales Units-CV

Japan：Wholesale & Direct Sales to Customers North America / Australia: Wholesale of Local Distributors

Other Regions: Shipment from Japan

1H 2H

Global Sales Units FY2019 FY2020 FY2021CV-Japan 83 81 68

CV-Overseas 223 208 167 CV-Total 306 289 235 Forecast

Forecast

8 6 9

5

FY2019 FY2020

8 9 9 11

FY2019 FY2020

9 11 9 11

FY2019 FY2020

17 16

16 10

FY2019 FY2020

39 32

37 37

FY2019 FY2020

7 5 5 5

FY2019 FY2020

16 17

15 12

FY2019 FY2020

10 9

9 11

FY2019 FY2020

� FY2020︓Sales units decreased mainly due to a drop in demand of L/D trucks in Japan and deteriorating markets in Asia.

� FY2021︓Decline of demand from 2Q and onwards in Japan, expected sales units of each regions of CV-Overseas are to be announced.


44 48

47 44

31.8%32.5%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

0

20

40

60

80

100

120

FY19 FY20 FY21Forecast

91

792H

1H

92

51 58

59 45

40.6%42.4%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

0

20

40

60

80

100

120

140

FY19 FY20 FY21Forecast

Japan Industry Sales and Isuzu Share

110

81

103

� H/D & M/D︓Industry sales increased slightly, stable sales resulted to a rise in shares.� L/D︓Despite fall in industry sales, successfully took in the last-minute surge demand

before implementation of the new emissions regulations into force in the 1H of FY2020 to increase shares.

H/D & M/D Trucks(4 tons or above)

L/D Trucks (2-3 tons) （K-units）（K-units）（Share）

（Share） 1H 2H


74 70

89 93

FY19 FY20 FY21

108

Mid/South America

Oceania

AsiaMid-East

19

Europe China

30

17

11

15

24

24

29

20

Thailand

7

163 163

1724

Africa

48 43

（K-units）

1H 2H

Global Sales Units-LCV

Global Sales Units FY2019 FY2020 FY2021LCV-Thailand 163 163 108LCV-Export 179 148 133LCV-Total 342 311 241

*Details of Global Sales Units-LCV:： Thai Shipment

Forecast

5 13 10

16

FY2019 FY2020

8 7 11

0

FY2019 FY2020

26 19

22 24

FY2019 FY2020

18 7

6

4

FY2019 FY2020

12 8

12 9

FY2019 FY2020

16 14

14 10

FY2019 FY2020

9 6

11 11

FY2019 FY2020

� FY2020︓Same level of sales units for LCV-Thailand as previous year, while sales units of LCV-Export saw a major drop due to decline of demand and restrained buying awaiting for the forthcomin full-model change.

� FY2021︓LCV-Thailand is forecasted to decline due to a drop in industry sales. Forecasted sales units according to regions for LCV-Export are to be announced.

（K-units）


163 163

81 74

80 67

0

50

100

150

200

250

300

350

400

FY2019 FY2020

Vehicle-Thailand Vehicle-Export KD Set

（K-units）

237 258

274 234 321

31.7% 31.1%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

0

100

200

300

400

500

600

CY18 CY19 CY20

512 492

1H

2H

Forecast

324

304

� Industry sales declined in 2019. Introduced full-model changed pickup trucks in the latter half of the year to maintain same level of shares as 2018.

� Production units for export decreased due to deteriorating markets and restrained purchase before the expected full-model change.

Thailand LCV Industry Sales & Share /LCV Production Units

Thailand LCV Industry Sales/Isuzu Share (Jan.-Dec.)

LCV Production Units in Thailand（Share）

（K-units）


63 59

72 64

0

20

40

60

80

100

120

140

160

FY2019 FY2020

430 366

417

365

0

100

200

300

400

500

600

700

800

900

1,000

FY2019 FY2020

731

847123

135

� Industrial Engines︓Decreased in result of the doubtful Chinese construction machine demand.

� Production units of diesel engines dropped in result of decline in sales units of vehicles and industrial engines.

Industrial Engine Global Shipment/Diesel Engine Production

Global Shipment of Industrial Engines

Production Units of Diesel Engines(K-units)

(K-units)

1H

2H


3. FY2020 Financial Results


FY2020 Consolidated Results- Year-on-year Comparison -

* Net income attributable to owners of parent

( JPY Bil. ) FY2020 FY2019

Sales 2,079.9 2,149.2 -69.3 -3%

Operating Income 140.6 176.8 -36.2 -20%

Ordinary Income 150.9 189.0 -38.1 -20%

*Net Income 81.2 113.4 -32.2 -28%FX

USD/JPY 109 111THB/JPY 3.51 3.43AUD/JPY 74 81

Changes


CV-Japan -1.3

CV-Overseas -8.7

LCV -8.5

Others -2.4

USD -2.0

AUD -3.0

THB -11.3

R&D +0.9

Dep. -1.7

Labor Cost -2.5

Strengthening

Infrastructure-1.8

Others＋2.6

176.8

-36.2

140.6‘

-20.9＋12.0

-2.5

-16.3-8.5

FY2019 vs. FY2020 Fluctuations- Consolidated operating income : analysis of change -

Operating Income for FY2019

Co

st R

ed

uc

tion

Ac

tivity

Sa

les

/Mo

de

l Mix

FX S

tee

l, Oil P

rice

etc

. F

luc

tua

tion

s

Fix

ed

Co

st

Flu

ctu

atio

n


(JPY Bil.)

� Decline in industry sales in Japan, worsening markets outside Japan, and FX resulted in decrease of operating income.


4． FY2021 Full-year Outlook


FY2021 Full-year Outlook- Consolidated, Year-on-year Comparison -

( JPY Bil. ) FY2021 FY2020

Sales 1,700.0 2,079.9 -379.9 -18%

Operating Income 50.0 140.6 -90.6 -64%

Ordinary Income 150.9 - -

*Net Income 81.2 - -FX

USD/JPY 108 109THB/JPY 3.30 3.51AUD/JPY 68 74

Changes

TBA

* Net income attributable to owners of parent


-90.6

50.0営業利益

20年3

月期

+8.0

-100.0

-10.0

140.6

＋11.4

±0

FY2020 vs. FY2021 Fluctuations- Consolidated operating income : analysis of change-

(JPY Bil.)



Sa

les

/Mo

de

l

Mix F

X

Ste

el, O

il

Pric

e e

tc.

Flu

ctu

atio

ns

Co

st

Re

du

ctio

n

Ac

tivity

Fix

ed

Co

st

Flu

ctu

atio

n

� Strategies to reduce costs will be taken, but the effect from sales/model mix shall be critical. Expecting a 90.6 billion yen decline of operating profit to amount to a 50.0 billion yen profit.


5. Alliance


� Collaboration in the area of Commercial Vehicle ① New Technology② H/D and M/D trucks in Japan and Asia③ M/D and L/D trucks

� UD Trucks ownership transfer from VG to ISZ (by end of CY2020)� Direction aiming through the strategic alliance with VG

• Create new valuable solution to take up the challenges and opportunities of the future logistic revolution, which will maximize the value for the customers and the society

• The very best No.1 in CV among Japan and Asia brands together with UD Trucks

December 18/2019 : Entered into Memorandum Of Understanding (MoU)

Collaborative Areas and Agreements currently under discussion � Technology Partnership Agreement� UD Trucks Share Purchase Agreement � Start the study of possible collaboration in Europe and North America

VG-ISZ strategic alliance status (1)


VG-ISZ strategic alliance status (2)

� The original time plan for signing binding agreements is still valid, but COVID-19 created challenges and there is some risk of delay.

� We will come back once there is better visibility on the COVID impact.

Expected Synergies

Next Milestone

� Collaboration in the area of R&D • Continuous support on UD Trucks Products R&D • R&D investment sharing in the area of future new

technology • Efficient H/D and M/D truck development for Japan and

Asian market� Cost reduction through components and parts sharing and

integration


91.497.0 99.0 98.1 95.0

FY17 FY18 FY19 FY20 FY21

R&D Costs (JPY Bil)

(Appendix) Main Financial Index

93.8

76.672.3

80.8 81.0


CAPEX (JPY Bil.)

58.8 59.9 60.9 62.7 64.0


Depreciation Cost

(JPY Bil.)

26.0 25.2 26.0 27.3 28.1

23.1

26.924.6 24.6

34.5

0.0

30.0

60.0

0.0

50.0


Dividends (JPY Bil/%)

171.6

146.4

166.8176.8

140.6

8.9

7.5

8.1 8.1

6.8

0

12

0.0

240.0


Operating Income

(JPY Bil./%)

693.1788.4 786.9 819.2 827.2

141.3

173.3 143.1 166.8 157.8

541.5

529.6 640.4644.6 613.3

551.1461.9

500.0518.6

481.6

0.0

2,500.0


Consolidated Sales by

Regions (JPY Bil.)

Japan North America

Asia Others

64 63 62 61 58

195 175 169 179

166

80

74 70

72

65

0

400

FY16 FY17 FY18 FY19 FY20H/D L/D KDSET

Production Units in Japan (K-units)

751.4

818.4

919.6 929.8 952.9

15.2

12.0 12.2 12.3

8.6

41.543.5 44.5 43.6 44.3

0.0

70.0

0.0

1,100.0


Shareholders’

Equity/ROE

(JPY Bil./%)

fy2020 financial results...cv-japan full-scale decline expected in 2q (yoy 1q-90％, 2q-60％,...

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