kia motors corporation - file.irgo.co.kr€¦ · s-cross renault duster. 2. strategy for...
TRANSCRIPT
1
April 2020
Investor PresentationKia Motors Corporation
2
Table of Contents
1. Recent Developments 4
2. Strategy for Sustainable Growth 12
3. Financial & Fundamentals 22
Plan S – Move 2025 26
3
Enhanced Profitability from US
• RV mix improvement continues
Solid Growth Continues while Preparing for the Future
Entering New Model Golden Cycle
• Key volume SUVs ready to be refreshed
• Continuous new model effect of Seltos & Telluride
Strengthening Presence in India
• Expect to reach BEP in 1H 2020
New Paradigm Readiness : Plan S
• Mid-to-Long Term Financial Goals
• Electrification – Preemptive Shift to EV
• Mobility Solution – Selection & Concentration
• Shareholder Value Enhancement
Prepared for CO2 regulations in Europe
• Green car sales
- 2020 : Sorento, Carvinal, Sonet (Entry SUV in India)- 2021 : Sportage
- Seltos : 310k units globally (2020)- Telluride : Georgia plant capacity expansion (80k → 100k)
- RV portion increase : 2019 46% → 2020 53%
- Early BEP due to high demand of Seltos &upcoming new RV launches (Carnival & Sonet)
- 2019 : 66k units (13%) → 2020 : 118k units (24%)
＊HEV 36K, PHEV 41K, EV 41K
- Full EV lineup of 11 models by 2025
- Green car sales ratio 25%
- 6.6% M/S of global EV sales
- Strategic deployment of MaaS & PBV
- MaaS : Promote mobility hub service in cities
with ICE vehicle restrictions
- PBV : Purpose-built-customized vehicles to
meet demand of B2B customers
- OP Margin : 5% (2022) → 6% (2025)
- Present ~ 2022 : Balance between investment & returnsMaintain payout ratio of 25~30%
- 2022 ~ : Proactive capital management throughshare buyback / cancellation to improve capital efficiency
1. Recent Developments
5
(in thousand units)
Korea
18.5%
% of Global Sales
Western Europe
17.9%
+1.2%
+1.7%10.5%
China
21.8%
U.S.
Global
-7.6%
-17.1%
-1.3%
+4.4%
India
1.5%
+45k units
1 Retail Sales Results
Region 2018 2019 YoY
Rest of World
841 836 -0.6%
Russia 228 226 -0.7%
MENA 188 191 +1.3%
LatinAmerica
241 224 -6.9%
Asia Pacific
89 95 +7.1%
15,624 15,806
495 503
22,37520,679
358 296
3,3712,954
45
17,274 17,048
590 615
-12.4%
1,813 1,780
532 520
-1.8%
-2.2%
2018 Industry Total 2018 Kia Sales
2019 Kia Sales2019 Industry Total
-4.4%
+0.04%
94,41990,266
2,815 2,816
※ CKD excluded
6
1 2020 Business Plan : Wholesale & Retail Sales
2019 2020(P)
2,821 +4.92,960
520 -0.04520
613 +2.7630
504 -4.0484
259 +19.8310
880 +1.4892
2019 2020(P)
※ Europe Sales : Western Europe / China : Dongfeng-Yueda-Kia(DYK) only
Change %(in thousands) (in thousands) Change %
Korea
U.S.
China
ROW
Wholesale
Europe
India
2,869 +3.52,970
520 -0.04520
615 +3.2635
503 -3.9484
296 +8.0320
889 +0.2891
Korea
U.S.
China
ROW
Retail
Europe
India 45 120 +167.245 124 +174.2
※ CKD sales included : Russia, Lain America, MENA, Asia-Pacific
(CKD) (68) (93) (+36.3) (CKD) (71) (89) (+26.1)
7
1 Korea Market
Sales & Market Share
Model Carnival
Launch July 2020
Dimension(L/W/H/WB)
5,155 / 1,995 /1,740 / 3,090
Segment MPV
SalesPlan
60k units / yearDomestic
Export 65k units / year
▶ 2019 Results
· Negative growth in 1H due to competitor’s new model launchand lack of Kia new models
· Positive growth in 2H on the back of new model launches
※ 2H : [Seltos] no.1 M/S for small SUVs, [K7] +75%, [Mohave] +175%
▶ 2020 Initiatives
· Focus sales increase of high margin new RVs(Seltos, Mohave, Sorento, Carnival) for mix improvement → revenue growth
· Recovery of sedan sales with new K models(K5, K7) and Stinger F/L
Sorento
March 2020
4,800 / 1,900 /1,690 / 2,815
D-SUV
62k units / year
158k units / year
○ 2019 Trend
· Industry Demand 1.78mn units (YoY -1.8%)
- Aged key models and weak sentiment due to low employment
- Negative demand growth due to supply issue of imported brands on the back of delayed emission certification
20192018 M/S2020(F)
* Industry demand & M/S: Imported brands included
1,802
520
1,780
520
1,813
532
29.2%
29.3%
(In thousand units,%)
○ 2020 Outlook
· Expecting 1.8mn units of industry demand (YoY +1.2%)
- (Positive) Scheduled launch of RV volume models
- (Negative) Continued overall sluggish economic conditions
28.9%
KIA
2019 : -2.2%
2020(F) : -0.04%
Industry
2019 : -1.8%
2020(F) : +1.2%
Industry
▣ New Models in 2020Kia Sales
8
1 US Market
▣ Incentive & Inventory ▣ RV Sales Increase
○ 2019 Trend
· Industry Demand 17.05mn units (YoY -1.4%)
- Weakened customer sentiment due to political uncertainties
- Continued slower demand of sedans despite solid demand growth from light trucks
20192018 M/S2020(F)
16,843
635
17,048
615
17,274
590
3.6%
3.4%
○ 2020 Outlook
· Expect 16.84mn units of industry demand (YoY -1.2%)
- (Positive) Continued steady consumption due to economic growth
- (Negative) Political uncertainties due to impeachment issue and Presidential Election (Nov. 2020)
3.7%
KIA
2019 : +4+4%
2020(F) : +3.2%
Industry
2019 : -1.4%
2020 (F) : -1.2%
▶ 2019 Results
· Decreased incentive spending and maintained stable inventory
· Successful launch of Kia’s first mid-size SUV, Telluride
▶ 2020 Initiatives
· Targeting further sales of Telluride + new model launches- Seltos to be launched in 1Q, leading to increased retail sales(+44k)
- Scheduled to launch FMC models of K5(June) & Sorento(Sept)
· Telluride CAPA : 60k (Initial) → 80k (Nov 2019) → 100k (July 2020)
(In thousand units,%)
Sales & Market Share Industry
Kia Sales
3,710
3,432 3,523 3,534
3,424
3,755
3,686
3.9 3.5
3.1 3.1 3.2 3.4
3.1
'19.1 '19.3 '19.5 19.7 '19.9 '19.11 '19.12
(Unit : month)
(Unit : $/unit)
40.2%
46.2%
52.7%
'18CY '19CY '20(F)
Telluride
Seltos, Sorento
9
1 Europe Market
▣ Kia’s sales performance in 2019
○ 2019 Trend
· Industry Demand 15.81mn units (YoY +1.2%)
- Low base effect on the back of ‘WLTP’ introduced in 2018 and pushing out sales ahead of CO2 regulations in 2020
20192018 M/S2020(F)
15,332
484
15,624
503
15,624
495
3.2%
3.2%
○ 2020 Outlook
· Expect 15.33mn units of industry demand (YoY -3.0%)
- (Positive) Forecasting similar economic growth as 2019- (Negative) Sales adjusted by OEMs due to CO2 regulations
3.2%
KIA
2019 : +1.7%
2020(F) : -3.9%
Industry
2019 : +1.2%
2020(F) : -3.0%
▶ 2019 Results
· Ceed sedan (+33%) / Ceed derivatives (CUV: +11k) and continued solid sales of Stonic (67k, +20%)
· Laid foundation to increase green car sales
▶ 2020 Initiatives
· Increasing green car sales to meet CO2 regulation
- Target : Green car sales 24% (EV 9% from 3% in 2019)
· Maintain efficient mix of ICE + xEVs for profitability
· Ceed + Ceed derivatives CAPA ↑ to meet increasing demand
- 750units per day by March (previously 650 units per day)
(In thousand units,%)
Sales & Market Share Industry
Kia Sales
96 63 63 51 4297 66 61 48 44
U.K. Germany Spain Italy France
2018 2019
+1.8%
+4.2% -4.6%-5.8%
+4.2%
Industry Growth
-2.4%
+5.0%-4.8%
+0.3% +1.9%
(in thousand units, %)
10
1 China Market
○ 2019 Trend
· Industry Demand 20.68mn units (YoY -5.9%)
- Government policies for economic recovery delayed and increased dealer inventories
20192018 M/S2020 (F)
21,485
320
20,679
296
22,375
358
1.4%
1.6%
○ 2020 Outlook
· Expect 21.49mn units of industry demand (YoY +3.9%)
- (Positive) Demand increase before NEV subsidies expire- (Negative) Continued sluggish economy leading to low consumer
spending growth
1.5%
KIA
2019 : -17.1%
2020(F) : +8.0%
Industry
2019 : -7.6%
2020(F) : +3.9%
▶ 2019 Results
· Drop of industry demand and lack of new models
· Aged key volume models such as K2 and K3
▶ 2020 Initiatives
· New model launches : KX3 FMC (Seltos) and K5 FMC
· Stabilizing dealer inventory
· Restructuring dealer system by changing incentive policies andimproving dealer profitability
(In thousand units,%)
Sales & Market Share Industry
Kia Sales
Model K5
Launch July 2020
Dimension(L/W/H/WB)
4,960 / 1,860 /1,445 / 2,885
Segment D-PC
Sales Plan 40k units / year
KX3(Seltos)
December 2019
4,375 / 1,800 /1,600 / 2,630
B-SUV
80k units / year
▣ New Models in 2020
11
1 India Market
○ 2019 Trend
· Industry Demand 2.95mn units (YoY -12.4%)
- Growth decreased from 2017 onwards due to past long periodof high growth
- Weakened customer sentiment due to sluggish economy
20192018 M/S2020 (F)
3,072
120
2,954
45
3,371
1.5%
○ 2020 Outlook
· Expect 3.07mn units of industry demand (YoY +4.0%)
- (Positive) Easing uncertainties on BS6 policy and recovery ofoverall economic conditions
- (Negative) Possibility of facing financing difficulties
3.9%
KIA
2019 : +45k
2019(F) : +167.2%
Industry
2019 : -12.4%
2020(F) : +4.0%
▶ 2019 Results
· Successful launch of Seltos
- No.2 M/S in Mid SUV segment (only started selling from August)
· Established premium brand image of Kia
· Increased to 2 shifts from 1 earlier than initial plan (Sept 2019)
▶ 2020 Initiatives
· New model launches : Carnival (Premium MPV) & Sonet (A SUV)
· Increasing Seltos sales to maintain current sales momentum
· Ramp-up plan : 65k(2019) → 170k(2020) → 300k(2022)
(In thousand units,%)
Sales & Market Share Industry
Kia Sales
Model
Launch
Segment
Seltos
August 2019
B-SUV
▣ Seltos & Mid SUV M/S
SalesPlan
India
Export
70k units / year
41k units / year
56%25%
10%
5%
SeltosHyundai
Creta
MarutiS-Cross
RenaultDuster
2. Strategy for Sustainable Growth
13
Entering New Model Golden CycleKey New Model Launches by Region
US
Korea
China
Europe
2020 1H 2020 2H
2
New Model : 1Sorento PHEV
Product Enhancement : 2 Stinger / Stonic
New Model : 2K5Seltos EV
Product Enhancement : 1 Zhi-Pao
New Model : 1Carnival
Product Enhancement : 2Stinger / Stonic
New Model : 2Sorento / Sorento HEVCarnival
Product Enhancement : 2Rio / Stinger
New Model : 1Sorento / Sorento HEV
Product Enhancement : 2K2 / Picanto
New Model : 1K3 EV
New Model : 1Sorento / Sorento HEV
Product Enhancement : 1Picanto
New Model : 1K5
Product Enhancement : 1K7
IndiaNew Model : 1
SonetNew Model : 1
Carnival
New Model Launch Schedule
K5TELLURIDE SELTOS
SPORTAGECARNIVALSORENTO
6 new models including CV to be introduced
2019
2020 ~ 2022
14
New Model – Seltos2
Global Launch Schedule
Product Information
Jul 2019 Jan 2020
B-Segment SUV
Jul. 2019 (Korea) / Aug. 2019 (India)
Korea U.S.
4,370 / 1,800 / 1,600 / 2,630
Global (excluding Europe)
Dec 2019
China
- Telluride (Feb 2019) → Seltos (Jul 2019) → Sorento (1Q 2020) → Carnival (3Q 2020) → Sportage (2021)
Segment
Launch
Dimension(L/W/H/WB)
Target Market
Aug 2019
India
15
New Model – K52
Product Information
Segment C-Segment Sedan
Launch Dec. 2019 (Korea)
Dimension(L/W/H/WB)
4,900 / 1,860 / 1,445 / 2,850
Target Market Global (excluding Europe)
- Design : fastback design, sharkskin pattern radiator grille, ‘heartbeat’ styled LED headlamp
Global Launch Schedule
Dec 2019
Korea
Jul 2020
China
Jun 2020
U.S.
- Technology : automatic air purification system, home IOT system voice recognition control system,digital key, built-in cam, KRELL sound system, etc.
16
New Model – Telluride2
Product Information
Segment Mid-size SUV
Launch Feb.2019
Dimension(L/W/H/WB)
5,000 / 1,990 / 1,750 / 2,900
Target Market North America (U.S. / Canada)
- Firstly launched model to open the SUV driven model cycle, which started from early 2019
- Highly profitable model lowering a burden of incentive spending
- Newly added model to improve utilization rate afterproduction halt of Santa-Fe in May 2018
- Capacity expansion of Telluride : 80K/year → 100K/year (2H 2020)
- Kia’s 1st penetrating model into the mid size SUV segment=> Market Demand in 2019 : 1.7mn unit, grew by 4% YoY
- Competing against Explorer (Ford), Cherokee (GM), Highlander (Toyota), Pilot (Honda)
=> Superior residual value (58) & strong competitiveness in pricing
- US Retail Sales : 67K units
17
Strengthening Presence in India2
Launch of India Strategic Model : Sonet
- Full-year sales plan : 110k units
Mid to Long-term Strategy
(Full ramp-up of 300k by 2022)
- Reached break even in 4Q 2019 on a quarterly basis - BEP on YTD basis expected in 1H 2020
- Brand : SUV Professional & Trend Leading Innovator Brand- M/S : Targeting to become TOP 5 player
New Model Launch Schedule
2019 2021
Seltos(SUV-Mid)
Aug 2020Feb 2020
Carnival(Premium MPV)
Sonet(SUV-Low)
India StrategicNew Model
18
19.1 19.5
21.723.2 23.7
24.5 24.9
2013 2014 2015 2016 2017 2018 2019
937
1,098 1,010
1,085
1,231
33%
36% 37%39%
44%
2015 2016 2017 2018 2019
Kia's RV Sales (in Thousand units) % of Total Sales
40.0%
27.6%37.2%
46.0%
37.9%
44.4%42.3%
46.2%
51.6%
Korea US Europe
2015 2016 2017 2018 2019
* RV = SUV + MPV + CUV
ASP Improvement via RV Sales Increase
RV Sales Growth in Tandem with Global Trend
Continuous Improvement of Average Selling Price
RV Sales Portion by Market
Domestic ASP (mn KRW)
Export ASP (Thousand USD)
2
13.814.2
13.9 14.0
15.4 15.516.1
19
Korea Domestic Plants
Capacity: 1,532,000
(Pride, K5, Sportage, etc.)
Kia Motors Manufacturing Georgia (KMMG)
Capacity: 340,000
(K5, Sorento, Telluride)
Kia Motors Slovakia (KMS)
Capacity: 330,000
(Sportage, Ceed)
DYK Automobile Manufacturing Plant
Capacity: 750,000No.2 Plant – Capacity: 300,000No.3 Plant – Capacity: 450,000
Kia Motors Mexico (KMM)
Capacity: 400,000
(Pride/Rio, K3, Accent*)Note: Capacity is based on official designed capacity.* Hyundai Models
• W.Europe• MENA• Russia• LatAm• Others
• Domestic• Export‧ US‧W.Europe‧ LatAm‧ Others
• US• LatAm• Others
• US• Mexico• LatAm
Kia Motors India (KMI)
Capacity: 300,000
(Seltos)
Strategically Located Production Sites2
※ No.1 plant closed in 2Q19
• India• Others
• China• Others
20
Competitive Electric Vehicles2
Niro EV
Completes eco-friendly Niro crossover range, alongside HEV, PHEV
Up to 385km(239miles) of Zero-Emission driving on a single charge, with next-generation EV powertrain
Advanced Driver Assistance System to support convenience and safety(e.g. Forward
Collision Warning with Forward Collision-AvoidanceAssist, Smart Cruise Control with Intelligent Stop & Go, Lane Following Assist)
Maximum Distance 385km
Battery Capacity 64kWh
Max Power Output 150kW
Fast Charging 54 min.
Retail Sales in 2020 50K / Year
Soul EV
All electric CUV of the 3rd generation Soul
Capable of up to 386km(240miles) of Zero-Emission driving on a single charge, applied high-tech infotainment system(10.25 inch HD wide display, Bluetooth Multi-
Connection, Combiner Head-Up-Display, Voice recognizable AI Platform collaborated with Kakao )
Equipped with Advanced Driver Assistance System (e.g. Highway Driving Assist, Smart Cruise
Control with Stop & Go)
CV
Maximum Distance 385km
Battery Capacity 64kWh
Max Power Output 150kW
Fast Charging 54 min.
Retail Sales in 2020 11K / Year
Kia’s first EV dedicated model CV, expected to launch in 2021, is aNext Generation EV produced with a EV dedicated platform
Futuristic Crossover outer appearance, breaking the barriers between sedans and SUVs
Equipped with new interface including differentiated UX/UI
Will be capable of up to 500km(311miles) of Zero-Emissions driving on a single charge, overcoming the weakness of electric vehicles and fast charging will be reduced to 20 minutes
Launch Schedule 2021
Maximum Distance 500 km
Fast Charging 20 min.
21
Next Generation Platform (iGMP : innovative Global Modular Platform)
Concept of Integrated Platform Reinforced – Parts Standardization/Commonization Ratio Increases
2
▣Module-Flexibility ▣ Design
Every Vehicle (ICE / xEV)
Every Powertrain- Smart Stream
EV Platform (2021)
Sporty & Stylish Platform
Extended Wheelbase
- Enlarged Room Space
▣ Safety & Strength ▣Weight Reduction
Multi Frame Structure
- Average Strength 10% ↑
- Weight Dispersion in Crash
Hot Stamping Method
Ultra High-tensile Steel
- Weight Reduction 55kg ↓
- Fuel Efficiency Improvement
Segment Domestic Overseas
Sedan
RV
Segment Domestic Overseas
Sedan
RV
Before : Within Segment After : Across Segment
By Integrated Planning(Product Planning, Design,
Development , Procurement)
30%
20%
50%
22
3. Financial & Fundamentals
23
Profitability & Capital Expenditure Trend
(KRW trn)
Revenue
EBITDA
3.84.1
2.53.1
4.14.6
2.4 2.4
3.1
2.4
2015 2016 2017 2018 2019
EBITDA CapEx
EBITDA vs. CapEx(KRW trn)
Note: CapEx = Acquisition of property, plant and equipment + Acquisition of intangible assets
(KRW trn)
Operating Profit
1,131 1,161
1,131 1,100
1,166
(KRW/USD FX Rate)
2.4 2.5
0.7
1.2
2.0
2015 2016 2017 2018 2019
4.8% 4.7%
1.2%2.1%
3.5%
(% Margin)
3.84.1
2.53.1
4.1
2015 2016 2017 2018 2019
7.6% 7.9%
4.7%5.7%
7.1%
(KRW trn) (% Margin)
3
49.552.7 53.5 54.2
58.1
2015 2016 2017 2018 2019
24
Liquidity & Debt Position Trend
Total : KRW6.5trn
(LT Debt 61%)
Note: 1. Liquidity includes ST Financial Instruments & ST Available for Sales Financial Assets2. Excludes trade finance
(KRW trn)
(KRW bn, ’19.4Q-end)
Total Debt vs. Net Cash
Debt Composition Debt Maturity Profile (2)
(‘19.4Q-end)
3
6.3
8.18.7
6.7 6.5
0.7 0.5 0.91.8
2.5
2015 2016 2017 2018 2019
Total Debt Net Cash
7.1
8.69.6
8.59.0
2015 2016 2017 2018 2019
Cash & Cash Equivalent
(KRW trn)
Total Liquidity (1)
1,116 835
983
2,159
2020 2021 2022 2023~
CurrentPortion of
LT Debt17%
Bond41%
LTDebt 20%
STBorrowing
22%
25
500 600 650 700
1,000 1,100 1,100
800 900
1,150 7.4%6.9%
6.8%7.4%
13.5%17.0% 16.0%
33.1%
31.2%
25.3%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Dividend Per Share Payout Ratio(KRW)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
DividendYield
1.0% 0.9% 1.1% 1.3% 1.9% 2.1% 2.8% 2.4% 2.7% 2.6%
Historical Dividend Trend3
19.0%
(excludingordinary wage
related expense)
Plan SM O V E 2 0 2 5
ELECTRIFICATION MOBILITY SOLUTIONPreemptive Shift to EV
Establishing a full EV line-upEV/AV-based Mobility Services
Selection and Concentration
BRAND PROFITABILITYNew Brand System
New BI, CI and DI to be EstablishedImproving Profitability of Existing Business
Securing EV Profitability
2 Key Basisfor the
Implementation
2 Key Business
Strategies
27
Preemptive Shift to EV
ELECTRIFICATION
28
25% 6.6%Sales ratio of
green cars EV M/S
EV Strategic GoalFull EV line-up by 2025 / 500k units of EVs & 1mn units of green cars by 2026
202511 models in the full EV full lineup
Number of EV models
Ratio of green cars EV M/S
29
2020
3 derivative EV models
EV Line-up StrategyStarting with EV dedicated model CV,
EVs will be implemented for all mass-produced new models from 2022
2021
CV
2025
Establish full EV line-up
PC
MPV초소형 소형 SUV
대형
중형 SUV
30
CV : EV Dedicated Model
EV Dedicated Platform
Differentiated UX/UI
(CODE42)
NEXT Generation EV
NewKIA Design
Identity
20Minutes
500km
31
EV Operation Strategy
Operation Strategy Price Positioning
• TCO equivalent to ICE
• Simultaneous operation of derivative EVs and dedicated EVs (EV architecture system, 400V/800V charging)
• Expansion of xEV distribution
• Differentiated UX/UI (CODE42)
• High Performance EV (RIMAC)/ Autonomous Driving (APTIV)
Europe-basedpricing
ICE xEV EV
2020 ~ 2025 ~
ICE xEV EV
32
Developed Markets
Emerging Markets
EV Strategy by MarketAim to increase EV sales up to 20%, by establishing a full EV line-up in developed markets
ICE-focused operation(selective introduction of EV models)
Full EV line-upDedicated EV-focusedDerivative EV-focused
ICE
xEV
EV
~2020 ~2023 ~2025
33
Selection and Concentration
MOBILITY SOLUTION
34
Strategic InvestmentBuilding up MECA capability by open innovation
Mobility Service Platform
Southeast Asia MSP
India MSP High-speed Charging Station in Europe
High Performance EV
Autonomous Driving Solution
Autonomous Driving Solution
AI Infotainment Medical Services
Mobility Electric
Connectivity Autonomous
35
Financial Goals
PROFITABILITY
36
2019
2022
2025
Mid-to-Long Term Financial Goals
OP Margin
Entering New Model Golden Cycle
Profitability Improvement in India & China
CKD Volume Expansion in EM
Secure EV Profitability
Increase Sales + Improve Profitability ofICE vehicles in EM
Maintain Stable Investment Spending + Efficient Fixed Cost Management
3.5%
5%
6%
37
K5TELLURIDE SELTOS
2019 E 2020 F 2021 F 2022 F
ex-China
50%
40%
50%
60%RV
PC
SPORTAGECARNIVALSORENTO
6 new models including CV to be introduced
Entering New Model Golden Cycle
New Model Launch Plan RV Sales Ratio Trend
2019
2020~
2022
38
India Full Ramp-up & RV Focused Line-up China Market Recovery Plan
2019 2022
52k units
1model
300k units
4models
Profitability Improvement in India & China
Fundamental Reformulation
01 Implementation of the Virtuous Cycle SystemStrengthen brand power, improve factory utilization
02 Profitability-oriented SalesOperate regional S\strategic models, reduce fleet sales
03 Streamline Product Line-upFocus on 7~8 models
04 Strengthen Dealer Network by ImprovingDealer ProfitabilityChanges of sales method (Push Pull)
39
20192020
20212023
2022
Asia Pacific
MENA
Russia
Latin America
Over300k units
80k units
CKD Volume Expansion in EM
40
BEP level
On par withICE vehicles
Secure EV Profitability
Profitability(OPM)
Details
2 Derivative EVs
60% 40%
Enhancing Cost Competitiveness
Material Cost Reduction
- Development of new electrification technology
- Increase parts commonization with ICE vehicles
Implementation of new specifications
Search for new profit-making business
Streamline sales costs
Economy of Scale
Reduce Fixed Costs
- Streamline the operation of plants/number of models.
- Sales channel advancement
~2019
(SOUL EV, NIRO EV)
EV Introduction
GrowthLaunch of Dedicated EV
2021
(CV, 1st application of dedicated EV platform)
ExpansionFull EV lineup2021
(11 models)
41
2019
20222023
20242025
20202021
+37% growth
vs. 2019
1.05mn units
770k units
Low-single digit 0P % Mid-single digit 0P %
Increase Sales + Improve Profitabilityof ICE Vehicles in Emerging Markets
42
2019
20222023
20242025
20202021
R&D Spending
Maintenance Investment
Equity/ joint investments
Total of
W29trn
4.2trn4.9trn
4.3trn4.9trn 5trn 4.9trn 5trn
Stable Long-term Investment Plan(2020-2025)
43
Shareholder Value Enhancement
Balance Between Investment & Returns
• Maintain payout-ratio of 25~30%
• Secure resources for future business by improving profitability
Improve Capital Efficiency with Increased Returns
• Based on improved cashflow, actively improve shareholder returns by share buyback/cancellation etc.
2019 2022 2025
Profitability(OP Margin)
Capital Efficiency(ROE assuming payout
ratio of 27.5%)
3.5%
7.1%
5%
10.4%
6%
10.6%
44
THANK YOU
