Hyundai Motor Companyhmc/document… · * Hyundai OP margin for 2008-2009 based on K-GAAP, ......

Hyundai Motor CompanyHyundai Motor CompanyInvestor Presentation Investor Presentation February 2013February 2013

1

Table of Contents

Market Update by Region4.

Appendix

Future Strategies3.

Key Strengths for HMC2.

Executive Summary1.

1. Executive Summary

3

Executive Summary

Balanced Sales Growth

and Diversified Portfolio

Strong Performance

through the Cycle

Structural Improvement in

Core Competitiveness

Superior Performance Relative to

Peer Groups

Volume Growth

Value Growth

Cost StructureImprovement

Green Car

Current Outstanding Performance Prudent Future Strategies

2. Key Strengths for HMC

5

Strong Performance Through the Cycle

3.9%4.0%

5.1% 5.1%

5.4%

5.7%

2007 2008 2009 2010 2011 2012

7% 6%

(7)%

7% 8% 11%9% 9%

(5)%

9%

19%24%

2007 2008 2009 2010 2011 2012

Automaker Value Growth HMC Value Growth

2,603 2,6543,239

3,7014,099

4,392

2007 2008 2009 2010 2011 2012

Steady Growth in Global Sales1

(Unit:: 1,000 vehicles)… and Strengthening Global Market Share

1. Retail sales excluding CKD sales2. Interbrand

1

Supported by Relatively Higher Brand value Growth2

than the Industry… and Improving Residual Value of Vehicles

+7.1%

61.7%

45.8%

39.4%

59.8%

59.5%

46.5%

35%

45%

55%

65%

'08 MY '09 MY '10 MY '11 MY '12 MY '13MY

Elantra Sonata Santa Fe

6

Balanced Sales Growth through Global Manufacturing Plants

(Unit: 1,000 vehicles)2011 2012

Turkey PlantIndia PlantChina PlantUS Plant Czech Plant Russia Plant

US

+8.9%

703646

Korea

667682

EU

444403

Middle East and Africa

493448

India

396368

China

847758

LatAm

268258

Worldwide

+7.1%

2011 2012

4,099 4,392

7 manufacturing plants ( ), 6 R&D facilities ( ), 12 direct sales subsidiaries ( ), sales in more than 190 countries globally

Source: Company data (Retail sales excluding CKD sales)

2

Brazil Plant

-2.2%

+11.8%+10.2%

+7.5%+3.9%

+10.0%

7

Geographically Diversified Portfolio (%)

Balanced Sales Growth by Diversified Business Portfolio

Marketable Product Mix2 (%)

10.9

27.9

31.5

17.5

15.3

18.5

28.2

27.5

14.1 8.2

42.2

25.4

5.0

30.9

25.8

18.0

6.4

46.7

0 20 40 60 80 100

Honda

Toyota

Fiat

VW

Domestic North America Europe Asia Others

1

Source: Company data for HMC 2011 Global Retail Sales, Competitor information from public filings (2011FY Earnings Results)1. Others include 38.0% of Brazil sales2. A+B+C=Compact+Sub-Compact+Mini; D+E+F=Mid-Size+Large+Luxury; RV=SUV+MPV, Others=PUP and others

2

18.9 31.416.7 14.6 18.4Hyundai

1.5

24.0

6.2

45.9

40.1

70.9

61.6

1.2

19.4

18.5

15.6 31.1

34.1

12.8

3.9

13.2

0 20 40 60 80 100

Honda

Toyota

Fiat

VW

A+B+C D+E+F RV Others

18.3 7.555.3 18.9Hyundai

8

Structural Improvement in Core CompetitivenessEnhanced Brand Value is leading sales growth and reduce incentive spending. Subsequently, reduction in incentive is resulting ASP increase and repeated Brand Value improvement.

Source: Auto data/PIN Data, ASP based on actual transaction prices

Structural Improvement

EnhancedBrand Value Sales Growth Reduction in

Incentives ASP Increase

Structural Improvement from US Market

3

(2.4)22,700

ASP (Sonata, $)

(%)

18,266 3.9

18,019 (1.4)

21,821 21.1

23,148 6.0

(0.2)4.98.8703

Sales (‘000) M/S (%)

(%) (%pt)

401 (14.0) 3.0 0.1

435 8.3 4.2 1.2

538 23.7 4.6 0.4

646 20.0 5.1 0.5

7.52012

6.0

5.0

4.6

4.8

Brand Value($ in Billion)US Market

2008

2009

2010

2011

(5.9)946

Incentive (PNVS, $)

(%)

2,194 20.7

2,506 14.2

1,649 (34.1)

1,005 (39.1)

9

3.9%

6.1%

8.8%

10.3% 10.0%

1126.91108.1

1156.3

1276.4

1102.6

2008 2009 2010 2011 2012

HMC OP Margin KRW/USD Avg.

Increased Resilience to FX FluctuationsHMC has reduced its exposure to FX fluctuations and made efforts to reduce risk from FX fluctuations

Portion of Exports from Korea Plant OP Margin & KRW/USD Exchange Rate Trend

Source: Company data* Hyundai OP margin for 2008-2009 based on K-GAAP, 2010–2012 based on K-IFRS

(Unit: KRW/USD)

52%59% 59% 60%

70% 70% 72%

48%41% 41% 40%

29% 30% 30% 28%

71%

2005 2006 2007 2008 2009 2010 2011 2012

Korea Domestic & Overseas Plant Sales Export from Korea Plant

3

HMC has implemented hedging, settlement currency diversification and improving export ASP to mitigate impact from FX

10

4,846 4,604 5,0336,005

7,50072

6965

6153

2008 2009 2010 2011 2012

Brand Enhancement

Source: Interbrand, JD Power

Enhancement in Brand Value

US Customer Retention Rate

(Ranks)

(Ranks)(Unit: US$ in Millions)

+9.3%+19.3%

47.0% 47.0%

60.0% 64.0%1311

3 1

2009 2010 2011 2012

3

Highest growth rate among automakers for two consecutive years

In US market, Hyundai achieved the highest retention rate among competitors in 2012

+13.0%p

+4.0%p

Awards and Accolades

+24.9%

Tucson ixCar of the Year2011.02

ix35Car of the Year2011.04

ElantraCar of the Year2011.04

ix20Family Car of the Year2011.12

Elantra‘12 N. American Car of the Year 2012.01

Veloster‘12 N. American Car of the Year2012.01

SonataCar of the Year 2012.01

HyundaiCarmaker of the Year 2012.02

i30Car of the Year 2012.02

Accent, Elantra, Coupe and TucsonBest Value in America2012.03

SolarisBest Auto 2011 2012.03

SolarisCar of the Year 2012.04

i40Company Car of the Year2012.07

i30Car Buyer Car of the Year 20122012.08

Model(s)RegionAward TitleDate

11

Utilization & InventoryHigh global utilization and low inventory level enables the company to promote value pricing strategy.

HMC Global Utilization Trend HMC Global/US Inventory Trend

Source: Company data/US Autodata

(Unit: %) (Unit: Month of Supply)

1

2

3

4

Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12

Overseas Inventory US Inventory

89.991.5

100.6

107.4

102.4

108.4

2008 2009 2010 2011 2012 2013(P)

3

12

Value Pricing StrategyWith value pricing strategy, ASP is keep improving while incentive spending is decreasing.

Average Selling Price (ASP) by Export Market US Incentive Trend(Unit: USD 1,000) (Unit: USD)

Source: Company Data, US Autodata, ASP is based on HMC headquarter results

6

8

10

12

14

16

18

2002 2005 2008 2011

LatAm Middle East and Africa Asia Pacific Total Export

Export ASP CAGR: +6.0%

US$15,000

3

2,427

946

1,804

865

872

2,206

600

1,000

1,400

1,800

2,200

2,600

2006 2008 2010 2012

Hyundai Toyota Honda

13

16.1%

31.2%

22.3%

(19.0)%

(26.3)%

(7.6)%

(28.4)%(27.0)%

14.7%10.9%

20.0%14.1%

23.1%

11.4%

20.6%

5.7%5.7%

(10.7)%(13.9)%

25.6%

8.0%7.8%

(3.8)%

24.0%

2008-2009 2009-2010 2010-2011 1~3Q 11–1~3Q 12

Consistent Sales Growth Relative to PeersHMC has shown the most consistent growth during the sector downturn.

Consolidated Revenue Growth—Annual (YoY)

Source: Public FilingsNote: Based on Consolidated Financials, Calendarized Financials for Japanese Firms1. Based on the average of 3 year (’08~’11) revenue growth. Hyundai Financials for 2009–2010 based on K-GAAP, 2010–2012 based on K-IFRS

4

’08~’11Revenue CAGR 18.0%1 -9.4% -11.7% 11.9% -2.2% -1.7%

3. Future Strategies

15

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

Volume Growth

Balanced Capacity Expansion and

New Model Launch

Value Growth

Higher ASP and Lower Incentive Driven by

Enhanced Product and Brand Value

Cost Structure Improvement

Higher Cost Competitiveness fromVertical Integration

Green Car

Develop Independent and Distinctive Technology

16

Value Growth – Product CompetitivenessElantra, Sonata, and Santa Fe are experiencing high demand with better specification.

Specification Comparison

Elantra (Compact Sedan)

Sonata (Mid-size Sedan)

Santa Fe (Compact CUV)

1

28mpg / 39mpg26mpg / 34mpg28mpg / 38mpgMileage

140@6,300132@6,000148@6,500Max. Power

1.8L1.8L1.8LDisplacement

Honda Civic (’12)Toyota Corolla (’09)Hyundai Elantra (’11)Specification


182@6,000178@6,000198@6,300Max. Power


Nissan Altima (’13)Toyota Camry (’12)Hyundai Sonata (’10)Specification


182@6,700179@6,000190@6,300Max. Power


Chevrolet Equinox (’10)Toyota RAV4 (’13)Hyundai Santa Fe (’13)Specification

Source: Company Data

17

Value Growth - Higher ASPTransaction price of major models in US market has improved with structural improvement.

Source: PIN data (Annual average transaction price in US market)

Transaction Price Trend in US Market

Compact Sedan(Unit: USD 1,000)

Mid-size Sedan Compact CUV

26.5

22.3

22.6

23.7

25.4

23.5

2009 2010 2011 2012

Santa Fe RAV4 Equinox

23.5

22.7

23.1

17.6

21.1

22.421.6

22.8

2007 2008 2009 2010 2011 2012

Sonata Camry Accord

19.9

18.0

18.9

15.5

19.6

17.8

15.8

19.318.6

2007 2008 2009 2010 2011 2012

Elantra Corolla Civic

1

4-Cyl, 2WD

18

Volume GrowthHMC’s global sales will be increased with capacity expansion and by maintaining high utilization rate.

Capacity Expansion and Sales Plan

Source: Company data* Above sales figures are based on shipment** BHMC : Beijing-Hyundai Motor Company / CHMC : Sichuan-Hyundai Motor Company

–60 –60 ––China (CHMC)

Sales Plan by PlantsProduction Capacity Expansion

+5.7

+12.4

+452.1

-2.0

-1.0

+3.6

-1.3

+13.3

+7.4

-3.2

Chg (%)

4,660 4,410 4,650 4,420 3,870 Total

2,810 2,499 2,780 2,550 2,050 Overseas

150 27150 150 –Brazil

220 225 200 200 150 Russia

300 303 300 300 300 Czech

89 86 200 100 100 Turkey

633 641 600 600 600 India

970 856 900 900 600 China (BHMC)

388 361 370 300 300 US

1,850 1,911 1,870 1,870 1,820 Korea

2013 (P)20122013 (P)20122011(Unit: 1,000 Vehicles)

2

19

Cost Structure Improvement (Platform Integration)Platform integration will reduce development cost and realize greater economies of scale per platform.

Platform IntegrationIntegration Schedule Reduction of Model Development Time

No. of Models per Type of Platform Increasing portion of models with integrated platform

2002 2009 2011 2013 (P)

Integrated Platforms 0 6 6 6

Total No. of Platforms 22 18 11 6

Total No. of Models 28 32 36 40

Avg. of 40 months → 24 months40

33

24

2002 2009 2013 (P)

Source: Company Data

Small Mid-size Large Coupe Frame SUV LCV

Mass Production Niche Market

New81%

Old19%

2011 2013 (P)2012

3

New62%

Old38%

New75%

Old25%

20

Green CarHMC independently developed and obtained distinctive technology on HEV system.

Developing Green Cars: HEV

Hybrid Vehicle Strategy Hybrid Vehicle

HEV Performance Comparison

Sonata HEV

Displacement: 2.4ℓ

Max. Power: 206 hp

Mileage: 34 / 39 mpg

Commercial production: 2011 (US & Korea)

Source: Company data

4

A “Fast Second Company” - strategy to quickly become a # 2 player by competing with industry leading players

Gradual expansion of HEV applied automotives (mid-size, SUV, heavy vehicles)

Enhancing fuel efficiency

Focusing on HEV system improvement and obtaining distinctive components technology

105kW (141hp)105kW (141hp)30kW (40.2hp)Motor

Power Split SystemPower Split SystemParallel SystemSystem


Ni-MH 30kWNi-MH 33kWLi-PB 34kWBattery

198 hp200 hp206 hpSystem Power

Altima HEVCamry HEVSonata HEVSpecification

21

Green CarHMC has been chosen to participate in European FCEV demonstration program together with Daimler.

Developing Green Cars: FCEV

Fuel Cell Electric Vehicle FCEV Vehicle

Development Roadmap Assessment of Light-duty FCEV Manufacturers

Tucson ix FCEV

Max. distance: 650 km

Max. speed: 160 km/h

Fuel Efficiency: 31km/ℓ

Commercial production: TBD

Phase 1 (~2006)— Develop

Stack Technology

Phase 2 (2007~2011)— Improve

Performance

Phase 3 (2012~)— Commence

Small Production

Santa Fe FCEV

Tucson FCEV

Fuel Cell Electric Bus

Tucson FCEV (2nd Gen.)

Mohave FCEV

Fuel Cell Electric Bus (2nd Gen.)

Tucson ix FCEV

Source: Company data, Pike Research (August 10, 2011)

69.9 66.7 66.1 65.1

54.4

43.936.8

Daimler Honda Toyota HMC GM Nissan Ford

4

Assuring “FCEV Leading Maker” position by demonstration program

Expected to commence producing 1,000 vehicles from 2012 to 2014

Mass production technology in process through independently developed “FCEV Stack Technology”

4. Market Update by Region

23

Korea

Source: KAMA, Company data

Sales and M/S Trend (Retail Sales) Market Strategy(Unit: 1,000 vehicles)

1,3921,464 1,474 1,411

50.5%

45.0%47.3%46.4%

2009 2010 2011 2012

Industry M/S

156 161 170

276 226 250

11494 77

155177 185

162

231

112

162

2009 2010 2011 2012Small PC Med + Large PC RV CV

701658

682 667

New Model Launch Santa Fe (May 2012): Enhance sales volume and Model mix with

new mid-size SUV model

Santa Fe Long : Santa Fe comes in various shapes

Avante 2 door: Targeting niche market with coupe version of Avante

Genesis : Strengthen the Premium segment competitiveness to improve brand imange

Corresponding Measures on Increase of Imported Vehicle

Enhanced Credibility

ImprovePremium Image

Improve Customer Satisfaction

Test drive for comparison with imported model

Develop options for domestic customers

Diversify product line up and Power train

Upgrade and expand sales/service network

Improve car master response to customer

Unique premium services such as “Home to Home service”

24

United States

Source: KAMA, Company data


10,43211,590

12,77814,492

4.2% 4.6%5.1% 4.9%

2009 2010 2011 2012

Industry M/S

180 184251

146229

264109

125

131

298

277

128

2009 2010 2011 2012Small PC Med + Large PC RV

435

538

646703

2013 New Model Launch

New Model : Santa Fe 7-Seater (1Q)

F/Lift Model : Equus F/L (1Q), Tucson F/L(2Q), Elantra F/L(4Q)

Premium PC Sales

13,604

16,448

18,850

22,687

3,1933,972

5.6%6.3%

7.6% 7.8%

7.1%5.7%

2009 2010 2011 2012

Genesis Equus Genesis M/S Equus M/S

25

China

Source: KAMA, Company data*Above are sales figures for Beijing-Hyundai Motor Company (JV) in China


8,276

11,12011,935 12,720

6.9% 6.3% 6.2% 6.7%

2009 2010 2011 2012

Industry M/S

484 519 472

3765 11349

120 154

567

117

172

2009 2010 2011 2012Small PC Mid-size PC SUV

570

703740

856

New Model Launch Santa Fe (December 2012) / D-segment sedan (4Q 2013) :

Product mix & ASP improvement with launch of new models in D & SUV segment

Dealer Enhancement Plan

418

500

600

720

802

2008 2009 2010 2011 2012

Number of Dealers

Focus on improving customer services and brand image

26

Europe

Source: Company data, ACEA


14,499 13,768 13,59312,528

2.4% 2.6%2.9%

3.5%

2009 2010 2011 2012

Industry M/S

181 157 142

104117

102

43 80 1409

820

147

109

145

43

2009 2010 2011 2012A+B seg C seg RV D seg & Others

337362

403

444

New Model Launch Santa Fe Long body (2Q 2013) / ix35 F/L (3Q) / i10 (4Q)

- Enhancing SUV segment through new models like Santa Fe& ix35 F/L

True Fleet Market Enhancing D-segment (i40) true fleet sales

- Develop exclusive finance program for fleet customer- Expand fleet business dealers

’12 430 dealers → ’13 500 dealers

Dealer Network Enhancing tier 1 city dealer network

- Develop tier 1 city dealers similar level of market averagetill 2015 (’12 29% → ’15 50%)

- Develop flagship dealers in main cities (Frankfurt, Paris etc.)

27

India

Source: Source: SIAM, Company data


1,747

2,309 2,430 2,656

16.6% 15.4% 15.4% 14.7%

2009 2010 2011 2012

Industry M/S

290357 373

270

247 242

391

250

2009 2010 2011 2012Domestic Export

560604 616

641

New Model Launch

Santa Fe (DM) : 2nd quarter of 2013

BA– Introducing new small segment car

Specification Comparison

U$ 5,100 ~ 6,100U$ 5,500 ~ 7,800MSRP

19.7km/ℓ21.1km/ℓMileage

47ps / 6,200rpm56ps / 5,500rpmMax. Power

Hyundai Eon Maruti Alto

Displacement 800cc 800cc

28

Other Emerging MarketsAchieving consistent sales volume growth through the years.

Africa-middle East and LatAmSales Breakdown by Major Emerging Markets Sales Volume (000’s) and CAGR (%)

Source: Company Data, 2012 HMC Global Retail Sales (excludes CKD sales)

Korea15.2%

N. Am.19.1%

Europe15.2%

Chindia28.3%

LatAm6.1%

Asia-Pacific 3.8%

Africa-Middle East

11.2%

Turkey 1.1%

Africa-ME

LatAm

82115 128

165 177 185

237258 268

2004 2005 2006 2007 2008 2009 2010 2011 2012

118185 208

253292 316

419448

493

2004 2005 2006 2007 2008 2009 2010 2011 2012

+16%

+20%

Appendix

30

Balance Sheet (K-IFRS Consolidated)

△1,86026,06427,924Net Debt

94.3%107.5%Debt/Equity (%)

167.0%147.5%Current Ratio(%)

7,59047,91840,328Equity

3627,0096,647Provision

1,86945,20743,339Short and Long-term Debt

△32832,83633,164Current Liabilities

4,46873,62069,152Liabilities

3,72919,14315,415Cash and Cash Equivalents1

5,92154,84848,926Current Assets

12,058121,538109,480Assets

Change20122011(KRW in Billions)

Source: Company filings (K-IFRS Consolidated)1. Cash and Cash Equivalents = Cash + Short-term Financial Instruments

31

Income Statement (K-IFRS Consolidated)

10,95810,364EBITDA1

823739Amortization

1,6981,596Depreciation

10.7%10.4%Margin (%)

11.7%9,0568,105Net Income

13.7%13.4%Margin (%)

11.1%11,60510,447Recurring Profit

10.0%10.3%Margin (%)

5.1%8,4378,029Operating Profit

13.1%14.0%Portion (%)

1.8%11,06110,867SG&A

23.1%24.3%Margin (%)

3.2%19,49818,896Gross Profit

8.6%84,47077,798Revenue

Growth20122011(KRW in Billions)

Source: Company filings (K-IFRS Consolidated)1. EBITDA = Operating Profit + Depreciation + Amortization

32

Financial Summary by Division

Source: Company filings (K-IFRS Consolidated)

29445Consolidation Adjustment

63.7%255155Other

△2.2%1,1781,203Finance

1.3%6,7116,624Automotive

5.1%8,4378,029Operating Profit

32.1%4,5003,406Other

18.9%8,6637,288Finance

6.3%71,30767,104Automotive

8.6%84,47077,798Sales Revenue

Growth20122011(KRW in Billions)

Hyundai Motor Companyhmc/document… · * Hyundai OP margin for 2008-2009 based on K-GAAP, ......

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