The major manufacturers have been publishing financial reports. BDN financial editor Roger Willis analyses the figures.
01/11/2018
Suzuki’s motorcycle business has underlined its return to profitability in solid half-year results to 30 September.
Over this six-month period, total revenue from bikes and ATVs was 1.5% up to £868m. Asia was responsible for the biggest chunk of that, rising by 16.2% to £445m. European turnover fell by 15% to £140m. North America was 4.5% down at £102m. However, related operating profit climbed by 7.4% to £28m.
Global sales volume achieved 10.2% growth to 878,000 units. Again, Asian markets were dominant, with a 14.8% improvement to 720,000. In the three largest of these, the wholly-owned Suzuki subsidiary in India put on 37.3% to 331,000. Joint-venture affiliates in China sold 170,000, a 13.7% decline. Suzuki’s subsidiary in the Philippines boasted a 23.5% rise to 100,000.
In the developed world, Europe was 12.5% up at 27,000 and North America added 5% to 21,000. Japan’s domestic market dropped by 13.9% to 31,000.
The company noted in its results statement that the value of repatriated revenue from India fell significantly in the second quarter, owing to sharp rupee depreciation.
01/11/2018
In nine-monthly results to 30 September, Ducati continued to benefit from high-end sales led by its new four-cylinder superbike, shrugging off falling overall volume.
Revenue over the three quarters of 2018 to date was almost static, just 0.2% up at £532m. However, thanks to a fresh skew towards premium-priced machines, profitability showed a sharp improvement. Calculated according to the same IFRS 9 accounting standards now applying to Ducati parent Audi’s automotive results, operating profit climbed by 50% to £34.6m and operating margin grew from 4.4% to 6.5%. But prettified by “goodwill” accounting trickery to adjust for the effects of purchase price allocation, profit was 27.3% up to £49.7m and margin increased to 9.4% from 7.3%.
Production during the period, and presumably wholesale shipments to dealers worldwide, fell by 4.9% to 45,372 bikes. Retail sales volume was 6.3% down to 43,939. Worst afflicted was the naked/cruiser sector encompassing Diavel, Monster and Streetfighter models, with a 23.7% decline to 10,891. Ducati’s Scrambler sub-brand dropped by 11.4% to 10,619, despite the introduction of larger-capacity products. The vaguely off-road slot covering Hypermotard and Multistrada models fell by 6.5% to 11,729. Good news was reserved for big-ticket superbike and supersport machines, which were 31.9% up to 10,700.
31/10/2018
On the face of it, half-year profitability at the motorcycle division of Kawasaki Heavy Industries looks dreadful — but actually isn’t.
Divisional revenue over the six months to 30 September improved by 5.5% to £1.005bn. Within that, turnover from wholesale motorcycle shipments into developed countries was 4.5% up to £353m, despite static year-on-year volume of 64,000 units. Bikes for emerging markets yielded £272m, a 9.2% rise, as volume rose by 14% to 163,000. Utility vehicles, ATVs and personal watercraft added 6.4% to reach £231m. And revenue from general-purpose petrol engines was 0.9% up to £149m.
In striking contrast, the division suffered an operating loss of £32m, more than doubling a £14m loss in the equivalent period of its previous fiscal year. This doesn’t reflect reality, of course, but is due to Kawasaki’s arcane accountancy practice of front-loading costs into the first half and booking profits into the final two quarters. Presumably some corporate taxation advantage is to be gained from this exercise.
Clues are easily visible in Kawasaki’s previous full-year performance and forecasts for this year. In its 2017/2018 fiscal, operating results moved from that £14m loss at the half-way mark to a £22m profit after nine months and then an annual profit of £106m. The company had originally predicted a slight reduction in annual earnings for the division this time round, to £104m. But obviously recent revenue-growth success is such that the full-year profit forecast has just been upgraded to £111m.
30/10/2018
Muscular half-year results from Honda underline its status as the world’s dominant bike manufacturer.
In the first six months of its current fiscal year to 30 September, Honda’s revenue from motorcycling activities grew by 7.4% to £7.602bn. Associated operating profit was 20.2% up at £1.23bn. Operating margin improved from 14.5% to 16.2%.
And it would be a mistake to assume these figures are a mere sideshow in overall Honda automotive and aeronautical operations. Although bikes contributed just 13.9% of total group turnover, they accounted for 34.5% of all operating profits. The company also acknowledged that an increase of more than 20% in those profits was largely attributable to surging motorcycle and scooter sales in Asia.
As usual, wholesale shipment numbers were astounding. Across the period, some 10.667 million Honda-branded bikes were produced and distributed, a 7.3% rise. Wholly-owned subsidiaries were responsible for 7.148 million of them. The rest were made by joint-venture affiliates — of which by far the biggest is Astra Honda in Indonesia.
Of the headline tally, 9.664 million were sold in Asian markets, a 7.1% improvement. Within Asia, an averaged 8% growth to 7.821 million machines was credited to four leading countries. India topped the pile, 4.8% up to 3.296 million. Indonesia stacked on 14.1% at 2.468 million. Vietnam added 12.1% to 1.318 million. Only Thailand was on the back foot, dropping by 2.3% to 740,000.
Other emerging regions, principally Latin America, were 14% up to 608,000. However, developed-market performance was mixed. Japanese domestic sales recovered sharply by 23.8% to 104,000. Europe rose by 5.2% to 141,000. But North America was 8% down at 150,000.
Honda is maintaining its full-year volume forecast of a 6.6% increase to 20.85 million, finally crossing the 20 million bikes barrier.