Although obviously not immune from the effects of Covid, Suzuki’s motorcycle business has used the pandemic as motivation for cleaning up corporate profligacy to raise profitability. BDN financial editor Roger Willis reports.
Total revenue for its fiscal year to 31 March fell by 14.9% to £1.343bn, front-loaded by sales decline in the first six months. The scale of turnover reduction in key markets varied. Asia was 20% down to £652m. Europe sank by 13.7% to £201m. North America lost 19.9% at £157m. Japan only dropped by 1% to £128m.
But assiduous cost-slashing resulted in an extraordinary turnaround for earnings. Despite global headwinds, operating profit almost quadrupled year-on-year, a 271.4% increase to £17m. Set against Suzuki’s serial losses on bikes for much of the past decade when there were far fewer excuses, this was a major achievement given the circumstances.
Worldwide sales volume finished 10.2% down at 1.535 million motorcycles and scooters. Across developed markets, Europe fell by 6.5% to 39,000, while North America and Japan posted respective increases of 32.4% to 46.000 and 4.5% to 51,000. Apparently aberrant contrasts between volume and revenue were generally attributable to differing model mix and price points.
Asian sales overall were 12.8% lower at 1.225 million. On the positive side, China managed a 23.7% gain to 374,000 and Vietnam was 22.4% up to 28,000. Conversely, India suffered a 19.5% retreat to 557,000 and the Philippines plunged by 29.6% to 136,000.
Suzuki has delayed performance forecasts for its new fiscal year until continuity of component supply and logistics disruption issues have been resolved.
[Yen-sterling currency translation at forex rates applicable on 13 May 2021]