Hyundai Motor Company 1 st Quarter 2011 Business Results April 28, 2011
Cautionary Statement with Respect to Forward-Looking Statements In the presentation that follows and in related comments by Hyundai Motor s management, our use of the words expect, anticipate, project, estimate, forecast, objective, plan, goal, outlook, target, pursue and similar expressions is intended to identify forward looking statements. The financial data discussed herein are presented on a preliminary basis before the audit from Independent Auditor; final data will be included in HMC s Independent auditors report. While these statements represent our current judgment on what the future may hold, and we believe these judgments are reasonable, actual results may differ materially due to numerous important factors. Such factors include, among others, the following : changes in economic conditions, currency exchange rates or political stability; shortages of fuel, labor strikes or work stoppages; market acceptance of the corporation s new products; significant changes in the competitive environment; changes in laws, regulations and tax rates; and the ability of the corporation to achieve reductions in cost and employment levels to realize production efficiencies and implement capital expenditures at levels and times planned by management. We do not intend or assume any obligation to update any forward-looking statement, which speaks only as of the date on which it is made.
Table of Contents Sales Summary Financial Summary Revenue & Profit Analysis Appendix
Sales Summary Retail Sales Wholesale
Sales Summary : Retail Sales 1Q 2010 1Q 2011 (Unit : 1,000 vehicles) -0.8% +29.3% +27.9% +0.01% 168 167 97 98 131 169 Korea 112 143 EU China +10.0% US +4.7% 322 337 830 914 Others 1Q 2010 Global Sales 1Q 2011 Source : Company data (Includes shipment of LCV / Excludes CKD sales) 5
Sales Results by Key Region Korea US US (Unit : 1,000 vehicles) EU EU 48.1% 46.0% 4.4% 4.7% 2.7% 2.8% -0.8% 168 167 40 46 27 19 112 35 +27.9% 143 27 +0.01% 97 98 2 11 2 34 101 102 77 116 84 62 1Q 2010 1Q 2011 PC RV CV M/S 1Q 2010 1Q 2011 PC RV M/S 1Q 2010 1Q 2011 PC RV CV M/S Unit sales in 10.1Q slightly declined due to the high base effect (YOY 0.8% ) Large-car segment sales increased with introduction of HG (YOY 60% ) Launched MD successfully while YF continues to maintain high level of customer demand Lowest level of incentive spending ( 11.1Q : $1,117 / units) Despite of market demand decrease in 1Q, sales of ix20 and ix 35 increased Sales growth in Germany (YoY 41% ) mitigated demand decrease in EU Source : Company data / Automotive News / ACEA 6
Sales Summary : Wholesale Sales Volume by by Plant Sales Mix Mix by by Segment (Unit : 1,000 vehicles) 842 +9.2% 919 7% 8% 398 411 KOREA CHINA INDIA 17% 17% 18% 18% CV RV 162 182 US CZECH TURKEY Mid-Large PC Small PC 162 68 42 10 151 84 57 20 14 RUSSIA 58% 57% 1Q 2010 1Q 2011 1Q 2010 1Q 2011 Sales volume by plant (Wholesale basis) 7
Financial Summary (K-IFRS) Statement of Income Financial Summary by division Statement of Financial Position Cash Flow Highlights
Consolidated Statement of Income (KRW Billion) 1Q 2010 1Q 2011 Change Sales Revenue Gross Profit Margin (%) SG&A Portion (%) Other Operating Income Operating Profit Margin (%) Recurring Profit Margin (%) Net Profit Margin (%) Depreciation Amortization EBITDA 15,021 3,357 22.3 2,165 14.4 63 1,256 8.4 1,591 10.6 1,281 8.5 395 155 1,806 18,233 4,157 22.8 2,434 13.4 105 1,828 10.0 2,465 13.5 1,877 10.3 385 155 2,367 3,212 800 269 42 572 874 596 Consolidated Statement of Income (K-IFRS), Business results of BHMC is accounted in equity income accounting Net Profit includes non-controlling interest 9
Financial Summary by Division (KRW Billion) 1Q 2010 1Q 2011 Change Sales Revenue 15,021 18,233 3,212 Automotive 12,511 15,541 3,031 Finance 1,665 1,873 208 Other 846 819 27 Operating Profit 1,256 1,828 572 Automotive 899 1,506 608 Finance 309 325 17 Other 44 27 17 Consolidation adjustment 4 31 35 Consolidated Statement of Income (K-IFRS) 10
Consolidated Statement of Financial Position (KRW Billion) 2010 1Q 2011 Change Assets 94,714 97,808 3,094 Current Assets 43,520 47,514 3,994 Cash & Cash Equivalents* 13,638 15,642 2,004 Liabilities 61,826 63,302 1,476 Current Liabilities 31,446 32,043 598 Short & Long-Term Debt 38,596 39,232 635 Warranty Provision 5,986 6,105 119 Equity 32,888 34,506 1,618 Current Ratio (%) 138.4 148.3 Debt / Equity Ratio (%) 117.4 113.7 Net Cash 24,959 23,590 1,369 EBITDA / Interest Expense 10.6 x 17.2 x Consolidated Statement of Financial Position (K-IFRS) Cash & Cash Equivalents : Cash & cash equivalents + Short-term financial instruments 11
Consolidated Cash Flow Highlights (KRW Billion) + 1,877 + 540 610 216 + 550 8,357 6,216 Depreciation / Amortization Tangible / Intangible asset Dividend payment Other Net Income Beginning Cash Balance Ending Cash Balance Consolidated Cash Flow Highlights (K-IFRS) Above figures includes consolidation adjustments by business division (Automotive / Finance / Others) 12
Revenue & Profit Analysis Sales Revenue Analysis COGS and SG&A Net Non-Operating Income
Sales Revenue Analysis Sales Revenue Positive // Negative Contributors (KRW Billion) Positive Factors 15,021 18,233 + 3,212 ( 21.4% ) Improved overseas sales & mix : Unit sales : + 9.2% (842,029 919,130) 15,541 12,511 Negative Factors KRW appreciation against the USD USD / KRW 1,144.7 1,119.3 (2.2% ) 1,665 1,873 846 819 1Q 2010 1Q 2011 KRW appreciation against the EUR EURO / KRW 1,576.0 1,540.4 (2.3% ) Automotive Finance Others Consolidated sales revenue excludes sales revenue of BHMC Consolidated sales revenue by business division (Automotive / Finance / Others) 14
COGS and SG&A COGS 77.7% 77.2% SG&A and Other Operating Income // Expense (% of Revenue) (% of Revenue, KRW billion) SG & A Salary & wage Marketing Expense Sales warranties Warranty Provision other Other income/ expense (net) F/X transactions 2,165 2,102 2.6% 5.4% 0.5% 1.3% 4.6% 10.8% 2,329 2.4% 4.8% 0.4% 1.6% 4.0% 2,434 other 63 0.3% 0.1% 0.1% 0.5% 105 1Q 2010 1Q 2011 1Q 2010 1Q 2011 Consolidated Statement of Income (K-IFRS) 15
Net Non-Operating Income (KRW Billion) Financial Income Financial Expense Equity Earnings 572 346 214 254 225 189 1Q 2010 1Q 2011 1Q 2010 1Q 2011 1Q 2010 1Q 2011 1Q 2010 : 335.4 Net Non-Operating Income 1Q 2011 : 637.1 Consolidated Statement of Income (K-IFRS) 16
Appendix Changes in accounting policy - Major changes under K-IFRS - Scope of consolidation changes - K-IFRS vs. K-GAAP (Standalone) Overseas Plant Operations
Major changes under K-IFRS Changes under K-IFRS Scope of Consolidation Recognition of Account Receivable Employee Benefit Accrued Liabilities Valuation Borrowing Cost Investment Property - Consolidation standard : more than 50% of equity or owns effective management control [largest shareholder with more than 30% shareholding NOT consolidated, SPC consolidated] - Account receivables with recourse to drawers (D/A, L/C, etc) are recognized as liabilities. Previously under K-GAAP they were not recognized as liabilities. - Use actuarial approach to determine amount of allowance for severance liability and long-term employment benefit. - The provision value is discounted with current market discount. - From the date of implementation of the new Standard, Borrowing costs related to the acquisition, construction or production of qualifying asset are capitalize as part of the cost of that asset. - Property held to earn rental income or profit taking purpose are classified as investment property. Previously under K-GAAP, it was classified as tangible asset. 18
Scope of consolidation changes Scope of consolidation under K-IFRS : 74 companies (Equity Method affiliates: 33 companies) Consolidation Company Name included (Total 23 companies) Hyundai ngv CARNES HMJ R&D Center Inc Hyundai Capital Europe GmbH Rotem Equiptments (Beijing), etc. excluded (Total 58 companies) Kia Motor & 23 subsidiaries Hyundai HYSCO & 8 subsidiaries Hyundai Dymos & 3 subsidiaries Hyundai WIA & 5 subsidiaries Hyundai Powertech & 2 subsidiaries Hyundai Commercial, etc. Total Number of consolidated companies under K-GAAP (as of end of 2010): 95 companies (Equity Method affiliates: 42 companies) 19
K-IFRS vs. K-GAAP (Standalone) (KRW Billion) 1Q 2010 (K-GAAP) 1Q 2010 (K-IFRS) 1Q 2011 (K-IFRS) 비고 Sales Revenue 8,418.2 8,415.3 9,326.2 Gross Profit 1,973.6 1,954.1 2,279.1 Margin (%) 23.4 23.2 24.4 SG&A 1,270.9 1,256.8 1,384.7 Portion (%) 15.1 14.9 14.8 Other Operating Income 52 58 Operating Profit 702.7 749.3 951.9 Margin (%) 8.3 8.9 10.2 Recurring Profit 1,339.7 959.0 1,209.7 Margin (%) 15.9 11.4 13.0 Net Profit 1,127.2 810.7 954.6 Margin (%) 13.4 9.6 10.2 20
Overseas Plant Operations
Overseas Plant : HMMA & BHMC (Unit : 1,000 vehicles / KRW Billion) US US Plant (HMMA) China Plant (BHMC) Sales Volume Revenue Sales Volume Revenue Sonata(YF) Elantra(MD) Santa-Fe(CM) Others 84 10 1Q 11 1Q Chg Elantra Tucson Sonata Others 182 10 1Q 11 1Q Chg 69 25 28 Revenue 1,368 1,558 14% 162 37 29 14 13 15 42 Revenue 2,262 2,933 30% 44 56 105 89 1Q 2010 1Q 2011 1Q 2010 1Q 2011 Above figures are standalone results base 22
Overseas Plant : HMI & HAOS (Unit : 1,000 vehicles / KRW Billion) India Plant (HMI) Turkey Plant (HAOS) Sales Volume Revenue Sales Volume Revenue I10 PB Santro Others Accent Matrix i20 162 15 31 151 14 30 Revenue 10 1Q 1,309 11 1Q 1,238 Chg -5% 20 Revenue 10 1Q 187 11 1Q 292 Chg 56% 36 32 10 14 2 80 75 8 6 1Q '10 1Q '11 1Q '10 1Q '11 Above figures are standalone results base 23
Overseas Plant : HMMC & HMMR (Unit : 1,000 vehicles / KRW Billion) Czech Plant (HMMC) Russia Plant (HMMR) Sales Volume Revenue Sales Volume Revenue i30 JC YN RBr 57 10 10 1Q 11 1Q Chg 10 1Q 11 1Q Chg 42 12 13 Revenue 613 907 48% Revenue 0 182-14 30 34 14 0 1Q '10 1Q '11 1Q '10 1Q '11 Above figures are standalone results base 24