Ending a difficult year, Goodyear showed areas of loss and areas of increasing growth, with total year sales down 16% and tyre unit volumes down 19%. However, whilst the segment operating sector for the whole year reduced by $14 million, it rose substantially during the last quarter, showing room for optimism.
How Goodyear Fared in 2020
Releasing all their results for the year, Goodyear’s fourth quarter 2020 sales were $3.7 billion, down 2% from a year ago, which they attribute to lower volume and unfavourable foreign currency translation, whilst these negatives were balanced by improvements in the price/mix.
Tyre unit volumes totalled 37.7 million, which marked a 5% decease from from the results of 2019. Factors for the decline in productivity include the economic disruption caused by the COVID-19 pandemic, as well as the decline in replacement tyre shipments (7%) which reflect a lower consumer demand. There was also an increased market share in OE within the EMEA market (3%).
Goodyear’s fourth quarter 2020 net income was $63 million compared to a net loss of $392 million a year ago, with the adjusted net income being $103 million compared to $45 million in 2019.
The most exciting news from Goodyear in the fourth quarter was $60 million increasing on segment operating income ($302 million) from the prior year. Goodyear believe this comes from cost-saving actions, lower raw material costs and improvements in the price/mix.
Caping off the year, Goodyear's net sales $12.3 billion (16% less than 2019), tyre unit volumes totaled 126.0 million (down 19% from 2019, including a 17% reduction in replacement tyre shipments and a 23% reduction in OE). Goodyear’s net loss was $1.3 billion (compared to a net loss of $311 million in 2019), however their segment operating loss of $14 million in 2020 is far better than their $959 million loss in 2019.
Goodyear Make Inroads in the European Market
Europe, Middle East and Africa’s fourth quarter 2020 sales increased 5% from last year to $1.2 billion due to improvements in price/mix, partially offset by lower volume. Tyre unit volume decreased 5%. Replacement tyre shipments fell 11%, driven by lower industry demand and the impact of the company’s previously announced initiative to align distribution in Europe. Original equipment unit volume increased 16%, reflecting share gains driven by the launch of new fitments and showing off again the optimism Goodyear are bringing to consumer confidence.
Fourth quarter 2020 segment operating income of $69 million was up $31 million from the prior year’s quarter, driven by the impact of lower raw material costs, improvements in price/mix and the benefits of cost saving actions, partially offset by lower volume and reduced factory utilization.
"We Have Good Momentum Entering 2021" States Goodyear President
“We delivered strong performance to end a challenging year,” said Richard J. Kramer, Chairman, Chief Executive Officer and President. “With a determination to win with our products in the marketplace and a relentless focus on cost and cash, we finished the year on a high note.
“We have good momentum as we enter 2021. Our commercial business continues to outperform the industry, our consumer replacement business is strengthening, and we are beginning to see the benefits of our robust consumer OE pipeline. I am confident we are positioned to capitalize on stronger industry fundamentals in 2021,” Kramer added resoundingly.