HMC Investor Presentation Hyundai Motor Company April 2020 Recent Updates
Global Wholesale P. 1~2
Geographical Sales Mix P. 3
Market Updates
United States P. 4 China P. 5 Korea P. 6 W. Europe P. 7 India P. 8 Russia / Brazil P. 9 March Global Wholesale (Preliminary)
Mar 2019 Mar 2020 (Thousand units)
Europe2 China Korea N. America 3 △41.0% △50.5% +3.0% △5.9% HMC Global Sales △22.4% △17.3% 55 33 61 30 70 72 68 64
393 305 332 275
Wholesale Wholesale (ex.China)
△22.3%
India Russia S. America Others1
△40.7% +11.1% △38.7% △14.6% 390 301
44 18 20 23 49 42 Wholesale 26 15 (ex.CKD)
1 MEA, Asia-Pacific, Other regions, Commercial vehicles(ex. Korea CV) 2 Western Europe excluding CV 3 Wholesale including CV and overseas CKD (CKD: ’19 Mar: 2,999 units, ’20 Mar: 4,037 units) 1 1Q Global Wholesale (Preliminary)
Q1 2019 Q1 2020 (Thousand units)
Europe2 China Korea N. America 3 △17.7% △51.1% △14.1% +16.7% HMC Global Sales △12.5% △6.6% 135 111 131 63 184 158 198 232
1030 901 897 838
Wholesale Wholesale (ex.China) △12.9%
India Russia S. America Others1
△18.7% +4.8% △17.5% △9.5%
1021 890 133 108 49 51 62 51 129 117 Wholesale (ex.CKD)
1 MEA, Asia-Pacific, Other regions, Commercial vehicles(ex. Korea CV) 2 Western Europe excluding CV 3 Wholesale including CV and overseas CKD (CKD: ‘19 Q1: 8,301 units, ‘20 Q1: 11,690 units) 2 Geographical Sales Mix
Sales by Region Feature by Region
Korea N.America W.Europe China E.Europe AMEA India S. America Others Developed Market Emerging Market
SUV SUV
13.7% 15.3% 15.7% 16.7% Developed SUV 54.3% 51.9% 32.7% 38.5% Market 18.0% Market Hyundai Market Hyundai 18.5% 17.9% 19.0% 48.1% of Opportunity to win shares Outperform market growth (Ex. GV80 in US market) Total Sales 10.1% Market Cyclical Recovery 11.8% 11.9% Cyclical slow down 12.4% Demand Secular Growth
24.5% 18.1% 17.5% 14.9% Competition Intense Moderate
5.3% 5.2% 5.4% 4.4% Green Mid to Long term 6.9% 6.6% 7.2% Emerging Imminent Pressure 7.5% Regulation Pressure Market
11.7% 12.0% 11.5% 10.4% 37.2% of Disruptive High Low 8.1% 7.9% Total Sales 6.7% 7.8% Forces (Ex. ADAS) (Ex. Car Sharing, Hailing)
4.6% 4.7% 5.1% 5.2%
2016 2017 2018 2019 (Company Data, Wholesale)
3 US Market
US Market sales Mid-to-Long Outlook
Industry Hyundai (Thousand units) (Thousand units) Year of Turn-Around M/S (%) 17,048 -1.3% 17,274 710 678 +4.7% 4.4% 27.4% 4.2% 30.2% 4.0% 3.9% 5.4% 5.3% 48.1% 775 18.3% 54.8% 17.0% 686 678 710
47.3% 49.0% 45.2% 51.9% SUV (%) 52% 2018 2019 2018 2019 45% 29% 36% SUV Pick-Up MPV Sedan (Company Data, Retail Sales) 2016 2017 2018 2019 2020(F) 2023(F) Full Line-up of SUV
2018 2019 2020 ~ Kona Santa Fe Tucson F/L · Elantra · Santa-Fe F/L Hyundai · Palisade· Sonata · Venue · Tucson · Santa Cruz M/S M/S M/S 8.9% 9.3% 4.9% Genesis · G90 F/L · GV80 · G80 · GV70 Entry CUV Compact SUV Sub-Compact SUV 2019 Regional HQ Optimizing Nexo Palisade Venue (Dec.) System Focusing on volume & profit market & M/S* Enhanced dealer Reducing fleet sales 3.6% customer Competitiveness Improve residual value Green Car Mid-Size SUV Entry CUV 4 · M/S* : 2019. 4Q China Market
Industry Demand Sedan 2020 Market Strategy (Thousand units) RV 24,140 23,834 23,017 20,819 20,804 Maximizing Optimizing 11,841 11,540 11,237 new car sales Margin & production 9,999 11,475 Volume Reducing Recovery Improving sales 11,993 12,600 10,804 9,345 11,780 dealer inventories Competitiveness of EVs (45%) (50%) (52%) (51%) (52%) 2015 2016 2017 2018 2019 New Model Line-up
Hyundai Sales 4Q 2019 2020 (Thousand units, Wholesale) Sedan M/S (%) 5.1% 4.8% RV Sedan Sonata Elantra Mistra
1,142 Verna F/L 1,063 3.3% 3.4% 3.1%
785 790 757 SUV 767 650 New China MPV ix35 F/L ix25 553 506 428
More to come 385 296 232 284 222 EV (28%) (34%) (30%) (36%) (34%) 2015 2016 2017 2018 2019 Ensino EV La Festa EV
(Launch schedule is subject to change) 5 Korea Market
Industry & HMC Volume Sales Rebound in domestic M/S
Industry Hyundai 41.6% (Thousand units, Retail Sales) -1.8% 1,818 1,785 +2.9% 721 742 39.7% 13.9% 14.3% 23.2% 38.9% 15.1% 13.2% 24.6% 38.3%
32.1% 32.7% 35.5% 27.7% 36.0%
38.2% 36.9% 47.7% 44.7%
2018 2019 2018 2019
Sedan RV Imported Others Sedan RV Others 2015 2016 2017 2018 20192019 Q3 Expanding SUV segment sales Growth Factors
742 2018 2019 721 2020~ 659 689 10% 14% 16% 18% small Sonata 25% 27% Sedan New Elantra mid-large New Genesis 23% 31% G90 Face Lift 8% G80 9% Genesis Grandeur F/L 10% 8% 28% 32% SUV 22% 19% Others Santa Fe New Tucson SUV Venue 26% 26% 25% 22% Genesis SUV Genesis SUV Palisade GV80 GV70 2016 2017 2018 2019 6 W. Europe Market
Sales and M/S Trend Green-car Sales Trend SUV Sedan Others EV FCEV HEV PHEV 8.2% 3.0% 3.0% 3.0% 6.4% 2.9% M/S BEV 5.4% M/S 4.5% 4.2% 528 539 536 59 495 1.3% 3.3% 5 Sales* Green-car M/S 1.0% 37 24 6 23 49% 2 17 SUV 45% 31 Portion 41% Sales* 5 15 39% 13 4 6 1 2016 2017 2018 2019 2016 2017 2018 2019
- New powertrain & platform with better fuel efficiency - Maximize EV & FCEV sales and Expand green-car line-up
2020 2018 2019 2020 i10 i20 i30 F/L Kona F/L Tucson New · Kona EV · Kona HEV Model · NEXO · IONIQ F/L · Greener SUV Line-up - 48V mild HEV, HEV, PHEV HEV PHEV EV FCEV · Expand Kona EV supply Line-up EU market volume models (sales portion : 80% ) 1 1 2 1
* Europe Market : EU + ETFA 7 * Thousand units, Retail Sales India Market
India Sales Winning M/S with Refreshed Line-up New Launch Industry Hyundai Full Model Change
(Thousand units) 2019 Venue Kona EV i10 17.3% 3,371 -12.4% 16.3% M/S 9.4% 2,954 -7.2% 378 21.3% 12.2% 412 24.2% India’s First India’s First Compact Sedan 69.2% 66.4% Fully Connected Car Premium EV 63.6% 76.7% 22.3% 33.6% 2020 Creta i20 2018 2019 2018 2019 Sedan SUV Others SUV Sedan (Source : SIAM) (Company Data, Wholesale)
SUV-Low Compact Sedan Strong M/S in SUV segment Crucial Market in the Long-run SUV Segment in India · Fastest growing among major EM (Thousand units) Population · Second largest after China 710 735 - 1.35 Billion(2018, World Bank) 632 500 · Fastest GDP growth among major EM Economy - 5.9%(2018), 7.5%(2021, World Bank) 171 123 94 107 23.3% 18.8% 17.0% 17.3% 2016 2017 2018 2019 Motorization · Lowest among major EM (2017) Hyundai Rest - 35 vehicles per 1,000 capita
8 Russia/Brazil Market
Russia Brazil Industry Hyundai Industry Hyundai
(2.3%) (Thousand units) (Thousand units) +7.7% 2,664 1,801 +0.5% 2,474 1,760 +4.4% 180 181 16.1% 198 8.0% 8.0% 16.1% 190 22.3% 29.5% 41.8% 20.3% 26.6% 42.8% 55.6% 59.6% 63.6% 61.6% 50.2% 49.2% 73.4% 70.5% 44.4% 40.4%
2018 2019 2018 2019 2018 2019 2018 2019
Sedan SUV Others (Source : Company Data) Sedan SUV Pick up (Source : Company Data)
Market Demand Trend Sales & M/S Trend Market Demand Trend Sales & M/S Trend 8.6% 8.2% 7.7% 10.5% 3,333 7.1% 7.4% 2,491 10.1% 10.2% 10.0% 10.0% 5.8% 7.2% 2,700 2,480 2,474 198 1,801 1,760 194 2,176 1,602 1,596 180 180 181 1,988 190 1,426 161 159 145 179 176 170
2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019
Rank Brand Model Sales M/S YoY Rank Brand Model Sales M/S YoY
1 Hyundai Creta 71.5 29.1% 5.3% 1 GM Onix 264 19.9% 25.7%
2 Renault Duster 39.0 15.9% (5.7%) 2 Ford Ka 156 11.7% 9.3%
3 GM Liva 31.9 13.0% (3.1%) 3 Hyundai HB20 139 10.5% 0.9% Creta HB20 (SUV-B) * As of 2019 (PV-B) * As of 2019 * New Creta launch in 2020 * New HB20 launched in Oct.2019 9 Retaining Core Strength
Next Design Philosophy P. 11
New Model Big Cycle P. 12 Cost Innovation Smartstream P. 13 3rd Generation Platform P. 14 New Design Philosophy
DESIGN MISSION DESIGN MISSION Be the Hyundai – Creating emotional values in design Being Desirable – Audacious, Progressive, Distinctly Korean
DESIGN IDENTITY DESIGN IDENTITY SENSUOUS + SPORTINESS ATHLETIC + ELEGANCE Emotional values Innovative solutions Sporty & Energetic Prestige & Exclusive In design In design
DESIGN SIGNATURES DESIGN SIGNATURES
QUAD LAMPS PARABOLIC LINES Hyundai Signature Look Human-Centered Space Human-Centered Space EVOLVING CREST GRILLE Hidden DLR signature Smart Living Space Emotional haptic & Sophisticated details The light architecture & Intuitive & connected interface Sustainable & Progressive Parametric Jewel
DESIGN STRATEGY Hyundai Look – Creating own spirit G-MATRIX BEAUTY OF SPACE Design based on the evolving future customer needs and desires DESIGN STRATEGY
Family Look Hyundai Look
11 New Model Big Cycle
Entering New Model Big Cycle Refreshing volume models Expanding SUV line-up 「Started from New Sonata launched in Q2 2019」 「Entered new SUV segment by launching Palisade and Venue」
Elantra Elantra
Sonata Sonata
Grandeur New Genesis G80 Grandeur F/L Genesis G70 New Genesis G90
New Creta Ix25 (Creta) Kona Venue New CUV
Tucson New Tucson
Santa Fe New SUV Genesis SUV GV70 Genesis SUV Palisade GV80 2014 2015 2016 2017 2018 2019 2020 2021~ 12 Smartstream
Fuel efficiency Roadmap Fuel efficiency improvement
(2015 - 2020) Improve average fuel efficiency by 25% · Sonata G 2.0 CVVL (2019.4) - 11% from 2019 to 2020 and 14% from 2015 to 2018 LF DN8 11.6~12.3 +10.8% 13.3 km/ℓ Improve fuel efficiency of powertrains & vehicles · Sonata HEV G 2.0 (2019.7) 18% Smartstream 3rd gen. platform Weight reduction LF +11.7% DN8 +5%pt 17.4~18.0 20.1km/ℓ Strengthen fuel efficiency technologies 23% 48V mild HEV ISG · DCT Solar roof charging · Sonata G 1.6-GDI with CVVD (2019.9) +2%pt Expand eco-friendly car sales volumes 25% · Eco-friendly car sales : 2015 45 thousand → 2019 200+α thousand Line-up strategy
Next-generation powertrains Complete line-up to meet tightened regulations 2018 2019 2020 ~ Smartstream · Redesign structure to optimize fuel efficiency Produce Apply with Complete · Engine : Refresh 5 Gasolines & 3 Diesels (inc.HEV) 1st gas.& diesel 3rd gen. platform engine line-up · T/M : Improve current transmissions T/M : Newly develop IVT, AMT, and etc. Elantra F/L Sonata Sonata Grandeur GV80 Gasoline 8 4 9 11 3 · World’s 1st CVVD technology for G1.6 T-GDI in 2H 1.6 + IVT 2.0 CVVL 1.6 T-GDI 2.5 GDI 2.5 /3.5 T-GDI
CVVD (Continuously Variable Valve Duration) Tucson F/L GV80 G80 · The valve control technology regulates the duration of Diesel 8 1 3 valve opening and closing according to driving conditions G 1.6 1.6 · Optimizes both engine performance and fuel efficiency GV 80 3.0 2.2
· IVT : Intelligent Variable Transmission, AMT : Automated Manual Transmission 13 3rd generation platform
3rd generation integrated platform Enhanced cost structure
Target of Standardized parts (FF Mid-Large platform) Apr. 2019 Applied to the DN8 8th generation Sonata +10+α %pt % of Standardized parts in total material cost Strategic considerations 3rd gen. platform 「LF Sonata」 「DN8 Sonata」
· Design and performance ① Design –friendly R&D manpower & · More SUVs · Genesis · EVs Material cost reduction · New PT & weight reduction ② Energy - efficient Investments reduction · Regulations (Safety · Emission) ③ Fun to drive Increase parts commonization Reduce investments and with more standardized parts manpower of design and test + and integrated procurement for standardized parts ④ Safety - first · Cost reduction & efficiency
Overall height 1 Hood △ 30~50mm △30mm Type of platform Dynamic design ratio Arranged lower & more interior space Overhang 2019 2020 ~ △20mm Wheelbase +35mm
2 · 3 · Improve power & fuel efficiency with FF Mid-Large Small-Mid Micro-Small Enhanced fuel efficiency Smartstream & lower underbody · Active driving performance, immediate & driving performance response, and more stability FR Genesis-Large Genesis-Mid LCV 4 EV-dedicated models Weight reduction · Weight reduction : 55kg+α EV · Average strength : +10% for Hyundai & Genesis & reinforced structure 14 A Head of Paradigm Change
Strategy 2025 P. 16
Preparing for the Future P. 19 Green Car Clean Mobility Trend P. 20 Our Green Car Focus P. 21
ADAS P. 22
Mobility As a Service P. 23 Strategy 2025
Smart Mobility Solution Provider
16 Strategy 2025 – Strategic Direction (Smart Mobility Device)
Smart Mobility Device
Among global top 3 brands
17 Strategy 2025 – Growth Strategy (Smart Mobility Device)
Product portfolio
18 Preparing for the Future – 5 Core Investment Area
Automotive Strategy & Technology Investment Division Production R&D Internal Open Quality Control Resources S&T Division HQ Innovation
Non-Automotive Global Open Innovation Hubs Collaboration Steel · Logistics Silicon Seoul Beijing Berlin Tel Aviv Finance Valley IT
5 Core Investment Area
MaaS Smart City Energy Robot A.I. Smart Mobility Robo-taxi / Fuel Cell / ESS Wearable Robot Autonomous Solution Business Smart City Vehicle
“Game Changer” “Smart Mobility Service Provider”
19 Clean Mobility Trend
Fuel Economy Regulation Weight/Driving Range Comparison
Weight EV FCEV * Size represent the relative annual energy consumption
Avg. Regulation (CAFE) CO2 Regulation Fuel Economy Regulation Bus & Truck
Small Cars/Urban mobility
Medium to Large Cars, Fleets and Taxis
Global Market Share Trend in Green Car * Source : 2017 Hydrogen Council Driving Range
85% 74% EV FCEV Cost Parity of EV & FCEV 71% HEV PHEV 65% Battery System Fuel cell System Cost 55% 55%
355km 30% 32% 23% 17% 15% 15% 13% 9% 12% 12% (Equivalent Range) 6% 11% 0.0% 0.0% 0.1% 0.1% 0.1% 0.2% 2014 2015 2016 2017 2018 2019 * Source : Bloomberg New Energy Finance forecast(2017) Driving Range * Source : IHS Markit December.2019 20 Our Green Car Focus
Battery Electric Vehicle Fuel Cell Electric Vehicle
New Models & EV platform ▶ Global Top 3 Global leader of hydrogen community
EV Dedicated Platform Business Expansion FCEV Production Capacity (Thousand units) 7.6 Expand line up HMG Cumulative Investment (in KRW tri.) Product Enhancement E Seg 500 A Seg B&C Seg MPV 2.9 New business model 1.5 < E-GMP > Charging Battery Cost Infrastructure Related Biz 0.3 Efficiency 130
11 40
HMC Global Market Share in EV Market 4.3% (5th) 2020 2022 2025 2030 2.8% * Ex-China 2.2% (11th) 3rd (16th) 1.1% 1,413 FCEV 3.0 (2030~) HMC (17th) 0.0% 0.0% M/S 1,189 (-) (-) Line up & value chain (Rank) expansion FCEV 2.0 (2023~) 718 Price competitiveness & Global 443 FCEV 1.0 System downsizing Demand 317 177 Establish business foundation 2014 2015 2016 2017 2018 2019
* Source : IHS Markit December.2019 21 ADAS
2015 ~ 2018 2018 ~ 2019 2020 ~ 2022
Adopt Safety ADAS on all vehicles Offer higher ADAS technology to the market Real Road Driving of NEXO (Lev. 4)
R&D Focus
Sensors Sensor Balancing Control Platform Cockpit Module Map V2X Infra Car Cloud
22 Mobility as a Service (MaaS)
Global Investment and Collaboration Mid-to-Long term MaaS Business Model
Building Platform (Phase I) Platform Business (Phase II)
Building integrated service Developing platform platform business model Connecting global mobility Commercializing belt from developed to Robo-taxi emerging markets
Mid-term Focus Long-term Target Grab · ASEAN, Car Sharing & Hailing · Rental, Subscription · Fleet Management CaaS · Fleet operation + Service (FMS) Ola · India, Car Sharing & Hailing Maintenance
Revv · India, Car Sharing · Car Sharing + Car · Smart Mobility MaaS Hailing Solution Investment Car Next Door · Australia, P2P Car Sharing
Migo · U.S.A., Mobility Service Platform · Robo-Taxi TaaS · Autonomous Shuttle Yandex · Russia, Robo-Taxi(LV4 Sonata, 2020 w/ Mobis)
CaaS - Car as a Service
Collab. Careem · MEA, fleet and service (5k units by 2019) MaaS – Mobility as a Service TaaS – Transportation as a Service
23 2025 Financial Strategy
Business Strategy P. 25
2019 results & 2020 Target P. 26
Mid to Long-term Target P. 28
Cost Innovation Committee P. 29
Shareholder Return Policy P. 30
Long-term Investment Plan P. 31
Investment Resources P. 32
Summary of Business Target P. 33 2025 Business Strategy
Long-term Strategy Shareholder Future ROE Shareholder Financial 2025 Return Investment Target Value Target
Declare long-term target · Balanced shareholder return Achieve ROE target based on strategy and communicate policy considering increasing sustainable profit recovery the growth strategy roadmap strategic investments
25 Summary of 2019
Investment Product BoD 30% Culture Strategy
YoY Increase 2018 2019 2020
Strong foothold for Accelerated turnaround Enhanced corporate-wide future growth competitiveness with new product launches with strategic investments to be the Game Changer + cost innovation including APTIV JV
26 2020 Business Target
Reasonable volume target considering Sales business environment and profitability Market HMC Demand Target Outperform Continuous double-digit growth with +0.4% Profit the market profit-oriented management
Operating Profit Forecast
- 5% R&D ＋ Marketing - ＋ F/X
＋ Quality Cost New Model 2.5% Wage Expenses Product Mix Others Division Incentive Reduction New Model Cost Innovation (YoY) KRW Product Mix 2.4T Incentive Reduction F/X
2018 2019 (E) 2020 (E)
· 2020 Industry demand : Company-data 27 Mid to Long-term Business Target
+1%pt Automotive Automotive + Margin Division 7% OP Division 8 % OP Margin
Improvement
Improved cost competitiveness of · Accelerated cost innovation Building strong growth foundation by ICE · green cars securing high auto profitability · Genesis brand
Limitation Expanding xEV Foundation for Regional Profit Cost Innovation based on mobility service Center System · Accelerated electrification Committee competitive cost business · Early stage investment in service business
· OP and OPM : automotive division + consolidation adjustment
28 Cost Innovation Committee
Automotive OPM (%) 7.0% Cost Improvement
Commonization Electrification
Regional Cost Sales-related Optimization Cost KRW34.5 T For 5 years 2.1% 11.9 10.1 Productivity Quality Cost 5.9 4.3 Operational 2.3 Genesis Efficiency 2018 2019 2020 2021 2022
Strategic competitiveness Achieve target profitability Effective bottom-up with company-wide by continuous Cost improvement activities cost innovation cost improvement
· OP improvement by revenue growth, improvement of COGS and SG&A
29 Shareholder Return Policy
2016-2018
Dividend 1.06T 「Paid 」 Total Shareholder Return* KRW 4.2T
「2018 year-end 0.8T+ 2019 interim0.26T」
Average Shareholder % Share Return Payout Ratio 39 「Buyback Repurchase 0.3T (per Annum) 」 「 94% of non-finance FCF」
Apr. 2018 Nov. 2018 -0.2T in 2019 out of 0.3T repurchase announcement in 2018
Buyback and cancellation (1%) / -0.1T repurchase for employee stock ownership Buyback(1%) treasury share cancellation (2%)
* Dividend + Buyback + Treasury Share Cancellation 30 Long-term Investment Plan
Core Business Investment for Growth 2020-2025 KRW 61.1T of Investment KRW 41.1T KRW 20.0T
R&D (KRW T) CapEx (KRW T) Strategic Inv. (KRW T) Annual average of KRW 10T · Mobility 7.8 · AI, Robotics 11.1 · New model New Biz. 10.0 10.1 10.4 10.5 26.5 · Energy, UAM 9.1 Product · Genesis 2.0 2.6 7.8 1.8 1.9 2.0 6.1 1.7 · Fuel efficiency 2.5 Autonomous · A.D. 0.9 0.1 Driving 4.5 4.5 · Connectivity 4.7 4.5 4.7 4.3 4.0 3.3 1 · New plants 9.7 · Dedicated EV 4.0 4.0 4 3.2 3.5 3.7 3.7 CapEx Electrification · EV production 2.7 2.9 · Customer channels . · Infrastructure 2018 2019 2020 2021 2022 2023 2024 2025 6
· CapEx : with changed classification in 2019 (appendix) · Product includes capex in product development · Electrification : including all xEV 31 Investment Resources
Resource (w/ shareholder return) Investment Plan Cash Flow (KRW T)
+2.4 +2.0 +2.4 Around +1.4 2019 2020 2021 2022 2023 2024 2025 △0.2
△1.5
2019 year-end 2020 2021 2022 2023 2024 2025 2019 2020 2021 2022 2023 2024 2025 net cash*
Positive cash-flow generation Stable funding for future investment post 2022 via accelerated profit recovery through 2022 Auto Liquidity (End 2019(E)) : KRW 10-12T
*Net cash : excluding finance division
32 Summary of Business Target
2020 -2025 5% 8% KRW 61.1T
Profit-centered Business Shareholder Value Management Transformation Enhancement
to build foundation for through active investment based on earnings recovery + sustainable growth and strong core biz strength improved capital management
33 Governance
BoD & Key Improvements P. 35 ESG Enhancement Roadmap P. 36
Shareholder Return P. 37
Share Buyback & Cancellation P. 38 BoD & Key Improvements
Committees of BoD Achievements in 2018 Board of Directors Increasing shareholder involvement to bring 11 Members better governance and sustainable growth (5 Internal / 6 Independent)
Independent Directors RecommendationCommittee Shareholder Recommended Director · Minority shareholders actively involved in · Search the talents who can contributes independent directors appointing directors who can represent them · Recommend Independent director nominees for AGM Board of Diversification of BoD members · Newly joined BoD members added diversity Directors in nationalities, expertise and perspectives Corporate Governance and Communication Committee Expansion of BoD · Make decisions on shareholder rights related agendas · Number of BoD members increase to 11 · Review major investments and transaction plans from 9 with 6 outside directors
Audit Committee Shareholder Return · Share buyback and cancellation to resolve · Approve financial statements, internal auditing process the undervaluation of share price · Designate external auditors and ensure to abide by laws Profit Level Commitment CGCC1 · CGCC1) reviewed and approved CEO’s operating income and ROE target New Committee Compensation Committee * (Expected in 2H19) Long-term Investment Strategy · Approve directors’ compensation policies and scheme · 5 year R&D plan is necessary to be ready · Determine directors’ compensation cap for the following year for the paradigm change in auto industry
1Corporate Governance and Communication Committee 35 ESG Enhancement Roadmap
ESG is considered to be a key element for sustainable growth Growing Market participants(equity, credit, government, etc.) take ESG as a necessary Importance criteria when making investment decisions and policies of ESG Customers make purchasing decision and assign brand value based on ESG
Phase I Phase II Phase III Phase IV
Awareness Initiation Advancement Continuing Effort (~2018) (~2019) (~2020) (2021~)
Report the market’s Involve actively with Establish corporate Improve ESG practice interest in ESG to ESG rating agencies level management to global peer level top management (Sustainalytics, DJSI, MSCI) system for ESG
Offer ESG seminars Include ESG ratings Review strategic Expand our exemplary to our Board members as one of CEO’s KPI approach activities to the group
Open dialogue with Share ESG matters with Coordinate with all Maintain high scores rating & consulting firms related departments related teams to and rankings build stronger ESG Rank 1st place in Climate Change Actions by CDP
36 Shareholder Return
Shareholder Return Payout Ratios
Total Dividend (KRW tri.) to FCF (%) Buyback & Cancellation (KRW tri.) to Net Income (%) 447% Total Return Amount (KRW tri.) 59% 51% 51% 71% 1.39 1.52 1.41 36% 1.08 1.08 0.45 0.96 0.31 0.36* 25% 27% 35% 0.14 17% 0.53 20% 1.08 1.08 1.08 1.07 1.05 0.82 17% 0.53 11% 6% 2013 2014 2015 2016 2017 2018 2019 2013 2014 2015 2016 2017 2018 2019 · Excluding Cancellation of treasury in Jul 2018 (2% of o/s shares)
2017 2018 2019
Announced Dividend Policy Buyback and Cancellation Shares Buyback · Disburse 30~50% of free cash flow · 1% of o/s shares cancellation (Apr-Jul) · 1% of o/s shares buyback · Target peer level of payout ratio · 1% of o/s shares buyback (Dec 2019-Mar 2020) (Nov 2018-Feb 2019) Total Shareholder Return Total Shareholder Return Total Shareholder Return · 1.1 trillion KRW (4,000won/share) · 1.1 trillion KRW (4,000won/share) · 1.1 trillion KRW (4,000won/share) · Payout ratios : 27% of NI / 50% of · 0.5 trillion KRW of share buyback · 0.4 trillion KRW of share buyback FCF
37 Share Buyback and Cancellation
Apr 27 Buyback & Cancellation : 1% of total issued shares 2018 Cancellation of treasury shares : 2%
Nov 30 2018 Buyback : 1% of total issued shares
Dec 4 2019 Buyback : 1% of total issued shares
Buyback & Cancellation Total Issued Shares Treasury Shares (Unit : Million Shares) (Unit : Million Shares) Outstanding Shares Treasury shares Cancellation Dec 2017 Sep 2019 KRW 559 Billion Total issued : 285.5 Total issued : 276.9 Buyback & Buyback* Cancellation KRW 436 Billion 16.8 13.9 (5.9%) (5.0%) KRW 380 Billion 1.1* 5.7
268.7 263.0 2.9 2.8
* Shares buyback in Dec 2019
38 Appendix
2020 Business Plan P. 40
Wholesales by Region P. 41
Statement of Income P. 42
Recent Earnings by Division P. 43
Finance Division P. 44 2020 Business Plan (Wholesale)
(Thousand units) 2019 2020(P) YoY
Total 4,426 4,576 +3.4%
Domestic 742 732 △1.3% (including CV)
Overseas 3,684 3,844 +4.4%
North America 881 906 +2.8%
Europe 580 558 △3.9%
India 510 525 +2.9%
Russia 203 199 △2.2%
South America 303 331 +9.0%
China 650 730 +12.3%
Others 555 596 +7.2%
* ’20 Business Plan includes 52,700 units of CKD sales
40 Wholesales by Region
Q4 Q4 Q4 2019 2018 YTD (Thousand units) Vs 2018 YTD 2019 YTD Vs 2018 2019 Q4 2018 2019 YTD
Korea 195 194 -0.5% 721 742 +2.9%
North America 232 239 +3.0% 872 881 +1.0%
Europe 146 147 +0.7% 589 580 -1.5%
India 138 133 -3.6% 550 510 -7.2%
Russia 52 54 +3.8% 196 203 +3.6%
South America 82 75 -8.5% 320 303 -5.1%
Others1 153 146 -4.6% 551 555 +0.8%
Sub-total 994 982 -1.2% 3,787 3,757 -0.8% (ex-China)
China 229 207 -9.6% 790 650 -17.7%
Total2 1,226 1,196 -2.4% 4,589 4,426 -3.6%
1 MEA, Asia-Pacific, Other regions, Commercial vehicles(ex. Korea CV) 2 Wholesale including CV 41 Statement of Income
(KRW Bil.) 2017 2018 2019 Q4 2018 Q4 2019 YoY
Revenue 96,376 96,813 105,765 25,231 27,843 +10.4%
Gross Profit 17,578 15,142 17,676 3,999 4711 +17.8%
Margin (%) 18.2 15.6 16.7 15.8 16.9
SG&A 13,003 12,720 14,037 3,554 3514 △1.1%
Portion (%) 13.5 13.1 13.3 14.1 12.6
Operating Income 4,575 2,422 3,639 501 1,198 +139.1%
Margin (%) 4.7 2.5 3.4 2.0 3.1
Income before tax 4,439 2,530 4,197 113 1,165 +931.0%
Margin (%) 4.6 2.6 4.0 0.4 4.2
Net Income 4,546 1,645 3,219 △203 805 △496%
Margin (%) 4.7 1.7 3.0 NM 2.9
D&A 3,529 3,762 4,012 954 1,041
EBITDA 8,104 6,184 7,650 1,455 2,239
42 Recent Earnings by Division
(KRW Bil.) 2017 2018 2019 Q4 2018 Q4 2019 YoY
Revenue 96,376 96,813 105,765 25,231 27,843 10.4%
Automotive 74,490 75,265 82,487 20,399 22,232 9.0%
Portion (%) 77.3 77.7 78.0 80.9 79.9
Finance 15,415 14,958 16,027 2,923 3,657 25.1%
Portion (%) 16.0 15.5 15.2 11.6 13.1
Others 6,471 6,589 7,252 1,908 1,954 2.4%
Portion (%) 6.7 6.8 6.9 7.6 7.0
Operating Income 4,575 2,422 3,639 501 1,198 139.1%
Automotive 2,585 1,062 2,618 463 1,045 125.7% Margin(%) 3.5 1.4 3.2 2.3 4.7
Finance 718 747 888 110 143 30.0%
Margin (%) 4.7 5.0 5.5 3.8 3.9
Others 339 105 179 △109 38 △134.9%
Margin (%) 5.2 1.6 2.5 △5.7% 1.9
Adjustment 932 508 0 36.9 17
43 Finance Division_HCA
Penetration Ratio Earnings Trend
(KRW Bil.)
3.1% Revenue Net Profit % 56% 54% 56% 50% 46% 2.2% 1.7%
1.2% 1.0% 10,851 9,738
8,633 9,124 7,013
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Asset Origination Asset Size (KRW Trn.) Asset Debt Prime Near Prime Sub Prime 43.2 39.1 41.4 37.3 37.4
40.1 34.4 35.0 36.9 75% 79% 81% 78% 80% 33.0
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 44 Cautionary Statement with Respect to Forward-Looking Statements
In the presentation 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 our Independent Auditor. 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.