HMC Investor Presentation Hyundai Motor Company August 2020 Retaining Core Strength
Key Highlights P. 1 Mix Improvement & ASP Growth
New Model Big Cycle P. 2 Global Sales and Market Share P. 3 Geographic Sales Mix P. 4 Product Mix & ASP trend P. 5
Future Growth Strategy BEV Strategy P. 6 FCEV Strategy P. 8 Introducing “Motional” P. 11 Key Highlights
Earnings Improvement led by Strong Model Cycle
+ 8 %
Target OPM of Automotive Division in 2025
* Hyundai, Genesis, Kia combined ex. Kia - 26 models / 920K units
1 New Model Big Cycle
2019 2020 2021~
2 Global Sales and Market Share
Global sales and market share trend
(Thousand units) 5.7% 5.7% 5.7% 5.6% 5.6% 5.5% Turning around 5.3% 5.3% 5.1% 4.9% 4.9% Hyundai M/S
4,835 4,844 4,920 4,621 4,537 4,495 4,476 4,099 4,392 3,701 1,630
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 H1 2020 · Source : IHS, Company data
Market share by region
2018 2019 H1 2020
41.6% 41.5% 4.2% 4.3% 17.3% 16.8% 3.9% 3.0% 3.0% 2.8% 3.4% 3.1% 39.7% 16.3% 2.4%
Korea India United States Europe China
1st model launch of 3rd gen. platform by regions
Q1 19 Sonata Q4 19 Sonata H2 20 Tucson H2 20 Sonata, Elantra
3 Geographical Sales Mix
Sales by Region Competitive mix in Developed Market
2018 2019 H1 2020 Korea N.America W.Europe China E.Europe, Russia AMEA India S. America Others High - ASP model* (%) SUV (%) EV (%)
62.8% 13.7% 15.3% 41.0% 9.9% 15.7% 16.7% 51.9% 24.2% 28.6% 45.2% 24.5% 5.7% 2.5% 18.0% 18.5% 17.9% 19.0% Korea United States Europe 22.3% 10.1% * Genesis + Grandeur + Palisade 11.8% 11.9% 12.4% Strong M/S in Emerging Market
11.1% India 17.3% 24.5% 17.5% 17.3% 17.0% 16.8% 18.1% 14.9% 16.2% 16.4% 16.3% 15.4% 15.4% 15.4% 14.7% 11.4% 5.3% 5.2% 5.4% 4.4% 6.9% 6.6% 7.2% 5.7% 10.1% 10.2% 9.9% 9.9% 10.2% 10.1% 7.5% Russia 6.4% 7.2% 12.0% 6.5% 11.7% 11.5% 6.2% 5.9% 10.4% 8.6% 8.2% 7.7% 7.9% 8.6% 4.6% 7.1% 7.4% 8.1% 7.9% 5.8% 6.7% 7.8% 5.2% Brazil 5.3% 3.1% 4.6% 4.7% 5.1% 5.2% 5.0% 2.6% 2.2% 2016 2017 2018 2019 H1 2020 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 H1 2020
(Company Data, Wholesale) 4 · Production : HMMR (2010), HMB (2012) Product Mix & ASP Trend
Others Korean ASP (Unit : KRW mn) 6.0% 5.5% 7.1% 8.4% A Overseas ASP (Unit : $ ‘000)
9.2% 7.9% 6.6% 2.7% B 4.8% C 8.5% 7.7% 9.0% D 15.5 Genesis 15.2 25.7% SUV 22.9% 27.6% 33.4 28.7%
14.4 12.2% 11.0% 8.0% 1.3% 13.9 31.3 9.7% 2.0% 5.4% 13.8 1.6%
58.4% 29.2 43.4% 40.5% 40.8% 「 Genesis 35.8% + D-Seg + SUV」 28.0 27.7
2018 2019 Q1 2020 Q2 2020 20172017 20182018 20192019 Q12020.1Q 2020 Q22020.2Q 2020
· GV80 is included in Genesis 5 BEV Strategy
Strengthening Technological Edge HMC BEV Line-up 「 & 」 [ EV-dedicated Platform ] 2016 2018 2019 2020 ~ 2022 Product Enhancement
A
E-GMP A-CUV Cost Efficiency
[ Ultra Fast Charging ] B B-SUV 800V System Kona EV voltage IONIQ 5 IONIQ 6
C Ioniq EV La Festa EV Midsize CUV Similar to fueling CUV C-Sedan experience
D [ Business Expansion ] D-Sedan D-SUV
E Seg A Seg B&C Seg “launching various types of MPV E new EVs” New business model E-Sedan
Charging Battery Infrastructure Related Biz LCV Porter EV MPV EV
1) E-GMP : Electric Global Modular Platform · Launch schedule is subject to change 6 Strong Market Position in EV
Enhancing Market Position in EV Market
3th HMC M/S Ex-China HEV EV PHEV FCEV (Rank) 5.2% 4.5% (5th) (5th) 2.8% 110K 2.2% (11th) 1.2% (16th) 0.0% 0.0% (17th) (-) (-) CAGR 1,350 32% Global 1,189 Demand (Thousand) 560K
722 8K 589 5K
440 110K 70K 313
177
2014 2015 2016 2017 2018 2019 H1 2020 2019 2020(E) 2025(E)
* Source : IHS Markit June 2020 7 FCEV Strategy
FCEV Vision 2030
HMG Cumulative Investment (in KRW tri.) 7.6 FCEV Production Capacity (Thousand units)
To deliver 1,600 FCEV 500 trucks by 2025 (JV)
2.9
Co-develop F.C Member and Co-Chair 1.5 Powertrain (MOU)
0.3 130 FCEV Vision 2030
40 11
2020 2022 2025 2030 Cross-license agreement Research partnership FCEV 1.0 FCEV 2.0 (2023~) FCEV 3.0 (2030~)
Establishing Competitive pricing Expanding line up & business foundation & system downsizing value chain
8 FCEV Strategy (continued)
Business Structure in Switzerland to bring 1,600 HD FCEV truck in operation by 2025
First 50 units will be delivered this year from September 2020 (First global commercialization)
Upfit H2 Mobility Switzerland Association
Truck sales Pay-Per-Use Model (Maas) Customer
Equity Share
Hydrogen Supply
Green Hydrogen Production Gas Station / HRS
9 FCEV Strategy (continued)
European market entry strategy
Spain Business Expansion based on Country specific differences Austria Italy
✓ Governmental goals France
✓ Direct or indirect subsidies Netherlands ✓ Energy prices and surplus energy
✓ Hydrogen price
Germany ✓ Private or public initiatives
Norway ✓ Status of infrastructure
Switzerland next target countries are under review ✓ City bans for diesel truck/bus Strategic foothold Stage 1 Stage 2
· Potential market size of FCEV trucks 10 Introducing “Motional”
Introducing “Motional”, an autonomous driving joint venture between HMG and Aptiv
∙ Established : March 2020
∙ Share Structure : Hyundai Motor Group, Aptiv (50:50 Joint Venture) (HMC 26%, Kia 14%, Mobis 10%) ∙ Headquarter : Boston ∙ Track record - First fully-autonomous Cross-country drive in U.S. (‘15) - The launch of the world’s first robo taxi pilot (Singapore ‘16) - Operation of the world’s most-established public robo taxi fleet (Las Vegas; ‘18 ~ present) - The fleet has provided over 100,000 rides, with 98% of riders rating their experience five-out-of-five stars • Business : Develop and sale of autonomous driving solutions Business Plan ~’20 ~‘22 Developing & Provide driverless system commercializing Begin testing Commercialize its driverless to Robo Taxi provider SAE Level 4 Vehicles Fully driverless system systems & technology
11 Recent Updates
Global Retail Sales P. 13
COVID-19 Impact P. 14
Market Updates
United States P. 15 Korea P. 16 China P. 17 W. Europe P. 18 India P. 19 Russia / Brazil P. 20 2020 Global Sales (Retail Sales)
H1 2019 H1 2020 (Thousand units)
Europe2 China Korea United States -38.7% -32.5% +0.1% -18.4%
267 113163 350 235 384 385 343 280
Brazil
-38.3%
97 60 HMC Global Sales3 -25.6% -24.1%
India Russia Others1 -43.3% -27.6% -26.9%
2,210 1,644 1,857 1,406 250 142 89 65 430 315 Sales Sales (ex. China)
1 MEA, Asia-Pacific, Other regions, Commercial vehicles(ex. Korea CV) 2 Western Europe excluding CV 3 Retail sales including CV and overseas CKD (’19 : 21,446 units, ’20 : 20,053 units) 13 COVID-19 Impact
Sales to recover from resumed production and demand rebounds
(Thousand units)
Jan Feb Mar Apr May 350 Sharp recovery in Global sales
Korea (Average of 4 days in mid Feb.) 300
250 China Jan 20~ Feb 19 (5th plant based.)
200 India 3/23 ~ 5/3 Sales decline from COVID-19 impact 150 US 3/18 ~ 5/3
100 Czech 3/23 ~ 4/13 50 Turkey 3/27 ~ 4/19 0 Jan Feb Mar Apr May Jun Russia 3/28 ~ 4/12
Domestic Overseas Global Brazil 3/20 ~ 5/26
14 Korea Market
Genesis Sales Increase Industry Demand 2020 2019 (Thousand units) (Thousand units) Volume % of sales 16.2% 10.4% 7.9% 9.8% 41.8% -14.5% -17.6% 206 YoY 174 168 169 157 156 154 36.5 145 137 117 121 8.6% 8.3% 100 7.5% 7.8% 6.3% 15.7 16.5 Jan Feb Mar Apr May Jun 12.3 12.2 12.4 Hyundai Sales (Thousand units)
M/S 40.7% 39.4% 41.6% 42.3% 41.8% 40.6% Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 2020 YoY -21.3% -26.4% 3.0% -0.5% 4.5% 37.2%
90.00 84 70 72 71 71 71 80.00 68 Strong New Vehicle Cycle to continue 60 61 70.00 53 60.00 48
50.00 39 2018 ~ 19 2020
40.00
30.00 Jan Feb Mar Apr May Jun Sedan Sonata Grandeur F/L Sales by Model New Elantra (Thousand units)
384 (H1 2019) 8.4% 12.3% 13.9% 8.4% 5.2% 11.5% 8.2% 32.1% Genesis Genesis SUV New Genesis Genesis SUV GV80 G80 GV70 9.8% 9.9% 20.2% 12.7% 3% 6.8% 8.1% 29.2% 385 (H1 2020)
Avante Sonata Grendeur Genesis Tucson Santa Fe Palisade Others SUV (Sedan-C) (Sedan-D) (SUV-C) (SUV-D) (SUV-E) (Luxury sedan Palisade Venue New Tucson Santa Fe F/L +GV80) 15 US Market
Industry Demand SUV Sales Trend 2019 2020 (Thousand units) Venue Kona Tucson Santa Fe Palisade
-29.9% -26.3% YoY 1.2% 8.6% -38.5% 62.8% -45.6% 51.9% SUV 45.2% 1,609 1,590 1,510 Portion 36.2% 1,374 1,332 28.5% 1,265 1,146 1,113 3.0% 3.6% 1,133 989 1,114 2.5% 2.2% 724 SUV seg. 2.0% M/S 29 Jan Feb Mar Apr May Jun 118 94
(Thousand units) 131 133 Hyundai Sales 137 36 Sales* 142 43 M/S 3.9% 4.0% 3.6% 4.8% 5.3% 4.6% (‘000 units) 90 115 58 2020 47 73 31 YoY 5.1% 15.8% -42.4% -39.0% -13.8% -22.0% 2016 2017 2018 2019 H1 2020
68 66 63 59 55 57 52 42 44 47 36 35
Jan Feb Mar Apr May Jun Sales by Model Regional HQ Optimizing (Thousand units) System Focusing on volume & profit market & Enhanced dealer 23.5% 13.7% 10.8% 19.2% 17.6% 2.9% 12.1% 343 (H1 2019) customer Reducing fleet sales Competitiveness Improve residual value
16.6% 10.8% 11.0% 20.7% 15.5% 13.0% 2.7% 9.7% 280 (H1 2020)
Elantra Sonata Kona Tucson Santa Fe Palisade Genesis Others (Sedan-C) (Sedan-D) (SUV-B) (SUV-C) (SUV-D) (SUV-E) 16 China Market
Industry Demand 2019 2020 China Strategy (Thousand units)
-20.5% Successful Long-term roadmap -49.8% -2.9% 8.4% 2.5% new car launch for sustainable growth YoY -83.9% 1,995 1,585 1,925 1,533 1,643 1,654 1,696 1,193 1,488 1,515 · Focus on 965 · Recover sales and M/S 192 EV Genesis · Improve profitability & Jan Feb Mar Apr May Jun dealer competitiveness · Optimize capacity Hyundai Sales (Wholesales) (Thousand units) New Model Line-up M/S 2.0% 0.5% 3.1% 2.3% 2.4% 2.6% Newly Launched 2020 2020-2021 YoY 0.3% -97.4% -50.5% -32.0% 11.1% -20.1% 61 Palisade* 50 55 44 38 40 Sedan 32 32 30 34 36 Elantra Mistra La Festa F/L
1 Sonata
Jan Feb Mar Apr May Jun
SUV Sales by Model New MPV ix35 F/L Tucson (Thousand units) ix25
22.1% 20.4% 10.6% 9.6% 9.2% 6.6% 350 (H1 2019) China Strategic Models (50%~60%) EV 19.9% 15.5% 13.5% 13.6%8.0%6.9% 235 (H1(36%) 2020) Mistra EV La Festa EV IONIQ 5 Elantra ix35 La Festa Celesta ix25 Mistra Others * Palisade will be imported from Korea (C2-Sedan) (SUB-C) (C2) (C2) (SUB-B) (D-Sedan) 17 · Launch schedule is subject to change W. Europe Market
Industry Demand Green-car Sales Trend 2019 2020 (Thousand units) EV FCEV HEV PHEV
-25.7% 8.2% 7.4% YoY -6.7% -7.5% -51.6% -55.5% EV 6.4% M/S -77.4% 4.5% 5.4% 5.6% 2,008 1,637 1,697 4.2% 1,395 1,304 1,528 1,290 1,216 1,260 972 59 Green-car 1.3% 3.3% 728 M/S 5 346 1.0% 37 24 Jan Feb Mar Apr May Jun 34 6 23 15 Hyundai Sales (Thousand units) 2 17 31 Sales* 5 15 M/S 2.9% 3.3% 2.8% 2.5% 2.5% 2.6% 13 16 2020 4 6 1 YoY 5.3% 7.4% -51.4% -79.8% -59.4% -28.3% 2016 2017 2018 2019 H1 2020 56 44 45 45 36 37 36 39 27 33 18 9 - Maximize EV & FCEV sales and Expand green-car line-up
Jan Feb Mar Apr May Jun 2019 2020 2021 Sales by Model (Thousand units) New · Kona HEV · Tucson HEV · IONIQ 5 (1st E-GMP EV) Model · IONIQ F/L · Santa Fe HEV/PHEV · Tucson PHEV 14.2% 15.5% 13.5% 6.1% 19.5% 24.9% 350 (H1 2019) EV HEV PHEV FCEV EV HEV PHEV FCEV EV HEV PHEV FCEV Line-up 12.5% 16.7% 12.2%6.6% 26.8% 22.0% 235 (H1(36%) 2020) 2 2 1 1 2 4 2 1 3 4 3 1
i10 i20 i30 Ioniq Kona Tucson Santa Fe Others (Sedan-A) (Sedan-B) (Sedan-C) (SUV-B) (SUV-C) (SUV-D) 18 India Market
Industry Demand Winning M/S with Refreshed Line-up 2019 2020 (Thousand units) (Source : SIAM) Q4 2019 H1 2020 H2 2020 2021 YoY -5.4% -6.6% -50.7% -47.4% -84.5% -100.0% i10 Nios & Aura Creta i20 Elantra 270 288 279 264 252 247 238 223 142 117 37 0 Compact - high SUV-Low Compact – prem Premium Jan Feb Mar Apr May Jun Restore sales momentum with volume models
Hyundai Sales (Wholesales) (Thousand units)
M/S 15.9% 15.9% 18.5% - 18.7% 18.2% 2020 Market Strategy YoY -8.3% -7.2% -40.7% -100% -83.8% -49.2% (Million units) Respond to recovery of demand 45.8 44.4 42.0 43.1 40.0 42.0 42.5 42.0 with volume model launch 2019 2020 26.3 21.3 -30.9% 6.9 - Supply expansion of profitable models 0.0 2.9 like new Creta and Venue Jan Feb Mar Apr May Jun 2.0(E) - Launch of new i20 in H2 2020 -47.4% Sales by Model -12.9% (Thousand units) 1.5 1.4 1.2(E) Strengthen sales competitiveness 0.8 by digital platform (Click To Buy) 24.0% 24.7% 23.0% 6.1% 15.1% 6.7% 260 (H1 2019)
- Respond to change of market after 30.6% 18.1% 18.1% 20.9% 8.6% 137 (H1 2020)(36%) H1 H2 Annual outbreak of COVID-19 [Industry Demand outlook] - Strengthen Sales Competitiveness i10 i20 Creta Venue Santro Verna Others (Sedan-A) (Sedan-B) (SUV Low) (Sedan-A) (Sedan-B) 19 Russia/Brazil Market Russia Brazil Industry Demand Industry Demand 2019 2020 2019 2020 (Thousand units) (Thousand units)
YoY 1.3% -19.0% YoY -21.9% -0.9% -4.6% -50.1% -3.5% 1.5% -42.6% -73.8% -76.8% -75.8% 160 162 151 214 148 138 191 200 128 122 123 184 190 193 103 156 222 234 102 123 69 39 51 57
Jan Feb Mar Apr May Jun Jan Feb Mar Apr May Jun
Hyundai Sales (Thousand units) Hyundai Sales (Thousand units)
M/S 11.2% 11.7% 9.7% 6.2% 10.3% 10.9% M/S 7.2% 8.5% 8.4% 8.6% 8.0% 9.3% 2020 2020 YoY 4.4% 0.0% -3.0% -83.9% -56.6% -18.2% YoY -3.0% -4.2% -36.6% -68.5% -63.1% -39.4% 17 16 16 17 18 15 15 15 18 14 16 15 16 16 11 12 13 12 10 10 7 6 7 3
Jan Feb Mar Apr May Jun Jan Feb Mar Apr May Jun Sales by Model Sales by Model (Thousand units) (Thousand units)
34.5% 7.1% 38.9% 5.6% 12.8% 89 (H1 2019) 73.4% 26.3% 97 (H1 2019)
28.6% 3.5% 45.8% 7.2% 11.2% 65(36%) (H1 2020) 72.1% 27.8% 163 (H1 2020) (36%)
Solaris Sonata Creta Santa Fe ix35 Others 20 HB20 Creta Others (Sedan-B) (Sedan-D) (SUV-B) (SUV-D) (SUV-C) (Sedan-B) (SUV-B) Strategy 2025
Strategy 2025 P. 22 Mid to Long-term Business Target P. 23 Cost Innovation Committee P. 24 Long-term Investment Plan P. 25 Preparing for the Future P. 26 Strategy 2025
Smart Mobility Solution Provider
22 Mid to Long-term Business Target
Improvement Building strong growth foundation Improving cost competitiveness of · Accelerated cost innovation based on high profitability of I.C.E. and xEV · Sales expansion of Genesis brand the automotive division
Automotive + Margin +1% pt Automotive Division 7% OP Division 8 % OP Margin
Limitation
· Accelerated electrification Expanding xEV Foundation for Regional Profit Cost Innovation · Increasing investment in based on mobility service Center System Committee mobility service business competitive cost business
· OP and OPM : automotive division + consolidation adjustment
23 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 24 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 tn) CapEx (KRW tn) Strategic Inv. (KRW tn) 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 1.7 · Fuel efficiency 2.5 6.1 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 · New plants 9.7 · Dedicated EV 4.0 4.0 3.2 3.5 3.7 3.7 14.6 CapEx Electrification · EV production 2.7 2.9 · Customer channels · Infrastructure 2018 2019 2020 2021 2022 2023 2024 2025
· CapEx : with changed classification in 2019 · Product includes capex in product development · Electrification : including all xEV 25 Preparing for the Future – 6 Core Investment Areas
Joint Venture Automotive Strategy & Technology * Division Production R&D Internal Open Investment 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
* JV named Motional 5 Core Investment Areas
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”
26 Governance
BoD & Key Improvements P. 28
ESG Enhancement Roadmap P. 29
Shareholder Return P. 30 BoD & Key Improvements
Committees of BoD Highlights since 2019 Board of Directors Continuous effort to secure sustainable growth 11 Members and transparency (5 Internal / 6 Independent)
Independent Directors Recommendation Committee 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 New BoD Chair · Make decisions on shareholder rights related agendas · Euisun Chung became a new BoD chair · Review major investments and transaction plans after 52nd AGM on Mar. 19th 2020
Mid- to Long-term Strategy Audit Committee · CGCC1) reviewed and approved strategy · Approve financial statements, internal auditing process 2025 with financial and investment target · Designate external auditors and ensure to abide by laws ESG Improvement CGCC1 · Amended C.G. charter and shared shareholders’ ESG related proposals Compensation Committee Shareholder Return · Share buyback to enhance shareholder · Approval of internal directors’ compensation structure value in Nov.2019 · Approval of registered directors’ remuneration ceiling · Suspension of 2020 interim dividend in response to uncertainty caused by COVID-19
28 1Corporate Governance and Communication Committee 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 Organize a team in Improve ESG practice interest in ESG to ESG rating agencies charge of overall to global peer level top management (Sustainalytics, DJSI, MSCI) ESG strategy
Offer ESG seminars Include ESG ratings Review strategic Expand our exemplary to our Board members as one of CEO’s KPI approach and set up activities to the group mid-to long-term plan Open dialogue with Share ESG matters with Maintain high scores rating & consulting firms related departments Coordinate with all and rankings related teams to st Rank 1 place in Climate build stronger ESG Change Actions by CDP
29 Shareholder Return
Shareholder Return Payout Ratios
Total Dividend (KRW tn) to FCF (%) Buyback & Cancellation (KRW tn) to Net Income (%) 447% Total Return Amount (KRW tn) 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, · 0.5 trillion KRW of share buyback · 0.4 trillion KRW of share buyback 50% of non-finance FCF
· Suspension of 2020 interim dividend in response to preemptively 30 secure liquidity to uncertainty caused by COVID-19 Appendix
Production capacity by plant P. 32 2020 Business Plan P. 33 Wholesales by Region P. 34 Statement of Income P. 35 Recent Earnings by Division P. 36 Finance Division P. 37 Production capacity by plant
2019 Products (Unit: 1,000 vehicles) CAPA Production
Korea (HMC) 1,742 1,786 PV (Hyundai & Genesis), CV
China (BHMC) 1,350 658 Elantra, Mistra, La Festa, ix25, ix35
India (HMI) 696 682 Creta, Venue, Nios, Aura, i20
US (HMMA) 370 336 Elantra, Sonata, Santa Fe
Czech (HMMC) 330 310 i30, Tucson, Kona EV
Turkey (HAOS) 200 178 i10, i20
Russia (HMMR) 200 245 Solaris, Creta
· Indonesian plant is Brazil (HMB) 180 206 HB20, Creta under construction
· Source: 2019 Annual business report, Company data 32 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%
* 2020 Business Plan includes 52,700 units of CKD sales · HMC forecasts 2020 auto industry demand to decline by 20%. However, would not officially revise 2020 business plan considering uncertainties during 2nd half. 33 Wholesales by Region
(Thousand units) Q2 2019 Q2 2020 YoY H1 2019 H1 2020 YoY
Korea 200 226 +12.7% 384 385 +0.1%
North America 215 135 -37.3% 413 367 -11.1%
Europe 149 71 -74.3% 291 190 -34.8%
India 127 28 -77.7% 260 136 -47.4%
Russia 51 26 -50.1% 100 77 -23.3%
South America 83 22 -72.8% 142 70 -50.5%
Others1 140 18 -43.5% 261 200 -23.3%
Sub-total2 961 585 -58.0% 1,850 1,423 -23.0% (ex-China)
China (BHMC) 141 118 -16.4% 272 181 -33.4%
Total3 1,105 704 -36.3% 2,126 1,607 -24.4%
1 MEA, Asia-Pacific, Other regions, Commercial vehicles(ex. Korea CV) 2 2019 ex-China excludes China CV 34 3 Wholesale including CV and CKD Statement of Income
(KRW Bil.) 2018 2019 Q1 2019 YoY Q2 2020 YoY H1 2020 YoY
Revenue 96,813 105,746 25,319 +5.6% 21,859 -18.9% 47,178 -7.4%
Gross Profit 15,142 17,655 4,265 +9.0% 3,712 -19.7% 7,977 -6.5%
Margin (%) 15.6 16.7 16.8 17.0 16.9
SG&A 12,720 14,050 3,402 +10.2% 3,122 -7.8% 6,523 +0.8%
Portion (%) 13.1 13.3 13.4 14.3 13.8
Operating Income 2,422 3,606 864 +4.7% 590 -52.3% 1,454 -29.5%
Margin (%) 2.5 3.4 3.4 2.7 3.1
Income before tax 2,530 4,164 724 -40.5% 596 -57.0% 1,321 -49.3%
Margin (%) 2.6 3.9 2.9 2.7 2.8
Net Income 1,645 3,186 553 -42.1% 377 -62.2% 930 -52.4%
Margin (%) 1.7 3.0 2.2 1.7 2.0
D&A 3,762 4,012 1,059 1,088 2,147
EBITDA 6,184 7,617 1,923 1,678 3,601
35 Recent Earnings by Division
(KRW Bil.) 2017 2018 2019 Q1 2020 Q2 2020 YoY
Revenue 96,376 96,813 105,746 25,319 21,859 -18.9%
Automotive 74,490 75,265 82,487 19,555 16,057 -23.6%
Portion (%) 77.3 77.7 78.0 77.2 73.5
Finance 15,415 14,958 16,027 4,176 4,341 +4.5%
Portion (%) 16.0 15.5 15.2 16.5 19.9
Others 6,471 6,589 7,233 1,589 1,461 -18.1%
Portion (%) 6.7 6.8 6.8 6.3 6.7
Operating Income 4,575 2,422 3,606 864 590 -52.3%
Automotive 2,585 1,062 2,618 569 295 -71.6% Margin (%) 3.5 1.4 3.2 2.9 1.8
Finance 718 747 888 218 272 +8.7%
Margin (%) 4.7 5.0 5.5 5.2 6.3
Others 339 105 99 71 42 -30.6%
Margin (%) 5.2 1.6 1.4 4.5 2.9
Adjustment 932 508 0 5 -19
1 Assets : Captive oriented stable portfolio Asset Portfolio (KRW tn) 46.5% 43.2% 46.3% 40.3% Pen. rate ② - New Car : Stronger competitiveness based on OEM co-marketing 7.7 7.3 Non-auto - Used Car : Prime dealer centric volume 6.8 7.9 21.9 22.5 Auto - Personal-loan : Cross-sell focused targeting Auto prime customers 17.7 19.1 - Mortgage : Limited loss with RV ① insurance & monthly sales cap 2017 2018 2019 H1 2020
2 Risk : Quality controlled by taking preemptive actions Asset Quality 2.0% 2.1% 1.9% 1.7% - Underwriting : Tightened policy on Non-auto products 30+%DQ ③ Prime mix - Collection : Focus on short-term collection and prevention of roll-over 58.2% 62.9% 44.7% 51.4% in volume④ - Non Performing Loan : Pre-write-off process of all products 2017 2018 2019 H1 2020 3 Profits : Income maintained with stable bad debt expense Profits (KRW bn) 1.5% and efficient cost 1.4% 1.4% Bad debt 0.9% expense ratio - debt expense: Stabilizing since conservative risk management in ‘18 401 415 460 249 IBT - SG&A : Efficient labor cost and marketing cost structure 2017 2018 2019 H1 2020
4 Treasury Liquidity (KRW tn) - Funding: Utilized bank loan and ABS during market crunch in early 154.2% 134.8% 126.0% 134.0% COVID19 and issued offshore green bond ALM ⑤
- Liquidity: Increased focusing on cash (6 Months Coverage 110% → 120%) 2.0 1.7 1.6 1.9 Cash - Rating (domestic) : Standalone rating stable at AA0 3.3 3.5 3.9 3.7 Credit line with excellent fundamentals 2017 2018 2019 H1 2020
① Residual value ② Penetration rate ③ Delinquency ratio ④ P-loan and mortgage ⑤ Asset Liability Management 37 Hyundai Card
1 Members : Expand thru PLCC & online channel (cost↓, efficiency↑) Members (KRW K, mn) 134 102 50 31 Acquisition - PLCC : Continually signing new partners (Starbucks, Baemin, Socar in 2H) cost① (HMC, KMC, Emart, ebay, Costco, SSG.com, GS Caltex, Korean Air) Total 8.67 8.92 7.16 7.73 members② 2 Volume : Balanced growth of Credit Purchase and Financial '17 '18 '19 H1 20 Online+PLCC Products by reinforcing channels with competitive edge 40.9% 53.6% 80.2% 77.8% mix③
Volume (KRW tn) Prime mix - Credit Purchase : Increased due to auto and Costco volume 60.7% 61.3% 56.7% in volume④ - Financial Product : Member expansion led to growth 51.8% 11.9 12.6 11.0 Financial Product 67.6 71.0 76.9 6.3 3 Profits: Increase from cost structure optimization 39.5 Credit Purchase - Card related cost : Reduced acquisition cost, renewed high-cost '17 '18 '19 H1 20 cards and continually enhanced personnel efficiency - Bad debt expense : Ratio decline from decreased delinquency rate Profits (KRW bn) 2.1% 2.1% 1.9% 1.6% Bad debt 4 Treasury expense ratio 259 201 220 214 IBT - Funding : Sourced alternative facilities (bank loan, ABS, etc.) to preemptively tackle short-term market crunch '17 '18 '19 H1 20 - Liquidity : Increased focusing on cash (6M Coverage 110% → 130%) Liquidity (KRW tn)
New growth engine : Enhance digital capacity 151.6% 5 136.0% 128.7% 128.2% to transition into a data science company ALM 0.9 Cash 0.8 1.0 0.9 - Built big data platform through PLCC partnership and developed 1.7 2.0 1.5 2.5 Credit line independent/cross-marketing tools '17 '18 '19 H1 20
① Per member ② Individual ③ In acquisition ④ Financial Product 38 Hyundai Commercial
1 Asset : Growth sustained by corporate financing asset Asset Portfolio (KRW tn) Pen. rate 49.0% 45.0% 47.0% 43.0% - Industrial financing : Diversifying portfolio to respond market volatility Corporate 2.2 2.6 2.7 finance - Corporate financing : Prime PF and platform business led to growth 1.9 4.2 4.5 4.2 4.2 Industrial Finance '17 '18 '19 Q2 20 2 Risk : Normalize quality by strengthening risk management Asset Quality 0.74% 0.65% - Underwriting : Tighter criteria for high risk asset 0.48% 0.46% 30+% DQ (low credit, low down payment, multi-debt) Risk-free 40.4% 46.8% asset - Collection : Enhance collection through mobile/branch-centric system 21.3% 25.5% volume mix① '17 '18 '19 Q2 20
3 Profits : Stabilized loss and affiliate contribution led to growth Profits (KRW bn) 1.73% 1.68% 0.81% 0.99% Bad debt - Loss : Continued improvement of asset quality since 4Q ’19 expense ratio
- Affiliate : Equity method income increased from Hyundai Card 106 80 96 70 IBT
'17 '18 '19 Q2 20
4 Treasury Liquidity (KRW tn)
- Funding : Utilized bank loan and ABS during market crunch 143.8% 125.1% 135.7% 136.3% in early COVID19 ALM - Liquidity : Increased focusing on cash 1.1 1.3 0.7 0.8 Cash 0.5 0.5 0.9 0.9 (Year-end 6M Coverage 110%, ALM 130% target) Credit line '17 '18 '19 Q2 20
① Industrial finance 39 Hyundai Capital America (US)
① Assets : Maintained growth with recovering car sales Asset Portfolio (KRW tn ) Pen. rate 1 62.6% and increased penetration rate 53.6% 46.1% 55.6% Wholesale - Loans : Recording high penetration rate with stronger loan 2.8 2.6 2.2 2.5 17.2 Lease focused co-marketing 17.2 17.0 17.2 18.6 21.7 Loan - Lease : Maintained asset size YoY by tightening control on volume 14.4 14.7 and pricing to support used vehicle values '17 '18 '19 H1 20
2 Risk management : Mitigated COVID-19 related Asset Quality 2.5% 2.6% 2.3% quality deterioration as much as possible 1.7% 30+% DQ
- 30+% : Solid on prime-focused portfolio and customer relief efforts Prime mix 78% 78% 80% 80% - Quality : Stable from tightening UW policy on low-credit customers in assets '17 '18 '19 H1 20 3 Profits: Plan to offset increased bad debt expense Profits (KRW bn ②) with portfolio growth and Lease RV stabilization 1.4% - Revenue : Interest income grew 9% YoY from Retail growth 1.2% 1.1% 1.0% Bad debt - Lease RV : Improved used vehicle pricing and recovering sales volume expense ratio 283 - Bad debt expense : Preemptively increase reserves for negative 116 155 124 IBT macro forecasts '17 '18 '19 H1 20
4 Capital structure & liquidity Liquidity (KRW tn ③) 7.6X 7.4X Debt 6.8X - Funding : Successfully issued largest ever amount of bonds 6.6X leverage 1.5 (total 3.8BN USD in Feb/April) and issued ABS at lowest rate ever (0.59%) 0.5 0.5 Cash 1.7 6.8 7.1 8.8 - Liquidity : Strong liquidity position with increased cash emphasis, 4.1 Credit line despite market volatility in early 2Q '17 '18 '19 H1 20
①②③ Applied end-of-term KRW/USD exchange rate of Seoul Money Brokerage Services 40 Beijing Hyundai Automotive Finance (China)
1 Assets: Maintained as pen. rate and maturity improved Asset (KRW tn①) 37.9% 43.0% despite car sales decline 27.8% 31.7% Pen. rate
- Volume: Auto sales drop impact offset by pen. rate increase 4.0 3.9 4.4 4.4 - Maturity lengthening: Focus on longer maturity products (24M→36M) '17 '18 '19 H1 20 2 Risk management : Quality index gradually stabilizing Asset Quality - 30+% : Gradually stabilizing as COVID-19 impact weakens 0.10% 0.08% 0.12% 0.12% (Feb 0.24% vs. June 0.12%) 30+% DQ - Quality : Recovered prime asset mix thru conservative risk management (March ’19 81.2% → Feb ’20 78.6% → June ’20 82.5%) '17 '18 '19 H1 20
3 P&L : Guarded profitability by maintaining assets and Profits (KRW bn ②) 2.6% reducing ordinary expenses 2.2% 1.9% 1.4% OPEX ratio over - Revenue: Interest income increased from asset growth avg. balance 162 123 - Ordinary expenses: Continually reduced with labor cost cuts and 109 76 IBT cost efficiency increase '17 '18 '19 H1 20
③ 4 Treasury Liquidity (KRW tn ) 111.0% 106.6% 102.9% 102.8% - Funding: Total 12.9BN RMB in 1H (issued 4.4BN RMB ABS in March) ALM
- Liquidity: Increased cash holdings based on lowered market rate and 1.5 0.8 0.8 Cash executing liquidity supply policy 0.8 '17 '18 '19 H1 20
①②③ Applied end-of-term KRW/RMB exchange rate of Seoul Money Brokerage Services 41 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.