Hankook released its 2021 financial results, reporting consolidated global sales of KRW 1.80 trillion and operating profit of KRW 187.1 billion.
Hankook Announces 2021 Financial Results
Having recorded solid sales in major regions during the first half of 2021, Hankook Tire was able to continue its steady growth resulting in a 10.7 per cent rise in sales and a 2.2 per cent increase in operating profit year-on-year. As momentum slowed in the second half, with the global economy collectively tackling issues such as global supply chain disruption, semiconductor shortage and rising raw materials costs, Hankook demonstrated resilience with promising business performance. Key contributing factors included a continued increase in sales of replacement tyres, an effective regional pricing strategy and strong sales of large-diameter tyres. Sales of large-diameter tyres, 18 inches or greater, increased by 3.1 percentage points (pp)compared to the previous year, accounting for 37.7 per cent of total sales of passenger car tyres.
The fourth quarter was a particular bump in the road for Hankook Tire. The company saw a decline in sales revenue to KRW 1.889 trillion while operating profit fell 61.3 per cent YoY and 51.3 per cent QoQ to KRW 87.9 billion. This decrease was largely due to a rise in operating costs and delayed sales opportunities caused by labour strikes at Hankook’s Daejeon and Geumsan plants in Korea. However, sales of large-diameter tyres again became the driving force for growth. Sales of large-diameter tyres rose by 1.5pp YoY to account for 38.9 per cent of total sales of passenger car tyres in the fourth quarter. In particular, sales of large-diameter tyres in China amounted to 46.4 per cent of total sales, a 6.7 pp increase YoY. Other markets also saw strong performance in large-diameter tyres with increases of 2pp in Europe and 2.9pp in Korea.
Meanwhile, Hankook Tire continued to gain remarkable recognition for its product quality as well as its sustainable practices. Last year, Hankook received top ratings in several tyre tests conducted by leading automobile magazines from Germany and the United Kingdom. Auto Bild, Europe’s most prestigious automobile magazine, awarded Hankook Tire with “Tyre Maker of the Year” in the all-weather tyre category. In addition, Hankook was listed for the sixth consecutive year in the Dow Jones Sustainability Indices World, which identifies global sustainability leaders.
Furthermore, Hankook strengthened its standing in the premium original equipment (OE) sector and electric vehicle (EV) tyre sector in 2021, with the company starting to equip the Porsche Panamera, BMW X3M and X4M, while fitting its EV tyres on Audi e-tron GT and Volkswagen ID.4. Hankook plans to further enhance its brand value in 2022. The company is aiming to achieve double-digit growth this year and to increase the share of large-diameter tyres sales to 42 per cent of total sales of passenger car tyres. Hankook will intensify its focus on strengthening its business in major markets, expanding OE partnerships with global premium carmakers, and gaining leadership in the electric vehicle tyre sector. Hankook will be the tyre supplier and technology partner for the ABB FIA Formula E World Championship as of the fourth quarter this year.