Feb 26, 2020 / 05:05PM GMT
Rod Avraham Lache - Wolfe Research, LLC - MD & Senior Analyst
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side chat, which is with Goodyear.
Goodyear, as all of you know, is a global tire manufacturer. They drive around 54% of their revenue from the Americas, 32% from Europe, 14% from Asia. Like many other tire makers, the company's margins had been on a nice upward trajectory up until around 2015, 2016. And at the time, the margins peaked at around 12%.
Segment operating income, which excludes corporate overhead, peaked at around $2 billion in that time frame and free cash flow peaked at around $1 billion. Then in 2017, '18 and '19, profitability deteriorated. The company's operating margin fell from 12% to 5.6%, segment operating income declined from $2 billion down to $945 million last year. Free cash flow last year, excluding working capital and restructuring would have been roughly $400 million. Over the past 3 years, the drivers of that $1 billion included $700 million approximately from the convergence of pricing versus raw materials, about $350 million from volume and overhead
Goodyear Tire & Rubber Co at Wolfe Research Global Auto, Auto Tech, and Mobility Conference Transcript
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