Hyundai Motor Company

Q3 headline performance: operating profit up despite volume hit - Global wholesale: ~921k units, -11.3% YoY (retail ~931k, -10.1% YoY) driven by weaker industry demand + strikes + reduced working days. - Revenue: KRW 45.1tn, -3.4% YoY. - Operating profit: KRW 2.7tn, +5.5% YoY; operating margin 5.9% (+0.5pp YoY) thanks to FX benefits + cost/contingency actions offsetting negative volume/mix. - Net profit: KRW 1.9tn, -24.2% YoY (non-operating items deteriorated).

Key profit drivers & negatives (what hurt “below operating profit”) - Operating positive factors: - FX benefit ~KRW +0.66tn (also helped warranty provisioning effects). - Cost optimization/contingency measures offset headwinds from incentives and lower production. - Operating headwinds: - Negative volume effect ~KRW -3.44tn, negative mix effect ~KRW -0.69tn; plus higher fixed cost per unit from lower utilization. - Non-operating/net profit negative: - Management pointed to FX impacts on foreign-currency assets (a major driver of non-operating decline). - Also mentioned equity-method stake valuation weakness contributed to non-operating deterioration (investor clarification). - Corporate tax noted by management: about KRW ~1tn in Q3; management said no major reason beyond rate/mix, and little change expected in Q4.

Volume recovery outlook (guidance + near-term expectations) - Near-term challenges: production disruptions (fire/inventory limits earlier in year + strikes), high raw material cost burden persisting due to prior price spikes and geopolitics. - Q4 expectations: - Domestic plant production normalized since Sept, but Q4 still faces higher fixed costs per unit (lower utilization in prior months) + persistent elevated raw material costs. - Geopolitical risks + U.S. tariffs remain. - Annual wholesale guidance cut: 2026 global wholesale target revised to ~4.0m units (from 4.1m) due to strikes, parts disruption (reduced export volumes), and weaker Middle East/EMEA demand. - Annual revenue guidance maintained: +1% to +2% (unchanged), with expectations that hybrids + North America demand partially offset weaker volume and FX. - Operating margin guidance revised (downward): 5.5% to 6.5% (vs prior range), reflecting delayed earnings contribution from new model launches and broader uncertainty.