Goodyear Sets Course for Major Transformation with "Goodyear Forward" Plan

A Strategic Overhaul with Impressive Financial Targets

The plan, announced today, outlines a series of financial milestones that Goodyear aims to achieve by the end of 2025. These include generating gross proceeds in excess of $2 billion from portfolio optimization, implementing top line and cost reduction actions totaling $1.3 billion, doubling the segment operating income margin to 10%, and achieving a net leverage of 2.0x – 2.5x.

Leadership's Vision for a New Era

Goodyear's Chairman, CEO, and President, Richard J. Kramer, expressed confidence in the new direction. "Our transformation plan represents a clear path to create a more profitable and focused Goodyear," he stated. Kramer emphasized the detailed initiatives identified by the Review Committee to streamline the portfolio, expand margins, and fortify the balance sheet.

Laurette T. Koellner, Independent Lead Director of Goodyear's Board, echoed these sentiments, highlighting the comprehensive assessment that led to the plan. "The full Board supports this plan and is confident it will deliver substantial and durable value creation for shareholders," she remarked.

Investor Enthusiasm and Support

The announcement has garnered positive reactions from key investors. Senior Portfolio Manager Marc Steinberg and Portfolio Manager Austin Camporin from Elliott Investment Management, one of Goodyear's largest investors, praised the plan. "We believe the 'Goodyear Forward' transformation plan represents a significant set of steps toward a stronger and more profitable Goodyear," they said in a joint statement.

Key Elements of the Goodyear Forward Plan

The plan includes several strategic actions:

1. Portfolio Optimization: Goodyear will actively pursue strategic alternatives for its Chemical business, the Dunlop brand, and the Off-the-Road equipment tire business, aiming to generate over $2 billion in gross proceeds.
2. Cost Reduction: The company plans to achieve an annual run-rate benefit of $1 billion by the end of 2025 through footprint actions, plant optimization, and other efficiency measures.
3. Top Line Growth: Goodyear aims for an annual run-rate benefit of $300 million by 2025, focusing on optimizing brand and tier positioning in North America, among other strategies.
4. Doubling Operating Income Margin: The company expects its segment operating margin to double from approximately 5% in 2023 to 10% by the fourth quarter of 2025.
5. Debt Reduction: Goodyear plans to reduce its debt by approximately $1.5 billion, moving closer to an investment-grade rating.

Investor Conference and Ongoing Updates

Goodyear will host an investor call on November 15 to discuss the transformation in detail. The company has also committed to providing regular updates to shareholders on the progress of executing the plan.

About Goodyear

Goodyear, one of the world's largest tire companies, employs about 74,000 people and operates in 23 countries. Known for its innovation, the company has two major Innovation Centers in Akron, Ohio, and Colmar-Berg, Luxembourg.

Forward-Looking Statements and Non-GAAP Measures

The company's news release contains forward-looking statements under The Private Securities Litigation Reform Act of 1995. These statements are subject to various factors that could cause actual results to differ materially from current expectations. Additionally, the release includes non-GAAP financial measures, which are important for understanding the company's financial health but are not defined by U.S. GAAP.

A New Chapter for Goodyear

With "Goodyear Forward," the company embarks on a transformative journey, aiming to strengthen its market position and deliver enhanced value to its shareholders. This strategic pivot marks a significant milestone in Goodyear's storied history, as it gears up to meet the challenges and opportunities of the modern automotive landscape.

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