2014 Business Results

January 23, 2015

Kia Motors

Note for Investors

This presentation has been prepared with unaudited

4th results of year 2014 for investor’s convenience.

Therefore, some numbers may change upon

the review of Kia’s independent auditors.

Table of Contents

• Sales Summary

• Financial Summary

• Revenue & Profit Analysis

• 2015 Business Plan

• Appendix

Sales Summary

• Retail Sales

• Ex-factory Sales

1

458 465

547 646

+1.5%

+18.2%

535 580

+8.4%

339 354

+4.3%

867 862

-0.6%

2,746 2,907

+5.9%

2013

2014

*

▣ 2014 Sales Summary : Retail Sales

Korea

China

US Europe

Rest of World Global Retail Sales

(Unit : Thousand)

2013 2014

* Europe : EU + EFTA

Ex-factory Volume by Plant

2

▣ 2014 Sales Summary : Ex-factory Sales

Ex-factory

Sales

Domestic

Export

Korea Plant

Europe

China

Overseas Plant

US

(Unit : Thousand)

2013

Change (%) 2014

(Unit : Thousand)

2013 2014

Korea

US

Europe

China

2,827 +7.6

1,598 +6.8

458 +1.5

1,140 +8.9

3,041

1,706

465

1,241

1,229 +8.6

313 +3.4

547 +18.2

1,335

323

646

369 366 -1.1

2,827

3,041

+7.6 %

56.5%

13.1%

11.1%

19.3%

56.1%

12.0%

10.7%

21.2%

Financial Summary

• Income Statement

• Statement of Financial Position

• Cash Flow Highlights

Revenue

Operating Profit

Recurring Profit

Net Profit

Gross Profit

2013 2014 Change (%) as %

of Rev.

(Unit : Billion Won)

3

▣ Income Statement

Cost of Sales

as %

of Rev.

SG&A

* F/X Rate (USD/KRW) : 2013 W1,095 → 2014 W1,054 (41won↓, -3.7%)

47,598 100 -1.1 47,097 100

3,177 6.7 -19.0 2,573 5.5

4,829 10.1 -21.0 3,816 8.1

3,817 8.0 -21.6 2,994 6.4

10,086 21.2 -7.4 9,343 19.8

37,512 78.8 +0.6 37,754 80.2

6,909 14.5 6,770 14.4 -2.0

Assets

Current Assets

2013-End 2014-End Change

Liabilities

Debt

(Net Debt)

Equity

Debt-to-Equity Ratio

Net Debt-to-Equity Ratio

* Cash = Cash & Cash Equivalents + Short-term Financial Instrument

** Net Debt-to-Equity = Net Debt / Equity

(Cash)

(Unit: Billion Won)

Current Ratio

*

* *

4

▣ Statement of Financial Position

36,182

13,472

15,927

3,339

(-3,007)

20,255

16.5%

-14.8%

(6,347)

124.7%

+4,862

+3,154

41,044

16,626

+2,633

+1,352

(+1,761)

18,560

4,691

(-1,246)

+2,229

+4.4%p.

+9.3%p.

22,484

20.9%

-5.5%

(5,937) (-409)

+14.2%p. 138.9%

5

▣ Cash Flow Highlights

(Unit : Billion Won)

* Above cash balance excludes shot-term financial instruments

Beginning

Cash Balance

Ending

Cash Balance

Net Profit

Depreciation/

Amortization

Tangible/

Intangible Asset

Others

+167

2,311

2,994

1,337

2,478

-2,035

+4,331 -4,164

-2,129

Revenue & Profit Analysis

• Revenue Analysis

• COS and SG&A

• Non-Operating Items

Revenue by Region

6

▣ Revenue Analysis

▶ Won Appreciation

· USD / KRW 1,095won → 1,054won (-3.7%)

Contributing Factors

Positive

Negative

Sales by Segment

A+B+C D+E RV Others

2013 2014

* Global retail sales (excluding China)

Others

Europe

North America

Korea

▶ ASP Improvement

· Korea : 19.1mn → 19.5mn (+2.1%)

· Export : $13.8thou. → $14.2thou. (+2.5%)

• Korea : KMC domestic revenue

• North America : KMA/KCI wholesale revenue + KMMG OEM revenue

• Europe : Europe sales subsidiaries’ wholesale revenue + KMS export revenue

• Others : KMC direct export revenue + Russia/KMAU/KMNZ wholesale revenue

2014 2013

47,598

-1.1%

47,097

28.0%

17.2%

35.9%

18.9%

26.6%

17.8%

35.8%

19.8%

52.2%

4.7%

13.9%

29.2%

52.0%

4.5%

13.1%

30.4%

(% of Revenue) (% of Revenue)

2013 2014

7

SG&A COS

▣ COS and SG&A

Warranty Expense

Export Expense

Marketing Expense

Salary & Wages

Others

78.8%

80.2%

2013 2014

+1.4%p.

3.7 3.8

2.2 2.1

1.9 1.9

4.5 4.3

2.2 2.3

14.5% 14.4%

-0.1%p.

(Unit: Billion won)

8

Equity Earnings Finance Income / Expense Other Income / Expense

▣ Non-Operating Items

1,320

1,394

2013 2014 2013 2014 2013 2014

16

-232

316

+74

82

-234

-248

2015 Business Plan

9

▣ 2015 Business Plan

3,041 +3.6

1,706 +0.2

465 +3.3 Domestic

1,241 -0.9 Export

3,150

1,710

480

1,230

Korea Plant

1,335 +7.9

323 +2.0 Europe

646 +15.3 China

1,440

330

745

Overseas Plant

366 -0.1 US 365

(Unit : Thousand)

2,907 +6.7 3,103

465 +3.3 Domestic 480

580 +12.0 US 650

354 +5.8 Europe 375

646 +15.3 China 745

862 -1.0 ROW 853

*

* Europe : EU + EFTA

Ex-Factory

Sales

Retail

Sales

2014 Change (%) 2015 2014 Change (%) 2015

Thank you.

http://pr.kia.com

Appendix

• Retail Sales by Region

(Korea, US, Europe, China, Rest of World)

• Quarterly Income Statement

9

2015 Outlook & Strategy Sales & Market Share

▣ Korea

(Unit : Thousand)

CV RV PC

* M/S is based on demand including imported cars.

458

+1.5%

29.8%

2015(P)

+3.3%

28.0%

2014 2013

61.1%

26.9%

12.0%

56.8%

30.7%

12.5%

465 480

50.3%

37.7%

12.0%

Industry Demand : +2.0%

▣ Strategy

▣ Market Outlook

▷ Despite increase in household debts and

weak real estate market, improved domestic

economy coupled up with new car effect will lead to

the highest market demand ever (1.7mn units in ’15)

▷ Sales growth of imported cars are expected to

continue with additional individual consumption tax cuts

and increased incentives from foreign brands

▷ New model launches of K5, Sportage to enhance

product competiveness and profitability

▷ Sorento, Carnival to drive sales momentum continuously

10

▣ US

Sales & Market Share

(Unit : Thousand)

RV PC

▣ Strategy

▣ Market Outlook

▷ 성공적인 신차 런칭(쏘렌토, K5)을 위한 마케팅 역량 집중

▷ 스포츠 마케팅(NBA, LPGA 등)을 활용한 브랜드 가치 제고

▷ 소비자/딜러 금융 프로그램 운영으로 가격 경쟁력 확보

535

+8.4

3.4%

2015(P)

+12.0%

3.5%

2014 2013

72.8%

27.2%

72.4%

27.6%

580

650

66.9%

33.1% ▷ 고용시장 안정 및 유가하락 등으로 소형 상용 중심 증가 전망

→ 전년 대기수요 해소에 따른 제한적 증가폭 예상

▷ 엔화약세로 인한 일본업체 판촉 공세 강화 전망

→ 경쟁차급 및 노후모델에 대한 인센티브/마케팅 확대

2015 Outlook & Strategy

Industry Demand : +1.9%

▣ Market Outlook

▣ Strategy

▷ Based on improved consumer sentiment and

stabilizing oil prices, demand recovery in RV segment

will likely to be stronger compared to PC segment

▷ Due to lower demand growth expectation, competition

among the automakers will get intensified

▷ New model launch of Sorento(Jan) and expanded

sales of Carnival to drive sales growth

▷ Flexible incentive strategy to defend M/S and

achieve sales target

11

▣ Europe

Sales & Market Share

(Unit : Thousand)

▣ Strategy

▣ Market Outlook

▷ Auto demand is likely to be maintained positive with

expectation for potential demand growth in

green-car segment

▷ Prolonged Russia crisis and deflation depression

may limit the demand growth

339

+4.3%

2.8%

2015(P)

+5.8%

2.7%

2014 2013

66.9%

33.1%

63.6%

36.4%

354 375

65.6%

34.4%

▷ Strengthened marketing activities to promote

new model launches of Sportage, cee’d F/L

▷ Sales promotion using low interest rate auto financing

programs to attract repurchases

2015 Outlook & Strategy

Industry Demand : +3.5%

RV PC

12

▣ China

Sales & Market Share

(Unit : Thousand)

RV PC

2015 Outlook & Strategy

▷ Motorization in western in-land cities and replacement

demand in east-coast cities will support growth

▷ Though less than double-digit growth rate expected

due to concerns from slow domestic economy

▣ Strategy

▣ Market Outlook

▷ Full-utilization of China 3rd plant to allow sharper growth

than the industry

▷ Introduction of Chinese strategic models(KX3, K4) to

enhance product competitiveness

547

+18.2%

3.6%

2015(P)

+15.3%

2014 2013

75.6%

24.4%

78.8%

21.2%

646

745

75.4%

24.6%

3.8% Industry Demand : +8.6%

13

▣ Rest of World

2015 Sales Plan Sales & Market Share

CV RV PC

▣ Strategy

867

-0.6%

2015(P)

-1.0%

2014 2013

64.4%

30.0%

5.6%

65.1%

29.8%

5.1%

862 853

64.5%

30.1%

5.4%

▷ Russia : - Reduce shipment from Korea/Slovakia plants

- Reroute volume to other ROW markets

- Increase prices to defend profitability

- Focus sales capabilities on ‘Rio’

(Unit : Thousand) (Unit : Thousand)

Canada

Russia

▣ Sales by Region

Sales Weight YoY(%) Rest of the world

Middle East/Africa

Eastern Europe/Turkey

Latin America

Asia/Pacific

+2.6% 35%

+0.2% 6%

+7.1% 9%

-12.0% 19%

+6.0% 12%

299

47

75

166

106

-2.7% 19% 160

15

▣ Quarterly Income Statement

2013

1Q 2Q 1Q 2Q

2014

3Q 3Q 4Q 4Q

4Q’14 vs.

4Q’13

Revenue

Gross Profit

Operating Profit

Recurring Profit

Net Profit

COGS

as % of Rev.

Margin (%)

Margin (%)

Margin (%)

Margin (%)

(Unit : Billion Won)

11,926

2,479

736

1,064

876

9,447

(79.2)

(20.8)

(6.2)

(7.3)

(8.9)

12,055

2,468

770

1,320

1,024

9,587

(79.5)

(20.5)

(6.4)

(8.5)

(11.0)

-0.5

-9.1

-23.0

-50.2

-54.0

+1.6

11,415

2,219

567

853

657

9,196

(80.6)

(19.4)

(5.0)

(5.8)

(7.5)

11,702

2,177

501

579

436

9,525

(81.4)

(18.6)

(4.3)

(3.7)

(4.9)

11,085

2,345

704

971

784

8,740

(78.8)

(21.2)

(6.4)

(7.1)

(8.8)

13,113

2,990

1,126

1,469

1,181

10,123

(77.2)

(22.8)

(8.6)

(9.0)

(11.2)

11,634

2,357

696

1,226

903

9,277

(79.7)

(20.3)

(6.0)

(7.8)

(10.5)

11,767

2,395

650

1,163

949

9,372

(79.6)

(20.4)

(5.5)

(8.1)

(9.9)