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5. G-TEKT Corporation Business Report FY ended Mar. 2020

G-TEKT Corporation Business Report FY ended Mar. 2020

Factors

<Japan>
-Sales were JPY 51,780 million, an 11.7% year-on-year (y/y) decrease, because operating sales and sales of molding-equipment decreased. Operating income was JPY 146 million, a 91.9% y/y decrease, because of lower revenue and higher labor costs.

<North America>
-Sales were JPY 80,608 million, a 10.6% y/y decrease, because operating sales and sales of molding-equipment decreased. An operating loss of JPY 1,533 million was posted, due to lower revenue and higher labor and plant operating costs. (The Company recorded an operating income of JPY 1,529 million in the year before.)

<Europe>
-Sales were JPY 20,689 million, a 0.8% y/y increase, thanks to high output levels of other company’s new models and higher unit sales, the launch of production at the Slovakian plant, and higher sales of dies, although customers’ production volumes significantly decreased. Operating income was JPY 2,590 million, a 14.3% y/y decrease, because of higher labor expenses and increased initial startup costs for the new production plant.

<Asia>
-Sales were JPY 34,729 million, a 17.4% y/y decrease, due to lower new-vehicle production volumes because of sluggish new-car sales. Operating income was JPY 2,608 million, a 46.7% decrease, because reductions in production costs and selling and administrations costs couldn’t keep pace with a significant drop in lower revenue.

<China>
-Sales were JPY 44,283 million, a 10.5% y/y decrease, which resulted from the suspension of operations ordered by the government as a means to stop the spread of the coronavirus. Operating profit was JPY 4,725 million, a 10.8% y/y decrease, because of a significant drop in revenue; however, the Company had to record an extraordinary loss of JPY 814 million for production expenses incurred during the time of the government-ordered suspension of operations, so it became a decrease in profit by JPY 573 million.

<South America>
-Sales were JPY 8,124 million, an 11.8% y/y increase, thanks to an increase in output of the Toyota Corolla and an increase in sales of molding equipment. Operating income was JPY 226 million, a 25.2% y/y decrease, because of higher labor costs incurred for an increase in personnel and layoff compensation.

Recent Business Developments

2020 Vision “New G4-20”
In order to clarify the hurdle that must be cleared under the G4-20 output, the Company set a target of consolidated sales of JPY 300 billion and a target of consolidated profit of JPY 20 billion as objectives to achieve in five years. In order to speed up the four initiatives of “Genba” (work site), “Global”, “Grow-up”, and “Green”, the Company is working to achieve three new innovations: Technology innovation, sales innovation, and human-resources innovation, along with sustainable growth and advances.

>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)

Contracts

-In the fiscal year that ended in March 2020, orders from and unit production to Honda totaled 4.4 million units.

R&D Structure

-The main R&D function is located at the Japan G-TEKT Tokyo Laboratory, conducting R&D activities to develop advanced technology and new products to meet the needs for environmental protection, safety, and vehicle electrification.
 

R&D Activities

-The following outlines R&D activities conducted in the fiscal year that ended in March 2020.

・Development of advanced technologies

• Development of forming-technology for high-strength but light-weight materials to make multi-materials (iron, aluminum, composite materials)
• Low distortion, high-speed, continuous joining
• Technology for joining different materials
• Fastening technology
• Tailored properties

・Responding to electrification
・Development of machining technology to cold-forge high-tensile steel
・Development of machining technology for hot-stamping
・Activities to enhance productivity, quality, reliability on the welding line
・Development of transmission parts