Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	Rate of Change (%)	Factors
Overall
Sales	918,688	760,870	20.7	-Sales hit a record high thanks to an increase in vehicle production at major customers and gains from exchange-rate translation.
Operating income	28,826	9,843	192.9	-Operating income reached a record high as a result of the Company's kaizen program to improve manufacturing operations and gains on weaker yen.
Ordinary income	29,543	12,840	130.1	-Although foreign exchange gains decreased, ordinary income reached the highest ever thanks a large increase in operating income.
Net income	25,016	5,548	350.9	-Net income also reached a record high due to an increase in ordinary income and a decrease in deferred income taxes.

Outlook for FY ending Mar. 31, 2015

(in billions of JPY)

	FY ending Mar. 31, 2015 (Outlook)	FY ended Mar. 31, 2014 (Result)	Rate of Change (%)
Sales	940.0	918.6	2.3
Operating income	30.0	28.8	4.1
Ordinary income	29.0	29.5	(1.8)
Net income	20.0	25.0	(20.0)
Investment Expenditure	21.8	29.2	(25.3)
R&D Expenditure	28.5	27.1	5.2

Estimated Operating Revenue by Region

(in billions of JPY)

	FY ending Mar. 31, 2015 (Outlook)	FY ended Mar. 31, 2014 (Result)	Rate of Change (%)
Japan	340	387.1	(12.2)
North America	330	295.6	11.6
Europe	115	104.7	9.8
Asia	220	195.3	12.6

 

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

Mid-term Business Plan

-The Company has mapped out a mid-term business plan called the CK G×4 T10, which covers from April 2011 through March 2017. During the 6-year period, the Company plans to introduce more than 10 new 'Green' technologies and products that are friendly to the environment, and to become a leading 'Great Company' in the global market.
-New technologies developed and commercialized by the Company include injection-molded skin technology, EGR coolers that are the lightest in the industry, and brushless motors for lithium-ion battery cooling systems. 

Thai Business

-In 2013, the Company announced that it has raised its voting share in Siam Calsonic Co., Ltd. from the current level of 49 percent to 51 percent, in order to convert Siam Calsonic into Calsonic Kansei's consolidated subsidiary. Siam Calsonic manufactures heat exchangers and emission control systems. In Thailand, Calsonic Kansei established its wholly owned subsidiary, Calsonic Kansei (Thailand) Co., Ltd., in 2001 and has been expanding its automotive parts business. Through this transaction, Calsonic Kansei intends to meet new orders for heat exchangers and emission control systems that the company has recently received in Thailand. (From a press release on December 25, 2013)

Expand Sales to Automarkets Other Than Nissan

-Calsonic Kansei Corporation will expand sales to automakers other than Nissan, by focusing mainly on heat exchangers, air conditioners and other electronic components, areas where the company has strong advantages. Currently the firm's sales to automakers other than Nissan account for 20% on a consolidated basis, but it plans to increase the ratio to 30% by fiscal 2016 through aggressive marketing activities. The company aims to boost its sales to more than 1 trillion yen on a consolidated basis and break into the list of top ten global auto parts suppliers by 2016. Calsonic Kansei hopes to become more competitive and boost its sales in the global market by securing both Nissan and non-Nissan automakers as its clients. (From an article in the Nikkan Jidosha Shimbun on Jun 20, 2013)

Collaboration with Mitsubishi Motors Group's suppliers

-Calsonic Kansei Corporation will collaborate with the Mitsubishi Motors Group's supplier in Mizushima, Okayama Prefecture on automotive HVAC business. Based on the collaboration, final assembly of Calsonic Kansei's HVAC parts, which will be installed on a new mini passenger car developed jointly between Nissan and Mitsubishi Motors, will be handled at Suiryo Plastics Co., Ltd. in Kurashiki City, Okayama Prefecture. The plastic parts supplier in the Mitsubishi Motors Group will provide the completed HVAC units to Mitsubishi's mini vehicle plant in Mizushima. For the new mini vehicle model, a number of suppliers in the Nissan Group have already been awarded new contracts. With all of its plants located in Kanto and Kyushu regions that are far from Okayama, Calsonic Kansei has decided to cooperate with suppliers near its customer's plant to ensure an efficient supply structure for large products. (From an article in the Nikkan Jidosha Shimbun on May. 20, 2013)

R&D Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012
Japan	22,210	21,270	21,310
Americas	2,360	1,490	1,210
Europe	1,220	850	670
Asia	1,260	160	250
Total	27,050	23,780	23,460

R&D Structure

-In order to connect its business operations as well as regions, the Company set up four new technical centers that play their own roles in developing mid-term technology and overseeing resource management since the fiscal year ended Mar. 31, 2013.

Name	Location
Advanced Fundamental Development Center	-
Production Technology Center	Yoshimimachi, Saitama Pref.
Testing & Research Center	Sano, Tochigi Pref.
Technological Resources Utilization Center	-

R&D Structure by Region

<Japan>
-As the center conducting R&D activities capable of responding to product requirements worldwide, it is in-charge of advanced, basic, and application development. The Company is adding more resources toward advanced and basic development activities, which create future development technology and are designed to enhance its competitive edge. 
-In order to strengthen its predominance in terms of product pricing, one element of product competitiveness, the Company has been working on ways to reduce the costs of goods. Making use of R&D capabilities in LLCs is one of these. Specific examples include transferring R&D responsibilities to Calsonic Kansei Engineering Center India-L&T (CECI-L&T) and CK Engineering Shanghai.

<Americas>
-The Company makes use of its Americas R&D capabilities to finalize product development based on discussions with local customers, after basic developments and application specs of vehicle product developments are decided in Japan. The R&D activities for products designed for the Mexican market are managed and operated in the Americas Technical Center.

<Europe>
-The Europe Technology Center serves the same function as that of the American one. The Center is in charge of one critical part of R&D activities for Renault, based on its partnership with the company.

<Asia>
-The importance of R&D in Asia is tied to the growth of the Chinese market. The Company is significantly expanding the R&D structure at its Asian Technical Center, which shares the role with the Japan Technical Center in developing products for the Chinese market, aiming to create a very efficient and cooperative R&D structure.
-The Company has further expanded the R&D functions at Calsonic Kansei Engineering Center India-L&T (CECI-L&T) in Chennai, India, which was established during the fiscal year ended March 2013.

R&D Activities

Improving product competitiveness
-Developing components and systems that respond to environmental concerns.
-Developing an exhaust system, and the components for it, which can improve fuel economy and exhaust purification performance.
-Developing highly advanced modular products as well as to develop components that are higher in performance and lighter in weight.
-Developing meters and information delivery systems that enhance safety.
-Developing air-conditioning systems that provide a comfortable driving environment.
-Developing products for low-cost vehicles sold in emerging markets.

Developing strategic products
- Developing thermal and power management systems for next-generation green vehicles.
- Developing products related to human machine interfaces (HMIs), cockpit modules, and front-end modules, which significantly affect the vehicle's design and performance.

Product Development

Brushless motors for HEVs' and EVs' battery cooling systems
-The Company developed compact and lightweight brushless motors for battery cooling fans used on HEVs and EVs. The new motors are already featured on hybrid models with a lithium-ion battery.

New Engineering Centers

<China>
-In 2013, the Company announced that it has established its second Chinese engineering center, at Calsonic Kansei (Guangzhou) Corporation Headquarters / Huadu Plant in Guangzhou, Guangdong Province. Calsonic Kansei is positioning the new center as an engineering hub for new vehicle applications. (From a press release on November 15, 2013)

<India>
-In 2013, the Company announced its partnership with Larsen & Toubro Integrated Engineering Service (L&T IES) to set up Calsonic Kansei Engineering Center India-L&T (CECI-L&T) in Chennai. CECI-L&T is positioned as CK's Global Engineering Center, and over the initial 5 years, it will focus on the expansion and optimization of engineering activities of the facility. With the partnership with L&T IES, CK will promote the standardization of global engineering process for efficient engineering resource allocation. L&T IES offers product design support, analysis, prototyping & testing solutions in addition to manufacturing engineering, Mobile OS solutions for various industry segments such as aerospace, automobile, trucks & off-highway vehicles, medical devices, consumer electronics, and telecom. (From a press release on March 8, 2013)

Capital Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012
Japan	7,000	8,700	7,300
Americas	10,400	6,900	4,900
Europe	3,600	1,500	1,200
Asia	9,100	7,800	8,100
Adjusted figure	(1,000)	(100)	-
Total	29,100	24,800	21,500

-The Company invested mainly in its auto-parts business to augment and upgrade its testing facilities, in addition to investing in facilities and equipment (including intangible assets) to respond to vehicle model changes being made by its major customers.

Outlook of Capital Expenditure

(in millions of JPY)

	FY ending Mar. 2015
Japan	7,000
Americas	7,000
Europe	2,900
Asia	4,900
Total	21,800