ASMO CO., LTD. Business report FY2006

Business Highlights

Financial overview
In million JPY FY2006 FY2005 Rate of Change (%) Factors
Sales 289,760 265,002 9.3

The sales increase was due to the growth in volume of vehicles (produced by Japanese automakers that experienced favorable production volume in Japan and overseas) that were equipped with the company's products such as wiper systems, power steering motors and cooling fan motors,

Operating income 8,081 13,681 (40.9) Operating income decreased due to the price hike in copper, which is used for manufacturing motors; and to an increase in depreciation charges incurred for greater investments made to deal with a switching over to handle next-generation products.
Ordinary income 8,534 14,489 (41.1)
Net income 3,903 8,469 (53.9)
A loss incurred with retiring fixed assets was recorded as an extraordinary loss.

Japan:
-Based on strong sales of Japanese automobiles overseas, the company's sales volumes increased due to greater demand seen in the volume of vehicles produced for export manufactured mainly in Japan, as well as due to the increase in parts destined for export due to greater production volume taking place overseas. Furthermore, increased sales of newly launched vehicle models by its clients contributed to increasing revenue at the company.
-In looking at sales by product, the Company saw sales growth especially in wiper systems, power steering motors, and electric fan motors.

The U.S.A.:
- Sales increased due to the growth in volume of vehicles equipped with the Company's products by Japanese automakers; as well as to favorable currency translation.

Other regions (Asia and Europe)
-Sales in Asia and Europe increased. This was due to the increased production volume by Japanese automakers in those regions and an improved operating capacity rate at the Company's new manufacturing facility.

R&D

R&D Expenditure
(in millions JPY) FY2006 FY2005 FY2004
R&D Expenditure
13,875 13,471 13,185

R&D Structure
-The R&D sections played a central role in further developing the company's global operations. The company furthered R&D activities in cooperation with Asmo Detroit, Inc.

R&D activities are conducted with several key words in mind. These are safety, environment, comfort and convenience.
-In dealing with and responding to environmental issues, the company is conducting R&D activities to develop motors using new systems that contribute to enhancing automotive fuel consumption and reducing emission gas. The company is also working on developing new, highly efficient and light-weight drive-trains and alternative technologies that are aimed at controlling environmentally harmful substances used in products.

R&D achievements
ツキBy developing a mechanism for avoiding external-force, the Company started mass production of rear windshield wiper motors that achieved a significant weight saving.
ツキBy developing a controlling circuit for window wipers, the Company was able to mass-produce compact, smart automatic window motors, which are part of the Company's endeavors to make motors more compact and improve greater operational speed control.
ツキThe Company developed and mass-produced brushless motors for electric VVTs (Variable Valve Timings), a motorized conventional hydraulic system to generate more power, improve fuel efficiency, and reduce exhaust emissions.

Technological licensing-in agreements (as of March 2007)
Partner Country Product Contractual Coverage
Contract Period
Canon Japan Ultrasonic wave motors - Licensing of patented technologies and receiving of technical information Jan. 1, 1998 - Dec. 31, 2017
Matsushita Electric Industrial Co., Ltd. (Panasonic) Japan Ultrasonic wave motors - Licensing of patented technologies and receiving of technical information March 19, 1999 - automatic extension

Investment Activities

Capital Expenditure
(in millions JPY) FY2005 FY2004 FY2003
Capital Expenditure
24,413 17,722 13,796

(in millions JPY) FY2006 FY2005 FY2004
Capital Expenditure
26,805 24,413 17,722

The Company and its consolidated subsidiaries invested a total of 26,805 million yen on their manufacturing facilities so they could switch over to handling next-generation products, increase production volume of existing products, and improve quality and reliability of the products.

-In FY2007, the fix amount budgeted for capital expenditures (for building new facilities and expanding existing plants) is 24,800 million yen.

New facilities
Company name Type of facility Planned total investment
(million JPY)
Asmo
(Kosai City, Shizuoka Pref.)
To switch over to handling next-generation products
To increase production volume
16,300