EXEDY Corporation Business Report FY ended Mar. 2018

Financial Overview

(in million JPY)
FY ended Mar. 31, 2018 FY ended Mar. 31, 2017 Rate of Change
Sales 283,319 268,188 5.6 -Sales increased as a result of stable increase in orders for AT components in China and in Japan.
Operating income 23,808 22,980 3.6 -Operating income increased thanks to an increase in sales and effective cost-cutting initiatives, despite a fierce price competition of MT components and a fluctuation of the steel materials market.
Profit before tax 22,499 21,744 3.5 -
Profit for the year attributable to owners of the parent 15,791 14,237 10.9 -

Trend by segment

In the MT segment, sales increased 6.2% y/y due to an increase of orders outside Japan. However, segment income decreased 8.9% y/y due to fiercer price competition and other reasons.

ーIn the AT segment, sales increased 4.6% y/y with segment income of 9.1% thanks to a stable increase in orders in China and Japan.

Business expansion

The company announced that its group has made an investment in FOMM, a company developing world-wide business through new “concepts” in mobility development. DYNAX of EXEDY Group acquired new shares issued by FOMM through third party allocation. With this investment EXEDY intends to expand its business fields and improve its business results, pressing forward its collaborations with FOMM and its affiliates in an electric vehicle business where demand is increasing worldwide. (From a press release on February 13, 2018)

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

R&D Expenditures

(in million JPY)
FY ended Mar. 31, 2018 FY ended Mar. 31, 2017 FY ended Mar. 31, 2016
MT business 1,212 1,235 1,255
AT business 1,880 1,789 1,754
Others 1,045 1,011 998
New products 1,631 1,727 1,366
Total 5,768 5,763 5,374

R&D Structure

-As of the fiscal year that ended March 2018, the Group had 471 R&D staff, which accounted for 3% of the entire workforce.
-The Company’s R&D activities are being conducted at the following locations.

Name Location
DYNAX Corporation Hokkaido
Outside Japan
EXEDY Chongqing Co., Ltd. Chongqing, China
EXEDY DYNAX SHANGHAI Co., Ltd. Shanghai, China
EXEDY Friction Material Co., Ltd. Chonburi, Thailand
EXEDY ENGINEERING ASIA Co., Ltd. Chonburi, Thailand
EXEDY India Ltd. Maharashtra, India

R&D Activities

MT business
-In the automobile sector, the Company is developing clutches and dual mass-fly wheels with high-performance dampers, which can effectively absorb vibration generated from lean-burn engines and direct-injection diesel engines that comply with environmental issues and lower fuel consumption.

-In the commercial-vehicle sector, the Company is developing products such as actuators and motor drivers that operate clutches that are controlled by control units, as products for AMTs that automate the startup and shifting of manual clutches and manual transmissions.

AT business
-The Company is developing torque convertors, lock-up clutches, and wet clutches.

-The Company is continuing to make use of the latest computer systems for research that leads to improving oil flow, surface pressure analysis, and slip properties inside wet clutches.

-The Company developed and started receiving orders for a torque converter that it developed, which dampens vibration when the clutch is engaged at slow speed, increasing the lockup range up to slow-speed range in order to reduce fuel consumption.

-Dynax Corporation, a consolidated subsidiary, is developing friction materials for lock-up clutches as well as parts for automatic transmissions, fostering its technology on wet friction-materials that use unwoven fabric. It is developing parts designed for DCTs mounted on commercial vehicles, mass-producing the first wet dual clutch for commercial vehicles.

Other business
-Development of high-performance dampers for downsized, supercharged engines and variable displacement engines.

-Development of new products such as dry type multi-plate clutch for hybrid vehicles, which disconnects the engine with the motor, creating space within the motor’s interior; a damper that absorbs engine vibration generated when the vehicle switches between the engine and motor or when the vehicle is traveling; and a damper torque limiter that prevents overload on the engine.

Capital Expenditure

(in million JPY)
FY ended Mar. 31, 2018 FY ended Mar. 31, 2017 FY ended Mar. 31, 2016
MT Business 2,742 3,884 4,859
AT Business 17,275 17,709 19,795
Others 1,244 1,012 2,187
Total 21,260 22,607 26,842

-The company completed a USD 87.8 million investment at its subsidiary Exedy-Dynax Mexico, located in Aguascalientes, Mexico. As its third major capital investment in Aguascalientes, the facility will add 136,000 square meters of production space. Exedy-Dynax started operations in Aguascalientes in 2011. Exedy-Dynax manufacturers clutches and torque converters, serving clients that include Jatco, Nissan, Isuzu, Suzuki, Ford, General Motors, Toyota, Mitsubishi, Hyundai and Honda. (From a Mexico-Now article on May 14, 2017)

-The company will double its production capacity for torque converters in China from the current level between 2019 and 2020. An increasing number of vehicles are incorporating automatic transmissions in the Chinese passenger car market. The Chinese automotive market, the largest in the world, is expected to continue growing. Because of these circumstances, the company will expand its Chinese operations in preparation for an increase in demand for torque converters used in automatic transmissions. EXEDY will install new facilities at a plant operated by Exedy Dynax (Shanghai) Co., Ltd., EXEDY's Chinese subsidiary for producing torque converters, to boost its production capacity. (From an article in the Nikkan Jidosha Shimbun on December 8, 2017)

Planned Capital Investments

-In the fiscal year ending in March 2018, the Company plans to spend JPY 30,000 million Group-wide on facilities and equipment, investing JPY 3,000 million in the MT business and JPY 21,900 million in the AT business.