F.C.C. Co., Ltd. Business Report FY ended Mar. 2015
Financial Overview |
(in million JPY) |
| FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | Rate of Change (%) | Factors | |
| Overall | ||||
| Sales | 154,395 | 145,433 | 6.2 | - |
| Operating profit | 8,746 | 14,512 | (39.7) | - |
| Profit before tax | 12,104 | 16,871 | (28.3) | - |
| Profit for the year | 8,042 | 13,012 | (38.2) | - |
| Automobile clutches | ||||
| Sales | 71,434 | 67,564 | 5.7 | -Higher sales in the U.S. to customers outside of the Honda Group; favorable currency translation (even though sales were impacted by Honda's converting to CVTs) |
| Operating income | (411) | 5,026 | - | -Increased depreciation expenses and initial start-up expenses; an impairment loss from reorganizing production facilities in Japan. |
*The Company adopted the International Financial Reporting Standards (IFRSs) from the fiscal year that ended in March 2015. In order to make year-on-year comparisons based on the same standards, the results from the fiscal year that ended in March 2014 are also given based on IFRSs.
New Company
-The Company announced that it has established a new consolidated subsidiary to manufacture and sell clutches for automobiles and motorcycles in India. The new company, FCC Clutch India Private Ltd., is capitalized at INR 1.25 billion (approximately USD 20.2 million). F.C.C. previously announced its plans to dissolve its joint venture with Rico Auto Industries Ltd., and to acquire Rico Auto's 50 percent of the shares of the joint venture, FCC Rico. After the acquisition, FCC Rico will be owned 50 percent by F.C.C., 45 percent by newly established FCC Clutch India, and 5 percent by FCC (Philippines) Corp. FCC Rico will change its corporate name to "FCC India Manufacturing Private Ltd." in January 2015. (From a press release on November 25, 2014)
Dissolution of Joint Venture
-The Company announced that it will dissolve its joint venture with Rico Auto Industries Ltd. in India. F.C.C. will acquire 50 percent of the shares of the joint venture, FCC Rico Ltd., from Rico Auto for INR 4.95 billion (approximately USD 80.6 million), converting the joint venture into its wholly-owned subsidiary. The transaction is expected to close in November 2014. FCC Rico manufactures and sells clutches for automobiles and motorcycles. (From a press release on September 25, 2014)
Mid-term Business Plan
-The Company has targeted achieving sales of JPY 175.0 billion, an operating profit of JPY 12.5 billion, and an ROE of 7% in the fiscal year ending March 2017.
-In order to reach the above-mentioned targets, the Company is implementing the following initiatives for the automotive clutch operations.
1. Respond to increased production in the U.S. and ensure a smooth production launch at the subsidiary in Mexico.
2. Improve profitability in the U.S. and China.
3. Launch new models in the U.S.
Outlook for FY ending Mar. 31, 2016 |
(in million JPY) |
| FY ending Mar. 31, 2016 (Forecast) |
FY ended Mar. 31, 2015 (Actual Results) |
Rate of Change (%) |
|
| Sales | 165,000 | 154,395 | 6.9 |
| Operating profit | 10,800 | 8,746 | 23.5 |
| Profit for the year* | 7,500 | 8,042 | (6.7) |
-The Company adopted the International Financial Reporting Standards (IFRSs) from the fiscal year that ended in March 2015.
*For the fiscal year ending March 2016, figures for the profit for the year attributable to owners of the parent were used.
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
R&D Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | FY ended Mar. 31, 2013 | |
| Overall | 3,163 | 3,168 | 2,983 |
| -Automobile clutches | 1,957 | 1,909 | 1,745 |
R&D Structure
-The Company has a Technology Laboratory and Production Technology Center in Hamamatsu City, Shizuoka Prefecture.
R&D Activities
Automobile clutches
-The Company conducted R&D on wet friction-materials for automatic transmissions (which include CVTs) and dry friction-materials for manual transmissions as the underlying framework to developing clutches that are lighter in weight and lower in cost, and which contribute to better fuel efficiency.
-In the fiscal year that ended March 2015, the Company developed a way to produce a segmented friction-plate, which is one of the Company's proprietary technologies; and launched production of CVT clutch assemblies that make use of the Company's proprietary technology that improves fuel-consumption and reduces weight. It also launched production of a lock-up clutch that has a newly designed damper that offers excellent damping performance; and it developed new friction materials with better marketability and durability.
Capital Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | FY ended Mar. 31, 2013 | |
| Motorcycle clutches | 3,603 | 3,026 | 5,059 |
| Automobile clutches | 15,501 | 16,115 | 6,038 |
| Company-wide (all functions) | 1,171 | 1,232 | 677 |
| Total | 20,276 | 20,374 | 11,774 |
-The Company invested to expand production capacity in the U.S. and China; establish a paper-based friction-materials plant (the first outside Japan), establish a subsidiary in Mexico, and reorganize production operations in Japan.
Company
-In line with reorganizing its production structure in Japan at the Hamakita Plant, invested to expand production plant; and invested in facilities and equipment manufacturing clutches.
Subsidiaries
-Invested in the plant building and clutch manufacturing facilities at FCC Automotive Parts de Mexico S.A. de C.V.
-Invested to respond to production of new models and increase production capacity at FCC (North Carolina), LLC; FCC (Indiana), LLC; FCC (Adams), LLC; and PT. FCC Indonesia
-Invested to migrate to in-house production and expand production capacity at FCC India Manufacturing Private Ltd.
Planned Capital Investments |
(As of Mar. 31, 2015) |
-In the fiscal year ending March 2016, the Company plans to invest JPY 23,230 million in facilities and equipment, which includes JPY 17,750 million for automotive clutches.
-It plans to invest to respond to production of new models and increase production capacity in North America and Japan; and to increase production capacity in India and Chengdu, China.
Company
-Invested to respond to production of new models and increase production capacity at the Tenryu and Hamakita plants.
Subsidiaries
-Invested to respond to production of new models and increase production capacity at FCC (Adams), LLC and FCC (Indiana), LLC.
-Invested to increase production capacity at FCC (North Carolina), LLC; FCC India Manufacturing Private Ltd.; and Chengdu Yonghua. F.C.C. Clutches Co., Ltd.