F.C.C. Co., Ltd. Business Report FY ended Mar. 2016
Financial Overview |
(IFRS, in million JPY) |
| FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | Rate of Change (%) | Factors | |
| Overall | ||||
| Revenue | 167,429 | 154,395 | 8.4 | -Sales increased because sales of automotive clutches were robust in the US and China, even though motorcycle product’s sales slowed down in Indonesia and China. |
| Operating income | 9,736 | 8,746 | 11.3 | -Income increased, thanks to higher profits from greater sales and to cost reductions, even though depreciation expenses increased and there was an impairment loss. |
| Current income before income taxes | 8,118 | 12,104 | (32.9) | - |
| Profit for the year attributable to owners of the parent | 6,162 | 7,230 | (14.8) | - |
| Automobile clutches | ||||
| Revenue | 86,821 | 71,434 | 21.5 | -Sales to Ford and ZF/FCA increased in the USA, but sales in Japan decreased due to falling new-car sales. -Revenue rose because sales in China increased. |
| Operating income | 1,421 | (411) | - | -Income increased, thanks to higher profits from greater sales and to cost reductions, even though depreciation expenses increased and there was an impairment loss. |
The 9th Mid-term Management Plan (FY ended Mar. 2015 - FY ending Mar. 2017)
-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.
Initiatives during the final fiscal year (ending in March 2017)
(1) Making use of global network
-The Company will start exports of clutch parts for automobiles to the U.S. from its plants in Japan and emerging countries. The Company will start exporting specific automotive clutch components from its plants in Shizuoka, Japan, some time between the fiscal years ending in March 2016 (FY 2016) and March 2017 (FY 2017). Factors leading to decision include increasing demand for automobile clutches in the U.S., stagnant demand in Japan, and the increase in export competitiveness of the Company’s plants in Japan due to the depreciation in yen. During this time period, The Company will also begin exporting automotive clutch components from its motorcycle plants in Brazil and Vietnam. This is due to declining demand for motorcycle clutch parts in emerging countries due to economic stagnation, which has consequently decreased the Company’s plant utilization rate in these countries. Under these circumstances, the Company will make full use of its plants across the world to meet growing demand in the U.S. (From an article in the Nikkan Jidosha Shimbun on August 26, 2015)
(2) Launch of operations at 7th business operation in India
-The number of business operations in India increased to seven, after becoming independently financed in December 2014. For example, there was the establishment of a technical center that started operating in September 2015 and launch of production at the Chennai and Ahmedabad Plants (motorcycles).
(3) Further increasing sales worldwide
-Taking into consideration regulations on fuel-economy and the growing use of CVTs and multi-stage transmissions, the Company is continuing to increase sales worldwide by enhancing its sales capabilities based on a seamless production structure, from developing friction materials (its signature products), up to producing them and guaranteeing their quality.
New Contracts
- Hyundai Motor: Clutch disc for FF 8AT (Production launched in Nov. 2015)
-The Company announced that it has started the mass-production of clutch discs for Hyundai Motor's vehicles. These parts are for use in automatic transmissions for front-wheel drive vehicles. The Company manufactures the clutch discs at its Tenryu Factory (Shizuoka Prefecture, Japan), Hamakita Factory (Shizuoka Prefecture), and Kyushu F.C.C. Co., Ltd. and supplies them to Seojin Automotive Co., Ltd. based in Gyeonggi-do, Korea. Seojin Automotive then assembles disc sets and delivers them to Hyundai Motor’s facility in Ulsan, Korea. Sales of the clutch discs is expected to reach approximately JPY 500 million (USD 4.1 million) by the fiscal year ending March 2019. (From a press release on November 24, 2015) - Unipres: Friction materials for torque converters on CVTs, based on a joint collaboration with Nissan/JATCO (Production launched in January 2016)
-The Company announced that it has received an order from Unipres Corporation to supply friction materials for torque converters. The torque converter is installed in the Jatco CVT7 W/R, a continuous variable transmission which was jointly developed by Nissan Motor Co., Ltd. and Jatco Ltd. The Company manufactures friction materials at its Suzuka Factory in Japan and adheres these friction materials to lock-up clutches at China FCC Foshan Co., Ltd. in Guangdong Province. After that, these components are supplied to Unipres Precision Guangzhou Corporation. The Company started mass production of the friction materials in January, 2016. Sales are expected to reach around JPY 200 million (USD 1.9 million) in FY 2016 ending in March 2017. (From a press release on April 28, 2016) - Toyota: Clutch assembly for FF 8AT (Production launched in May 2016 at the Hosoe and Hamakita Plants in Hamamatsu City, Shizuoka Pref. Japan)
Outlook for FY ending Mar. 31, 2017 |
(IFRS, in million JPY) |
| FY ending Mar. 31, 2017 (Forecast) |
FY ended Mar. 31, 2016 (Actual Results) |
Rate of Change (%) |
|
| Revenue | 155,000 | 167,429 | (7.4) |
| Operating income | 10,000 | 9,736 | 2.7 |
| Current income before income taxes | 8,500 | 8,118 | 4.7 |
| Profit for the year attributable to owners of the parent | 6,000 | 6,162 | (2.6) |
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
R&D Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | |
| Overall | 3,417 | 3,163 | 3,168 |
| -Automobile clutches | 2,050 | 1,957 | 1,909 |
R&D Structure
-The Company has a Technology Laboratory and Production Technology Center in Hamamatsu City, Shizuoka Prefecture.
R&D Location
-The Company announced that it will establish FCC INDIA Technical Center as part of the Company's Indian subsidiary. The new technical center will collect development information and needs from local companies and serve as a contact point to promptly meet the needs of its customers. The new center is also expected to enhance the Company's functionalities in the area of sales, development, and procurement. Operations are scheduled to start on September 1, 2015. (From a press release on August 25, 2015)
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 2016, 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, 2016 | FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | |
| Motorcycle clutches | 3,472 | 3,603 | 3,026 |
| Automobile clutches | 13,278 | 15,501 | 16,115 |
| Company-wide (all functions) | 414 | 1,171 | 1,232 |
| Total | 17,164 | 20,276 | 20,374 |
-The Company invested to expand production capacity in the U.S. and China; to increase production capacity of motorcycle clutches in India, and respond to new models in Japan.
The Company
- Invested to respond to production of new models and increase production capacity at the Hamakita plants.
Subsidiaries
- FCC (Adams), LLC.: Respond to production of new models and increase production capacity
- FCC Clutch India Private Ltd.: Increase production capacity
- FCC (Indiana), LLC.: Respond to production of new models and increase production capacity
- Chengdu Yonghua. F.C.C. Clutches Co., Ltd.: Respond to production of new models
Planned Capital Investment
|
(As of Mar. 31, 2016) |
-During the fiscal year ending in March 2017, the Company plans to spend a total of JPY 18,422 million, out of which it plans to spend JPY 12,253 million on the automotive clutch business.
-It plans to spend to respond to new models and increase production capacity in the USA and Japan, and to increase production capacity in India.
The Company
- Investment to respond to production of new models and increase production capacity at the Hamakita plants.
Subsidiaries
- FCC (Adams), LLC.: Respond to production of new models and increase production capacity
- FCC (Indiana), LLC.: Respond to production of new models and increase production capacity
- FCC Clutch India Private Ltd.: Increase production capacity
- FCC (Vietnam) Co., Ltd.: Respond to production of new models and increase production capacity