F.C.C. Co., Ltd. Business Report FY ended Mar. 2017
Financial Overview |
(IFRS, in million JPY) |
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | Rate of Change (%) | Factors | |
| Overall | ||||
| Revenue | 157,217 | 167,429 | (6.1) | -Revenue fell because of lower sales of motorcycle clutches in Indonesia and the effect of negative currency translation, although sales of motorcycle clutches in North America increased. |
| Operating income | 11,236 | 9,736 | 15.4 | -Operating income increased due to the benefits of effective cost reductions and due to the fact that the impairment loss that was recorded the previous year was no longer an issue the most recent past year. However, the effect of negative currency translation and higher expenses for launching operations in the USA impacted business performance. |
| Current income before income taxes | 11,419 | 8,118 | 40.7 | -Current income increased because the amount of loss because of negative currency translation was lower this past year. |
| Profit for the year attributable to owners of the parent | 7,204 | 6,162 | 16.9 | - |
| Automobile clutches | ||||
| Revenue | 83,922 | 86,821 | (3.3) | -Revenue was lower due to the effect of negative currency translation, even though sales of automotive clutches increased. |
| Operating income | 2,903 | 1,421 | 104.3 | -Income increased due to increased sales in Mexico and due to the fact that the impairment loss that was recorded the year before was no longer an issue the most recent past year. However, the effect of negative currency translation and higher expenses for launching operations in the USA impacted business performance. |
Business Development outside Japan
-The Company announced that it has made FCC (Thailand) Co., Ltd., its joint venture for clutch parts production in Thailand, a wholly owned subsidiary. The company acquired the 39% stake in the joint venture owned by HSH Co., Ltd. and the 3% stake owned by Thai Suzuki Motor Co., Ltd. Through the acquisition, the company is aiming to expand its business by speeding up decision making and strengthening collaboration among group companies. (From an article in the Nikkan Jidosha Shimbun on March 30, 2017)
Contracts
-The Company announced that it has received an order for clutch assemblies from Toyota Motor Corporation. These parts are for use in 8-speed automatic transmissions for front-wheel drive vehicles. This is the first time that the company has won an order from Toyota. F.C.C. manufactures the clutch assemblies at its Hosoe Factory and Hamakita Factory in Shizuoka Prefecture and supplies them to Toyota's Kinu-ura Plant in Aichi Prefecture. Mass production started in May 2016. (From a press release on September 16, 2016)
-The Company has announced that its U.S. subsidiary, FCC (Adams), LLC., received a new order from Ford to supply clutch assemblies for 10-speed automatic transmissions. These clutch assemblies will be supplied to Ford's Livonia Transmission Plant in Michigan, USA. (From a press release on August 23, 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. F.C.C. 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. F.C.C. 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)
10th Mid-term Management Plan (FY ending in March 2018-FY ending in March 2020)
-Performance targets are as follows:
Sales: JPY 185.0
ROE: 8.3%
Operating Profit: JPY 15.5 billion
Consolidated Dividend Payout Ratio: 30%
Major initiatives in the fiscal year ending in March 2018
-Increase production capacity in India.
-Build a framework that can respond to cutting over to new models and ensure stable production volumes while enhancing profitability.
Outlook for FY ending Mar. 31, 2018 |
(IFRS, in million JPY) |
| FY ending Mar. 31, 2018 (Forecast) |
FY ended Mar. 31, 2017 (Actual Results) |
Rate of Change (%) |
|
| Revenue | 158,000 | 157,217 | 0.5 |
| Operating income | 10,200 | 11,236 | (9.2) |
| Current income before income taxes | 10,000 | 11,419 | (12.4) |
| Profit for the year attributable to owners of the parent | 7,700 | 7,204 | 6.9 |
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
R&D Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | |
| Overall | 3,713 | 3,417 | 3,163 |
| -Automobile clutches | 2,206 | 2,050 | 1,957 |
R&D Structure
-The Company has a Technology Laboratory and Production Technology Center in Hamamatsu City, Shizuoka Prefecture.
R&D Activities
Automobile clutches
-Focusing on wet friction materials for automatic transmissions (including CVTs) and dry friction materials for manual transmissions, the Company is conducting R&D activities on clutches to downsize them, reduce their costs, and have contribute more to improve fuel efficiency.
-The Company is making product proposals on its proprietary segment-type friction-plate production technology. It also launched commercial production of clutch assemblies for automatic transmissions, in which its proprietary technology is used to reduce their weight and improve fuel efficiency.
-The Company developed a lock-up clutch with a newly designed damper that excels in damping performance.
-The Company developed a new friction material that enhances product appeal and reliability
Capital Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | |
| Motorcycle clutches | 2,856 | 3,472 | 3,603 |
| Automobile clutches | 11,942 | 13,278 | 15,501 |
| Company-wide (all functions) | 569 | 414 | 1,171 |
| Total | 15,367 | 17,164 | 20,276 |
-The Company invested to increase production capacity of automobile clutches in North America and increase production capacity of motorcycle clutches in India.
The Company
- Acquired the land and building of the Watagashima plant.
Subsidiaries
- Invested to cutover to new models and increase production capacity at FCC (Adams), LLC.
- Invested to cutover to new models and increase production capacity at FCC (Indiana), LLC.
- Invested to cutover to new models and increase production capacity at FCC (Vietnam) Co., Ltd.
- Invested to cutover to new models and increase production capacity at FCC Clutch India Private Ltd.
Planned Capital Investment
|
(As of Mar. 31, 2017) |
-In the fiscal year that ends in March 2018 the Company plans to spend JPY 17,939 million in capital investments, allotting JPY 13,363 million to automotive clutches.
-The Company plans to invest in order to cutover to new models and increase production capacity in North America and Japan and increase production capacity in India.
The Company
- The Company plans to invest in order to enhance the capabilities of its testing facilities and equipment at its engineering and R&D center, to cutover to new models, and increase production capacity at the Hamakita Plant.
Subsidiaries
- Invest in order to cutover to new models and increase production capacity at FCC (Adams), LLC.
- Invest in order to cutover to new models and increase production capacity at FCC (Indiana), LLC.
- Invest in order to cutover to new models and increase production capacity at FCC (Vietnam), LLC.
- Invest in order to cutover to new models and increase production capacity at FCC Clutch India Private Ltd.