Financial Overview

(in millions of JPY)

	FY2010	FY2009	Rate of Change (%)	Factors
Sales	278,490	255,937	8.8	-
Operating income	21.598	13,716	57.5	-In spite of negative currency translation (because of the higher valuation of the yen) and higher R&D expenses, the Company posted higher income year-on-year as a result of greater sales volumes and initiatives that successfully rationalized operations and reorganized the Company’s business structure.
Ordinary income	21,694	15,361	41.2
Current net income	12,324	7,633	61.5	-In spite of incurring a loss due to the Great East Japan Earthquake, current net income increased as a result of recording negative goodwill.

Highlights by Region

 

<Japan>
-In spite of the effects on sales of products designed for four-wheel vehicles in Japan due to the Great East Japan Earthquake, sales of products destined for North America, Europe, and Asia increased.
-Sales of products for two-wheel vehicles and sales of general-purpose products, especially those destined for Asia, increased. Sales were 146.4 billion yen.

<The Americas>
-In spite of negative currency translation, the Company posted increased sales due to favorable sales of products designed for four-wheel vehicles as a result of the market recovery in North America.
- In Brazil and other countries, sales of products for two-wheel vehicles and sales of general-purpose products increased.
-Sales were 73 billion, 72 million yen.

<Asia>
-Sales of four-wheel vehicles in Thailand increased.
-In Thailand, Indonesia, India and Taiwan, sales of products for two-wheel vehicles and sales of general-purpose products increased.
-Sales were 80 billion, 656 million yen.

<China>
-In spite of negative currency translation, the Company posted increased sales due to favorable sales of products designed for four-wheel vehicles, thanks to the continued, strong growth in the Chinese market.

-Sales of products for two-wheel vehicles and sales of general-purpose products increased.
-Sales were 34 billion, 147 million yen.


<Europe>
- In spite of negative currency translation, the Company posted increased sales because the end came to inventory adjustments that were needed because of the significant decrease in production volume that occurred last year.
-Sales were 5 billion, 792 million yen.

Acquisitions

-Keihin Corporation announced on June 6 that it has reached a final agreement with Showa Denko K.K. about Keihin’s acquiring the automotive heat exchanger business of Showa Denko. The project includes the aluminum evaporator and other heat exchanger products in the automotive climate control systems, but it does not involve the aluminum cylinder business for laser printers and other technologies.  In 2013, the Company will make a new company which will be a fully owned subsidiary. (From an article in the Nikkan Jidosha Shimbun on June 7, 2011)

R&D Expenditure

(in millions of JPY)

	FY2010	FY2009	FY2008
Overall	15,086	14,150	14,404

R&D Facilities

Tochigi R&D Center (Takanezawa Town, Tochigi Pref., Japan)

-With system development being a key focus , the Tochigi R&D Center conducts all R&D activities, from developing and inspecting software, to conducting research and analysis using actual vehicles. -As the main facility conducting system development, the Tochigi R&D Center focuses on expanding R&D areas based on systemization and integration as well as developing advanced technologies mainly for electronic control units (ECUs).

Kakuda R&D Center (Kakuda City, Miyagi Pref., Japan)

-The Kakuda R&D Center, in aiming to develop core products that support systems, pursues performance, functionality, durability, and economy, which are elements that form the foundations to improving quality; and at the same time, it links these elements to production technology. -It consists of an analysis building, which analyzes data; a durability building, which conducts vibration tests and measures heat resistance; and a chassis building, which uses actual motorcycles and vehicles to evaluate products in terms of their value as system components.

R&D Activities

Four wheel vehicle business
The Company developed and commercialized
-Parts for engine fuel supply systems and transmission hydraulic control systems
-Systems that are compatible with alternative fuels
-High-performance small air-conditioning systems
-Electronic engine control units
-Control units for hybrid cars and power modules for driving a motor

-Keihin Corp. plans to develop a low-priced automotive fuel injection system targeted to emerging nations. By specializing in products designed for manual transmissions, which account for a high percentage of transmissions equipped on vehicles in emerging nations, the Company hopes to reap cost-reduction benefits. The Company intends to increase its market share by enhancing its product range targeted to emerging nations. (From an article in the Nikkan Jidosha Shimbun on December 21, 2010)

Capital Expenditure

(in millions of JPY)

	FY2010	FY2009	FY2008
Total	12,518	9,366	17,974

 

Breakdown of capital investment costs in facilities and equipment:
-Production: 7 billion, 142 million yen; R&D: 970 million; Others (including intangible assets) 4 billion, 404million yen.

Breakdown of capital investment costs by region:

-Japan: 2 billion, 249 million yen; The Americas: 1 billion, 747 million yen; Asia: 2 billion, 364 million yen; China: 648 million yen; Europe: 132 million yen

Investments in New Production Facilities

Segments	Planned Amount of Investment (in million yen)
Japan	6,552
The Americas	3,412
Asia	3,877
China	1,196
Europe	36
Total	15,075