Suncall Corporation Business Report FY ended Mar. 2016
Financial Overview |
(in million JPY) |
| FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | Rate of Change (%) | Factors | |
| Overall | ||||
| Sales | 36,730 | 35,816 | 2.6 | -Significant increase in sales of automotive parts in the U.S. and China. -Japan: Even though new-car sales were lower, sales of valve springs for export were strong. -North America: Sales of parts for engines and transmissions increased in line with the continued, strong demand in the automotive market. -Asia: Subsidiary in China continued to maintain high sales of engine and transmission parts. Sales at the Thai subsidiary were strong. |
| Operating income | 2,113 | 2,557 | (17.4) | -Income was lower due to increased expenses to launch production at subsidiary in Mexico, and increased orders for unprofitable products. |
| Ordinary income | 1,522 | 3,352 | (54.6) | -Income was lower because of negative currency translation due to the sharp rise in the valuation of the yen in the fourth quarter, and due to a loss on the investment in a joint venture outside Japan (accounted for under the equity method of accounting) that resulted from delays in the joint venture’s launch. |
| Profit for the year attributable to owners of the parent | 1,042 | 2,143 | (51.4) | - |
| Functional Precision Materials | ||||
| Sales | 4,185 | 4,299 | (2.7) | -Sales were about the same as they were last year, as sales in Japan decreased while sales outside Japan were strong. Favorable currency translation also contributed to the results. |
| Functional Precision Components | ||||
| Sales | 22,484 | 20,443 | 10.0 | -Sales were higher due to strong sales of mainly engine and transmission parts at operations outside Japan, even though sales were stagnant in Japan. |
Mid-term Business Plan
-The Company announced its mid-term business plan and policies in May 2016. The objectives are as follows: in the fiscal year ending in March 2019, JPY 50.0 billion in consolidated sales, operating profit margin of 10%; and investment of JPY 12.0 billion yen over three years, which includes potential investments in M&As.
Expand automotive business
-Expand valve-spring-material business;
For high-precision parts for engines and transmissions, continue to increase production capacity at the plants in China and Mexico manufacturing automotive wire materials, in line with the expanding global market. This includes enhancing productivity based on a three-region operating structure, which includes Japan, and building the organizational structure to achieve optimum product production and delivery.
- Mexico: launch operations in 2016 to take advantage of the strong demand in the North American market
- China: increased sales from the latter half of 2015 in China and the Southeast Asian market.
- Japan (Kyoto): operate at full capacity
-Take advantage of seamless production operations, from materials to products;
- Expand market share of coil springs for seatbelts (retractors) and materials: The Company's current market share of these products is 8%, according to the Company's own study. Increase the Company's capacity to deliver 2,600 tons of materials per year (as of 2015), to 4,000 tons in 2018. Transfer operations producing materials to the joint venture in Korea, and increase sales outside Japan. Launch sales of coil-springs in the North American market through a joint venture with Hayamizu Hatsujo Co., Ltd.
- Expand business in high-strength springs for transmissions (damper springs): Demand for high-strength materials will increase, in line with multi-stage automatic transmissions and stop/start systems. Make better use of valve spring materials and improve profitability by switching to automated production lines, in order to expand the business.
- Develop valve-spring material for hybrid vehicles: develop low-cost new products that can respond to low density compared to high-powered engines.
-Development of new products for HVs, EVs, PHVs, and FCVs; and non-automotive products;
In the midst of growing demand for electronic products and alternative materials because of the rapid progress in vehicle electrification and weight reduction as a result of developments in technology on safety, low-environmental impact, and driver-assist systems, the Company is making use of technology on precision plastic processing and production technology on electronic information and communications, developing and manufacturing major components for HVs, EVs, PHVs, and FCVs. It plans to make this one of its major business operations in the future. It is also researching to find alternative materials for materials currently being used.
- Shunts on busbars: sensors to detect electrical current in integrated, single-unit busbars. Capability to detect flows of high electrical current in lithium-ion batteries, with high precision. Low-cost, simple architecture, integrated single-unit. Space-saving design.
- Bus rings: Eliminates the need for stamping dies based on being formed from a single strand of copper rectangular wire. Small-lot production possible. Significantly simplifies installation of wire on the motor.
- Wireless power supply coils: non-contact power supply coils for high electric current. The thickness of the coil is about half that of round wire due to the use of shaped, cross-sectional wire. Being coated after being processed improves its performance to withstand high voltage and maintain stable frequency because of its uniform shape.
- Square magnetic wire: Magnetic wire for motor coil. The Company has a patent for this wire. It is based on rolling technology. Size of motor can be reduced by using this wire. It is made of aluminum so reduces vehicle weight. Improves heat resistance.
R&D activities
1) Development Group
Shunts on busbar
-This electric-current sensor directly measures high electric current in the range of 200 to 800 amperes. Jointly developed with KOA Corporation, it was developed for battery management purposes on EVs, hybrid vehicles, etc.
2) High precision materials
Precision piston-ring material for improving surface properties
-Currently, piston rings are mostly cast or made from steel-wire material (precision shaped wire). Now, in order to further improve performance and lower costs, customers are requiring wires with more precise shapes and cleaner surfaces. This is because they need to eliminate or at least reduce machining processes after the rings are formed, i.e., need near-net wire. In response to this, the Company developed new production methods that improve the shape of wire materials, which was an issue with drawn wire materials. It started manufacturing and delivering them.
3) Precision Products
Springs for new variable valve
-The Company has been developing spiral springs using shaped cross-sectional material with excellent properties on the same level as valve springs, as parts for new variable valves for next-generation engines. The Company received orders for them and began producing them from May 2014 for a major Japanese OEM. Since then, the Company developed the same spring coils for other engines mounted by the same OEM. In addition, the Company launched production for non-Japanese OEMs from September 2015. Furthermore, the Company is continuing to development them for new-generation models.
High rebound-spring for seatbelt retractors
-By developing rolled material for high-tension spiral springs, the Company was able to increase tension by 10% compared to conventional springs. The Company made the spring material thinner while reducing the length, and thus reduced both the weight and cost of the spring too. The Company launched production of the springs during the fiscal year that ended in March 2016, with plans to further develop the springs and increase sales by winning more customers.
R&D Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | |
| Overall | 940 | 823 | 735 |
Capital Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | |
| -Functional Precision Materials (Japan) | 330 | 310 | 180 |
| -Functional Precision Materials (North America) | 941 | 1,031 | - |
| Functional Precision Materials Total | 1,271 | 1,341 | 180 |
| -Functional Precision Components (Japan) | 1,078 | 1,119 | 1,015 |
| -Functional Precision Components (North America) | 1,007 | 527 | 192 |
| -Functional Precision Components (Asia) | 340 | 566 | 343 |
| Functional Precision Components Total | 2,425 | 2,212 | 1,550 |
| Other | 934 | 304 | 440 |
| Grand Total | 4,630 | 3,857 | 2,170 |
Planned Capital Investments |
(As of Mar. 31, 2016) |
| Company or Office Name | Facilities | Expected Investment (in million JPY) |
From | To |
| The Company (Kyoto, Japan) |
Manufacturing facility (Functional Precision Materials) |
441 | - | Mar. 2017 |
| Manufacturing facility (Functional Precision Materials) |
516 | - | Mar. 2017 |
|
| Suncall Engineering Co., Ltd. (Yamanashi, Japan) |
Manufacturing facility (Functional Precision Materials) |
121 | - | Mar. 2017 |
| Suncall Kikuchi Corp. (Kumamoto, Japan) |
Manufacturing facility (Functional Precision Materials) |
131 | - | Mar. 2017 |
| Suncall Technologies Mexico, S.A. de C.V. (Aguascalientes, Mexico) |
Manufacturing facility (Functional Precision Materials) |
329 | - | Dec. 2016 |
| Manufacturing facility (Functional Precision Materials) |
399 | - | Dec. 2016 |
|
| Suncall America Inc. (Indiana, USA) |
Manufacturing facility (Functional Precision Materials) |
156 | - | Dec. 2016 |
| Suncall High Precision (Thailand) Ltd. (Chonburi, Thailand) |
Manufacturing facility (Functional Precision Materials) |
170 | - | Dec. 2016 |
Outlook for FY ending Mar 31, 2017 |
(in million JPY) |
| FY ending Mar 31, 2017 (Forecast) |
FY ended Mar. 31, 2016 (Actual Results) |
Rate of Change (%) |
|
| Overall | |||
| Sales | 39,000 | 36,730 | 6.2 |
| Operating income | 2,000 | 2,113 | (5.4) |
| Ordinary income | 1,700 | 1,522 | 11.6 |
| Profit for the year attributable to owners of the parent | 1,100 | 1,042 | 5.5 |
| automotive-parts sector | |||
| Sales | 28,300 | 26,669 | 6.1 |
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
-Sales are predicted to increase based on the following factors: unit production by OEMs is forecast to increase, increased orders in North America and China, the Mexican subsidiary will launch production, and more orders for transmission products in Japan.
-Operating profit is predicted to be lower because of the following factors: unfavorable currency translation and higher fixed costs at the subsidiary in Mexico.