Sanden Corporation Business Report FY ended Mar. 2015

Business Highlights

Financial Overview

(in millions of JPY)
  FY ended Mar. 31, 2015 FY ended Mar. 31, 2014 Rate of Change (%) Factors
Sales 306,984 274,786 11.7 -
Operating Income 9,407 4,858 93.6 -
Ordinary Income 10,314 4,976 107.3 -
Net Income 5,580 5,843 (4.5) -
Automotive systems business
Sales 200,222 182,207 9.9 Sales increased year-on-year because;
-It recorded higher sales of vehicles in China/Asia.
-It acquired commercial rights making use of its environmental technology.
Operating Income 5,602 3,762 48.9 Profit increased year-on-year because;
-It made upfront investments in developing environmentally friendly and energy-saving technologies.
-It streamlined production facilities overseas.
-It switched to in-house production and improved its global-procurement operations.
-Productivity improvement efforts were effective.
-Foreign currency translation was positive.

Open a new sales branch office in France to drive environmental business

-The Company announced the opening of Sanden Environmental Solutions (SES) at Rennes in France, in order to drive environmental business in European market as a new sales branch under the SIE (Sanden International (Europe) Ltd.) , which is wholly owned by Sanden Corporation. SES will offer new devices with natural refrigerant of CO2, as well as module system products and relevant services with the aim to achieve Mid-Term-Planning of 200 million euro sales per year. With the opening of SES, Sanden will accelerate its global business based in Japan and in Europe. (From a press release on September 25, 2014)

Unit sales of automotive compressors

  FY ending Mar. 31, 2016
Year-on-year Change FY ended Mar. 31, 2015
(Actual Results)
Year-on-year Change FY ended Mar. 31, 2014
(Actual Results)
Units sold (in 1,000s) 16,700 4.4% 16,000 2.6% 15,600
Year-on-year Change by region
-Europe - 0% - -8% -
-Asia - +12% - +14% -
-Japan - -12% - -5% -
-Americas - 0% - +2% -

Outlook by Segment for FY ending Mar. 31, 2016

(in millions of JPY)
  FY ending Mar. 31, 2016
FY ended Mar. 31, 2015
(Actual Results)
Rate of Change
Sales 310,000 306,984 1.0
-Automotive systems business 206,000 200,222 2.9
Operating income 10,000 9,407 6.3
Ordinary income 11,000 10,314 6.7
Net income 7,000 5,580 25.4

>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)

R&D Expenditure

(in millions of JPY)
  FY ended Mar. 31, 2015 FY ended Mar. 31, 2014 FY ended Mar. 31, 2013
Group 6,742 7,095 6,890
Automotive systems business 4,488 4,908 4,555

R&D Facilities

-Major development activities are performed at 4 regions, namely in Japan, the U.S., Europe (Germany, France) and China.
-The Company is advancing development of new products that satisfy customer needs.

-The Company is studying the possibility of establishing a new research and development site for automotive heating, ventilating, and air conditioning (HVAC) units in China. The Company currently enjoys strong sales of HVAC units mainly in China and other Asian countries. To expand its sales even further, the Company will strengthen its capacity for locally developing HVAC units that are applicable for each model. The Company's sales from HVAC units account for almost one third of its total sales from automotive equipment business. The rest of the total sales come from the sales of compressors. The Company intends to expand its business by increasing order intake of the highly profitable HVAC units. (From an article in the Nikkan Jidosha Shimbun on December 13, 2014)

R&D Activities

Automotive systems business
-The Company strengthened development of compressors and car air-conditioners compatible with new types of vehicles such as plug-in hybrid, and electric vehicles.

-In facing the two greatest issues in the automotive industry, namely developing products that are eco-friendly and more energy efficient, the Company developed hybrid compressors, electric compressors, and compact and lightweight HVAC systems.

Product Development

HVAC using CO2
-The Company will develop a heating, ventilation and air conditioning (HVAC) unit that uses CO2 refrigerant for car air conditioners. In 2017, German automakers will start to use carbon dioxide (CO2) as refrigerant of car air conditioner for new models to be released in Europe. In response to this, the Company will commercialize the new HVAC unit by 2017. The Company aims to expand business by utilizing its expertise in developing CO2 refrigerants for automatic beverage vending machines. The CO2 refrigerant has very low global warming potential (GWP) rated at 1.0. In addition, the refrigerant improves cooling and heating capacity. However, the CO2 refrigerant should be compressed at high pressure, and existing compressors of car air conditioners cannot be used. Therefore, development of new compressors is required. In European countries, refrigerant with GWP at 150 or higher is not allowed to be used for some of new models, and its use will be totally banned on all of new models to be launched in 2017 or later. One of the alternatives for existing refrigerants is the HFO1234yf, which was jointly developed by Honeywell International Inc. and E.l. du Pont de Nemours and Company. The HFO1234yf also has very low GWP at between 4 and 6. However, Daimler announced it will not use the refrigerant as there is a concern for its inflammability. Volkswagen and BMW are expected to follow Daimler, which means that three major car makers in Germany will choose nonflammable CO2 refrigerant. (From an article in the Nikkan Jidosha Shimbun on May 15, 2014)

Capital Expenditure

(in millions of JPY)
  FY ended Mar. 31, 2015 FY ended Mar. 31, 2014 FY ended Mar. 31, 2013
Group 13,300 16,600 15,500
Automotive systems business 9,800 13,600 11,100
-Japan 3,200 3,400 2,800
-Europe 4,000 4,300 4,200
-North America 500 2,500 1,200
-Asia 2,000 3,200 2,700

-In the fiscal year ended March 2015, the Company invested mainly to localize production and switch to in-house production.

Planned Capital Investments

-In the fiscal year ending March 2016, the Company plans to invest a total of JPY 12,000 million in facilities and equipment in order to strengthen production operations, increase local procurement, and conduct more manufacturing in-house. It plans to invest JPY 10,000 million in the automotive systems business. The breakdown by region in the sector is as follows:

  • Japan: JPY 4,000 million
  • Europe: JPY 3,000 million
  • North America: JPY 500 million
  • Asia: JPY 2,500 million