SHOWA Corporation 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 | 258,246 | 266,407 | (3.1) | -Sales decreased year-on-year due to lower sales of motorcycle/automotive products and steering systems. |
| Operating income | 7,568 | 15,978 | (52.6) | -Profit fell due to the Company’s posting warranty expenses (reserve funds set up for product warranties) to cover defects in some gas-springs. |
| Profit before taxes | 7,454 | 18,222 | (59.1) | |
| Profit for the year attributable to owners of the parent | (2,348) | 11,570 | - | |
| Automobile | ||||
| Revenue | 94,203 | 96,039 | (1.9) | -Sales decreased because of lower sales mainly in Japan. |
| Operating income | 4,683 | 3,971 | 17.9 | - |
| Steering | ||||
| Revenue | 74,738 | 74,380 | 0.5 | -Sales increased due to favorable currency translation; although sales volumes actually decreased, mostly in the North America and China. |
| Operating income | 94 | 3,144 | (97.0) | - |
| Gas spring | ||||
| Revenue | 3,188 | 2,952 | 8.0 | - |
| Operating income | (9,036) | (122) | - | -Profit fell due to the Company’s posting warranty expenses (reserve funds set up for product warranties) to cover defects in some gas-springs. |
Recent business developments
Dual-pinion-assist electric power steering system (DPA-EPS)
-The Company has started production of a newly developed dual-pinion-assist electric power steering (DPA-EPS) system at its Gotemba Plant (Shizuoka Pref., Japan). The new DPA-EPS system offers an improved steering feel and higher output power. The steering system has been selected for Mazda's all-new "Roadster" for the first time. The new system features pinion gears at two locations on the steering wheel shaft side and the assist mechanism side. The power assist mechanism is apart from the steering unit to offer an improved steering feel. The deceleration mechanism is installed at a location independent from the steering shaft to provide an optimal reduction gear ratio. This configuration can efficiently boost the power output. In addition to the all-new "Roadster", the new DPA-EPS system will be installed on Honda's "Civic Type R", which is scheduled to be produced in the U.K. Showa will produce the products for exporting to the U.K. at the Gotemba Plant. The Company also received an order for the new DPA-EPS system to be installed on Honda's next-generation "Civic". The Company will produce the next-generation "Civic's" systems at its plant in Mexico. (From an article in the Nikkan Jidosha Shimbun on May 29, 2015)
Launched local production of dual-pinion-assist electric power steering system (DPA-EPS)
- Jun. 2015: Showa Autoparts Mexico, S.A. de C.V. (Guanajuato, Mexico)
- Feb. 2016: Showa Autoparts (Thailand) Co., Ltd. (Chonburi, Thailand)
- Mar. 2016: Guangzhou Showa Autoparts Co., Ltd. (Guangzhou, China)
-The Company will expand its annual production capacity for new dual-pinion-assist electronic power steering (DPA-EPS) systems in Mexico to 1 million units by fiscal year 2018 (ending in March 2019), twice the level forecast in FY2016. Production will be expanded for the DPA-EPS system, which provides excellent steering feel. The Company will convert its existing lines for pinion-assist (PA) type systems into lines for DPA-EPS systems. (From an article in the Nikkan Jidosha Shimbun on March 1, 2016)
Outlook for FY ending Mar. 31, 2017 |
(IFRS, in million JPY) |
| FY ended Mar. 31, 2017 (Forecast) |
FY ended Mar. 31, 2016 (Actual Result) |
Rate of Change (%) |
|
| Overall | |||
| Revenue | 251,000 | 258,246 | (2.8) |
| Operating income | 12,200 | 7,568 | 61.2 |
| Profit before taxes | 12,800 | 7,454 | 71.7 |
| Profit for the year attributable to owners of the parent | 4,700 | (2,348) | - |
>>>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 | |
| Motorcycle/General | 2,945 | 2,517 | 2,344 |
| Automobile | 3,562 | 3,354 | 2,992 |
| Steering | 3,902 | 3,767 | 3,296 |
| Gas spring | 101 | 110 | 94 |
| Total | 10,534 | 9,750 | 8,044 |
R&D Facilities
| Name (Location) | Main R&D Activities |
| R&D Automotive Parts (Saitama, Japan) |
Research and development of shock absorbers for 4-wheeled vehicles, gas springs |
| R&D Center (Tochigi) (Tochigi, Japan) |
Research and development of hydraulic devices, power steering systems and drivetrain-related components and materials |
| R&D Center (Tochigi), Shioya Proving Ground (Tochigi, Japan) |
Test course |
| R&D Motorcycle Parts (Shizuoka, Japan) |
Research and development of shock absorbers for 2-wheeled vehicle |
-The Company held an opening ceremony for its Shioya Proving Ground near its Tochigi R&D Center in Tochigi Pref. in Japan. A decision to construct this facility, which is the Company's first vehicle test track, was made in 2013, and its construction began in November 2014. The first phase of the construction project, which includes a 1km straight track and a circuit, was completed earlier this month, and tests are already being performed at the new facility. The second phase, which includes winding roads, is scheduled to be completed by June 2017. Up until recently, the Company has conducted vehicle tests at Honda R&D Co., Ltd. The Company's own new proving ground is expected to speed up development and improve its capability for developing new products such as suspension and steering technologies that can support future autonomous driving. (From an article in the Nikkan Jidosha Shimbun on September 28, 2015)
R&D Activities
Automobile business
- Launched production of the high-performance, improved S-SEES II shock-absorber that further enhances riding comfort and stabilizes maneuverability, raising performance to a new dimension.
- The Company completed developing its Intelligent Electronic Control Adaptive Suspension (IECAS) and is now commercially producing it. This system estimates stroke from the wheel-speed sensor by using the Company’s proprietary control logic. Since this eliminates the need for other sensors, the system not only is cost competitive but also lighter in weight.
Steering Business
- In working to further improve the performance of its dual-pinion-assist electric power steering system (DPA-EPS), the Company is advancing R&D activities to increase output, lower weight, make the system more compact, and increase the types of models on which it can operate.
- As part of the new product range of electric power steering systems for mid-sized and heavy-duty vehicles, the Company is continuing its R&D activities on a belt-rack assist electric power steering system.
Capital Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | |
| Motorcycle/General | 1,788 | 3,074 | 4,287 |
| Automobile | 3,496 | 3,386 | 3,776 |
| Steering | 7,216 | 7,442 | 4,104 |
| Gas spring | 166 | 35 | 51 |
| Other | 255 | 383 | 676 |
| Total | 12,921 | 14,321 | 12,896 |
-Capital investments during the fiscal year that ended March 2016 is mainly attributable to the launch of new steering-system operations in Japan and Mexico.
Planned Capital Investment
-The total amount of capital investment planned at the end of FY ending March, 2016, was JPY 18,383 million. The following outlines major construction projects for new facilities, etc.
| Facility (Location) |
Type of facility | Planned investment (million JPY) |
Construction start month | Planned completion | Production capacity growth after completion |
| Saitama Plant (Gyoda City, Saitama, Japan) |
Production facilities for automobile parts, production machinery facilities, and other | 2,248 | Apr. 2015 | Mar. 2017 | (Note 1) |
| Gotemba Plant (Gotemba City, Shizuoka, Japan) |
Production facilities for automobile parts | 1,632 | Apr. 2015 | Mar. 2017 | (Note 1) |
| Tochigi R&D Center (Tochigi, Japan) |
R&D facilities | 1,187 | Apr. 2015 | Mar. 2017 | (Note 2) |
| Asaba Plant (Fukuroi City, Shizuoka, Japan) |
Production facilities for automobile and motorcycle parts | 1,212 | Apr. 2015 | Mar. 2017 | (Note 1) |
| American Showa, Inc. Sunbury Plant (Ohio, USA) |
Production facilities for automobile and motorcycle parts | 1,194 | Jan. 2015 | Mar. 2017 | (Note 2) |
| American Showa, Inc. Blanchester Plant (Ohio, USA) |
Production facilities for automobile parts | 669 | Jan. 2014 | Mar. 2017 | (Note 2) |
| Showa Canada Inc. (Ontario, Canada) |
Production facilities for automobile parts | 675 | Sep. 2015 | Mar. 2017 | (Note 1) |
| Showa Autoparts Mexico, S.A. de C.V (Guanajuato, Mexico) |
Production facilities for automobile parts | 3,910 | Sep. 2015 | Mar. 2017 | (Note 2) |
| Showa Autoparts (Thailand) Co., Ltd. (Chonburi, Thailand) |
Production facilities for automobile and motorcycle parts | 555 | Dec. 2015 | Mar. 2017 | (Note 2) |
| Showa India Pvt. Ltd. (Haryana, India) |
Production facilities for automobile and motorcycle parts | 590 | Aug. 2013 | Mar. 2017 | (Note 2) |
| Guangzhou Showa Autoparts Co., Ltd. Wuhan Plant (Wuhan, China) |
Production facilities for automobile parts | 532 | Dec. 2014 | Mar. 2017 | (Note 2) |
(Note 1) Since the investments are mainly made under projects to enhance capabilities and rationalize operations, any actual increase in capacities, once the projects are completed, are forecast to be slight.
(Note 2) Due to difficulty in calculating production capacity growth after completion, the figure is not provided here.