SHOWA Corporation 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 | 259,495 | 258,246 | 0.5 | -Revenue increased due to higher sales of mainly steering-systems products. |
| Operating income | (3,263) | 7,568 | - | -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 | (2,407) | 7,454 | - | |
| Profit for the year attributable to owners of the parent | (11,444) | (2,348) | - | |
| Automobile | ||||
| Revenue | 84,563 | 94,203 | (10.2) | -Revenue decreased because of lower sales of automotive products and the effect of negative currency translation. |
| Operating income | 4,801 | 4,683 | 2.5 | - |
| Steering | ||||
| Revenue | 86,205 | 74,738 | 15.3 | -Revenue increased due to higher sales mainly in North America and China. |
| Operating income | 7,820 | 94 | 8219.1 | - |
| Gas spring | ||||
| Revenue | 3,464 | 3,188 | 8.7 | - |
| Operating income | (25,703) | (9,036) | - | -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
Increase in the number of vehicle models on which the S-SEESII shock absorber and the DPA-EPS power steering system are being equipped.
The Showa Super Empowering Efficient Suspension (S-SEESII) shock absorber is being equipped on Honda North America’s CR-V and the Subaru Impreza. In addition, the DPA-EPS is being equipped on the Honda Civic and Mazda Roadster, in addition to the redesigned Honda CR-V.
Outlook for FY ending Mar. 31, 2018 |
(IFRS, in million JPY) |
| FY ended Mar. 31, 2018 (Forecast) |
FY ended Mar. 31, 2017 (Actual Result) |
Rate of Change (%) |
|
| Overall | |||
| Revenue | 257,000 | 259,495 | (1.0) |
| Operating income | 19,000 | (3,263) | - |
| Profit before taxes | 18,800 | (2,407) | - |
| Profit for the year attributable to owners of the parent | 10,100 | (11,444) | - |
>>>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 | |
| Motorcycle/General | 3,119 | 2,945 | 2,517 |
| Automobile | 3,692 | 3,562 | 3,354 |
| Steering | 3,999 | 3,902 | 3,767 |
| Gas spring | 125 | 101 | 110 |
| Total | 10,934 | 10,534 | 9,750 |
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 |
R&D Activities
Automobile business
- The Company launched production of its Intelligent Electronic Control Adaptive Suspension (IECAS), an electronically controlled damper system.
- In working to make autonomous driving a reality, the Company is working on developing technology that coordinates the control of steering systems, etc.
Steering Business
- The Company is focusing on enhancing the feel and ease of steering, while increasing the power and making the second-generation Dual Pinion Assist-EPS (DPA-EPS) system the lightest such system in the world.
- By coordinating control with the electronically controlled damper system (IECAS), the Company is working to raise steering stability and riding comfort to a higher dimension.
-The Company has developed a high-performance hypoid gear for use in Honda Motor Co., Ltd.'s new NSX. The new hypoid gear is Japan's first to have a mirror finish on its surface through application of special barrel polishing. It supports high torque and high rotation. Conventional finishing methods have a disadvantage in that the durability of the hypoid gear is decreased by the frictional heat generated when the gear engages with other gears. Thanks to the mirror finish, the newly-developed hypoid gear reduces friction and thereby improves durability. It supports 550 Newton-meters of engine output torque. (From an article in the Nikkan Jidosha Shimbun on June 7, 2016)
Capital Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | |
| Motorcycle/General | 1,911 | 1,788 | 3,074 |
| Automobile | 2,388 | 3,496 | 3,386 |
| Steering | 3,825 | 7,216 | 7,442 |
| Gas spring | 2,265 | 166 | 35 |
| Other | 608 | 255 | 383 |
| Total | 10,997 | 12,921 | 14,321 |
-The Company spent 14.9% less on capital investments year-over-year in the fiscal year that ended in March 2017 because fewer expenses were incurred by the steering-systems business this past year in launching new models in Mexico.
-The Company announced that its subsidiary, Showa Kyushu Corporation (Showa Kyushu), which is currently operating at 70% capacity utilization due to the impact of Kumamoto earthquakes, will be operating at full capacity by September 2016. Showa Kyushu produces shock absorber components, and its production facilities were damaged by the earthquakes. The company has been outsourcing production to other makers in and outside Japan to continue supplying the products. (From an article in the Nikkan Jidosha Shimbun on July 30, 2016)
Planned Capital Investment
-The total amount of capital investment planned at the end of FY ending March, 2017, was JPY 11,348 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 | 1,051 | Apr. 2016 | Mar. 2018 | (Note 2) |
| Gotemba Plant (Gotemba City, Shizuoka, Japan) |
Production facilities for automobile parts | 862 | Apr. 2016 | Mar. 2018 | (Note 2) |
| Tochigi R&D Center (Tochigi, Japan) |
R&D facilities | 1,679 | Apr. 2016 | Oct. 2017 | (Note 2) |
| Asaba Plant (Fukuroi City, Shizuoka, Japan) |
Production facilities for automobile and motorcycle parts | 509 | Apr. 2016 | Mar. 2018 | (Note 2) |
| American Showa, Inc. Sunbury Plant (Ohio, USA) |
Production facilities for automobile and motorcycle parts | 664 | Oct. 2015 | Mar. 2018 | (Note 2) |
| American Showa, Inc. Blanchester Plant (Ohio, USA) |
Production facilities for automobile parts | 494 | Apr. 2016 | Mar. 2018 | (Note 2) |
| Showa Canada Inc. (Ontario, Canada) |
Production facilities for automobile parts | 565 | Jan. 2016 | Mar. 2018 | (Note 2) |
| P.T. Showa Indonesia Manufacturing (Cikarang, Indonesia) |
Production facilities for automobile and motorcycle parts | 988 | Jan. 2016 | Mar. 2018 | (Note 1) |
| Summit Showa Manufacturing Co., Ltd. (Chonburi, Thailand) | Production facilities for automobile and motorcycle parts | 438 | Jan. 2017 | Mar. 2018 | (Note 2) |
| Showa India Pvt. Ltd. (Haryana, India) |
Production facilities for automobile and motorcycle parts | 569 | Apr. 2014 | Mar. 2018 | (Note 2) |
| Guangzhou Showa Autoparts Co., Ltd. Wuhan Plant (Wuhan, China) |
Production facilities for automobile parts | 467 | Dec. 2014 | Mar. 2018 | (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.