SHOWA Corporation Business Report FY ended Mar. 2018
Financial Overview |
(IFRS, in million JPY) |
FY ended Mar. 31, 2018 | FY ended Mar. 31, 2017 | Rate of Change (%) | Factors | |
Overall | ||||
Revenue | 291,989 | 259,495 | 12.5 | -Revenue increased due to higher sales of the products for motorcycles, vehicles and steering systems. |
Operating income | 25,296 | (3,263) | - | - |
Profit before taxes | 26,042 | (2,407) | - | |
Profit for the year attributable to owners of the parent | 13,855 | (11,444) | - | |
Automobile | ||||
Revenue | 92,209 | 84,563 | 9.0 | -Revenue increased due to higher sales mainly in China and Japan. |
Operating income | 5,969 | 4,801 | 24.3 | - |
Steering | ||||
Revenue | 102,041 | 86,205 | 18.4 | -Sales increased due to higher sales mainly in China and Asia. |
Operating income | 15,110 | 7,820 | 93.2 | - |
Gas Spring | ||||
Revenue | 3,245 | 3,464 | (6.3) | - |
Operating income | (8,397) | (25,703) | - | - |
Recent Development Outside Japan
-The Company has started discussions on increasing its production capacity for automotive shock absorbers and electric power steering (EPS) systems in China. The Company's main customer, Honda, is enjoying robust sales in China, and its vehicle production volume is expected to continue to increase. The Company will decide on investment to boost automotive parts production capacity in China by the end of March 2019. Currently, the Company's four subsidiaries in China produce shock absorbers and EPS systems supplied for the CR-V, Accord, and Civic that are assembled by Honda's Chinese joint ventures. Honda's car sales in China reached a record high in 2016, and the Company is receiving an increasing number of orders for shock absorbers and EPS systems. Honda's Chinese joint venture, Dongfeng Honda Automobile Co., Ltd., is building its 3rd plant in Wuhan, which will start operations in the first half of 2019. (From an article in the Nikkan Jidosha Shimbun on December 28, 2017)
Outlook for FY ending Mar. 31, 2019 |
(IFRS, in million JPY) |
FY ended Mar. 31, 2019 (Forecast) |
FY ended Mar. 31, 2018 (Actual Result) |
Rate of Change (%) |
|
Overall | |||
Revenue | 280,000 | 291,989 | (4.1) |
Operating income | 27,000 | 25,296 | 6.7 |
Profit before taxes | 27,200 | 26,042 | 4.4 |
Profit for the year attributable to owners of the parent | 17,000 | 13,855 | 22.7 |
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
R&D Expenditure |
(in million JPY) |
FY ended Mar. 31, 2018 | FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | |
Motorcycle/General | 3,136 | 3,119 | 2,945 |
Automobile | 3,550 | 3,692 | 3,562 |
Steering | 3,811 | 3,999 | 3,902 |
Gas Spring | 99 | 125 | 101 |
Total | 10,598 | 10,934 | 10,534 |
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 |
-On October 20, the Company held a ceremony to celebrate the completion of its winding courses built at the Company's Tochigi R&D Center Shioya Proving Ground. The Company expects that the winding roads replicating general roads in the U.S. and Europe will speed up the development of new value-added products. The total length of the courses is about 1,500 meters. The courses copy conditions on U.S. roads with many ups and downs and sharp curves, and on EU roads with gentle curves and slopes. The Company intends to fully utilize the courses to develop products for autonomous driving including advanced driver assistance systems. (From an article in the Nikkan Jidosha Shimbun on October 23, 2017)
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.
Capital Expenditure |
(in million JPY) |
FY ended Mar. 31, 2018 | FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | |
Motorcycle/General | 2,200 | 1,911 | 1,788 |
Automobile | 2,200 | 2,388 | 3,496 |
Steering | 1,920 | 3,825 | 7,216 |
Gas spring | 90 | 2,265 | 166 |
Other | 460 | 608 | 255 |
Total | 6,870 | 10,997 | 12,921 |
Planned Capital Investment
-The total amount of capital investment planned at the end of FY ending March, 2018, was JPY 10,640 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 | 1,244 | Apr. 2017 | Mar. 2019 | (Note 2) |
Gotemba Plant (Gotemba City, Shizuoka, Japan) |
Production facilities for automobile parts | 629 | Apr. 2017 | Mar. 2019 | (Note 2) |
Tochigi R&D Center (Tochigi, Japan) |
R&D facilities | 406 | Apr. 2017 | Mar. 2019 | (Note 2) |
Asaba Plant (Fukuroi City, Shizuoka, Japan) |
Production facilities for automobile and motorcycle parts | 1,120 | Apr. 2017 | Mar. 2019 | (Note 1) |
American Showa, Inc. Sunbury Plant (Ohio, USA) |
Production facilities for automobile and motorcycle parts | 803 | Oct. 2015 | Mar. 2019 | (Note 2) |
Showa Canada Inc. (Ontario, Canada) |
Production facilities for automobile parts | 613 | Jul. 2016 | Mar. 2019 | (Note 2) |
Showa Autoparts Mexico, S.A. de C.V. (Mexico Guanajuato) |
Production facilities for automobile parts | 449 | Oct. 2017 | Mar. 2019 | (Note 1) |
P.T. Showa Indonesia Manufacturing (Cikarang, Indonesia) |
Production facilities for automobile and motorcycle parts | 737 | Mar. 2016 | Mar. 2019 | (Note 2) |
Summit Showa Manufacturing Co., Ltd. (Chonburi, Thailand) | Production facilities for automobile and motorcycle parts | 391 | Jan. 2018 | Mar. 2019 | (Note 2) |
Showa Auto-Parts Vietnam Co., Ltd. (Vietnam Hanoi) |
Production facilities for motorcycle parts | 480 | Oct. 2017 | Mar. 2019 | (Note 2) |
Showa India Pvt. Ltd. (Haryana, India) |
Production facilities for automobile and motorcycle parts | 758 | Apr. 2014 | Mar. 2019 | (Note 1) |
Guangzhou Showa Autoparts Co., Ltd. Wuhan Plant (Wuhan, China) |
Production facilities for automobile parts | 648 | Sep. 2017 | Mar. 2019 | (Note 1) |
(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.