SHOWA Corporation Business Report FY ended Mar. 2019
Financial Overview |
(IFRS, in million JPY) |
| FY ended Mar. 31, 2019 | FY ended Mar. 31, 2018 | Rate of Change (%) | Factors | |
| Overall | ||||
| Revenue | 286,692 | 291,989 | (1.8) | -Revenue fell because of lower sales of steering systems and negative currency translation. |
| Operating income | 30,142 | 25,296 | 19.2 | -Income increased due to effective cost-reduction initiatives. |
| Income before taxes | 29,963 | 26,042 | 15.1 | |
| Profit for the year attributable to owners of the parent | 19,052 | 13,855 | 37.5 | |
| Automobile | ||||
| Revenue | 90,752 | 92,209 | (1.6) | - |
| Operating income | 7,174 | 5,969 | 20.2 | - |
| Steering | ||||
| Revenue | 94,045 | 102,041 | (7.8) | - |
| Operating income | 12,766 | 15,110 | (15.5) | - |
| Gas Spring | ||||
| Revenue | 2,940 | 3,245 | (9.4) | - |
| Operating income | (881) | (8,397) | - | - |
Recent Development Outside Japan
<China>
-Showa Corporation (Showa) will expand its product development system for automobiles in China. Demand for shock absorbers and power steering devices in the Chinese market is expected to grow, and Showa will consider doubling production capacity at its plants in China in four to five years from now. While the company will continue basic product design in Japan, in China, it will increase engineers, strengthen its training system, and install various test machines at its development base in Guangzhou, Guangdong Province, in order to enhance its ability to deal with local automakers. Showa will double the number of engineers within 3 to 4 years to enhance tuning, setting, and small scale design abilities in the country. It will establish a development system for rapidly and accurately incorporating market needs. (From an article in the Nikkan Jidosha Shimbun on February 15, 2019)
Recent Development in Japan
-Showa Corporation will promote automation of the assembly line at its Saitama Plant, where it manufactures shock absorbers for automobiles, to start mass production on the automated line in June. It will substantially improve its production efficiency by reducing manpower. Subsequently, the company will start projects such as automation at its Asaba Plant in Shizuoka Prefecture, where it manufactures shock absorbers for motorcycles. Showa will introduce efforts made at its plants in Japan relating to production efficiency improvements to its plants in North America and China, in this order, and accelerate improvements global production efficiency. The company's plant reform will be carried out in a two-step process. The first process involves revamping plant structure like physical distribution improvements, inventory reductions, changing the plant's layout, and bolstering quality control. The second process involves automation toward production efficiency improvements. (From an article in the Nikkan Jidosha Shimbun on February 8, 2019)
Outlook for FY ending Mar. 31, 2020 |
(IFRS, in million JPY) |
| FY ended Mar. 31, 2020 (Forecast) |
FY ended Mar. 31, 2019 (Actual Result) |
Rate of Change (%) |
|
| Overall | |||
| Revenue | 276,000 | 286,692 | (3.7) |
| Operating income | 27,000 | 30,142 | (10.4) |
| Profit before taxes | 27,300 | 29,963 | (8.9) |
| Profit for the year attributable to owners of the parent | 17,000 | 19,052 | (10.8) |
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
R&D Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2019 | FY ended Mar. 31, 2018 | FY ended Mar. 31, 2017 | |
| Motorcycle/General | 3,785 | 3,136 | 3,119 |
| Automobile | 4,095 | 3,550 | 3,692 |
| Steering | 3,477 | 3,811 | 3,999 |
| Gas Spring | 85 | 99 | 125 |
| Total | 11,443 | 10,598 | 10,934 |
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 |
Capital Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2019 | FY ended Mar. 31, 2018 | FY ended Mar. 31, 2017 | |
| Motorcycle/General | - | 2,200 | 1,911 |
| Automobile | - | 2,200 | 2,388 |
| Steering | - | 1,920 | 3,825 |
| Gas spring | - | 90 | 2,265 |
| Other | - | 460 | 608 |
| Total | 8,231 | 6,870 | 10,997 |
Planned Capital Investment
-The total amount of capital investment planned at the end of FY ending March, 2019, was JPY 17,957 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 | 1,174 | Apr. 2018 | Mar. 2020 | (Note 2) |
| Gotemba Plant (Gotemba City, Shizuoka, Japan) |
Production facilities for automobile parts | 717 | Apr. 2018 | Mar. 2020 | (Note 2) |
| Tochigi R&D Center (Tochigi, Japan) |
R&D facilities | 956 | Apr. 2018 | Mar. 2020 | (Note 2) |
| Asaba Plant (Fukuroi City, Shizuoka, Japan) |
Production facilities for automobile and motorcycle parts | 1,594 | Apr. 2018 | Mar. 2020 | (Note 1) |
| American Showa, Inc. Sunbury Plant (Ohio, USA) |
Production facilities for automobile and motorcycle parts | 652 | Nov. 2017 | Mar. 2020 | (Note 2) |
| American Showa, Inc. Blanchester Plant (Ohio, USA) |
Production facilities for automobile parts | 525 | Mar. 2018 | Mar. 2020 | (Note 1) |
| Showa Autoparts Mexico, S.A. de C.V. (Mexico Guanajuato) |
Production facilities for automobile parts | 1,143 | Mar. 2018 | Mar. 2020 | (Note 1) |
| P.T. Showa Indonesia Manufacturing (Cikarang, Indonesia) |
Production facilities for automobile and motorcycle parts | 756 | Mar. 2016 | Mar. 2020 | (Note 2) |
| PT. Showa Autoparts Indonesia (Bekasi, Indonesia) |
Production facilities for automobile parts | 560 | Feb. 2018 | Mar. 2020 | (Note 1) |
| Showa Auto-Parts Vietnam Co., Ltd. (Vietnam Hanoi) |
Production facilities for motorcycle parts | 524 | Aug. 2018 | Mar. 2020 | (Note 2) |
| Showa India Pvt. Ltd. (Haryana, India) |
Production facilities for automobile and motorcycle parts | 1,350 | Apr. 2014 | Mar. 2020 | (Note 1) |
| Guangzhou Showa Autoparts Co., Ltd. (Guangzhou, China) |
Production facilities for automobile parts | 3,092 | Jun. 2017 | Mar. 2020 | (Note 1) |
| Guangzhou Showa Autoparts Co., Ltd. Wuhan Plant (Wuhan, China) |
Production facilities for automobile parts | 1,808 | Oct. 2018 | Mar. 2020 | (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.