Stanley Electric Co., Ltd. Business Report FY ended Mar. 2017

Financial Overview

(in millions of JPY)
FY ended Mar. 31, 2017 FY ended Mar. 31, 2016 Rate of Change (%) Factors
Sales 388,560 404,148 (3.9) -Developed products that ideally met global market needs
-Strengthened management capabilities and enhanced productivity to win greater product orders.
-Totally removed all inefficiencies from production processes and back-office functions, raising productivity through implementing totally innovative production operations.
Operating income 42,305 36,774 15.0
Ordinary income 45,720 39,402 16.0 -
Net income 28,685 25,537 12.3 -
Automotive products
Sales 308,176 312,780 (1.5) -Sales were lower year-over-year (y/y) due to the effect of negative currency translation because of the high valuation of the yen, in spite of the fact that there temporary higher sales due to unifying the dies accounting processing in the Americas.
Operating income 26,034 21,185 22.9 -Operating income increased due to increased content ratio on more vehicle types, of LED headlamps that are seamlessly produced starting from the light sources; and a reduction in temporary expenses incurred last year.
Electronic Components
Sales 28,745 30,504 (5.8)

-Sales were lower because sales volumes of LEDs and automotive lamps for the game, AV, and industrial equipment markets decreased.-Operating income rose because sales of LEDs used as light sources in LED headlamps increased.

Operating income 6,674 5,602 19.1 -Operating income rose because sales of LEDs used as light sources in LED headlamps increased.
Applied Electronic Products
Sales 51,347 59,879 (14.2) -Sales and income were lower because sales of PC backlights and strobes decreased, even though internal sales of electronic circuit boards used in light sources and controls for LED light bodies increased.
Operating income 6,684 6,837 (2.2)

Investments Outside Japan

-Thai Stanley Electric revealed that it is expecting 16.30% sales growth or at THB 11.65 billion and profit at THB 1.48 billion in FY2018 (April 2017 – March 2018). The factor that contributed to the growth is the growth of production in automotive industry of 1-3% to 1.95-2 million units from 2016 from the recovery of Thai economy and launch of new models. However costs of production are likely to increase from defect products of new models after it had received new orders for Isuzu Mu-X, Honda CR-V, Honda Scoopy I, and Yamaha QBIX. (From a Khao Hoon article on July 7, 2017)

Product Development

HUD module
-The Company will develop a new head-up display (HUD) module for lower grade model-use by around 2017. The new module will have a reduced parts count by having minimum display functions. The company will bring the cost of the new module down to half of that of existing HUD modules. The new product will offer high visibility by adopting the company's proprietary high-luminance backlight and LCD technologies. While luxury cars in particular are increasingly equipped with HUDs, the company will promote the new module at an affordable price primarily for Japanese OEMs' models to receive more orders. The new module for HUD systems is a passive-matrix color PBTLCD module that displays driving speed and other information on a compact screen (combiner). Passive-matrix LCDs can display less contents than full-color TFT LCDs. On the other hand, passive-matrix LCDs use less materials like glass and insulator films and enable substantial cost reduction. Passive-matrix LCDs have been used in electronic calculators and instrument panels. The company will apply it to HUDs for the first time to support practical implementation of low-priced HUDs. (From an article in the Nikkan Jidosha Shimbun on October 7, 2016)

R&D Activities

-The Company pursues "the five values of light", which are creating light, detecting and recognizing through light, freely obtaining information through light, making use of light energy, and rendering a scene with light.

-Advancing and integrating core technologies (light distribution, design, CAE, circuits, control, light source, process innovations)

-Major areas of R&D activities:

  • Opto-electronics: High-output white LED, high-output red/infrared LED, high-speed/highly sensitive image sensors
  • Displays: ultra-high contrast LCD, fiber micro scanner, display drive circuit
  • Light source/lighting: automotive lighting, LED road-surface lighting devices, interior lighting devices, lighting drive circuits/power sources
  • Software/CAE technology: light-distribution simulator, tools for measuring the optimum shapes of optical devices
  • Materials and processing technology
  • Styling and design of products
  • Products in which the above devices and technology have been integrated

R&D Expenditure

(in millions of JPY)
FY ended Mar. 31, 2017 FY ended Mar. 31, 2016 FY ended Mar. 31, 2015
Overall 13,800 5,527 5,513
Automotive products 9,290 3,335 3,044
Electronic Components 2,802 1,462 1,794
Applied Electronic Products 1,389 699 578
Others 318 30 95

R&D Facilities

Name of Facilities Location
Research & Development Laboratory Yokohama City, Kanagawa Pref., Japan
Utsunomiya Technical Center Utsunomiya City, Tochigi Pref., Japan
Yokohama Technical Center Yokohama City, Kanagawa Pref., Japan
Opto Technical Center Yokohama City, Kanagawa Pref., Japan

-Established Tianjin Stanley Electric Technology Co., Ltd. in August 2015, in China, which will design and develop automotive lamps.

Technology Licensing-in Agreement

(As of Mar. 31, 2017)
Partner Technology Period
Nichia Corporation Patent on White LED Validity period of the patent
OSRAM GmbH Patent on White LED Validity period of the patent

Technology Licensing-out Agreement

(As of Mar. 31, 2017)
Partner Content Term
Thai Stanley electric Public Co., Ltd. (Thailand) Technology related to automotive lamps April 1, 2015 -
March 31, 2018
SL Lighting Corporation (Korea) Technology related to automotive lamps April 1, 2017 -
September 30, 2017
Lumax Industries Ltd. (India) Technology related to automotive lamps April 1, 2017 -
March 31, 2018

Capital Expenditure

(in millions of JPY)
FY ended Mar. 31, 2017 FY ended Mar. 31, 2016 FY ended Mar. 31, 2015
Overall 34,440 39,003 38,834
-Automotive products 26,058 29,408 28,531
-Electronic Components 2,699 1,353 3,413
-Applied Electronic Products 3,625 5,192 3,012
-Others 8 580 125
(Fundamental testing research and systems that link management functions)
2,048 2,469 3,749

-The Company plans to spend JPY 44,690 million in capital investments in the fiscal year ending in March 2018.

Outlook for FY ending Mar. 31, 2018

(in million JPY)
FY ending Mar. 31, 2018
FY ended Mar. 31, 2017
(Actual Results)
Rate of
Change (%)
Sales 398,000 388,560 2.4
Operating income 46,800 42,305 10.6
Ordinary income 50,400 45,720 10.2
Net income 32,000 28,685 11.6
Automotive Equipment
Sales 320,000 308,176 3.8
Operating income 29,000 26,034 11.4
Electronic Components
Sales 30,200 28,745 5.1
Operating income 8,400 6,674 25.9
Applied Electronic Products
Sales 44,700 51,347 (12.9)
Operating income 8,100 6,684 21.2

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

Fifth Three-year Mid-term Management Plan (April 2108-March 2020)

Targets FY ended March 2017
FY ending March 2018
ROE 15% 9.4% 10.3%
FY ending March 2018 (Targeted) 20% 20.9% 19.6%
Total return ratio 35% 34.8% 35.0%