H-ONE Co., Ltd. Business Report FY ended Mar. 2017
Financial Overview
(IFRS, in millions of JPY)
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | Rate of change (%) | Factors | |
| Revenue | 182,737 | 200,224 | (8.7) | -Revenue decreased due to the effect of negative currency translation, although production volume of automotive frames shipped to major customers increased 13% year-over-year. |
| Operating income | 7,760 | 6,067 | 27.9 | -Business results improved year-over-year. Profit from sales of dies in North America decreased. In Japan, profit increased because of higher volumes of unit production and the positive effects of cost-cutting initiatives. In China, unit-production increased. As for business performance in other Asian countries and Oceania, unit production increased in Thailand and the amount of loss incurred at the Indonesian subsidiary improved. |
| Income before income taxes | 7,549 | 4,377 | 72.5 | |
| Profit for the year attributable to owners of the parent | 6,057 | 2,383 | 154.2 | |
| Sales by segment | ||||
| Japan | ||||
| Revenue | 37,844 | 33,512 | 12.9 | -Revenue increased, thanks to higher production volumes of automotive frames. |
| Income before income taxes | 3,707 | 1,219 | 204.1 | -Income increased due to effective production-cost reductions, higher production volumes, and an increase in dividends received from foreign subsidiaries. |
| Europe and North America | ||||
| Revenue | 81,992 | 99,904 | (17.9) | -Revenue decreased due to the negative effect of currency translation, in spite of the fact that production volumes of automotive frames were high. |
| Income before income taxes | 2,187 | 2,560 | (14.6) | -Income decreased due to the effect of negative currency translation combined with lower profits from sales of dies, even though investment income increased from subsidiaries accounted for under the equity method of accounting. |
| China | ||||
| Revenue | 37,340 | 39,020 | (4.3) | -Revenue decreased due to the effect of negative currency translation, in spite of the fact that production volumes of automotive frames increased year-over-year. |
| Income before income taxes | 4,014 | 2,226 | 80.3 | -Income increased due to higher unit production volumes and greater content on more types of vehicle models. |
| Asia and Pacific | ||||
| Revenue | 25,560 | 27,786 | (8.0) | -Revenue decreased due to the effect of negative currency translation, in spite of the fact that overall sales at other segments increased year-over-year, making up for lower production volumes of automotive frames in India. |
| Income before income taxes | (218) | (597) | - | -The operating loss occurred by the Indian subsidiary grew even bigger due to lower production volumes, while the operating losses at the Thai and Indonesian subsidiaries improved. |
Business Developpment
Production
- China: WH Auto Parts Industries Inc. completed the installation of a 3,000t servo transfer press, which started operating in October.
- India: The installation of a stamping line was completed at Plant No. 2 of H-one India PVT., Ltd. located in Rajasthan. After the completion, the plant is now able to manufacture products seamlessly, from stamping operations to welding processes.
- Japan: Kameyama Works located in Kameyama, Mie Prefecture plans to complete the rebuilding of its high-efficiency welding line within the next fiscal year.
R&D Activities
- Japan: The Company, Nippon Steel and Sumitomo Metal Corp., and Nippon Steel & Sumikin Pipe Co., Ltd. are jointly advancing R&D activities on Three-Dimensional Hot-Bending and Direct Quench (3DQ) technology. They have developed and started commercial production of a front pillar in which this latest 3DQ technology is used. The Company was in charge of developing manufacturing technology that can be applied to manufacturing automotive frames.
Mid-term Management Plan (FY ending in March 2018-FY ending March 2020)
-The Company launched its 5th Mid-term in April 2017.
Management policy: To enhance the H-one brand, quality, and reliability; develop the highest technology; and enhance the profit structure.
- Define areas of focus
- Strengthen sustainability
- Maintain high quality
- Improve profitability
- Develop the highest level of technology and expand the scope of business operations
- Strengthen human-resources development
-Strengthening ESG (Environment, Social, Governance) initiatives and developing human resources are fundamental to ensuring sustainability of the Group. The Company is working on developing new products and technology that can respond to various requirements that will arise in the future. The Company is further strengthening its operational framework to meet customer needs globally in terms of quality, cost, and delivery (QCD). The Company aims to expand its business by winning new customers.
Outlook for FY ending Mar. 2018 |
(IFRS, in millions of JPY) |
| FY ending Mar. 2018 (Forecast) |
FY ended Mar. 2017 (Actual Results) |
Rate of Change (%) |
|
| Revenue | 170,000 | 182,737 | (7.0) |
| Operating income | 6,000 | 7,760 | (22.7) |
| Income before income taxes | 5,000 | 7,279 | (31.3) |
| Profit for the year attributable to owners of the parent | 3,000 | 5,766 | (48.0) |
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
R&D Expenditure |
(in millions of JPY) |
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | |
| Overall | 1,848 | 1,689 | 1,161 |
-Most of the Company's R&D expenditure was directed to automotive parts related businesses in Japan.
R&D Structure
-Centering on its development technology headquarters, the Company carried out R&D activities in cooperation with many research and development institutions including those of Honda Group.
R&D Facilities
| Name | Location | Function |
| Model development center | Tochigi Pref. Japan | Product designing, Sales planning |
| Model development center Karasuyama | Tochigi Pref. Japan | Research and Development, Development of prototypes of the automotive parts |
| Development & Engineering center | Fukushima Pref. Japan | Model planning, Welding engineering, Die engineering, Die manufacturing |
| KTH Parts Industries Inc. | Ohio, U.S. | Research and Development |
Recent R&D Activities (Automotive Component Division)
-Developed a welding/mating process
-Developed stamping process technology for high tensile materials and light weight materials
-Developed a outer parts stamping process
-Developed functional parts by incorporating thick plate precision stamping technology and assembly technology
-Developed material hardening technology
-Developed an in-house information system based on CAD, CAM, and CAE technology; and trained engineers to use it
-Developed stamping process technology for precision metal parts
Capital Expenditure |
(in millions of JPY) |
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | |
| Overall | 15,657 | 16,680 | 33,995 |
-Automotive Parts Division: JPY 5,488 million to launch production of new automotive parts, and JPY 10,168 million to increase/upgrade general-purpose production facilities to raise productivity and to extend and reconstruct buildings.
Planned Capital Investment
|
(As of Mar. 31, 2017) |
| Company Name | Location | Estimated total amount of investment (in millions of JPY) |
Project duration | |
| From | To | |||
| The Company | ||||
| Kameyama Factory | Mie Pref. Japan | 3,214 | Jan. 2017 | Mar. 2019 |
| Maebashi Factory | Gunma Pref. Japan | 1,785 | Mar. 2017 | Jan. 2019 |
| Koriyama Factory | Fukushima Pref. Japan | 2,178 | Mar. 2017 | Feb. 2019 |
| Consolidated Subsidiaries | ||||
| KTH Parts Industries Inc. | Ohio, USA | 16,580 | Dec. 2016 | Mar. 2019 |
| Kalida Manufacturing, Inc. | Ohio, USA | 1,479 | Oct. 2016 | Mar. 2019 |
| KTH Leesburg Products, LLC. | Alabama, USA | 511 | Feb. 2017 | Mar. 2019 |
| KTH Shelburne Manufacturing, Inc. | Ontario, Canada | 792 | Mar. 2017 | Mar. 2019 |
| GH Auto Parts Industries Inc. | Guangdong, China | 7,804 | Dec. 2016 | Feb. 2020 |
| QH Auto Parts Industries Inc. | Guangdong, China | 1,429 | Mar. 2017 | Mar. 2019 |
| WH Auto Parts Industries Inc. | Hubei, China | 4,370 | Jan. 2017 | Mar. 2019 |
| H-one Parts （Thailand） Co., Ltd. | Ayutthaya,Thailand | 4,115 | Mar. 2017 | Mar. 2019 |
| H-one Parts Sriracha Co., Ltd. | Chonburi, Thailand | 178 | Mar. 2017 | Mar. 2019 |
| H-one India PVT., Ltd. | Uttar Pradesh, India | 1,641 | Feb. 2017 | Mar. 2019 |
| PT. H-one Kogi Prima Auto Technologies Indonesia | Karawang, Indonesia |
1,763 | Nov. 2015 | Mar. 2018 |