Univance Corporation Business Report FY ended Mar. 2016
Financial Overview |
(in million JPY) |
| FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | Rate of Change (%) |
Factors | |
| Overall | ||||
| Sales | 63,087 | 64,781 | (2.6) | -Sales were almost on par with those of the previous year. Sales outside Japan such as in North America and Asia increased, while sales of all wheel drive distribution devices, transmissions for agricultural vehicles and automotive parts decreased in Japan. |
| Operating income | 160 | 770 | (79.1) | -Sales decreased at business operations in Japan and because of production losses. -Income fell due to higher expenses incurred for strengthening operations outside Japan. |
| Ordinary income | (348) | 1,811 | - | -Income fell (minus JPY 580 million) due to valuation losses on assets outside Japan, caused by the weak yen. |
| Net income attributable to owners of the parent | (604) | 1,779 | - | -Income was lower due to expenses incurred to improve the business structure. |
| Control-unit Business | ||||
| Sales | 35,938 | 37,200 | (3.4) | -Sales were almost on par with those of the previous year. Sales fell in Japan, but sales of all wheel drive distribution devices increased in North America and Asia. |
| Operating income | 320 | 1,276 | (74.9) | -Sales decreased at business operations in Japan and because of production losses, even though sales outside Japan increased. |
| Parts Business |
||||
| Sales | 27,078 | 27,507 | (1.6) | -Sales were almost on par with those of the previous year, as sales of drive train parts increased in the USA while sales decreased in Japan. |
| Operating income | (250) | (612) | - | -Sales decreased at business operations in Japan and because of production losses, even though sales outside Japan increased. -Operating losses continued at operations outside Japan, due to expenses incurred to strengthen the operations. |
Recent Development in Production
-The Company plans to construct a new plant to manufacture all-wheel drive systems in Thailand. The new plant, which is scheduled to start operations in 2016, is expected to boost the Company's production capacity of all-wheel drive systems in Thailand by 50%. The Company currently supplies the systems to Nissan and Ford facilities in Thailand, where production of vehicles for export is growing. The increase in production is expected to result in an increased number of systems supplied specifically to Nissan. The Company plans to install automated production lines that ensure product quality at the new plant, and aims to increase production efficiency by 20%. The Company also produces all-wheel drive systems in the U.S. and Indonesia. (From an article in the Nikkan Jidosha Shimbun on July 29, 2015)
Challenges
-Reorganizing operations and carrying out sales activities to respond to lower production volumes in Japan.
- Reorganize production plants in Japan
- Set strategies to achieve more new sales
- Conduct activities to strengthen product competitiveness
-Outside Japan, improve ability of business operations to generate profits, which are being impacted by expenses incurred to rapidly grow the business.
- Initiate activities that are focused on improving profitability
Mid-term Business Strategy
-Vision: To sustain viable business operations as an independent manufacturer based on technology
-The following is an outline of policies under the Mid-term Management Plan:
- Create a solid company with a firm foundation embedded in an improved corporate structure.
- Expand business by launching value-added products that meet both customer and market needs.
-Initiatives:
- Strengthen R&D capabilities in terms of products and technology.
- Strengthen global procurement activities and local business operations outside Japan.
- Improve product competitiveness and profitability.
- Initiate the UNIVANCE Production Way.
- Launch new-generation businesses by commercializing new technology.
Outlook for FY ending Mar. 2017
|
(in million JPY) |
| FY ending Mar. 31, 2017 (Forecast) |
FY ended Mar. 31, 2016 (Actual Results) |
Rate of Change (%) |
|
| Overall | |||
| Sales | 60,000 | 63,087 | (4.9) |
| Operating income | 1,000 | 160 | 525.0 |
| Ordinary income | (400) | (348) | - |
| Net income attributable to owners of the parent | (400) | (604) | - |
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
R&D Expenses |
(in million JPY) |
| FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | |
| Overall | 1,161 | 1,359 | 1,430 |
| Ratio in total sales (%) | 1.8 | 2.1 | 2.2 |
R&D Structure
-R&D activities at the Company are mainly carried out by the Product Development Division. 90 employees have conducted R&D activities, which accounts for approximately 5.2% of the Group's workforce as of the end of March 2016.
R&D Activities
1) Control-unit Business
-The Control-unit Business follows the three policies outlined below, which form the common basis for all R&D activities performed at the Company. This Business develops new high value-added products that optimize the high level of technology that the Company has in the area of control, working to create cost competitive products.
- Pursuit of greater functionality based on a high level of mechatronics.
- Pursuit of products and product-creation designed to best suit each region
- Pursuit of both environmental performance and competitive pricing.
-The Company is developing new manual transmissions for vans, as well as for small- and medium-duty commercial vehicles. It is doing this by focusing on improving vehicle fuel efficiency, reducing emissions so as to meet environmental standards, complying with high-output engines and easing the burden on drivers behind the wheel.
-The Company enhanced R&D activities to develop reduction gears to meet various layouts on hybrid vehicles and electric vehicles.
-In order to become more competitive in the transfer unit market, the Company's major line of business, the Company is developing lighter and more compact systems, while at the same time increasing its product range. It is focusing on transfer units for use in pick-up trucks and SUVs (Sports utility vehicles), CUVs (Cross over utility vehicles) which is a market segment that is growing worldwide.
2) Parts Business
-The Company is developing high-accuracy components for CVT (Continuously variable transmissions) in order to improve fuel economy and reduce drivers' burden.
-Going forward, in order to raise the competitive advantages of its products, the Company always works under an R&D policy that requires creating materials, production methods, and elemental design technology. In this regard, the Company is working mainly on its core product lines such as gearwheels, transmission axes, and companion flanges. In addition, the Company is producing products and materials in countries outside Japan so as to increase its local production volume overseas.
Product Development
Light weight next generation transfer unit
-The Company has started the development of a next-generation transfer unit for large all-wheel drive (AWD) vehicles like SUVs and pickup trucks. The Company is aiming to make the next-generation transfer unit 20% to 30% lighter than current products. It is considering large-scale replacement of materials, including the partial use of plastics in the transfer case. The Company will step up the promotion of the next-generation product to OEMs, with the aim of launching supply around 2021. Large AWD vehicles enjoy strong global demand and there is a growing need for eco‐friendly models. The Company intends to substantially reduce the weight of the transfer unit, a core drive train component, in an effort to enhance the competitiveness of its product. (From an article in the Nikkan Jidosha Shimbun on July 20, 2016)
Capital Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2017 (Forecast) |
FY ended Mar. 31, 2016 (Actual Results) |
FY ended Mar. 31, 2015 (Actual Results) |
FY ended Mar. 31, 2014 (Actual Results) |
|
| Control-unit Business | 3,035 | 3,401 | 1,832 | 2,026 |
| Parts Business | 763 | 1,960 | 2,563 | 1,946 |
| Others | - | 6 | 6 | 7 |
| Total | 3,799 | 5,367 | 4,402 | 3,980 |
-For FY ended Mar. 2016 and FY ending Mar. 2017, the Company made, will make, capital investments mainly to launch new operations and to enhance its production facilities so as to increase production capacity.