U-SHIN LTD. Business Report FY ended Nov. 2014

Business Highlights

Financial Overview

(in million JPY)
  FY ended Nov. 30, 2014 FY ended Nov. 30, 2013 Rate of Change (%) Factors
Overall
Sales 155,985 108,473 43.8 -
Operating profit 3,075 1,791 71.7 -Operating profit increased year-on-year due to the following factors:
・Increased profits at the Automotive Component Division in Japan and China
・Improvement in production efficiency in Europe
・Strong sales at the Industrial Equipment Division
Ordinary profit 1,057 1,536 (31.2) -
Net profit (433) 400 - -
Automotive Components Division
Sales 132,459 88,337 49.9 -Sales at the Automotive Components Division increased year-on-year due to the following factors:
・Effects of acquiring Valeo's Access Mechanism Business
・Strong sales in Japan and China
・Improvement in production efficiency in Europe
Operating profit 3,690 1,963 88.0 -

Acquisition

To cancel acquiring stakes in Minda Value Security Systems Private Limited
-The Company announced that it has decided to cancel acquiring stakes in India-based Minda Value Security Systems Private Limited (MVI) from Valeo S.A. The planned transaction was part of an agreement to acquire Valeo's Access Mechanism Business, which was signed in May 2013. Under this agreement, the Company was supposed to obtain from Valeo a 50 percent share in MIV, a 50-50 joint venture between Valeo and Minda Capital Limited. U-Shin, however, has cancelled this, considering it would be difficult to conclude the deal given MIV's hostile attitude towards the transaction. In line with this cancellation, U-Shin will pay a settlement of EUR 9 million (approximately JPY 1.26 billion) to Valeo. The payment will be recorded as an extraordinary loss. (From an article in the Nikkan Jidosha Shimbun on January 31, 2014)

Contracts

-The Company will start supplying its electric steering locks for the all-new Hyundai Sonata. This is the first time for the Company to supply products to Hyundai on a full scale. Electric steering locks have increasingly become available among mid-size and luxury cars. It has won the first order from Hyundai as it has widely sold the products in Japan, the U.S., and Europe. The Company expects that its business expansion in Asia will be driven by the order for the Sonata, Hyundai's global model. (From an article in the Nikkan Jidosha Shimbun on March 26, 2014)

-The Company's steering switches and engine start switches are used on the Mazda Axela. These components are produced at a new plant in Zhongshan, Guangdong Province, China that began operations in June 2013.

-The Company's rear inside handles offering the following characteristics are used on the BMW i3:
  • Door detector (an integrated mechanism to prevent the rear door from opening when the front door is closed)
  • High-strength lever made from nylon with silver satin plating
  • Lightweight unit using high-strength plastic components. Components other than shafts and screws are made of plastics.
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)

R&D

R&D Expenditure

(in million JPY)
FY ended Nov. 30, 2014 FY ended Nov. 30, 2013 FY ended Nov. 30, 2012
Overall 6,080 4,333 1,831
Ratio to sales (%) 3.9 4.0 3.0
R&D Personnel 478 471 200

R&D Structure

-The Company has transferred its domestic development operations in Hamamatsu & Tokyo to its new facility in Hiroshima Prefecture, Japan.

-Engineers at R&D facilities in Japan, China, the U.S. and India are collaborating to develop products that meet the needs of each market quickly and efficiently. 

Product Development

Door latches, Key sets, Electric steering locks
-The Company is developing lighter products, focusing on door latches, lock sets and electric steering locks that use many metal parts. It is also working on reducing noise and vibration to improve operational feeling.

Door handles
-Handles integrated with door detectors to prevent the rear door from opening when the front door is closed.
-High-strength lever made from nylon with silver satin plating.
-Lightweight unit using high-strength plastic components. Components other than shafts and screws are made of plastics.
-The Company also developed a new mechanism for preventing the door from opening at the time of collisions.

Investment Activities

Capital Expenditure

(in million JPY)
FY ended Nov. 30, 2014 FY ended Nov. 30, 2013 FY ended Nov. 30, 2012
Overall 7,666 10,351 8,705
-Automotive Components Division 7,444 9,821 8,483

-Major investment activities at the Automotive Component Division for fiscal year ended Nov. 2014 included spending on dies and production machinery.

Investment Outside Japan

<China>
-U-Shin Manufacturing (Zhongshan) Co., Ltd. in Guangdong Province, which started full-scale operations in June 2013, produces steering switches and engine start switches. The subsidiary plans to boost its production capacity in order to become more competitive in the Chinese market.