Yutaka Giken Co., Ltd. Business Report FY2009

Business Highlights

Financial Overview

(in million JPY)
  FY2009 FY2008 Rate of
change (%)
Factors
Overall
Sales 166,567 205,049 (18.8) 1)
Operating income 6,857 3,634 88.7 2)
Ordinary income 6,608 2,797 136.3
Net income 3,921 45 8,613.3
Automotive components division
Sales 149,408 182,785 (18.3) -
Operating income 6,072 2,925 107.6 -

Factors
1)
<Japan>
-Sales in Japan decreased 21.3 percent year-on-year to 69,726 million yen due to decreased orders from customers.

<North America>
-Sales in North America dropped 24.8 percent year-on-year to 50,004 million yen because of a decline in vehicle sales amid the slowing economy and a reduction in the number of items for medium- and large-size vehicles in its product line.

<Asia>
-Sales in Asia decreased 11.6 percent year-on-year to 15,272 million yen due to losses from negative currency translation.

<China>
-Supported by strong sales of Honda's vehicles, sales in China increased 16.5 percent year-on-year to 24,473 million yen.

<Other Regions>
-Although sales increased following the production launch at Yutaka do Brasil Ltda., overall sales in "Other Regions" fell 39.3 percent year-on-year to 7,090 million yen due to decreased sales in the U.K.

2)
-Operating income, ordinary income, and net income increased significantly on a year-over-year basis, because the Company enhanced its production structure and reduced costs.

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

Outlook for FY2010

(in billions of JPY)
  FY2010
(forecast)
FY2009
(actual)
Rate of
change (%)
Sales 177.00 166.56 6.3
-Automotive exhaust systems 116.65 108.85 7.2
-Automotive drivetrain systems 39.81 37.39 6.5
-Other automotive components 3.69 3.24 13.9
Operating income 7.80 6.85 13.7
Ordinary income 7.50 6.60 13.5
Net income 4.00 3.92 2.0

Sales by Region

(in billions of JPY)
  FY2010
(forecast)
FY2009
(actual)
Rate of
change (%)
Japan 76.31 69.73 9.4
North America 52.41 50.00 4.8
Asia 14.53 15.27 (4.8)
China 26.14 24.47 6.8
Other 7.61 7.09 7.3
Total 177.00 166.56 6.3

R&D

R&D Expenditure

(in million JPY)
  FY2009 FY2008 FY2007
Group 2,201 2,752 2,598
Automotive Parts 2,138 2,711 2,568

R&D Structure

-Tochigi Development Center, which consists of Development Sections No.1, No.2 and No.3, and the Production Technology Office, mainly promote R&D activities.

Automotive parts division
Exhaust-related parts -The Development Section No. 1 and the Production Technology Office focused on further advancement of eco-friendly technologies, like improving the cleaning of exhaust gases, fuel-efficiency and reducing noise, etc. Developed production technology and carried out R&D on exhaust systems, which improved both its product competitiveness and productivity.
Powertrain-related parts -The Development Section No. 2 and the Production Technology Office focused on R & D and production technology development in further efforts to reduce the size and weight of parts and improve fuel-efficiency, etc, which improved both its product competitiveness and productivity.

R&D Activities

Exhaust parts
-The Company developed a high-power, fuel efficient, low-noise and low-cost exhaust system for use in the new Honda CR-V, and started producing the system at both the Ranzan Plant in Saitama, Japan and at Cardington Yutaka Technologies Inc., a consolidated subsidiary in the U.S.A. A significant reduction in costs was made possible by increasing the use of shared/common parts.

-The Company developed a fuel efficient, low-noise, and low-cost exhaust system for the Honda new Stepwagon. It started mass producing the system at the Ranzan Plant.

-The Company developed and started mass-producing a cost-efficient exhaust system with improved emissions purification performance for the new Active Truck by Honda. Production operations are being handled at the Mie Plant. It also developed two catalyst converters: one to be installed immediately below the engine; and another to be installed underneath the vehicle body. The former offers improved emissions purification, as it is highly resistant to heat.

-The Company developed a lightweight and low-cost exhaust system for the new Honda CR-Z. A significant cost reduction was made possible by increasing the use of shared/common parts. Commercial production of the product began at the Mie Plant.

-The Company developed and started mass-producing finishers for the new Accord Crosstour and the Acura ZDX by Honda sold in the U.S. market. These finishers are manufactured at Yutaka Manufacturing (Philippines) Inc., a consolidated subsidiary in the Philippines, and supplied to the U.S.A.

-The Company also developed new, high-performance and lightweight silencers and finishers for the new Honda Pilot sold in the U.S.A. The finishers are mass-produced at Yutaka Manufacturing (Philippines) Inc., a consolidated subsidiary in the Philippines, and supplied to the U.S. market.

-The Company developed an exhaust system for the all-new Dongfeng Honda Spirior sold in China. It started mass-producing the system at Wuhan Jin Feng Autoparts Co., Ltd., a consolidated subsidiary in China.

Powertrain parts
-The Company developed a flat torque converter with a lockup clutch for the new Honda Stepwagon powered by a 4-liter engine. The torque converter is mass-produced at the Yutaka Plant.

-The Company developed a dual mass fly wheel for the new Honda CR-Z hybrid. It started mass-producing the fly wheel at the Yutaka Plant.

-The Company developed a flat torque converter for the V6 engines used in the Honda Acura MDX and Acura ZDX manufactured at Honda Canada. The torque converter is equipped with a high-performance, multiple disc clutch with a lock up system. This is the first time for Honda to use such a torque converter with a high-performance multiple disc clutch and a lock up system. It started mass-producing the converter at the Yutaka Plant.

Investment Activities

Capital Expenditure

(in million JPY)
  FY2009 FY2008 FY2007
Group 3,722 10,325 17,252
Automotive Parts 3,355 9,604 15,567

Automotive Parts Division
-The Group's automotive parts division focused its investment activities on Yutaka Giken Co., Ltd. and Cardington Yutaka Technologies Inc. in the U.S. for the purpose of preparing production lines for new models, revamping equipment to increase production capacity, and streamlining operations to reduce costs.

Plans for Facilities Installation and Renovation

(As of Mar. 31, 2010)

Name of company or subsidiary
(Location)
Type of
facility
Planned amount of investment
(million JPY)
Start Planned
completion
Expected level of increase in capacity
Head Office
YutakaPlant
(Shizuoka Pref., Japan)
Manufacturing facilities for automobile parts etc., R&D facilities and other facilities 773 2009.02 2011.03 Slight increase
Takaoka Plant
(Shizuoka Pref., Japan)
Manufacturing facilities for automobile parts, etc. 87 2009.08 2011.03 Slight increase
Mie Plant
(Mie Pref., Japan)
Manufacturing facilities for automobile parts, etc. 396 2009.12 2011.03

Slight increase

Ranzan Plant
(Saitama Pref., Japan)
Manufacturing facilities for automobile parts, etc. 406 2010.01 2010.12

Slight increase

Tochigi R&D Center
(Tochigi Pref., Japan)
R&D facilities 190 2010.05 2011.03

Slight increase

Cardington Yutaka Technologies Inc.
(Ohio, USA)
Manufacturing facilities for automobile parts, etc. 418 2010.03 2011.01

Slight increase

Alabama Cullman Yutaka Technologies LLC.
(Alabama, USA)
Manufacturing facilities for automobile parts, etc. 628 2009.12 2010.06

Slight increase