Yutaka Giken Co., Ltd. Business Report FY ended Mar. 2017
Financial Overview |
(IFRS, in million JPY) |
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | Rate of change (%) | Factors | |
| Overall | ||||
| Revenue | 157,176 | 165,315 | (4.9) | -Revenue and income both decreased due to the effect of negative currency translation because of the high valuation of the yen, in addition to stiff competition and increased expenses, in spite of the fact that the Company won more orders from customers outside Japan and implemented rationalization and streamlining initiatives. |
| Operating income | 12,096 | 14,637 | (17.4) | |
| Income before income taxes | 11,336 | 13,451 | (15.7) | |
| Profit for the year attributable to owners of the parent | 5,455 | 7,194 | (24.2) | - |
| Japan | ||||
| Revenue | 21,762 | 21,996 | (1.1) | -Even though fix costs were lower for the year and effective rationalization initiatives were implemented, revenue decreased, with the Company posting an operating loss. This was attributable to the effect of negative currency translation due to the high valuation of the yen, lower sales of prototypes and service parts, and expenses incurred for cutting over to new models. |
| Operating income | (379) | 774 | - | |
| North America | ||||
| Revenue | 52,288 | 62,083 | (15.8) | -Lower revenue was reported due to the effect of negative currency translation. Lower income was reported due to the effect of negative currency translation because of the high evaluation of the yen, the impact of stiff competition, and expenses incurred for cutting over to new models. |
| Operating income | 1,711 | 3,571 | (52.1) | |
| Asia | ||||
| Revenue | 25,986 | 26,186 | (0.8) | -Even though revenue grew because of receiving greater numbers of product orders, in the end, the Company reported lower revenue and income after factoring in the effect of negative currency translation because of the high valuation of the yen, and expenses incurred at the automotive business in Indonesia and for opening a new production plant in Thailand. |
| Operating income | 3,347 | 2,923 | 14.5 | |
| China | ||||
| Revenue | 49,437 | 47,816 | 3.4 | -Revenue fell in the end because of lower sales (impacted by fierce competition), increased expenses, and negative currency translation, although the Company won more product orders from customers. Income increased. |
| Operating income | 8,141 | 7,689 | 5.9 | |
| Other regions (Including affiliated company in UK and Brazil) | ||||
| Revenue | 7,703 | 7,233 | 6.5 | -Revenue increased because the Company won more product orders from customers, in spite of incurring expenses needed to cut over production to respond to new models and being impacted by the low valuation of the GBP. However, an operating loss was reported. |
| Operating income | (444) | (559) | - | |
Business Planning
-Since April 2014, the 12th medium-term plan started. Slogan is "Breakthrough to the next stage".
-FY2020 vision: Continuously develop innovative products and technologies that impress customers
- To offer the world's most competitive products in the area of its core technologies
- To develop and produce next-generation products that support a new era of mobility
- To demonstrate global leadership in creating the future, with each employee taking the initiative
- During the FY ended March 2015, the Company constructed the most advanced torque converter production line at its Yutaka Plant in Hamamatsu, Shizuoka Prefecture, Japan. The new integrated and synchronized production line almost quadrupled (up 280 %) the production efficiency in terms of the number of units produced by a single worker. The Company plans to introduce this advanced and efficient production system to its each and every plant.
Contracts
| -Major contracts given for FY ended March 2017 |
| Product ordered | Vehicle Model | Production Plant |
| Exhaust catalytic converters and silencers | Honda 「CR-V」 | Cardington Yutaka Technologies Inc. |
| Heat collectors | Honda 「Accord Hybrid」 | Yutaka Works |
| Turbine damper torque converters | Honda 「Step wgn」「Civic」「CR-V」 | Yutaka Works Yutaka Technologies de Mexico S.A. de C.V. Foshan Fengfu Autoparts Co., Ltd. |
| Stator cores, stator holders, magnet plates, magnetic plate collars | Honda 「Freed Hybrid」 | Yutaka Works |
| Exhaust catalytic converters and silencers | Honda 「Ridgeline」 | Alabama Cullman Yutaka Technologies LLC. |
Outlook for FY ending Mar. 31, 2018 |
(IFRS, in millions of JPY) |
| FY ending Mar. 31, 2018 (Forecast) |
FY ended Mar. 31, 2017 (Actual Results) |
Rate of Change (%) |
|
| Revenue | 162,000 | 157,176 | 3.1 |
| Operating income | 11,700 | 12,096 | (3.3) |
| Income before income taxes | 12,000 | 11,336 | 5.9 |
| Profit for the year attributable to owners of the parent | 6,000 | 5,455 | 10.0 |
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
R&D Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | |
| Japan | 2,751 | 2,547 | 2,746 |
| North America | 139 | 134 | 120 |
| Total | 2,890 | 2,681 | 2,865 |
R&D Structure
-Tochigi Development Center and the Production Technology Office mainly promote R&D activities.
-Cardington Yutaka Technologies Inc. (Ohio, USA) is the main technological center in North America, conducting R&D activities on products designed for the North-American market.
R&D Activities
Exhaust system
-The Company focuses 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.
Heat-management System Parts
-R&D activities to improve fuel economy, enhance environmentally friendly technologies, and develop production technology.
Drive-train products
-R&D activities to reduce both the size and weight of products, strengthen product competitiveness, improve productivity, and develop manufacturing technology.
-The Company focuses on product development mainly for automotive exhaust system for the North-American market.
Product Development
Exhaust heat recovery system
-The Company was successful in developing a heat-collector, which it began commercially producing in April 2016. This latest heat-collector improves fuel efficiency when the engine is warming up by reducing the time it takes for the engine to heat up when it is cold. This heat-collector enables the electric-vehicle motors on hybrid-vehicles especially, which run on only the motor, to start quickly. This is anticipated to improve fuel efficiency even further. The Company has seven patents pending related to this heat-collector.
Major features:
- Compact, high-efficiency heat-exchanger with a high-density fin at the core, based on precision-stamping and precision-joining technology.
- Wide opening channel switching valve makes it possible to reduce exhaust resistance using a long-stroke thermo actuator.
- Compact design in terms of its excellent ease and accessibility when being equipped on vehicles.
Improving performance:
- Heat collection: 5% better performance than competitors’ products
- Heat insulation after warm up: 44% better performance than competitors’ products
- Exhaust-pressure loss: 72% better performance than competitors’ products
- Size: 31% smaller than competitors’ products
- Weight: 5% lighter than competitors’ products
Capital Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | |
| Group | 11,722 | 14,072 | 14,789 |
| by Region | |||
| -Japan | 4,015 | 2,157 | 3,960 |
| -North America | 3,073 | 5,187 | 3,510 |
| -Asia | 2,107 | 2,060 | 3,577 |
| -China | 2,321 | 2,972 | 2,950 |
-Investment to install production facilities to respond to new models, and streamline operations to reduce costs.
-Investment mainly at Cardington Yutaka Technologies Inc. and Yutaka Technologies de Mexico S.A. de C.V. to manufacture new types of automobile parts and streamline operations.
-In aiming to increase sales in Asia, investment to increase production capacity and install new equipment, mainly in YS Tech (Thailand) Co., Ltd.
-Investment in Foshan Yutaka Auto Parts Co., Ltd. to manufacture automotive parts for new models and increase production capacity.
Investment Outside Japan
-The Company will increase production of torque converters at its plant in Mexico. The Mexican plant has two torque converter production lines, and the Company will move one line from its plant in Ohio State in the U.S. to Mexico by the end of March 2017. Labor costs in Mexico are much lower than the U.S., and producing parts that require much assembly in Mexico offers production cost advantages. The Company expects that car production in Mexico and demand for torque converters in the U.S. will increase, and is looking to improve its cost competitiveness in North America by rearranging part of its production system. The Mexican plant was opened in Guanajuato State in 2014 to match the start of production at Honda Motor Co., Ltd.'s Mexican plant, and produces exhaust systems and torque converters. The plant has two production lines for torque converters, and supplies the parts to Honda's Mexican plant. Another line will be moved from the Ohio plant to boost production capacity at the Mexican plant. (From an article in the Nikkan Jidosha Shimbun on April 1, 2016)
Planned Capital Investments |
(As of Mar. 31, 2017) |
| Name of company or subsidiary (Location) |
Type of facility | Planned amount of investment (million JPY) |
Start | Planned completion |
| Head Office YutakaPlant (Shizuoka Pref., Japan) |
Manufacturing facilities for automobile parts etc., other facilities | 2,087 | Apr. 2016 | Mar. 2018 |
| Mie Plant (Mie Pref., Japan) |
Manufacturing facilities for automobile parts | 437 | Apr. 2016 | Mar. 2018 |
| Ranzan Plant (Saitama Pref., Japan) |
Manufacturing facilities for automobile parts | 526 | Aug. 2016 | Mar. 2018 |
| Tochigi R&D Center (Tochigi Pref., Japan) |
R&D facilities | 913 | Apr. 2017 | Mar. 2018 |
| Cardington Yutaka Technologies Inc. (Ohio, USA) |
Manufacturing facilities for automobile parts | 1,429 | Apr. 2017 | Mar. 2018 |