Ashimori Industry Co., Ltd. Business Report FY ended Mar. 2017
Financial Overview |
(in million JPY) |
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | Rate of Change (%) | Factors | |
| Overall | ||||
| Sales | 50,331 | 51,380 | (2.0) | - |
| Operating income | 1,510 | 2,071 | (27.1) | - |
| Ordinary income | 1,361 | 1,700 | (19.9) | - |
| Net income attributable to owners of the parent | 1,019 | 1,360 | (25.1) | - |
| Automotive Safety Systems | ||||
| Sales | 36,006 | 38,444 | (6.4) | -Even though the volume of unit sales increased, sales in monetary terms decreased due to lower production volumes in Japan of vehicles that the Company had previously been supplying products to and due to the effect of negative currency translation. However, sales of seatbelts and airbags increased outside of Japan because of the Company’s winning new orders to equip new vehicle models. -Sales of interior products decreased because of lower sales in Japan and all other countries except for Korea and Thailand, where sales increased. |
| Operating income | 1,172 | 1,830 | (36.0) | - |
Global Business Activities
-The Company announced that it will purchase approximately 9,300 square-meters of land for a new plant for Ashimori Korea Co., Ltd. Approximately KRW 2.1 billion (JPY 200 million) will be invested in this project. Ashimori Korea completed the construction of a plant in March 2016 and has decided to add the land adjacent to the existing plant, aiming to further expand its business and receive new orders. (From a press release on May 13, 2016)
-The Company will increase the local procurement ratio at its plant in Mexico from the current 26% to over 60% by the end of 2017. The Company will enhance cooperation with local suppliers in Mexico and improve product quality by using know-how acquired at its other plants and by quantifying its evaluation criteria. By doing so, the Company will increase the number of locally produced parts which conform to OEMs' quality standards. While car sales remain favorable in North America, the Company intends to win more orders for its parts for use in cars produced in North America by increasing the local procurement ratio to a level which meets the requirement for an exemption from import duty under the North American Free Trade Agreement (NAFTA). The Mexico plant, which began operations in September 2013, produces seat belts, air bags and interior parts. Since it has not been long since the opening of the plant, the local procurement ratio is only 26%, far below the figures of its Thai and Chinese plants (61% and 63%, respectively). Therefore, the plant procures parts from the Company's Thai and Chinese plants. The Company finds it difficult to raise the local procurement ratio partly because OEMs set rigorous quality standards especially on critical safety parts, which consist of a large number of components. (From an article in the Nikkan Jidosha Shimbun on April 1, 2015)
-Ever since Ashimori India Private Ltd., the Company’s subsidiary in India, launched operations in October 2009, it has been able to significantly improve earnings because of increasing sales and taking measures that effectively mitigate negative currency translation. In addition, it has been making efforts to increase sales locally, improve quality, and reduce costs.
<Germany/U.S>
-The Company will establish its first sales offices in Europe and the U.S. to strengthen its overseas automotive business. The company aims to open a German office by March 2017 and the U.S. office within three years. Ashimori Industry is expanding its business with European automakers, as well as Japanese automakers in the strong U.S. automotive market. By establishing bases in the European and U.S. markets, the company will enhance its ability to work with automakers, and at the same time prepare a system where local needs can be identified as it looks to expand its overseas business. (From an article in the Nikkan Jidosha Shimbun on April 5, 2016)
Mid-term Management plan (FY ending Mar. 2017 - FY ending Mar. 2019)
| Financial Targets and Actual Results | (in million JPY) |
| FY ended Mar. 31, 2015 (Actual Result) |
FY ended Mar. 31, 2016 (Actual Result) |
FY ended Mar. 31, 2017 (Actual Result) |
FY ending Mar. 31, 2018 (Target) |
FY ending Mar. 31, 2019 (Target) |
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| Overall | |||||
| Sales | 48,067 | 51,380 | 50,331 | 56,500 | 62,000 |
| Operating income | 1,025 | 2,071 | 1,510 | 2,400 | 3,000 |
| -Operating margin (%) | 2.1 | 4.0 | 3.0 | 4.2 | 4.8 |
| Ordinary income | 1,306 | 1,700 | 1,362 | 2,300 | 2,900 |
| Net income attributable to owners of the parent | 1,470 | 1,360 | 1,019 | 1,700 | 2,100 |
| ROA (Return on Assets) (%) | 4.0 | 3.7 | 3.8 | 4.1 | 4.8 |
| Automotive Safety Systems | |||||
| Sales | 35,932 | 38,444 | 36,006 | 40,500 | 44,300 |
| Operating income | 904 | 1,830 | 1,172 | 1,900 | 2,100 |
| -Operating margin (%) | 2.5 | 4.8 | 3.3 | 4.7 | 4.7 |
Mid-term Management Strategy
| Setting up global production and sales operations (Strengthen organizational structure outside Japan) | Expand business outside Japan by enhancing production plants worldwide |
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| Increase sales of interior parts worldwide |
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| Develop new-generation products | Making use of core technologies to advance integration and systemization. | Core technologies
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| Develop products for autonomous driving systems |
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| Increase sales by enhancing value to customers (“Best Partner” strategy) |
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| Enhance competitive advantages by improving costs |
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Outlook for FY ending Mar. 31, 2018 |
(in million JPY) |
| FY ending Mar. 31, 2018 (Forecast) |
FY ended Mar. 31, 2017 (Actual Results) |
Rate of Change (%) |
|
| Overall | |||
| Sales | 56,500 | 50,331 | 12.3 |
| Operating income | 2,400 | 1,510 | 58.9 |
| Ordinary income | 2,300 | 1,362 | 68.8 |
| Net income attributable to owners of the parent | 1,700 | 1,019 | 66.8 |
| Automotive Safety Systems | |||
| Sales | 40,000 | 36,006 | 11.1 |
| Operating income | 1,700 | 1,172 | 45.0 |
-The Company forecasts that in the fiscal year ending in March 2018 revenue and income will increase year-over-year, to the point where sales, operating income, ordinary profit, and new profit will all set new record highs.
>>>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 | 868 | 939 | 952 |
| -Automotive Safety Systems | 434 | 471 | 541 |
R&D Activities
Seatbelts
-The Company developed and improved the reliability of new devices that comply with government regulations in every country and which pass assessment tests.
-The Company developed and commercialized devices that are designed for production worldwide.
Airbags
-The Company developed and improved the reliability of new modules for new collisions mode.
-The Company is developing and commercializing products that can be manufactured worldwide.
Interior products
-The Company expanded its product range of shades and tonneau covers, and expanded the types of cargo-nets it can supply. It also developed highly functional products and new materials; in addition to improving designs.
-Outside Japan, the Company is commercializing products, increasing the operations and number of customers.
Capital Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | |
| Overall | 2,691 | 1,800 | 1,728 |
| -Automotive Safety Systems | 2,287 | 1,568 | 1,405 |
Automotive Safety Systems
-The Company made capital investments mainly at its Osaka Plant to rationalize and strengthen production of automotive products, as well as augment R&D facilities.
Planned Capital Investments |
(As of Mar. 31, 2017) |
| Name of Company/Plant (Location) |
Purpose | Planned investment (in million JPY) |
Starting Month | Completing Month | Capacity increase on completion |
| The Company's Osaka Plant (Osaka, Japan) |
To rationalize production facilities for automotive safety systems and high performance products | 3,473 | Apr. 2016 | Mar. 2018 | Practically none as this is to improve quality |
| Ashimori Korea Co., Ltd. (Gangwon-do, Korea) |
To construct production facilities for automotive safety systems | 930 | Jul. 2015 | Mar. 2019 | - |
| To enhance production facilities for automotive safety systems | 200 | May 2016 | Mar. 2018 | - | |
| Ashimori Industria de Mexico, S.A. de C.V. (Guanajuato, Mexico) |
To enhance production facilities for automotive safety systems | 1,300 | Jul. 2016 | Jul. 2017 | - |