G-TEKT 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 | 220,731 | 193,769 | 13.9 | -Increases were seen in unit production, orders for Honda’s major models that were redesigned, and launches of SUVs. -Increase in sales of non-mass-production products for the development of new models. -Sales increased due to favorable currency translation. |
| Operating income | 12,826 | 9,643 | 33.0 | -Higher income and reduction in costs of goods in the production and technology areas. -Operating income was higher due to reductions in the cost of goods for dies and greater revenue. |
| Ordinary income | 11,382 | 8,983 | 26.7 | -In spite of unfavorable currency translation in emerging-countries’ currencies, income increased as a result of G-ONE Auto Parts de Mexico, S.A. de C.V. returning to profitability. |
| Net income attributable to owners of the parent | 7,559 | 4,652 | 62.5 | -Income increased because business performance at subsidiaries, namely Jefferson Southern Corporation (USA), Wuhan Auto Parts Alliance Co., Ltd. (China), and PT. G-TEKT Indonesia Manufacturing, returned to profitability. |
| Japan | ||||
| Sales | 42,256 | 41,187 | 2.6 | -Even though production volumes of minicars fell drastically, sales ended up slightly ahead of those of the previous year because production of the Honda "Fit" destined for export started, the product lineup was improved, and sales to OEMs other than Honda increased. -Sales of non-mass-production products such as die facilities fell. |
| Operating income | 2,245 | 2,137 | 5.1 | -Income increased due to improvement in product lineup of mass-production products and improved profit margins for sales of non-mass-production products. -Income increased as a result of effective cost-reduction initiatives in the production and engineering functions. |
| North America | ||||
| Sales | 85,587 | 66,612 | 28.5 | -Market on the whole continued to remain robust. -Improvement in product lineup for newly launched models. Continuance of further sales to customers other than Honda contributed to greater production volumes. -Increased sales of die facilities. -Sales increased due to favorable currency translation. |
| Operating income | 3,541 | 2,476 | 43.0 | -Expenses for new model launches were within expectations, and improvement in productivity of mass-production operations. -Income increased due to the benefits of favorable currency translation in terms of sales of non-mass-production products. |
| Europe | ||||
| Sales | 11,899 | 10,111 | 17.7 | -Unit production volumes were on par with those of the previous year. -Sales increased due to higher sales of die facilities as well as the launch of production of products for Jaguar. -Sales increased due to favorable currency translation. |
| Operating income | 1,148 | 959 | 19.7 | -The Company was able to post a profit, in spite of the fact that labor costs and depreciation expenses increased. |
| Asia | ||||
| Sales | 39,752 | 32,806 | 21.2 | -Sales increased due to recovery in unit production in the major markets of Thailand, Indonesia, and India. |
| Operating income | 4,261 | 2,574 | 65.5 | -Income increased because the Indonesian production plant returned to operating in the black, in addition to improved productivity in line with increased production. |
| China | ||||
| Sales | 32,343 | 31,901 | 1.4 | -Increase in unit production -In spite of an unfavorable product lineup that resulted from increased competition, and due to lower sales of die facilities, sales nevertheless posted an increase due to favorable currency translation. |
| Operating income | 1,232 | 1,594 | (22.7) | -Income decreased due to changes in the product lineup and higher depreciation expenses. |
| South America | ||||
| Sales | 8,892 | 11,149 | (20.2) | -Unit production was as planned. -Even though sales of die facilities increased on a local currency basis, sales when converted into yen were lower due to the weak real. |
| Operating income | 341 | 444 | (23.2) | -Labor and production expenses increased due to higher inflation and the weak real. However, they were somewhat offset by streamlining and cost-reduction initiatives. |
Business Activities
R&D
- In June 2015, G-TEKT (Deutschland) GmbH was established in Munich as a sales and R&D center. As a result, the Company built a global R&D framework with facilities in Japan, the USA, and Europe, which are capable of supporting each other.
-The Company will create a new development and sales subsidiary in Germany. The new subsidiary will be established in Munich City, Bavaria in July 2015. The subsidiary will develop next-generation car bodies and collect information on the automotive market in Europe, in an effort to win more orders from European automakers. The Company will own 100% of the subsidiary, which is capitalized at EUR 550,000 (JPY 71 million). In Europe, the Company has another development base in the U.K. The new subsidiary in Germany, a leading automobile country, will allow the Company to collect information on advanced technologies on stamping methods and new materials, and to explore new business opportunities globally. (From an article in the Nikkan Jidosha Shimbun on April 28, 2015)
- As the Company’s global R&D headquarters, the R&D functions in Japan are working on developing advanced elemental technology such as “multi-material processing technology” on aluminum and other metals, which is simpler, easier, and has competitive advantages, in order to make car bodies lighter and more rigid, which are requirements when it comes to developing vehicles.
Production Technology
- Hot-stamping lines started operating, one each in Japan and North America. The Company is in the process of installing one more production line in Japan, while studying the idea of adding one more production line in North America.
Reorganization of Production Operations
- The Company reorganized its logistics and production operations in North America, in order to respond to greater production volumes by customers. In addition, the Company optimized its production operations on a regional basis, such as by transferring production among its North American production plants.
- During the fiscal year that ended in March 2016, Austin Tri-Hawk Automotive, Inc. (Indiana, USA) started producing products for delivery to Honda.
Additional Investments
-The Company and H-One Co., Ltd. announced that the two companies will make an additional investment of USD 30 million (approximately JPY 3.6 billion) in their equity-method affiliate, G-ONE Auto Parts de Mexico, S.A. de C.V., which manufactures and sells automotive parts. Each company will provide 50% of the total additional investment. After the capital injection, G-ONE Auto Parts de Mexico's capital will increase to USD 60 million (approximately JPY 7.2 billion). (From a press release on May 14, 2015)
Mid-long term vision:
Quantitative objectives:
- Consolidated sales: JPY 300 billion
- Operating income: JPY 20 billion
Technological innovations
- The Company is enhancing its “one-body analysis technology” as its fundamental technology so as to make optimum product presentations to customers based on complete structural analysis of car bodies. Doing so, the Company aims to win more new orders by proposing solutions that make car bodies even lighter and more rigid.
- The Company added multi-material processing technology as ones of its new, advanced stamping and joining technologies for aluminum and other metals.
Sales innovations
- Europe/American Market: increase sales activities, win new orders, and win new customers by making use of new technological innovations.
- Emerging-country markets: increase sales by further advancing existing stamping, joining, and analysis technologies.
Outlook for FY ending Mar. 2017 |
(in millions of JPY) |
| FY ending Mar. 2017 (Forecast) |
FY ending Mar. 2016 (Actual Results) |
Rate of Change (%) |
|
| Sales | 206,500 | 220,731 | (6.4) |
| Operating income | 13,000 | 12,826 | 1.4 |
| Ordinary income | 12,300 | 11,382 | 8.1 |
| Net income attributable to owners of the parent | 8,400 | 7,559 | 11.1 |
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
R&D Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | |
| Overall | 613 | 641 | 459 |
R&D Structure
-R&D activities involving new technologies and new products are conducted at the Company's main Technology Development Department.
-17 engineers work at the Product Development Section as of March 2016.
-The product development and R&D functions consists of the technology center’s stamping technology, joining-technology, precision-technology’s departments and the sales center’s product-development department, which work closely with customers
R&D Activities
-Major R&D activities and achievements in the FY, which ended Mar. 31, 2016
- Developing hot-press technology
- Developing forming technology to manufacture high tensile strength steel sheets
- Developing non-destructive inspection technology to test spot-welded points.
- Developing stamping technology for transmission components
- Developing technology to create forming simulations
- Developing technology that contributes to reducing vehicle weight
Capital Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | |
| Overall | 20,181 | 43,671 | 21,056 |
| -Model investment (Investment to respond to new products launch) | 6,480 | 18,108 | - |
| -Fundamental investment (Investment to increase production capacity) | 13,701 | 25,563 | - |
Capital Investments in FY ended Mar. 31, 2016
-The Company invested a total of JPY 6,480 million to respond to new product launches, broken down as follows. Japan: JPY 3,325 million; China: JPY 1,831 million.
-As fundamental investments to increase production capacity, the Company invested a total of JPY 13,701 million, broken down as follows. North America: JPY 6,520 million; Asia: JPY 3,683 million; China: JPY 2,045 million.
-The Company plans to spend JPY 23,900 million yen companywide in capital investments in the fiscal year ending in March 2017.
Investments in Japan and U.S.
-The Company will add new lines for hot-stamped components at its plants in Japan and the U.S. The Company will add one line at the Japanese plant between FY 2016 and FY 2017, which will give the plant a total of two lines including an existing line. Subsequently, the Company will consider adding a line at its U.S. plant. Hot stamping technology enables the manufacturing of components that are higher in strength than those made from ultra-high tensile steel sheets. Consequently, hot-stamped components are increasingly used in some body frames to improve collision safety performance. Since the Company is receiving increased orders for hot-stamped components to be used in various models and body parts, the Company will prepare for mass production in earnest. (From an article in the Nikkan Jidosha Shimbun on February 18, 2016)
Planned Capital Investments |
(As of Mar. 31, 2016) |
| Plant | Location | Equipment to be installed | Estimated amount of investment (in millions of yen |
From | To | Purpose of investments |
| The Company's Saitama Plant |
Saitama Pref., Japan | Equipment for manufacturing auto parts (dies, jigs and tools) | 2,622 | Dec. 2014 |
Jul. 2016 |
Dealing with new model |
| 1,591 | Feb. 2014 |
Aug. 2016 |
Dealing with new model | |||
| Austin Tri-Hawk Automotive, Inc. | Indiana, USA |
Equipment for manufacturing auto parts (dies, jigs and tools) | 1,759 | Jun. 2015 |
Nov. 2016 |
Dealing with new model |
| G-TEKT North America Corporation | Ohio, USA |
Equipment for manufacturing auto parts (stamping and welding equipment) | 483 | Oct. 2015 |
Oct. 2016 |
Increasing production capacity |
| G-TEKT Mexico Corp. S.A. de C.V. | Guanajuato, Mexico | Equipment for manufacturing auto parts (stamping and welding equipment) | 675 | Apr. 2015 |
Aug. 2016 |
Increasing production capacity |
| G-TEKT (Thailand) Co., Ltd. | Ayutthaya, Thailand | Equipment for manufacturing auto parts (dies, jigs and tools) | 1,556 | Oct. 2014 |
Feb. 2016 |
Dealing with new model |
| Auto Parts Alliance (China) Ltd. | Guangdong, China | Equipment for manufacturing auto parts (dies, jigs and tools) | 1,033 | Apr. 2015 |
Oct. 2016 |
Dealing with new model |
| 910 | Dec. 2014 |
May 2016 |
Dealing with new model |