G-TEKT Corporation 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 | 206,072 | 220,731 | (6.6) | -Production volumes rose in line with the increase in global unit production volumes by OEMs. -Sales fell due to lower production volumes of non-mass-market products and the effect of negative currency translation. |
| Operating income | 14,402 | 12,826 | 12.3 | -Operating income increased due to higher operation rates that resulted from greater production volumes and from effective cost-reduction initiatives. |
| Ordinary income | 14,430 | 11,382 | 26.8 | -Ordinary income increased because of lower finance expenses and because investments accounted for under the equity method of accounting turned profitable. |
| Net income attributable to owners of the parent | 9,706 | 7,559 | 28.4 | - |
| Japan | ||||
| Sales | 40,240 | 42,256 | (4.8) | -Sales were lower because prototype sales decreased, even though production volumes by customers increased and improvements were made to the product lineup. |
| Operating income | 1,558 | 2,245 | (30.6) | -Operating income decreased because prototype sales were lower, the benefits of the weak yen ended in terms of non-mass-market-product sales, and labor costs increased. |
| North America | ||||
| Sales | 77,692 | 85,587 | (9.2) | -Operating income decreased because prototype sales were lower, the benefits of the weak yen ended in terms of non-mass-market-product sales, and labor costs increased. |
| Operating income | 3,552 | 3,541 | 0.3 | -Operating income slightly increased due to improved profitability of G-Tekt North America Corporation. |
| Europe | ||||
| Sales | 16,692 | 11,899 | 40.3 | -Sales increased due to higher unit production volumes by OEMs, a higher unit consumption rate for the fully redesigned Honda Civic, and higher sales of products delivered to the Jaguar. |
| Operating income | 2,461 | 1,148 | 114.4 | -Operating income increased due to higher sales and improved profitability of sales from die facilities. |
| Asia | ||||
| Sales | 34,674 | 39,752 | (12.8) | -Although production volumes of products delivered to OEMs in Thailand and Indonesia increased, production volumes in India decreased, which resulted in lower overall sales. |
| Operating income | 3,890 | 4,261 | (8.7) | - |
| China | ||||
| Sales | 31,220 | 32,343 | (3.5) | -Sales were lower due to the effect of negative currency translation because of the high valuation of the yen. |
| Operating income | 2,614 | 1,232 | 112.2 | -Operating income increased due to higher sales that resulted from greater production volumes, in addition to effective cost-reduction initiatives and higher sales of non-mass-market products. |
| South America | ||||
| Sales | 5,552 | 8,892 | (37.6) | -Sales decreased due to lower sales volumes of mass-market products, lower sales volumes of non-mass-market products due distribution changes for die facilities, and the effect of negative currency translation because of the high valuation of the yen. |
| Operating income | 253 | 341 | (25.8) | -Operating income decreased, in spite of the Company’s implementing cost-reduction initiatives. |
Business Activities
-The Company made advances in terms of its global sales plan by winning new orders in North America from European OEMs. Until winning these new orders, it had won business from European OEMs only in Europe.
-The Company is raising the precision of its body-analysis technology that can analyze an entire vehicle body, in working to reduce weight while at the same time strengthen body rigidity.
-The Company is developing simulation technology that has a high correlation with collusion tests that use actual cars, making product presentations on highly reliable light-weight products that will hopefully lead to greater product orders.
-The G-Tekt Tokyo Laboratory (GTL) in Tokyo will be the main R&D function responsible for developing innovative technology.
Mid-long term vision:
Quantitative objectives:
- Consolidated sales: JPY 300 billion
- Operating income: JPY 20 billion
Technological innovations
- Once the G-Tekt Tokyo Laboratory (GTL) is completed and comes online, it will be an enhancement to the Company’s R&D structure, working under the premise of presenting technological proposals to OEMs.
Sales innovations
-Win new business in the USA by approaching European OEMs.
-Increase sales activities by taking note of recent market developments in China.
-International sales function was consolidated into the new Sales Planning Department in the Sales Division.
-The Company plans to open a local office in Shanghai, China, which will conduct market research on the Chinese market.
Outlook for FY ending Mar. 2018 |
(in millions of JPY) |
| FY ending Mar. 2018 (Forecast) |
FY ended Mar. 2017 (Actual Results) |
Rate of Change (%) |
|
| Sales | 198,000 | 206,072 | (3.9) |
| Operating income | 13,200 | 14,402 | (8.4) |
| Ordinary income | 13,200 | 14,430 | (8.5) |
| Net income attributable to owners of the parent | 8,800 | 9,706 | (9.3) |
>>>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 | |
| Overall | 737 | 613 | 641 |
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 2017.
-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, 2017
- Development of hot stamping technology
- Development of forming technology for ultra-high tensile steel sheets
- Development of stamping technology for transmission parts
- Development of forming-simulation technology
- Development of technology designed to reduce vehicle weight
- Technology for applying multi-materials
- Dissimilar welding technology
Capital Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | |
| Overall | 22,394 | 20,181 | 43,671 |
| -Model investment (Investment to respond to new products launch) | 12,698 | 6,480 | 18,108 |
| -Fundamental investment (Investment to increase production capacity) | 9,696 | 13,701 | 25,563 |
Capital Investments in FY ended Mar. 31, 2017
-The Company invested the following amounts by region to switchover to launches of new models:
Japan: JPY 5,891 million
North America: JPY2,113 million
Asia: JPY 2,096 million
China: JPY 2,500 million
-The Company made the following basic capital investments to increase production capacity.
Japan: JPY 2,541 million
North America: JPY 5,212 million
Europe: JPY 695 million
Asia: JPY 587 million
-The Company plans to spend JPY 25,200 million company-wide on capital investments during the fiscal year that ends in March 2018.
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, 2017) |
| Plant | Location | Equipment to be installed | Estimated amount of investment (in millions of yen |
From | To | Purpose of investments |
| The Company's Hamura Office |
Tokyo, Japan |
R&D facilities | 2,000 | Mar. 2017 | Mar. 2018 | Boost R&D capabilities |
| The Company's Saitama Plant |
Saitama, Japan |
Equipment for manufacturing auto parts (dies, jigs and tools) | 701 | Nov. 2016 | Dec. 2017 | Dealing with new model |
| The Company's Shiga Plant |
Shiga, Japan |
Equipment for manufacturing auto parts (dies, jigs and tools) | 1,012 | Dec. 2014 | Sep. 2017 | Dealing with new model |
| Jefferson Industries Corporation | Ohio, USA |
Equipment for manufacturing auto parts (Press and welding) | 625 | Dec. 2016 | Jan. 2018 | Increasing production capacity |
| 765 | Feb. 2017 | Sep. 2017 | Increasing production capacity | |||
| Equipment for manufacturing auto parts (dies, jigs and tools) | 1,271 | May 2016 | Sep. 2017 | Dealing with new model | ||
| G-TEKT (Thailand) Co., Ltd. | Ayutthaya, Thailand | Equipment for manufacturing auto parts (dies, jigs and tools) | 1,311 | Dec. 2015 | Apr. 2017 | Dealing with new model |
| G-TEKT India Private Ltd. | Rajasthan, India |
Equipment for manufacturing auto parts (dies, jigs and tools) | 867 | Sep. 2016 | Apr. 2018 | Dealing with new model |
| Auto Parts Alliance (China) Ltd. | Guangdong, China | Equipment for manufacturing auto parts (dies, jigs and tools) | 607 | Aug. 2016 | Nov. 2017 | Dealing with new model |
| 917 | May 2016 | Nov. 2017 | Dealing with new model |