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5. G-TEKT Corporation Business Report FY ended Mar. 2019

G-TEKT Corporation Business Report FY ended Mar. 2019

Factors

＜Japan＞
-Sales were JPY 58,666 million, a 14.8% year-over-year (y/y) increase, thanks to increased production volumes and sales. Operating income was JPY 1,795 million, a 24.2% y/y increase, thanks to increased sales.

＜North America＞
-Sales were JPY 90,202 million, a y/y increase of 12.0%, thanks to greater sales of die facilities and equipment. Operating income was JPY 1,529 million, a 13.0% y/y decrease, due higher labor costs caused by the labor situation.

＜Europe＞
-Sales were JPY 20,523 million, a 29.5% y/y increase, thanks  to greater sales of die facilities and equipment delivered to Toyota. Operating income was JPY 3,022 million, an 18.9% y/y increase, thanks to higher sales.

<Asia>
-Sales were JPY 42,061 million, a 6.3% y/y increase, thanks to higher production volumes in Thailand. Operating income was JPY 4,897 million, a 19.4% y/y increase, because of higher incomes.

<China>
-Sales were JPY 49,481 million, a 22.7% y/y increase, because of higher production volumes and sales. Operating income was JPY 5,298 million, a 28.1% y/y increase, thanks to increased income.

＜South America＞
-Sales were JPY 7,264, a 3.9% y/y increase, because of higher production volumes and sales. Operating income was JPY 303 million, a 1.9% y/y increase.

Business Activities

The Company announced its long-term growth strategy, targeting sales of JPY 300 billion and operating income of JPY 20 billion.

-In April 2018, established the G-Tekt Tokyo Lab (GTL) in Hamura, Tokyo. The lab is responsible for developing next-generation, highly rigid auto bodies.

-Increase production volume through applying high-speed processing and joining technology to aluminum auto bodies at the new production plant in Slovakia, aiming to develop aluminum production/processing technology in order to respond to the growing electric vehicle market.

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

Contracts

-In the fiscal year that ended in March 2019, the Company won orders for and produced 4.94 million units for Honda (an y/y increase of 160,000 units), and 1.0 million units for Subaru (a y/y decrease of 68,000 units).

R&D Structure

-R&D activities involving new technologies and new products are conducted at the Company's main Technology Development Department.
-34 engineers work at the Product Development Section as of March 2019.
-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, 2019

• 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 Investments in FY ended Mar. 31, 2019

-The Company invested the following amounts by region to switchover to launches of new models:
Japan: JPY 7,500 million
North America: JPY 2,500 million
Asia: JPY 1,000 million
China: JPY 3,900 million

-The Company made the following basic capital investments to increase production capacity.
Japan: JPY 1,900 million
North America: JPY 2,500 million
Asia: JPY 600 million
China: JPY 1,700 million
Europe: JPY 500 million
South America: 300 million

-The Company plans to spend JPY 35,600 million company-wide on capital investments during the fiscal year that ends in March 2020.