Ichikoh Industries, Ltd. Business Report FY ended Mar. 2015

Business Highlights

Financial Overview

(in million JPY)
  FY ended Mar. 31, 2015 FY ended Mar. 31, 2014 Rate of Change (%) Factors
Overall
Sales 94,166 88,698 6.2 1)
Operating income 514 290 77.2 2)
Ordinary income 3,118 1,113 180.1 3)
Net income 2,363 665 255.3 4)
Automotive components
Sales 84,330 78,783 7.0 5)
Operating income 274 (172) - 6)

*From the fiscal year that ended in March 2015, the Company changed the categories under which some expenses are recorded. Until then, some R&D expenses and expenses for indirect functions at production facilities, which had been recorded under sales costs, are now being posted as sales & general administrative expenses. In addition, some logistics & quality-control functions' expenses, which were being posted under sales & general administrative expenses, are now being posted as sales costs. For that reason, results for the fiscal year that ended in March 2014 and prior years have been readjusted retroactively according to the new reporting method.

Factors
1) Sales
-Sales increased mainly because of higher sales at the automotive parts business.

2) Operating profit
-Even though the launch of new products for Thai OEMs was postponed, which therefore negatively affected sales, operating profit increased as a result of changing a Chinese subsidiary, which had been accounted for under the equity method of accounting, into a consolidated subsidiary.

3) Ordinary profit
-Ordinary profit increased as a result of posting the following one-time, non-operating gains: JPY 1,200 million in investment gains based on the equity method, JPY 587 million in gains from favorable currency translation, and JPY 501 million in insurance benefit payments.

4) Net profit
-Net profit increased overall, taking into account the following one-time, extraordinary gains and losses: JPY 1,130 million gain from disposing fixed assets, and JPY 1,857 million impairment loss involving fixed assets at a Thai subsidiary, and so on.

5) Sales at the automotive parts business
-Sales increased 7% year-on-year due to brisk orders received in Japan and the addition of results from a consolidated subsidiary in China, which had been a subsidiary accounted for under the equity method of accounting.

6) Operating profit at the automotive parts business
-Operating profit was in the black this past year, due to positive factors such as the addition of results from a consolidated subsidiary in China, which originally had been a subsidiary accounted for under the equity method of accounting, and an overall increase in sales. This was despite disappointing results in the ASEAN Region countries where the launch of new products for Thai OEMs was postponed, and the costs of parts materials imported to Indonesia rose because of the weak Indonesian rupiah.

Business Plan

-The Company aims to expand its net sales in the fiscal year ending March 2019 (FY 2018) by 50 percent from the FY 2013 result to JPY 135 billion. The Company intends to win new orders mainly in the lamp and door mirror businesses in Japan by enhancing the cost competitiveness and marketing well-designed LED headlamps. It expects to raise its market share in Japan from 18 percent in 2013 to 25 percent for lamps and from 12 percent in 2013 to 20 percent for door mirrors. After the global financial crisis in 2008, the Company has made efforts to improve profitability through consolidating its plants in Japan. It aims to attain a 6.5 percent ordinary income in FY 2018 by increasing the output of competitive products. (From an article in the Nikkan Jidosha Shimbun on February 27, 2015)

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

Outlook for FY ending Mar. 2016

(in million JPY)
  FY ending Mar. 31, 2016
(Forecast)
FY ended Mar. 31, 2015
(Actual Results)
Rate of Change
(%)
Overall
Sales 104,000 94,166 10.4
Operating income 2,000 514 289.1
Ordinary income 3,100 3,118 (0.6)
Net income 2,700 2,363 14.3

R&D Expenditure

(in million JPY)
FY ended Mar. 31, 2015 FY ended Mar. 31, 2014 FY ended Mar. 31, 2013
Overall 6,172 5,450 5,537
-Automotive components 5,879 5,353 5,454

 

R&D Structure

Department Functions
Technical Center
(within Isehara Plant)
Development of advance technology and new products
Production Engineering Development of products that reach commercialization
Commercialization of products that the Company developed


-The Company will add an automotive door mirror development function to its plant in Wuxi, Jiangsu province, China. The development base will be the Company's first own door mirror development base outside Japan and second own overseas development base after the lamp development base in Thailand. The Company regards door mirrors as its second flagship products, following automotive lamps. The Company localizes development of door mirrors for the promising Chinese market in order to expand its sales in China by 40% to JPY 10 billion by 2018. (From an article in the Nikkan Jidosha Shimbun on March 10, 2015)

R&D Activities

Main R&D Projects in FY ended Mar. 31, 2015
-Lighting equipment and signals

  • Development of high functional automotive lamp devices which capitalizes on car design
  • Development of a mirror replacement camera system.
  • Research on situation-sensitive light distribution properties and evaluation systems.
  • Development of high-definition automotive signals.
  • Development of new light sources.

View-related Devices

  • Development of intelligent mirror system.
  • Development of view-related systems, utilizing functional thin membranes, electronics, etc.
  • Development of car control systems and control devices.
  • Development of vehicle perimeter sensing and security devices.

Opto-mechatronics

  • Development of display devices using new light sources such as LED.
  • Development of mechatronics devices utilizing membrane/precision molding technologies.

Capital Expenditure

(in million JPY)
FY ended Mar. 31, 2015 FY ended Mar. 31, 2014 FY ended Mar. 31, 2013
Overall 8,991 8,727 4,845


-The Company invested mainly in facilities and equipment in its automotive products business in order to install facilities, save on labor, and rationalize operations involving new products and model change.

-Major investment in FY ended Mar. 31, 2015 are as follow:

Plant Location Segment (business division) Amount of investment
(in million JPY)
Isehara Plant Kanagawa Pref.,
Japan
Automotive parts 2,996
Mirror  Plant Gunma Pref.,
Japan
Automotive parts 230
Fujioka Plant Gunma Pref.,
Japan
Automotive parts 2,443
Ichikoh Industries (Thailand) Co., Ltd. Chonburi,
Thailand
Automotive parts 2,677