Sumitomo Electric Industries, Ltd. Business Report FY ended Mar. 2018

Financial Overview

(in million JPY)

	FY ended Mar. 31, 2018	FY ended Mar. 31, 2017	Rate of Change (%)	Factors
Overall
Sales	3,082,247	2,814,483	9.5	-Companywide, business results improved year over year, thanks to increased production volumes of new vehicles by OEMs, mainly outside Japan; and strong demand for wire-harnesses, powder metal alloys, and sintered products.
Operating income	173,139	150,503	15.0	-Income increased due to the above-mentioned strong demand.
Ordinary income	195,010	173,872	12.2	-
Profit for the year attributable to owners of the parent	120,328	107,562	11.9	-

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

Business partnership

-The Company formed a commercial alliance with NEC in February 2018. The commercial alliance covers the planning and development of automotive parts, which will enable the companies to begin collaborating in the area of connected-cars to connect cars via networks. The companies will make use of their AI and IoT technologies to commercialize high-level hardware and software offering competitive advantages for interior and exterior automotive systems.

R&D Expenditure

(in million JPY)

	FY ended Mar. 31, 2018	FY ended Mar. 31, 2017	FY ended Mar. 31, 2016
Overall	117,735	115,155	110,839
-Automotive Business	71,766	70,894	68,402

R&D Activities

Wire harnesses / In-vehicle electronic equipments
-R&D activities are mainly conducted at AutoNetworks Technologies, Ltd., which is jointly owned by the Company and Sumitomo Wiring Systems, Ltd. R&D activities are mainly focused on developing new products meeting safety, comfort and environmental needs.

-Wire harnesses:

The Company is building harness architectures that can be mounted in next-generation vehicles' onboard systems, conducting R&D activities on elemental technologies needed to meet this need.
Also, in order to reduce vehicle weight and be environmental friendly, the Company is developing lighter weight harnesses. It has succeeded in this area, developing and starting mass-production of harnesses using aluminum, which is lighter in weight than copper.
Moreover, the Company is continuing its R&D activities on high-voltage harnesses, connectors, battery wiring modules and so on for the growing EV/HEV sector.

-In-vehicle electronics devices:

The Company is now developing electronics devices such as PDs (power distributors) and next-generation in-vehicle LAN (Local Area Network) units in order to respond to the rapid advances taking place in IT. The Company is also launching systems with advanced features and/or networking capabilities.

-Sumitomo Riko:

The Company is developing a smart-rubber (SR) sensor to place in automotive seats, which can detect the body pressure of drivers when the drivers are seated. By detecting changes in the driver’s vital conditions such as respiration and heartbeat, the sensor is designed to stop dangerous situations from happening. In addition, it is developing environmentally friendly products and technology designed for electric vehicles and fuel-cell vehicles.

Alliance with GoMentum Station
-In November 2017, the Company became the first automotive-parts maker to form a business alliance with GoMentum Station for testing facilities involved with testing self-driving and connected-car technologies. GoMentum Station is a testing facility with over 20 miles of paved road that recreates various types of urban infrastructure found in real life such as tunnels, land-bridges, and railroad tracks.