Nishikawa Rubber Co., Ltd. Business Report FY ended Mar. 2015
Financial Overview |
(in millions of JPY) |
| FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 |
Rate of |
Factor | |
| Overall | ||||
| Sales | 87,986 | 82,750 | 6.3 | - |
| Operating income | 4,568 | 8,833 | (48.3) | - |
| Ordinary income | 4,358 | 9,374 | (53.5) | - |
| Net income | 2,097 | 6,189 | (66.1) | - |
| Automotive parts | ||||
| Sales | 83,565 | 77,971 | 7.2 |
-Sales increased year-on-year due to higher production volumes of new vehicles outside Japan and due to favorable currency translation. However, production volumes of new vehicles in Japan decreased year-on-year. |
| Operating income | 4,151 | 8,147 | (49.0) | -U.S.: Higher expenses were incurred to improving operations to respond to high operation. -Mexico, Indonesia: Higher expenses were incurred to raise production capacity for series production. -Thailand: Fewer product orders due to lower new-vehicle production volumes. -Japan: Higher expenses were incurred because of (1) launching new products and changing production processes, (2) dealing with higher labor costs due to inability to meet target indexes in terms of productivity, and (3) paying higher expenses associated with the rising volume of raw materials. |
Business Overview
-In FY March 2015, the Company took following actions.
- Strengthen cost competitiveness (reduction of overall costs - development, production, purchasing, quality, logistics and indirect costs)
- Creation of new technology and new products (products to meet the environmental requirements, products for noise and acoustic insulation, products to meet the safety requirements)
- Expansion of offshore manufacturing (new locations: Mexico "Nishikawa Sealing Systems Mexico S.A. de C.V" and Indonesia "PT. Nishikawa Karya Indonesia"; expansion of existing facilities: Guanzhou plant "Guangzhou Nishikawa Sealing System Co., Ltd." in China.)
Nishikawa Group's 2020 Vision
-Reaffirm that sealing and foam-forming technology form the basis of the Group, making them its areas of superior strength.
-Financial objectives:
- Consolidated sales: JPY 100 billion and over
- Consolidated operating margin: 10% and over
- Consolidated ROA: 10% and over
-Basic strategies
| Areas | Initiatives |
| Operations | 1. Expand and augment global operations 2. Deeply research sealing and foam-forming technology 3. Innovate new, core business operations |
| Systems/assembly | 1. Respond to global expansion 2. Improve high cost-structure 3. Rebuild organization and operations |
Outlook for FY ending Mar. 31, 2016 |
(in millions JPY) |
| FY ending Mar. 31, 2016 (Forecast) |
FY ended Mar. 31, 2015 (Actual Results) |
Rate of Change (%) |
|
| Sales | 89,000 | 87,986 | 1.2 |
| Operating income | 7,100 | 4,568 | 55.4 |
| Ordinary income | 7,000 | 4,358 | 60.6 |
| Net income * | 4,700 | 2,097 | 124.1 |
*As for FY ending March 2016, it's defined " Net income attributable to owners of the parent".
R&D Expenditure |
(in millions of JPY) |
| FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | FY ended Mar. 31, 2013 | |
| Overall | 548 | 321 | 250 |
| -Automotive parts | 419 | 203 | 171 |
R&D Structure
-Consolidated the previously separate R&D functions of the automotive business and the general industrial materials business in March 2015, working to enhance common activities, share expertise, and revitalize in regard to technology, expertise, and human resources.
R&D Activities
To reduce Product Weight
- Door outer seals based on using the world's smallest* cross-sections (*according to the Company's data)
- Door inner seals made lighter in weight from using inherently lighter core materials
- Glass-run channel created from ultra-fine foam
- Integrated parts made of retaining parts made from plastic instead of metal and of seal material for retaining purpose
To improve Sound-proofing Performance
- Developing and launching high-performance specs that improve soundproofing of door-hole seals.
- Benchmarking in order to make better use of existing products and expand into products other than doors.
- Continuing R&D activities in which foaming technology and different materials are combined.
To reduce Environmental Impact
- Replacing metal glass-run channels with plastic ones and developing materials that can be processed with less energy.
- Reducing energy consumption by shortening production lines and reducing materials loss.
Capital Expenditure |
(in millions of JPY) |
| FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | FY ended Mar. 31, 2013 | |
| Overall | 6,200 | 7,146 | 5,409 |
| -Automotive parts | 5,956 | 7,032 | 5,305 |
Automotive parts
-The Company invested in facilities and equipment to produce new-type seals. It is also investing to rationalize its operations under the aim of lowering costs.
Investment Outside Japan
-The Company will expand its plant that produces automotive body sealing products in Guanajuato, Mexico, Nishikawa Sealing Systems Mexico S.A. de C.V., in 2016. An additional building will be built at the plant site and the number of workers will be doubled to 800. In Mexico, demand for body sealing products is increasing as Japanese and other automakers are expanding vehicle production volume in the country. Japanese automakers are using Mexico as the export hub of small cars mainly destined for the U.S. The Company will expand its production capacity to meet the needs of automakers to procure parts within Mexico. The Company will make an additional investment in the plant that started operations in October 2013 to cope with the expected increase in demand partly due to a recovery in the U.S. automotive market. (From an article in the Nikkan Jidosha Shimbun on July 24, 2014)
-Nishikawa Cooper LLC, a subsidiary located in Indiana in the U.S.A., is building its third production plant at Fort Wayne, Indiana. The new plant premises will be 15,000m sq. and the plant building will be 5,500m sq. The existing plants have reached the limits of their production capacities, while the Company continues to receive more orders. The Company is investing JPY 500 million in the plant, which is scheduled to launch operations from July 2015. The Company plans to transfer around 150 employees from Plant No. 2 and hire 50 additional employees. Once the new plant comes online, annual sales in the U.S. will increase from the current JPY 23.0 billion, to JPY 26.0 billion in the fiscal year ending March 2019.
Planned Capital Investments |
(As of Mar. 31, 2015) |
| Plant | Equipment to be introduced | Estimated amount of investment (in million JPY) |
Project Period | |
| From | To | |||
| The Company | ||||
| Shiraki Plant (Hiroshima Pref., Japan) |
-Manufacturing equipment for automotive seals and Components for general industry | 362 | Jul. 2014 |
Mar. 2016 |
| Asa Plant (Hiroshima Pref., Japan) |
-Manufacturing equipment for automotive seals and Components for general industry | 1,055 | Oct. 2014 |
Mar. 2016 |
| Yoshida Plant (Hiroshima Pref., Japan) |
-Manufacturing equipment for automotive seals and interior/exterior components -Manufacturing equipment for exterior walls for housing |
426 | Dec. 2014 |
Mar. 2016 |
| Mihara Plant (Hiroshima Pref., Japan) |
-Manufacturing equipment for automotive seals. -Manufacturing equipment for exterior walls for housing |
387 | Jul. 2014 |
Mar. 2016 |
| Others | -Buildings and R&D equipment and others | 962 | Dec. 2014 |
Mar. 2016 |
| Domestic subsidiaries | ||||
| Nishikawa Bussan (Hiroshima Pref., Japan) |
-Manufacturing equipment for automotive seals and dies | 200 | - | Mar. 2016 |
| Nishikawa Big Ocean Co., Ltd. (Hiroshima Pref., Japan) |
-Manufacturing equipment for automotive seals and Components for general industry | 172 | Mar. 2015 |
Mar. 2016 |
| Nishikawa Rubber Yamaguchi (Yamaguchi Pref., Japan) |
-Manufacturing equipment for automotive seals | 157 | Mar. 2015 |
Mar. 2016 |
| Overseas subsidiaries | ||||
| Nishikawa Cooper LLC. (Indiana, USA) |
-Manufacturing equipment for automotive seals | 3,250 | Dec. 2014 |
Dec. 2015 |
| Nishikawa Tachaplalert Cooper Ltd. (Nakhonratchasima, Thailand) |
-Manufacturing equipment for automotive seals | 1,057 | Dec. 2014 |
Dec. 2015 |
| Shanghai Nishikawa Sealing System Co., Ltd. (Shanghai, China) |
-Manufacturing equipment for automotive seals | 851 | Dec. 2014 |
Dec. 2015 |
| Guangzhou Nishikawa Sealing System Co., Ltd. (Guangzhou, China) |
-Manufacturing equipment for automotive seals | 142 | Dec. 2014 |
Dec. 2015 |
| Nishikawa Sealing Systems Mexico S.A. de C.V. (Guanajuato, Mexico) |
-Manufacturing equipment for automotive seals | 1,274 | Dec. 2014 |
Dec. 2015 |
| PT. Nishikawa Karya Indonesia (West Java, Indonesia) |
-Manufacturing equipment for automotive seals | 87 | Dec. 2014 |
Dec. 2015 |
Data
| Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2013 | |
| Automotive parts | 5,485 | 5,086 | 4,617 |
| General industrial materials | 141 | 134 | 176 |
| Corporate (In-common) | 41 | 38 | 39 |
| Total | 5,667 | 5,258 | 4,832 |
Sales by Segment |
(in millions of JPY) |
| FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | FY ended Mar. 31, 2013 | ||||
| Sales | Operating Profit | Sales | Operating Profit | Sales | Operating Profit | |
| Automobile parts | 83,565 | 4,151 | 77,971 | 8,147 | 66,281 | 6,154 |
| General industrial materials | 4,420 | 417 | 4,778 | 686 | 4,440 | 650 |
| Adjustment | - | - | - | - | - | - |
| Consolidated | 87,986 | 4,568 | 82,750 | 8,833 | 70,721 | 6,805 |
Sales by Geographic Area |
(in millions of JPY) |
| FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | FY ended Mar. 31, 2013 | |
| Japan | 40,944 | 41,792 | 40,828 |
| USA | 20,471 | 16,882 | 11,993 |
| China | 11,828 | 11,106 | 7,007 |
| Other | 14,742 | 12,968 | 10,890 |
| Total | 87,986 | 82,750 | 70,721 |
(Note) Sales are based on customer locations, categorized by country or region.
Consolidated |
| FY ended Mar. 31, 2011 | FY ended Mar. 31, 2012 | FY ended Mar. 31, 2013 | FY ended Mar. 31, 2014 | FY ended Mar. 31, 2015 | |
| Sales (million yen) | 52,019 | 60,384 | 70,721 | 82,750 | 87,986 |
| Income from ordinary business activities (million yen) | 5,453 | 3,140 | 7,151 | 9,374 | 4,358 |
| Net income (million yen) | 3,828 | 1,655 | 4,483 | 6,189 | 2,097 |
| Comprehensive income (million yen) | 3,202 | 1,634 | 8,180 | 14,240 | 10,676 |
| Net assets (million yen) | 42,077 | 42,924 | 50,755 | 59,275 | 69,546 |
| Total assets (million yen) | 71,835 | 71,771 | 81,431 | 93,447 | 105,014 |
| Book value per share (yen) | 2,058.92 | 2,120.33 | 2,475.86 | 2,875.00 | 3,379.16 |
| EPS (yen) | 195.60 | 84.58 | 229.00 | 316.11 | 107.13 |
| Diluted EPS (yen) | 195.54 | - | - | - | - |
| Net asset ratio (%) | 56.1 | 57.8 | 59.5 | 60.2 | 63.0 |
| ROE (%) | 9.9 | 4.0 | 10.0 | 11.8 | 3.4 |
| PER | 5.5 | 10.1 | 6.9 | 5.5 | 18.5 |
| Cash flow from operating activity (million yen) | 8,406 | 2,434 | 10,235 | 10,535 | 8,802 |
| Cash flow from investment activity (million yen) | (5,865) | (1,936) | (5,531) | (5,685) | (7,534) |
| Cash flow from financial activity (million yen) | (671) | (810) | (679) | (3,045) | (1,985) |
| Balance of cash and cash equivalents (million yen) | 11,745 | 11,430 | 15,511 | 17,369 | 16,696 |
| Number of employees | 4,492 | 4,518 | 4,832 | 5,258 | 5,667 |
Non Consolidated
| FY ended Mar. 31, 2011 | FY ended Mar. 31, 2012 | FY ended Mar. 31, 2013 | FY ended Mar. 31, 2014 | FY ended Mar. 31, 2015 | |
| Sales (million yen) | 42,154 | 42,482 | 44,320 | 47,128 | 44,821 |
| Income from ordinary business activities (million yen) | 3,523 | 1,829 | 4,106 | 5,544 | 4,436 |
| Net income (million yen) | 2,373 | 1,087 | 2,888 | 3,980 | 3,484 |
| Paid-in Capital (million yen) | 3,364 | 3,364 | 3,364 | 3,364 | 3,364 |
| Number of shares outstanding (1,000) | 19,995 | 19,995 | 19,995 | 19,995 | 19,995 |
| Net assets (million yen) | 30,713 | 31,629 | 35,376 | 41,893 | 50,560 |
| Total assets (million yen) | 56,095 | 57,408 | 61,861 | 68,013 | 76,910 |
| Book value per share (yen) | 1,568.76 | 1,615.47 | 1,806.83 | 2,139.71 | 2,582.38 |
| Dividend per share (yen) | 20.00 | 20.00 | 26.00 | 38.00 | 36.00 |
| EPS (yen) | 121.26 | 55.56 | 147.54 | 203.29 | 177.97 |
| Diluted EPS (yen) | 121.22 | - | - | - | - |
| Net asset ratio (%) | 54.7 | 55.1 | 57.2 | 61.6 | 65.7 |
| ROE (%) | 7.9 | 3.5 | 8.6 | 10.3 | 7.5 |
| PER | 8.9 | 15.4 | 10.7 | 8.6 | 11.1 |
| Payout ratio (%) | 16.5 | 36.0 | 17.6 | 18.7 | 20.2 |
| Number of employees | 1,266 | 1,295 | 1,303 | 1,320 | 1,324 |