Sumitomo Riko Co., Ltd.(Formerly, Tokai Rubber Industries) Business Report FY ended Mar. 2019

Financial Overview

(IFRS, in million JPY)
  FY ended Mar. 31, 2019 FY ended Mar. 31, 2018 Rate of Change (%) Factors
Sales 469,705 462,885 1.5 1)
Operating income 1,153 12,196 (90.5) -
Income before income taxes 700 11,285 (93.8) -
Net income attributable to owners of the parent (5,022) 3,528 - -
Automotive parts
Sales 398,160 393,440 1.2 2)
Operating income 7,771 9,590 (20.4) -

1) Sales increased because of greater demand in the automotive segment and infrastructure segment in China and Asia.

Automotive parts
2) Lower deliveries to Argentina from Brazil and the impact of the WLTP in Europe were offset for the most part by higher revenue in Japan, the USA, China, and Thailand.


Recent business outside Japan

-Sumitomo Riko Company Limited (Sumitomo Riko) will establish a new sales headquarters for automotive business in China on April 1, 2019. Currently, the majority of Sumitomo Riko’s automotive business sales in the country are from Japanese automakers, and the company aims to expand sales of anti-vibration rubber and automotive hoses to local automakers and parts suppliers through the new headquarters in the world’s largest automotive market. The new headquarters will be located in Jiaxing, Zhejiang Province, and start with 30 employees. Sumitomo Riko is aiming to achieve automotive parts sales of JPY 70 billion in China in the fiscal year that ends in March 2019. (From an article in the Nikkan Jidosha Shimbun on December 20, 2018)


Mid-term Management Plan

-Sumitomo Riko Company Limited (Sumitomo Riko) announced its new mid-term business plan at a press conference on May 24. The company aims to become a developer and supplier of systems like sound and vibration control systems, as well as passenger sensing systems. Sumitomo Riko will invest JPY 190 billion in plants and equipment, and JPY 100 billion in research and development through the end of March 2023. The company will also invest JPY 5 billion to open its own test course in Ena City, Gifu Prefecture in December 2021. It aims to establish a full vehicle model that analyzes noise, vibration, and harshness (NVH), and offer systems to automakers that are busy with the development of next-generation technologies and services. Tetsu Matsui, President and CEO of Sumitomo Riko, stated that the company will strengthen its technical development capability for both the tightening environmental standards for engine vehicles and the advancement of electric vehicles. (From an article in the Nikkan Jidosha Shimbun on May 25, 2018)


Outlook for FY ending Mar. 31, 2020

(IFRS, in million JPY)
  FY ending Mar. 31, 2020
FY ending Mar. 31, 2019
Rate of Change
Sales 470,000 469,705 0.1
Operating income 8,000 1,153 593.7
Income before income taxes 7,000 700 899.4
Net income attributable to owners of the parent 2,000 (5,022) -

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


R&D Expenditure

(in million JPY)
  FY ended Mar. 31, 2019 FY ended Mar. 31, 2018 FY ended Mar. 31, 2017
Overall 15,002 14,796 14,614
-Automotive parts 12,204 11,941 11,812

-Automotive Business: The Automotive Product Development Center that opened in August 2016 is working to commercialize functions capable of detecting the condition of drivers in order to avoid dangerous driving situations. It is doing  this by embedding automotive seats with smart-rubber (SR) sensors that can detect body pressure, and which can detect changes to drivers' vital signs such as breathing and heart beat. In addition, it is continuing to develop technology on ecological products used in electric vehicles and fuel-cell vehicles.


R&D Activities

-Sumitomo Riko Company Limited (Sumitomo Riko) aims to commercialize automotive actuators that use smart rubber material by around 2021 or 2022. Smart rubber material moves in reaction to static electricity. The company will incorporate the actuators into touch panels to transmit operational information by vibration, and provide direct sensation. Sumitomo Riko intends to reduce costs for mass production as early as possible. The company will provide higher added value for automotive parts with its actuators by applying rubber technology. (From an article in the Nikkan Jidosha Shimbun on July 13, 2018)

<Groundbreaking Ceremony for a New Research and Development Center>
-Sumitomo Riko Co., Ltd. (Sumitomo Riko) announced that SumiRiko AVS Germany GmbH, its anti-vibration rubber subsidiary in Hessen, held a groundbreaking ceremony for a new research and development center in late May. In addition to traditional anti-vibration rubber products for engine-powered vehicles, the new center will develop systems and products for enhanced comfort in electrified vehicles and promote the use of them to European automakers. Sumitomo Riko will invest EUR 10 million (JPY 1.3 billion) in the new R&D center. Construction is scheduled to be completed in September 2019. The new R&D center will be made up of a development department office building and a prototype, first article and testing building. The two buildings will have a total floor space of 4,700 square meters. (From an article in the Nikkan Jidosha Shimbun on June 12, 2018)

Capital Expenditure

(in million JPY)
  FY ended Mar. 31, 2019 FY ended Mar. 31, 2018 FY ended Mar. 31, 2017
Overall 31,074 29,486 32,069
-Automotive parts 24,225 23,664 27,199

-During the fiscal year ended March 2019, the automotive parts division invested mainly in production equipment to manufacture anti-vibration rubber and hoses at home and abroad.