Nissin Kogyo Co., Ltd. Business Report FY ended Mar. 2017
Financial Overview |
(IFRS, in millions of JPY) |
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | Rate of Change (%) | Factors | |
| Sales | 166,889 | 167,709 | (0.5) | -Sales were lower because of the effect of negative currency translation, even though sales volumes increased in Asia, Japan, and North America. |
| Operating income | 12,278 | 7,490 | 64.0 | -Operating income rose due to increased sales and effective cost reductions, even though income was impacted by the effect of negative currency translation. |
| Ordinary income | 12,880 | 7,406 | 73.9 | - |
| Profit for the year attributable to owners of the parent | 5,385 | 33,654 | (84.0) | - |
| Sales by Segment | ||||
| -Japan | 25,953 | 24,684 | 5.1 | -Sales rose due to increased sales of aluminum products, although sales of motorcycle products decreased. |
| -North America | 42,078 | 43,841 | (4.0) | -Sales were lower due to the effect of negative currency translation, in spite of the fact that sales of aluminum products increased. |
| -Asia | 86,830 | 86,452 | 0.4 | - Sales were lower due to the effect of negative currency translation, in spite of the fact that sales in China, Vietnam, and Thailand increased. |
| -South America/Europe | 12,029 | 12,732 | (5.5) | - Sales were lower due to the weak economy in Brazil and the effect of negative currency translation. |
-In the fiscal year that ended in March 2016, some of the operations run by the Company and its subsidiaries were divested and categorized as discontinued businesses in accordance with IFRS 5: Non-current Assets Held for Sale and Discontinued Operations. As a result, sales, operating income, profits before taxes in the fiscal year that ended in March 2016 reflect the results of continued operations. In the fiscal year that ended in March 2017, JPY 32,219 million from discontinued operations was included as a current profit in the current net profit and JPY 31,928 was included in the current net profit returned to owners of the parent company. A gain on transfer from these business divestitures of JPY 39,184 (pre-tax) was included in the current net profit.
Joint Ventures
-On March 31, 2016, the Company spun off its automotive brake-control and brake appliance business and turned it into a joint-venture company with Autoliv (Sweden), called Autoliv-Nissin Brake Systems (ANBS). Nissin has a 49% stake while Autoliv has the remaining 51%. The Company aims at continuing to grow its business in the integrated brake system segment while increasing sales to global OEMs.
-Autoliv-Nissin Brake Systems (ANBS) combines the current brake control business of Autoliv with a “carve-out” of Nissin Kogyo's automotive braking business. ANBS has manufacturing facilities in Japan, China, and the U.S. It will be part of Autoliv's Electronics business segment (consisting of passive safety electronics products, ADAS products and brake control systems). The enterprise value of the joint venture is around JPY 58.2 billion (USD 524.4 million). Autoliv purchased 51% of the joint venture for JPY 29.7 billion (approximately USD 264 million. (From a press release on April 1, 2016)
Contracts
-The Company’s aluminum products, i.e., front knuckles and rear knuckles, are being equipped on the Subaru Impreza being built in Japan and North America.
-The Company’s brakes and aluminum products are being equipped on the Honda CR-V and Changan Automobile Company’s CS95.
-Major supply agreements during the fiscal year that ended March 2017.
| Car maker | Model | The Company's product | Start of sales |
| Mazda | "Impreza" | Housings, front and rear knuckles | Oct. 2016 |
| Honda | "CR-V" | Rear calipers with electric parking system Rear lower-arms Compliance bracket |
Dec. 2016 |
| Changan Automobile | "SC95" | Front calipers | Mar. 2017 |
| Dongfeng Honda | "UR-V" | Rear knuckles | Mar. 2017 |
13th Mid-term Plan
Policies
Motorcycles: Aim to become the largest motorcycle brake company
Automobiles: Grow the Company based on developing weight-reduction technology on aluminum.
Business environment
Motorcycle business: Develop advance brakes that meet laws and regulations
Aluminum business: Respond to needs calling for lighter bodies
Automotive business: Enhance autonomous driving technology and meet safety regulations
Issues for achieving growth
Motorcycle brakes: Expand CBS business
Aluminum business: Enhance profitability by making large-size suspension parts lighter
Automotive brakes: Improve profitability
-Sales target for the fiscal year ending in March 2019: JPY 177.0 billion
- Sales target for the fiscal year ending in March 2020: JPY 183.0 billion (with operating profit margin of 10%)
Outlook for FY ending Mar. 31, 2018 |
(IFRS, in million JPY) |
| FY ending Mar. 31, 2018 (Forecast) |
FY ended Mar. 31, 2017 (Actual Result) |
Rate of Change (%) |
|
| Sales | 175,000 | 166,889 | 4.9 |
| Operating income | 12,500 | 12,278 | 1.8 |
| Ordinary income | 13,000 | 12,880 | 0.9 |
| Profit for the year attributable to owners of the parent | 5,000 | 5,385 | (7.1) |
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
R&D Expenditure |
(in millions of JPY) |
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | |
| Overall | 4,744 | 4,634 | 8,605 |
-For FY ending Mar. 31, 2018, JPY 4,500 million is planed for R&D expenditure.
R&D Facilities
| Country | Name of facility | Location |
| Japan | Nagano Development Center | Tomi City, Nagano Pref. |
| Tochigi Development Center | Nasukarasuyama City, Tochigi Pref. | |
| Spain | Nissin R&D Europe, S.L.U. |
Barcelona, Catalunya |
| Thailand | Nissin R&D Asia Co., Ltd. | Bangkok |
| China | Nissin R&D China - Zhongshan | Zhongshan, Guangdong |
| Nissin R&D China - Chongqing | Chongqing | |
| U.S. | Nissin R&D USA - East Liberty | Ohio |
| Nissin R&D USA - Milwaukee | Wisconsin |
R&D Activities
-With a global perspective in mind, the Company is developing products, materials, and manufacturing methods in the pursuit of making its products designed mainly for two- and four-wheel vehicles lighter, smaller, more fuel efficient, safer and more comfortable. These include basic brake systems, mechatronics-based automatic control-systems for motorbike, and aluminum products, which form the backbone of its product range.
-The Company is working to develop products, materials, and manufacturing methods that contribute to reducing CO2 emissions.
-The Company focused on developing products that meet the market needs in North America, such as basic braking systems and aluminum products.
Major R&D Achievements in Automobile Parts
Foundation brake development
-In meeting the needs for improving fuel economy and making light-weight products, the Company developed a new-design, low-drag disc brake. Expanding content ratio of lighter weight brakes on more new vehicle models by replacing existing materials with aluminum ones.
-To create a global production framework, procure more parts locally and reduce costs.
Development of weight reduction technology
-In meeting the requirement for lighter weight products, replace steel suspension parts and brackets with aluminum ones, which will reduce weight between 30-40%.
-Launched commercial production of rear and front knuckles capable of carrying higher loads by making use of their special features, which are high strength and tensility.
-The Company is delivering two types of engine mount brackets, three types of knuckles, and two types of arms to OEMs.
Capital Expenditure |
(in millions of JPY) |
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | |
| Japan | 2,149 | 1,538 | 2,384 |
| North America | 3,493 | 5,027 | 2,801 |
| Asia | 5,448 | 5,149 | 5,954 |
| South America/Europe | 29 | 222 | 837 |
| Adjustment | (173) | (200) | (319) |
| Total | 11,214 | 11,737 | 11,658 |
-In FY ending Mar. 2018, the Company plans to invest JPY 10,500 million in facilities and equipment.
Planned Capital Expenditure |
(As of Mar. 31, 2017) |
| Company or Office Name | Facility type | Estimated amount of investment (in millions JPY) |
Start | Scheduled Completion |
| Tobu Plant (Tomi City, Nagano Pref.) |
Production facilities | 2,405 | Dec. 2016 |
Feb. 2018 |
| Naoetsu Plant (Joetsu City, Niigata Pref.) |
Production facilities | 1,159 | May 2016 |
Jun. 2018 |
| Nagano Development Center (Tomi City, Nagano Pref.) |
R&D facilities | 256 | Sep. 2016 |
Feb. 2018 |
| Nissin APS Co., Ltd. (Ueda City, Nagano Pref.) |
Production facilities | 126 | Oct. 2016 |
Mar. 2018 |
| Nissin Brake Ohio Inc. (Ohio, USA) |
Production facilities | 1,316 | Oct. 2016 |
Mar. 2018 |
| Nissin Brake Georgia Inc. (Georgia, USA) |
Production facilities | 1,371 | Oct. 2016 |
Mar. 2018 |
| Nissin Brake de Mexico, S.A. de C.V. (Guanajuato, Mexico) |
Production facilities | 142 | Apr. 2016 |
Mar. 2018 |
| Nissin Brake (Thailand) Co., Ltd. (Nakornratchasrima, Thailand) |
Production facilities | 3,041 | Jan. 2017 |
Mar. 2018 |
| P.T. Chemco Harapan Nusantara (Cikarang, Indonesia) |
Production facilities | 576 | Apr. 2016 |
Mar. 2018 |
| Zhongshan Nissin Industry Co., Ltd. (Guangdong, China) |
Production facilities | 2,521 | Jul. 2016 |
Mar. 2018 |
| Nissin Brake Vietnam Co., Ltd. (Vinh Phuc, Vietnam) |
Production facilities | 480 | Oct. 2016 |
Mar. 2018 |
| Nissin Brake India Pvt. Ltd. (Rajasthan, India) |
Production facilities | 683 | Oct. 2016 |
Mar. 2018 |
| Nissin Brake Do Brasil Ltda. (Manaus-Am, Brazil) |
Production facilities | 437 | Oct. 2016 |
Mar. 2018 |