Nippon Seiki Co., Ltd. Business Report FY ended Mar. 2016

Financial Overview

(in millions of JPY)
FY ended Mar. 31, 2016 FY ended Mar. 31, 2015 Rate of Change (%) Factors
Sales 243,606 226,956 7.3 -Sales of automotive instruments in Japan increased by JPY 7,100 million, in the Americas by JPY 6,400 million, and in Europe by JPY 3,500 million.
-Sales outside Japan increased by JPY 14,800 million y/y. The Company’s sales to GM and Chrysler in Americas, Honda and JLR in Europe, and Shanghai GM in Asia increased.
Operating income 18,083 16,436 10.0 -Sales of added-value products increased at the instrument business. However, amortization expenses and R&D expenses for developing instruments increased.
Ordinary income 16,378 23,619 (30.7) -
Profit for the year attributable to owners of the parent 9,143 14,467 (36.8) -
Automotive and general-purpose instrument business
Sales 189,784 174,436 8.8 -Sales of motorcycle and general-use instruments fell; however, sales of automobile instruments increased, thanks to strong sales in Europe and America.
Operating income 15,876 13,856 14.6 -

Increase in Sales of Head-up Displays (HUDs)

Sales of HUDs to increase in fiscal year 2017
-The Company will increase its sales of head-up displays (HUDs) by 50% to JPY 23 billion in the fiscal year ending in March 2018 (FY 2017) from the FY 2014 result. A HUD projects driving speed and other information, such as directional signals, from a car navigation system over the windshield or the combiner (screen) of a vehicle. The Company supplies windshield-type HUDs to BMW AG, General Motors, and Fiat Chrysler Automobiles. In addition, the Company started supplying the products for Audi AG's Q7 after establishing a business connection with the automaker. The Company supplies combiner-type HUDs, which are relatively compact and reasonably priced, to Mazda Motor Corporation. The Company is winning customers mainly in the U.S., Europe and China. Its sales of HUDs for FY 2014 increased by 30% to JPY 15.6 billion from the FY 2013 result. The Company's existing customers will increase the number of models equipped with its HUDs, which will positively affect its sales of HUDs for FY 2017. The supplier currently produces HUDs in Japan and the U.S. In addition to these areas, the supplier is considering HUD production in another region as it has won new orders from European and U.S. automakers. The Company developed a "2-Plane HUD", which is a single HUD unit with two display areas on near and far planes. The supplier aims to begin mass-producing the "2-Plane HUD" as early as possible in an effort to add a new product to its existing HUD lineup. The supplier intends to improve competitiveness of its HUDs by adopting a new light source with increased visibility in addition to the current LCD types. (From an article in the Nikkan Jidosha Shimbun on September 24, 2015)

Aggregated sales of HUDs surpassed the 2.5 million mark
-The Company announced that its total sales volume of head-up displays (HUDs) exceeded 2.5 million units in July 2015. The Company started the development of HUDs in 1987, and began full-scale HUD production in the late 1990s. The Company produced 630,000 HUD units in the fiscal year ended in March 2015 (FY 2015). Its cumulative production volume of HUDs exceeded 2.7 million units. The Company has strengthened its development and production of HUDs, believing the HUD business to be its second most important business after its instrument cluster business in expanding operations. In 2005, the Company developed a color HUD with a wide angle of view, based on Controller Area Network (CAN) communication and other technologies it developed in its instrument cluster business. Thereafter, the Company began supplying HUDs to BMW AG, General Motors Company, and Mazda Motor Corporation. In 2015, the company also began supplying HUDs to its new customers, Audi AG and China-based Geely Automobile. (From an article in the Nikkan Jidosha Shimbun on August 8, 2015)

Audi placed Orders for HUDs
-The Company announced that it has started supplying head-up displays (HUDs) to Audi. This will be the first time that the company's HUDs are used in Audi models. The Company has supplied instruments to Audi since the 1990s. The Company’s HUDs can be used on a range of Audi models and will initially be installed on the Audi Q7 large SUV, which is built at Volkswagen's plant in Slovakia. The HUD has a thin-film transistor (TFT) display and projects an image on the windshield. Information such as speed, warnings, and navigation data is displayed with full color approximately 2.1 meters away from the driver’s eyes. The HUD uses high-intensity LEDs to create a clear image even in bright sunlight. (From an article in the Nikkan Jidosha Shimbun on July 17, 2015)

Outlook for FY ending Mar. 2017

(in millions of JPY)
FY ended Mar. 31, 2017
FY ended Mar. 31, 2016
(Actual Results)
Rate of Change
Sales 240,000 243,606 (1.5)
Operating income 15,500 18,083 (14.3)
Ordinary income 17,000 16,378 3.8
Profit for the year attributable to owners of the parent 10,500 9,143 14.8

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

Long-term Management Plan

-NS Group Long-term Business Roadmap: Company sets target of JPY 270.0 billion in sales for the fiscal year ending in March 2018, with target of JPY 300.0 billion in the future.

Policies for Achieving Mid-term Growth

Instruments business
-Optimize production operations and increase production capacity group-wide.
-Increase production plants globally and control R&D costs.

Head-up Display Business
-Boost unit production by customer and production operations to manufacture JPY 50.0 billion in HUD sales.
-Enhance capabilities to make product presentations by effectively making use of the existing production operations that consists of four locations in three countries.

Sensor Business
-The Company is expanding sales in various areas where growth is predicted by making use of its expertise in producing automotive sensors capable of functioning in harsh environments (cold, water proofing, dust control, oil resistance, and anti-vibration etc.)

Consumer Business
-Increase market share of industrial equipment, of which the market is predicted to grow.

New Business
-Launch operations in new business areas such as the IoT and new display systems, collaborating with other companies.

R&D Expenditure

(in millions of JPY)
FY ended Mar. 31, 2016 FY ended Mar. 31, 2015 FY ended Mar. 31, 2014
Overall 4,738 4,459 3,616
-Automobile and general-purpose instruments business 4,395 4,146 3,416

R&D Structure

-The R&D structure is comprised of R&D centers such as the R&D Center and NS Technical Center, which are both located in Nagaoka, Niigata Pref., Japan. They are in charge of developing mass-market products for each business area, working closely with the design function and production technology function.

Raising technological development capabilities
-While enhancing design development technology in Japan, the Company conducts design work close to customer locations, strives to lower costs, and works to raise the capability and efficiency of its design functions.

R&D Activities

Automotive and General-use Instrument Business
-Development of driver-assist type of information systems such as headup displays (HUDs) and next-generation human-machine-interface (HMI) instruments.
-Development of technology for smart phones
-Development of in-vehicle optical technology and actuator technology
-Development of in-vehicle sensor instruments

Product development

Development of elemental technology (safety/driver-assist systems)
-DVAD (Driver's Vision Assist Display): system that senses the driver’s intention based on driver-sensing technology, and which provides a 360-degree exterior image of the area where the driver intends to go, without the need for any operation.
*Examples of screen displays:
・Checks for blind spots when the vehicle is making right/left turns at intersections
・Checks the rearview while the vehicle is changing lanes at high speed
・Checks for blind spots while the vehicle is traveling backward

Capital Expenditure

(in millions of JPY)
FY ended Mar. 31, 2016 FY ended Mar. 31, 2015 FY ended Mar. 31, 2014
Overall 10,901 12,027 12,061
-Automotive and general purpose instrument business 8,183 9,384 9,520

Automotive and General-use Instrument Business
-Capital investment to increase production capacity and revamp facilities to meet product demand for new models; and for facilities to install substrate and assemble instruments.

-Japan: head office (JPY 2,100 million to meet product demand for new models)
-USA: N.S. International, Ltd. (JPY 550 million to increase testing facilities and equipment)

Planned Capital Investment (Meters for automobile and general-purpose use) (As of Mar. 31, 2016)

Name of company
or facility
Purpose Planned total investment
(in million JPY)
Starting Planned Completion

Head office and Plant
(Nagaoka City, Niigata Pref.)

Core work systems 2,200 Dec.
NS Advantech Co., Ltd.
Head office Plant
(Ojiya City, Niigata Pref.)
Forming and printing machines 237 Apr.
NS Advantech Co., Ltd.
Nagaoka Plant
(Nagaoka City, Niigata Pref.)
Coloring equipment 362 Apr.
NS Electronics Co., Ltd.
Head office Plant
(Nagaoka City, Niigata Pref.)
Production lines for performing mounting work 170 Feb.
Nissei Advantech Mexico S.A. De C.V.
(Nuevo Leon, Mexico)
Forming facilities 190 Jan.


Shanghai Nissei Display System Co., Ltd.
(Shanghai, China)
Production lines for performing mounting work 150