NHK SPRING CO., LTD. Business report FY2007

Business Highlights

Financial overview

In million JPY FY2007 FY2006 Rate of Change (%) Factors
Overall
Sales 484,878 428,059 13.3 Sales increased due to an increase in sales volume as a result of sales promotions and marketing activities.
Operating income 30,356 25,115 20.9 Income increased as a result of such activities as reducing cost and improving  productivity and operation efficiency. Increased sales volume also contributed to the income increase.
Ordinary income 31,336 27,185 15.3
Net income 20,361 15,931 27.8
Suspension springs Division
Sales 116,917 104,482 11.9 Sales and operating income increased as a result of increased sales due to increased car production volume as well as recovery of the Company's business in North America.  
Operating income 4,757 1,204 295.0
Seat Division
Sales 171,603 144,597 18.7 Sales increased as a result of greater vehicle production volume and the division's sales promotion activities.
Operating income 8,033 6,074 32.3
Precision parts
Sales 154,723 137,609 12.4 Sales and operating income increased due to increased car production volume as well as an increase in information equipment related demand.
Operating income 14,450 14,349 0.7

Domestic Business
The Company announced that it will acquire additional 3,100 shares in Faurecia-NHK Kyushu Co., Ltd. (FNQ), which is a car seat production company it jointly established with Faurecia S.A. of France. The acquisition will increase the Company's control over the joint venture company in Kanda-machi, Fukuoka Prefecture, enhancing its initiatives to improve the plant's production efficiency. After the closing of the share transaction scheduled on December 31, Faurecia-NHK Kyushu will be owned 81 percent by the Company and the remaining 19 percent by Faurecia. The business results of the Kyushu facility will be thereafter added to the consolidated financial statements of the Group, which aims to turn the subsidiary profitable by fiscal year 2008. (From an article in the Nikkan Jidosha Shimbun on Dec. 25, 2007)

Overseas Business
<Thailand>
The Company announced that it has decided at the Board of Directors meeting held on July 2, 2007 to transfer all the shares of Thai Automotive Seating & Interior Co., Ltd. (TASI) now held by the Company to Toyota Boshoku Asia Co., Ltd., Toyota Boshoku Corporation's subsidiary in Thailand. The Company made a decision to dispose its entire stake in TASI, accepting the request presented by Toyota Boshoku, who expressed its desire to further strengthen its operations in Thailand by providing its customers with comprehensive services covering both the development and sales of automotive seats and door trims. The Company is scheduled to transfer a total of 125,000 TASI shares, which accounts for 50% of the all the issued and outstanding shares of TASI, as 37,500 shares (15%) owned by itself and another 87,501 shares (35%) held by its subsidiary NHK Spring (Thailand) Co., Ltd. being combined.(From a press release on July 2, 2007)

Mid-term business plan "Plan 2010"
In Nov. 2007, the Company announced its mid-term business plan from FY 2008 through FY 2010. It will aim to establish itself as "the global No. 1 in its mainstay business of suspension spring, both in name and substance," and will build up systems to achieve this goal while comparing its future visions and the current situations. The numerical targets for the last fiscal year include 620 billion yen sales, up 30.2% from the estimated result of FY 2007, and 7.6% operating profit ratio, up 1.4%. (From an article in the Nikkan Jidosha Shimbun on Nov. 20, 2007)

R&D

R&D expenditure
- R&D expenses for FY2007 were 9,989 million yen, representing approximately 2.1% of total sales for the Group.

Suspension Spring Division

- R&D expenses were1,197 million yen. 
- The Company is engaged in developing light-weight, high-durability leaf and coil springs, and light-weight, high-durability stabilizers and stabilizer springs that protect the environment, save energy, and enhance riding comfort

Seat Division
- R&D expenses were 3,229 million yen.
- Conducting R&D activities on active headrests that reduce whiplash injuries resulting from rear-end collisions.
-The Company developed new models to be used in next generation vehicle models. This development focused on reducing values of whiplash injury index as well as reducing products weight. It also worked to develop hood up devices.

Investment Activities

Investment expenditure
Capital investment for FY2007 was 34,779 million yen.

Suspension Spring Division
-The Company made 5,475 million JPY in capital investments within the Group to win supply contracts for new products and to improve productivity for existing products.
The focus of investments was manufacturing facilities for suspension springs at Yokohama Plant, NHK Spring (Thailand) Co., Ltd., NHK of America Suspension Components and New Mather Metals, Inc.

Seat Division

-The Company made 6,298 million JPY in capital investments within the Group in order to win business for new products and to improve the productivity of  existing products.
Its focus of investment was manufacturing facilities for seats at the Toyota plant and NHK Spring (Thailand) Co., Ltd.


Installation of New Equipment (suspension springs and seating division)
Company
Name
Plant Segment Major Equipment to be installed Estimated amount of investment (million yen) Project Period
from  to
NHK Spring
Co., Ltd.
Shiga plant Suspension springs Manufacturing facilities for springs 1,090 May 2008 Mar. 2009
Shiga plant Suspension springs Manufacturing facilities for springs 340 Apr. 2008 Feb. 2009
Yokohama plant Seats Manufacturing facilities for automotive seats 559 Oct. 2007 Oct. 2008
Yokohama plant Seats Manufacturing facilities for automotive seats 520 Apr. 2008 Dec. 2008
Yokohama plant Seats Manufacturing facilities for automotive seats 400 Oct. 2008 Sep. 2009
Toyota plant Seats Plant building 466 Apr. 2008 Mar. 2010
Toyota plant Seats Manufacturing facilities for automotive seats 388 Oct. 2008 May 2009
Toyota plant Seats Manufacturing facilities for automotive seats 363 Apr. 2008 Oct. 2008
Gunma plant Seats Manufacturing facilities for automotive seats 508 May 2008 Aug. 2009
NHK Seating of America Inc. Indiana, USA Seats Manufacturing facilities for automotive seats 815 July 2007 June 2008
NHK Spring (Thailand)
Co., Ltd.
Bangpoo plant
(Samutprakarn, Thailand)
Seats Manufacturing facilities for automotive seats 290 Sep. 2008 Dec. 2008
Banpho Plant
(Chachoengsao, Thailand)
Seats Manufacturing facilities for automotive seats 566 Mar. 2008 Dec. 2008
Precision parts Plant building 731 Jan. 2008 Dec. 2008
Tokuhatsu Co., Ltd. Itami Plant Precision parts Plant building 775 Feb.2008 Aug. 2009