NHK Spring Co., Ltd. Business Report FY ended Mar. 2017
Financial Overview |
(in millions of JPY) |
FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | Rate of Change (%) | Factors | |
Overall | ||||
Sales | 626,950 | 640,516 | (2.1) | -Lower sales were recorded due to the effect of negative currency translation on sales generated at operations overseas. |
Operating income | 40,613 | 35,041 | 15.9 | -Operating income increased to due effective streamlining initiatives and more types of vehicle models on which the Company’s products are equipped. |
Ordinary income | 41,640 | 36,111 | 15.3 | - |
Net income | 25,098 | 21,592 | 16.2 | - |
Suspension Springs Division | ||||
Sales | 119,542 | 124,511 | (0.4) | -Sales decreased due to the effect of negative currency translation. |
Operating income | 11,533 | 12,062 | (4.4) | - |
Seat Division | ||||
Sales | 285,924 | 296,054 | (3.4) | -Sales decreased due to the effect of negative currency translation. |
Operating income | 13,984 | 9,824 | 42.4 | -Operating income increased to due effective streamlining initiatives and more types of vehicle models on which the Company’s products are equipped. |
Precision Parts Division | ||||
Sales | 139,086 | 142,943 | (2.7) | -Sales decreased due to lower volumes of HDD parts and the effect of negative currency translation. |
Operating income | 9,605 | 10,074 | (4.6) | - |
R&D Activities
-In response to the need for products ensuring environmental protection and vehicle safety, the Company is developing lighter weight suspension springs, as well as springs capable of preventing high-frequency-vibration. It is working on developing seat safety-mechanisms. Also, it is advancing R&D activities on parts for hybrid, electric, and clean-diesel vehicles.
Suspension spring business
-The Company is working on developing suspension springs that are smaller, lighter, and more durable so as to improve fuel efficiency and reduce CO2 gas emission.
- FSD (Fully Stressed Design) a method to ensure even stress distribution without relying on parts)
- FRP (Fiber Reinforced Plastics)
-Ongoing activities: developing processing methods that use less-expensive materials, while making products stronger and lighter; and developing production methods capable of lowering costs through automation.
Seat business
-The Company is developing seats that are lighter; products for use in biomedical signal seats; and seats with improved comfort and operating performance
- Injection molded Carbon Fiber Reinforced Plastics (CFRP) front-seat frame: Replacing sheet-metal parts, the Company is developing CFRP front-seat frames that are 20% lighter than current products, and which have improved designs and structures.
- Refresh seat making use of biomedical signal processing: improved prototypes, customer presentations, conducting exhibits.
- Seats with improved comfort and operating performance: a human-like model was completed that can foresee low-frequency occupant behavior when vehicles are cornering, nearing the objective of creating a high-performance seat that is needed to reduce occupants' shifting. The Company started work on a system that can automatically evaluate comfort based on pressure stress distribution data, when occupants are seated, nearing the objective of a basic sorting algorithm. In addition, the Company created a process that can effectively develop high-precision CAE seat models.
Precision parts business
-The Company is developing precision parts for automotive engines and transmissions.
- Development of technology on motor parts, fuel-cell battery parts, and weight reduction for improving fuel efficiency, based on high-precision stamping process technology for next-generation vehicles.
- Development activities to make better performing and more reliable products by developing high-strength materials; and reducing product costs by making use of inexpensive materials.
R&D Expenditure |
(in millions of JPY) |
FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | |
Overall | 16,130 | 16,328 | 15,702 |
Ratio of R&D expenses to sales (%) | 2.6 | 2.5 | 2.6 |
by Business | |||
-Suspension springs | 3,886 | 3,199 | 2,707 |
-Seating | 5,916 | 6,263 | 6,667 |
-Precision Components | 3,452 | 3,741 | 3,392 |
R&D Structure
-The Company's R&D Structure is comprised of the following functions: head office main R&D division and engineering division; development departments, technical departments, and design departments at each production division and business division; and R&D departments at subsidiaries.
-In the fiscal year that ended in March 2017, the Company had 1,026 R&D staff, which accounts for 6.0% of all employees.
Technical Licensing Agreements |
(as of March 31, 2017) |
Licensing company | Licensee | Details | Period |
NHK Precision Co., Ltd. | Acument Global Technologies, Inc. (The Netherlands) | Patent and production technology on Torx Punch | April 23, 2014- April 22, 2017 |
Sumihatsu Co., Ltd. |
Pandrol UK Limited (U.K.) | OEM agreement for Pandrol e-clip | May 1, 2008- March 22, 2018 |
Capital Expenditure |
(in millions of JPY) |
FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | |
Overall | 25,637 | 27,392 | 20,671 |
by Business | |||
-Suspension springs | 5,489 | 9,987 | 6,656 |
-Seating | 5,074 | 5,130 | 4,380 |
-Precision parts | 10,310 | 8,813 | 6,566 |
-Capital investments in the fiscal year that ended in March 2017
- Suspension Springs Business: The objectives of this business are to increase new product orders and enhance the productivity of existing products. The Company invested in suspension-spring production facilities at its Yokohama Plant; NHK-UNI Spring (Guangzhou) Co., Ltd. (NUS); and New Mather Metals.
- Seat Business: The objectives of this business are to increase new product orders, raise the productivity of existing products, and enhance product quality. The Company invested in seat production facilities at the Toyota Plant, Gunma Plant, and Seating of America.
- Precision Parts Business: The objectives of this business are to develop new products, increase new-product orders, raise the productivity of existing products, enhance product quality, and increase production capacity. The Company invested in precision-parts-production facilities at its Komagane Plant, Ina Plant, NHK Spring Thailand, NAT Peripheral (Dong Guan)Co., Ltd., and NHK Spring Precision of America.
-The Company plans to spend JPY 33,400 million on capital investments in the fiscal year that ended in March 2018.
Planned Capital Investment |
(As of Mar. 31, 2017) |
Facilities Details | Planned Investment Total (in millions of JPY) |
Start | End (Scheduled) |
Seat-production facilities (Toyota Plant) |
1,132 | Jul. 2016 | Mar. 2018 |
Spring-production facilities (Yokohama) | 717 | Sep. 2017 | Jul. 2018 |
Precision-parts-production facilities (Ina Plant) | 1,028 | Apr. 2017 | Aug. 2018 |
Precision-parts-production facilities (Komagane Plant) | 2,328 | Apr. 2017 | Dec. 2018 |
Expand production plant building (New Mather Metals (USA) |
714 | May. 2017 | Jan. 2018 |
Spring-production facilities (NHK Spring Mexico) | 2,388 | Apr. 2017 | Apr. 2019 |
Outlook for FY ending Mar. 31, 2018 |
(in millions of JPY) |
FY ending Mar. 31, 2018 (Forecast) |
FY ended Mar. 31, 2017 (Actual Results) |
Rate of Change (%) |
|
Sales | 638,000 | 626,950 | 1.8 |
-Suspension springs | 1,210 | 1,195 | 1.2 |
-Seating | 2,890 | 2,859 | 1.1 |
-Precision Components | 1,410 | 1,390 | 1.4 |
Operating income | 36,000 | 40,613 | (11.4) |
Ordinary income | 37,000 | 41,640 | (11.1) |
Net income | 25,000 | 25,098 | (0.4) |
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income, etc.)
-The Company predicts that sales in the fiscal year that ends in March 2018 will increase by JPY 11.0 billion year-over-year.
-The Company predicts a strong automotive market worldwide.
-Outline by business segment:
Business | Outlook |
Suspension Springs | -Higher sales but lower income due to lower sales volumes and higher fixed costs in Japan, although sales of springs at subsidiaries overseas are predicted to be higher. |
Seats | -Higher sales but lower income due to less product content on fewer types of vehicle models and lower selling prices. |
Precision Parts | -Strong sales |
Mid-term Management Plant (FY ending March 2018-FY ending March 2020)
-The Company launched its latest mid-term management plan, called the 2020 Plan, which covers the period through the fiscal year ending in March 2020.
-The following are the final targets set under the 2020 Plan, for the fiscal year ending in March 2020.
Sales: JPY 710.0 billion
Operating income: JPY 54.0 billion (operating profit margin: 7.6%)
Ordinary income: JPY 57.0 billion (ordinary profit margin: 8.0%)
Current net profit: JPY 38.0 billion (profit margin: 5.4%)
Business Strategies
Strengthen competitive advantages to increase sales
- Strengthen and speed up design and development capabilities
- Strengthen global management capabilities
- Advance more aggressive cost-cutting initiatives
New products/new businesses
- Develop and commercialize more appealing products
- Develop products designed for the next generation
- Develop high-level production technology
CSR
- Ensure a strong management framework based on a high level of transparency emphasizing strict legal compliance.
- Seek new ways of working
- Systematically develop and maintain human resources, and create diversity.