NHK Spring Co., Ltd. Business Report FY ended Mar. 2018
Financial Overview |
(in millions of JPY) |
| FY ended Mar. 31, 2018 | FY ended Mar. 31, 2017 | Rate of Change (%) | Factors | |
| Overall | ||||
| Sales | 659,730 | 626,950 | 5.2 | - |
| Operating income | 35,541 | 40,613 | (12.5) | -Operating income decreased due to the change of composition of vehicle models on which the Company's products are equipped. |
| Ordinary income | 36,421 | 41,640 | (12.5) | - |
| Net income | 20,495 | 25,098 | (18.3) | - |
| Suspension Springs Division | ||||
| Sales | 124,267 | 119,542 | 4.0 | - |
| Operating income | 9,627 | 11,533 | (16.5) | - |
| Seat Division | ||||
| Sales | 295,710 | 285,924 | 3.4 | -Sales increased due to an increase in the vehicle production volume. |
| Operating income | 9,457 | 13,984 | (32.4) | -Operating income decreased due to the change of composition of vehicle models on which the Company's products are equipped. |
| Precision Parts Division | ||||
| Sales | 147,874 | 139,086 | 6.3 | - |
| Operating income | 10,855 | 9,605 | 13.0 | - |
R&D Expenditure |
(in millions of JPY) |
| FY ended Mar. 31, 2018 | FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | |
| Overall | 16,119 | 16,130 | 16,328 |
| Ratio of R&D expenses to sales (%) | 2.4 | 2.6 | 2.5 |
| by Business | |||
| -Suspension springs | 4,346 | 3,886 | 3,199 |
| -Seating | 5,706 | 5,916 | 6,263 |
| -Precision Components | 3,220 | 3,452 | 3,741 |
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 2018, the Company had 1,026 R&D staff, which accounts for 6.1% of all employees.
R&D Activities
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.
-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.
- The Company is examining seat functions necessary for autonomous driving and developing its original items.
- Seats with improved comfort and operating performance: a human-like simulation model for numerical analysis was developed that can foresee seat frame vibration when occupants are seated, aiming to evaluate comfort to high-frequency seat vibration that was considered difficult to make a quantitative evaluation. The Company started to work on a system that can automatically evaluate comfort based on pressure stress distribution data when occupants are seated.
- The Company is developing thin suspension seats for light-duty trucks, which has come close to commercial production.
Precision parts business
-The Company is developing precision parts for automotive engines and transmissions.
- For HEVs and EVs, the Company is developing motor parts, lithium ion battery and fuel cell parts, inverter parts and weight reduction technologies that can contribute to improving fuel efficiency, based on its high-precision stamping technologies.
- 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.
Technical Licensing Agreements |
(as of March 31, 2018) |
| Licensing company | Licensee | Details | Period |
| NHK Precision Co., Ltd. | Acument Global Technologies, Inc. (The Netherlands) | Patent and production technology on Torx Punch | April 23, 2017- April 22, 2020 |
| Sumihatsu Co., Ltd. |
Pandrol UK Limited (U.K.) | OEM agreement for Pandrol e-clip | Mar. 23, 2018- Mar. 22, 2018 |
Capital Expenditure |
(in millions of JPY) |
| FY ended Mar. 31, 2018 | FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | |
| Overall | 34,010 | 25,637 | 27,392 |
| by Business | |||
| -Suspension springs | 7,490 | 5,489 | 9,987 |
| -Seating | 7,081 | 5,074 | 5,130 |
| -Precision parts | 12,801 | 10,310 | 8,813 |
Investments in Japan
-The Company announced that its subsidiary, Tohoku Nippatsu Co. Ltd. (Tohoku Nippatsu) has established its Oshu Plant for production of automotive seat frame parts. Tohoku Nippatsu will establish a flexible production system by starting in-house production. The Company will raise the ratio of local production and consumption, and create jobs in the Tohoku region. The new plant will also supply seat frame parts to other parts suppliers, and become a part of their supply chains. (From an article in the Nikkan Jidosha Shimbun on December 25, 2017)
-The Company announced that it established an automotive seating company, NHK Mizushima Co., Ltd. in Kurashiki City, Okayama. This establishment responds to an accepting order of automotive seating from Mitsubishi Motors Corporation which plans to manufacture vehicles in its Mizushima Plant. The manufacturing operation is expected to start in January 2018. The estimated sales of 2020 is about JPY 15 billion. (From a press release on August 8, 2017)
Investments outside Japan
-The Company announced that NHK Spring Hungary, its production subsidiary in Hungary, will build a new plant to produce automotive suspension springs in Hungary. HUF 13.6 billion will be invested in the new plant, which will have a floor area of approximately 23,000 square meters. The new facility is planned to start operations in November 2019 and will produce, together with the existing plant, 6.5 million units of coil springs and 2.5 million units of stabilizers a year in 2025. (From a press release on November 24, 2017)
-The Company recently broke ground for a new USD 6.8 million facility in Irapuato, Mexico to expand its operations there. The company expects to double its workforce from 250 to 500 employees once the new premises become fully operational. NHK Spring’s Irapuato operation supplies components to OEMs including Nissan, Mazda and Ford, as well as automotive suppliers such as Rassini. The new facility will supply parts for the new Infiniti assembly plant scheduled to open in the coming months in Aguascalientes. (Mexico-Now article on October 7, 2017)
-Capital investments in the fiscal year that ended in March 2018
- 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; New Mather Metals; NHK of America Suspension Components; and NHK Spring Mexico.
- 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 Gunma Plant, Tohoku Nippatsu, and NHK 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 Ina Plant, Komagane Plant, Topra, NHK Spring Thailand, and NHK Spring Mexico.
-The Company plans to spend JPY 66,000 million on capital investments in the fiscal year that ended in March 2019.
Planned Capital Investment |
(As of Mar. 31, 2018) |
| Company / Plant | Equipment to be introduced | Estimated amount of investment (in million JPY) |
Project Period | |
| From | To | |||
| Ina Plant (Kamiina District, Nagano Pref.) |
Building and Manufacturing equipment for Precision Parts | 6,654 | Dec. 2017 |
Dec. 2018 |
| Yokohama Plant (Yokohama City, Kanagawa Pref.) |
Manufacturing equipment for Suspension Springs | 686 | May 2017 |
Sep. 2019 |
| Horikiri Inc. (Chiba Pref., Japan) |
Manufacturing equipment for Suspension Springs | 960 | Apr. 2018 |
Oct. 2019 |
| Tokuhatsu Co., Ltd. (Hyogo Pref., Japan) |
Manufacturing equipment for Precision Parts | 537 | May 2018 |
Oct. 2019 |
| New Mather Metals, Inc. (Kentucky, USA) |
Manufacturing equipment for Suspension Springs | 822 | Apr. 2018 |
Mar. 2019 |
| New Mather Metals, Inc. (Kentucky, USA) |
Manufacturing equipment for Suspension Springs | 545 | Apr. 2018 |
Feb. 2019 |
| NHK of America Suspension Components Inc. (Kentucky, USA) | Manufacturing equipment for Suspension Springs | 534 | Jun. 2018 |
Aug. 2019 |
| NHK Spring (Thailand) Co., Ltd. (Samutprakarn, Thailand) |
Manufacturing equipment for Seating | 1,024 | Mar. 2018 |
Aug. 2018 |
| NHK Spring (Thailand) Co., Ltd. (Chachoengsao, Thailand) | Manufacturing equipment for Precision Parts | 859 | Jan. 2018 |
Jan. 2019 |
Outlook for FY ending Mar. 31, 2019 |
(in millions of JPY) |
| FY ending Mar. 31, 2019 (Forecast) |
FY ended Mar. 31, 2018 (Actual Results) |
Rate of Change (%) |
|
| Sales | 690,000 | 659,730 | 4.6 |
| -Suspension springs | 130,500 | 124,267 | 5.0 |
| -Seating | 308,200 | 295,710 | 4.2 |
| -Precision Components | 155,400 | 147,874 | 5.1 |
| Operating income | 30,000 | 35,541 | (15.6) |
| Ordinary income | 32,000 | 36,421 | (12.1) |
| Net income | 22,000 | 20,495 | 7.3 |
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income, etc.)
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.