NHK Spring Co., Ltd. Business Report FY ended Mar. 2019
Financial Overview |
(in millions of JPY) |
| FY ended Mar. 31, 2019 | FY ended Mar. 31, 2018 | Rate of Change (%) | Factors | |
| Overall | ||||
| Sales | 681,006 | 659,730 | 3.2 | - |
| Operating income | 26,650 | 35,541 | (25.0) | ｰ |
| Ordinary income | 31,457 | 36,421 | (13.6) | - |
| Net income | 7,104 | 20,495 | (65.3) | - |
| Suspension Springs Division | ||||
| Sales | 128,880 | 124,267 | 3.7 | - |
| Operating income | 6,193 | 9,627 | (35.7) | -Suspension Springs: Despite increased sales worldwide, profit fell due to increased fixed-expenses in line with the increase in unit production; and a change to product lineup. |
| Seat Division | ||||
| Sales | 303,242 | 295,710 | 2.5 | ｰ |
| Operating income | 4,435 | 9,457 | (53.1) | -Seats: Likewise with the Suspension-spring Business, sales increased worldwide, but profit fell as a result of lower volumes in Japan and China, changes to product lineup, and fixed expenses. |
| Precision Parts Division | ||||
| Sales | 152,958 | 147,874 | 3.4 | - |
| Operating income | 9,791 | 10,855 | (9.8) | - |
Business Developments
-The Company will strengthen product development for electrified vehicles. NHK Spring established a new department for its electrification business under the direct control of its president on April 1. The department will lead the development of new products for electrified vehicles by applying the company’s metal heat treatment and deformation processing technologies for automotive springs. NHK Spring produces motor cores for electric vehicles in Japan and Mexico. The company aims to increase motor core sales by expanding its sales channels for electrified vehicles, including hybrid, plug-in hybrid, and fuel cell vehicles. It plans to develop high-efficiency motor cores, reduce costs, and boost production capacity by installing an additional press machine at its plant in Mexico. NHK Spring will also focus on the development of electric component substrates with characteristics suitable for automobiles by utilizing its automotive parts production know-how. (From an article in the Nikkan Jidosha Shimbun on September 21, 2018)
R&D Expenditure |
(in millions of JPY) |
| FY ended Mar. 31, 2019 | FY ended Mar. 31, 2018 | FY ended Mar. 31, 2017 | |
| Overall | 16,822 | 16,119 | 16,130 |
| Ratio of R&D expenses to sales (%) | 2.5 | 2.4 | 2.6 |
| by Business | |||
| -Suspension springs | 4,488 | 4,346 | 3,886 |
| -Seating | 5,830 | 5,706 | 5,916 |
| -Precision Components | 3,051 | 3,220 | 3,452 |
R&D Structure
-The Company's R&D Structure is comprised of the following functions: Headquarters R&D Division, Engineering Division, and Electrification Promotion Department; production departments’ individual product-development, engineering, and design departments; and R&D departments at subsidiaries.
-In the fiscal year that ended in March 2019, the Company had 1,074 R&D staff, which accounts for 5.9% of all employees.
R&D Activities
Suspension spring business
-The Company is focusing on engineering and developing lighter-weight, higher-quality, and higher-added-value products to meet the needs in the electrification and self-driving segments. It is developing processing technology to develop, form, and shot-peen new types of high-strength steel and fiber-reinforced materials. In addition, it is also developing energy-efficient and automated production methods in order to lower costs.
Seat business
-The Company is advancing development of the following items, focusing on making lighter-weight and self-driving compliant seats, products for seats capable of detecting occupants’ vital signs, and seats that offer comfortable dynamic performance and quietness.
- Increase sales of parts made of ultra-high tensile materials, to make the parts lighter in weight; and front-seat frames that incorporate high-strength and ductile materials.
- In addition to the weight-reduction technology mentioned above, using non-ferrous metals in strategic places and applying this to rear seats.
- Seats that are optimized to suit occupants’ postures and functions needed in self-driving level 3 and 4.
- Seats offering dynamic performance and quietness suited to the characteristics of human bodies and occupants’ sense of feel/touch.
Precision parts business
-In regard to precision springs, the Company is developing the following for automotive engine and transmission parts.
- Motor parts and power-module parts based on high-precision stamping technology; and on weight-reduction technology, to improve the fuel efficiency of hybrid electric cars and electric cars.
- Enhancing the performance of products that were created based on the development of high-strength materials; and reducing the costs of products by using low-cost materials and making them more reliable.
Technical Licensing Agreements |
(as of March 31, 2019) |
| 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, 2019 | FY ended Mar. 31, 2018 | FY ended Mar. 31, 2017 | |
| Overall | 44,975 | 34,010 | 25,637 |
| by Business | |||
| -Suspension springs | 12,547 | 7,490 | 5,489 |
| -Seating | 6,544 | 7,081 | 5,074 |
| -Precision parts | 14,841 | 12,801 | 10,310 |
Investments in Japan
-Announced that it will construct a new plant to produce precision springs for automotive transmissions in Ina, Nagano Prefecture. The new plant will be build within the premises of its subsidiary NHK FLEX. JPN 6.6 billion will be invested in the new plant, which will have a floor area of approximately 6,988 square meters. The new facility is planned to start operations in April 2019 and will produce 58 million units of springs for transmissions a year. (From a press release on June 21, 2018)
Planned Capital Investment |
(As of Mar. 31, 2019) |
| Company / Plant | Equipment to be introduced | Estimated amount of investment (in million JPY) |
Project Period | |
| From | To | |||
| Yokohama Plant (Yokohama City, Kanagawa Pref.) |
Manufacturing equipment for Suspension Springs | 1,076 | May. 2019 | Aug. 2021 |
| Yokohama Plant (Yokohama City, Kanagawa Pref.) |
Manufacturing equipment for Suspension Springs | 632 | May. 2019 | Feb. 2021 |
| Horikiri Inc. (Chiba Pref., Japan) |
Manufacturing equipment for Suspension Springs | 705 | Apr. 2019 |
Feb. 2021 |
| New Mather Metals, Inc. (Kentucky, USA) |
Manufacturing equipment for Suspension Springs | 729 | Apr. 2019 |
Oct. 2020 |
| NHK Spring (Thailand) Co., Ltd. (Chachoengsao, Thailand) | Manufacturing equipment for Precision Parts | 1,225 | Jan. 2019 |
Oct. 2019 |
Outlook for FY ending Mar. 31, 2020 |
(in millions of JPY) |
| FY ending Mar. 31, 2020 (Forecast) |
FY ended Mar. 31, 2019 (Actual Results) |
Rate of Change (%) |
|
| Sales | 690,000 | 659,730 | 1.3 |
| -Suspension springs | 130,900 | 128,880 | 1.6 |
| -Seating | 307,100 | 303,242 | 1.3 |
| -Precision Components | 154,000 | 152,958 | 0.7 |
| Operating income | 20,000 | 26,650 | (25.0) |
| Ordinary income | 22,000 | 31,457 | (30.1) |
| Net income | 14,000 | 7,104 | 97.1 |
>>>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%)
-Suspension Spring Business: sales: JPY 139 billion; operating profit-margin: 8.6%.
-Seat Business: sales: JPY 305 billion; operating profit-margin: 6.2%
-Precision Parts Business: sales: JPY 165 billion; operating profit-margin: 8.5%
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