Yachiyo Industry Co., Ltd. Business Report FY ended Mar. 2016
Financial Overview |
(IFRS, in millions of JPY) |
| FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | Rate of Change (%) | Factors | |
| Overall | ||||
| Revenue | 149,816 | 142,043 | 5.5 | -Revenue increased due to receiving more product orders and favorable currency translation. |
| Operating Profit | 11,766 | 16,760 | (29.8) | -Even though the costs of goods were reduced and currency translation was favorable, y/y results were lower in comparison to the profit earned the previous year from production gains on past returns from the previous term’s employees' pension fund and service costs based on changes to the retirement benefit plan. |
| Profit before tax | 11,333 | 16,788 | (32.5) | - |
| Profit for the year attributable to owners of the parent | 4,715 | 8,341 | (43.5) | - |
| Japan | ||||
| Revenue | 31,718 | 31,966 | (0.8) | - |
| Profit before tax | 418 | 5,697 | (92.7) | - |
| Americas | ||||
| Revenue | 41,879 | 36,939 | 13.4 | -Revenue was higher due to AY Manufacturing Ltd.’s receiving more product orders from customers and due to favorable currency translation. |
| Profit before tax | 2,278 | 2,613 | (12.8) | -Profit was lower due to changes in the product lineup and expenses to respond to new models, in spite of favorable currency translation. |
| China | ||||
| Revenue | 23,471 | 19,586 | 19.8 | -Revenue increased due to higher number of product orders at Yachiyo (Nakayama) and Yachiyo (Wuhan); and due to favorable currency translation. |
| Profit before tax | 3,846 | 3,938 | (2.3) | -Even though the volume of product orders increased, profit was down due to changes in the product lineup and higher depreciation expenses. |
| Asia | ||||
| Revenue | 52,749 | 53,553 | (1.5) | -Even though Goshi-Thanglong Auto-Parts (Vietnam) received more product orders y/y and currency translation was favorable, revenue decreased because Siam Goshi Manufacturing (Thailand) and Goshi India Auto Parts both received fewer orders. |
| Profit before tax | 4,920 | 4,426 | 11.2 | -Profit increased because of a change in product lineup and favorable currency translation. |
Mid-term Management Plan
-In the 12th mid-term management plan, the sheet-metal business was sold off, as the Company decided to focus its operations on plastic fuel tanks and sun roofs. The Company added to its product lineup, commenced commercial production, and worked to increase sales.
- Plastic Fuel Tanks (PFTs): Won orders for products that are made by using new technologies and new production methods.
- Roof Systems: Launched production of wide, panorama sun roofs.
-The Company has started reviewing its long-term "Yachiyo 2020 Vision" business plan. The Company will develop a new Vision that will continue until the end of 2025, and is aiming to increase orders from automakers other than its main customer Honda Motor Co., Ltd. The Company plans to raise the sales ratio of sunroofs to automakers other than Honda from the current level of 10% to 30%. It will also conduct research and development for hydrogen tanks with plastic liners and mass-production parts using carbon fiber reinforced plastics, among other projects that can lead to new business from a long-term perspective. The company has positioned the three years starting from April 2017 covered by its next mid-term business plan as a "time to grow" that looks ahead to the year 2025, and is aiming for sustainable growth for the future. (From an article in the Nikkan Jidosha Shimbun on May 10, 2016)
-"Yachiyo 2020 Vision": Become a true, major worldwide supplier based on technological excellence and distinctive products
- 11th mid-term plan: (from FY2011 to FY2013) "Time for Innovation and Implementation" Develop competitive strengths of technology and products that are known around the world.
- 12th mid-term plan: (from FY2014 to FY2016) "Time for fostering growth" Develop competitive strengths of the world's best technology and products.
- 13th mid-term plan: (from FY 2017 to FY2019) "Time for reaping the benefits" Achieve developing world-class, top technology and products.
Reorganization
Transferring stamping operations in Japan to Topre
-At the board meeting held on October 15, 2015, it was agreed and signed on the same day that with the absorption and spin-off of Yokkaichi Works' sheet-metal stamping operations (Yokkaichi City, Mie Pref.), all the shares held in YG Tech would be transferred to Topre, with YG-Tech (Ina-Gun, Mie Pref.) a consolidated subsidiary surviving. The transfer of the stock shares in YG Tech was completed on January 1, 2016, and it ceased to exist as a consolidated subsidiary.
-The Company announced that it has completed the transfer of its consolidated subsidiary, YG Tech Co., Ltd., to Topre Corporation. YG Tech has changed its corporate name and is engaged in manufacturing automotive stamping parts. (From a press release on January 6, 2016)
Transfer of UK Operations
-In June 2015, the Company and H-One announced that they had reached an agreement to transfer all of the operations of UYT, Ltd. to N Press Assembly Limited, an automotive-parts supplier based in the UK. (UYT was an affiliated company of both companies, which manufactures and sells automotive parts.) In advance of this, both companies sold all of the stock shares they held in Hirata Yachiyo Leasing Limited (HYL) to UYT. HYL is a 50/50 joint venture of the companies, which is engaged in leasing land and buildings. Yachiyo Industry (UK) Limited (a consolidated subsidiary of Yachiyo) and H-One each had 35% percent of the stock shares in UYT. Honda of the U.K. Manufacturing Ltd. has 25%, and Honda Trading Europe Ltd. has 5%. UYT was delivering stamped products to Honda's plant in the UK. However, it was decided to transfer all of its operations to N Press Assembly that was launched in February 2015 to manufacture automotive parts. A Chinese chemical maker has a 75% share in the company.
Contracts
Plastic Fuel Tanks (PFTs)
-The Company's latest ultra-thin PFT is being equipped on the Honda Odyssey. This fuel tank is 43% thinner than conventional tanks designed for sedans. In addition, it is also being equipped on the Honda Jade and StepWGN. Furthermore, being equipped on the Honda minivan, it contributes to its low floor and low center of gravity.
Sunroof
-The latest sunroof is being equipped on the Honda "Crosstour". It is 2.8 times wider than conventional sunroofs.
Product Development
Energy Storage
-The Company is developing liquefied petroleum gas composite storage containers, fuel-tanks for natural-gas vehicles, and accumulators for hydrogen stations. It eventually intends to mass-produce hydrogen tanks for fuel-cell vehicles．In addition, it aims to launch sales of LPG composite storage containers in Asia during the fiscal year ending in March 2016.
CFRP Products
-The Company is selling athletic wheel chairs made of carbon-fiber reinforced products (CFRP), as one of the outcomes of developing CFRP parts for automotive body frames
R&D Activities
- Commercializing fuel tanks for new-model vehicles
- Commercializing sunroofs for new-model vehicles
- Developing fuel tanks for new-model vehicles
- Developing sunroofs for new-model vehicles
- Developing metal-honeycomb, high-precision fuel-cell carriers that comply with exhaust-gas regulations worldwide.
- R&D activities on plastic fuel tanks with new structural designs.
- R&D activities and related technology on new types of sunroofs
- R&D activities on environmental technology used to make automotive parts
- R&D activities on special-needs vehicles and driver-assist systems
- R&D activities for launching new business operations
R&D Facilities
| Plant | Location | Activities |
| Tochigi R&D Center | Tochigi Pref., Japan | Development of fuel tanks and sunroof systems for mass-market vehicles |
| Saitama R&D Center | Saitama Pref., Japan | R&D activities on next-generation products. Established in April 2012 |
| Goshi Giken Co., Ltd. | Kumamoto Pref., Japan | Motorcycle parts |
| Yachiyo of America Inc. | Ohio, U.S. | Designing and testing of sunroofs and fuel tanks manufactured in North America. Established in July 2008 |
R&D Expenditure |
(in millions of JPY) |
| FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | |
| Overall | 4,009 | 3,083 | 4,837 |
Finished vehicle business
Shifting to small-lot, specialized production
-For camper trucks: A series of products under the “CAMPACHI” name was launched in December 2014. They are first being equipped on the Honda Vamos Hobio. In the fiscal year that ended in March 2016, they were released for the "N-BOX".
-The Company has started production of customized Honda "Fit Hybrid" equipped with the "Franz System," a driving assistance device for drivers with arm disabilities, at its Yokkaichi Factory in Mie Prefecture. The Company does the work from development to production, and customizes the vehicles for each user. The Yokkaichi Factory has seen declining contract production of mini vehicles and is aiming to maintain profitability by expanding its special purpose vehicle business. The Franz System allows the driver to operate the steering wheel by rotating their left leg forward and backward. Honda Motor Co., Ltd. started selling the system in 1982 after receiving technical guidance from Mr. Eberhard Franz, the developer, and adding its own technology as well. (From an article in the Nikkan Jidosha Shimbun on March 24, 2016)
Increasing outsourcing-in of production of the "S660"
-The Company announced that it will expand its capacity to produce the Honda "S660" open-top mini sports car that it is assembling for Honda. The Company will increase its daily output to 48 vehicles, which will be a 20 percent rise from the current 40 vehicles. The expansion is intended to fill the large order backlog that has built up since the release of the model. (From an article in the Nikkan Jidosha Shimbun on May 27, 2015)
Capital Expenditure |
(in millions of JPY) |
| FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | |
| Japan | 1,587 | 3,885 | 2,546 |
| Americas | 1,215 | 2,554 | 3,720 |
| China | 1,090 | 957 | 1,405 |
| Asia | 1,019 | 1,517 | 2,091 |
| Overall | 4,922 | 8,913 | 9,763 |
-Actual results in the fiscal year that ended in March 2016: responded to new orders, increased capacity, renewed facilities, and set up testing facilities.
-Outlook for the fiscal year ending in March 2017: JPY 7,700 million (JPY 1,400 million for remodeling and capacity, JPY 4,000 million for new models, and JPY 2,300 million for renewal)
Planned Capital Investments |
(As of Mar. 31, 2016) |
| Company/Facility (Location) |
Facility Details | Planned Investment Total (in million yen) |
Start | End (Scheduled) |
Remarks |
| Kashiwabara Plant (Saitama Pref., Japan) |
Production facilities | 317 | Mar. 2016 |
Feb. 2017 |
Install testing facilities, renew facilities |
| Yokkaichi Factory (Mie Pref., Japan) |
Production facilities | 437 | Jul. 2015 |
Mar. 2017 |
Renew facilities, reduce energy consumption, streamline operations |
| Suzuka Plant (Mie Pref., Japan) |
Production facilities | 317 | Apr. 2016 |
Jan. 2017 |
Respond to new orders, renew equipment, facilities |
| Kameyama Branch (Mie Pref., Japan) |
Production facilities | 143 | Mar. 2016 |
Jan. 2017 |
Renew facilities and equipment, respond to new orders |
| Saitama R&D Center (Sayama, Saitama Pref.) |
Facilities for managing operations | 90 | May 2016 |
Mar. 2017 |
Renew facilities and equipment, improve environment |
| Tochigi R&D Center (Tochigi Pref., Japan) |
R&D facilities | 127 | May 2016 |
Feb. 2017 |
Renew facilities and equipment, improve environment |
| Saitama R&D Center (Sayama, Saitama Pref.) |
R&D facilities | 337 | Apr. 2016 |
Feb. 2017 |
Install testing facilities, respond to new orders |
| Goshi Giken Co., Ltd. | Production facilities R&D facilities |
539 | Mar. 2015 |
Mar. 2017 |
Respond to new orders, install testing facilities |
| US Yachiyo Inc. (Ohio, USA) |
Production facilities | 335 | Feb. 2015 |
Mar. 2017 |
Reduce energy consumption, streamline operations, respond to new orders |
| Yachiyo Zhongshan Manufacturing Co., Ltd. (Guangdong Prov., China) |
Production facilities | 1,171 | Apr. 2015 |
Mar. 2017 |
Respond to new orders |
| Yachiyo Wuhan Mfg. Co., Ltd. (Hubei Prov., China) |
Production facilities | 1,294 | Apr. 2016 |
Mar. 2017 |
Respond to new orders |
| Siam Yachiyo Co., Ltd. (Prachin Buri, Thailand) |
Production facilities | 296 | Apr. 2016 |
Mar. 2017 |
Respond to new orders, increase production capacity |
| Siam Goshi Manufacturing Co., Ltd. (Rayong Province, Thailand) |
Production facilities | 414 | Apr. 2016 |
Mar. 2017 |
Respond to new orders, increase production capacity |
| Goshi-Thanglong Auto-Parts Co., Ltd (Hanoi, Vietnam) |
Production facilities | 497 | Apr. 2016 |
Mar. 2017 |
Reduce energy, streamline operations, increase production capacity |
| Goshi India Auto Parts Private Ltd. (Haryana, India) |
Production facilities | 270 | Apr. 2016 |
Mar. 2017 |
Increase production capacity |
Outlook for FY ending March 2017 |
(in millions of JPY) |
| FY ended Mar. 31, 2017 (Forecast) |
FY ended Mar. 31, 2016 (Actual results) |
Rate of Change (%) | |
| Revenue | 144,000 | 149,816 | (3.9) |
| Operating Profit | 11,500 | 11,766 | (2.3) |
| Profit before tax | 11,300 | 11,333 | (0.3) |
| Profit for the year | 7,700 | 6,957 | 10.7 |
| Profit for the year attributable to owners of the parent | 5,500 | 4,715 | 16.6 |
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
Sales Forecast by Business Sector |
(in millions of JPY) |
| FY ended Mar. 31, 2017 (Forecast) |
FY ended Mar. 31, 2016 (Actual results) |
Rate of Change (%) | |
| Automotive parts | 135,000 | 139,563 | (3.5) |
| -Sunroofs | 40,000 | 41,000 | (2.4) |
| -Fuel tanks | 33,000 | 33,600 | (1.8) |
| Automotive assembly | 9,000 | 9,851 | (9.1) |
| Total | 144,000 | 149,816 | (3.9) |