Fuji Kiko Co., Ltd. Business Report FY ended Mar. 2017

Financial Overview

(in million JPY)
FY ended Mar. 31, 2017 FY ended Mar. 31, 2016 Rate of
Change (%)
Remarks
Overall
Sales 112,765 104,313 8.1 1)
Operating income 6,708 6,147 9.1 -
Ordinary income 7,245 6,609 9.6 -
Net income 4,271 4,079 4.7 -


1) Sales
-Sales of its mainstream products increased (steering columns, seats, powertrains), thanks to an effective action plan based on its regional, sales, and product strategies.

Sales by region:
-Japan: Sales increased by JPY 47,589 million, a 10.5% year-over-year (y/y) increase, thanks to new orders for seat frames and high sales volume of new vehicles equipped with the latest high-tech technologies.
-Americas: Sales increased by JPY 26,485 million, a 13.2% increase y/y, thanks to its US subsidiaries’ receiving greater numbers of orders for steering columns and seats.
-Europe: Sales increased by JPY 17,486 million, a 1.6% increase y/y, thanks to a recovery.
-China: Sales increased by JPY 13,710 million, a 2.8% increase y/y, thanks to a rise in last-minute demand caused by tax incentives given for purchases of small cars.
-Southeast Asia: Sales increased by JPY 7,492 million, a 5.2% increase y/y.


Transferred seat business to Tachi-S
-JTEKT Corporation announced that it has reached an agreement with Tachi-S Co., Ltd. and Fuji Kiko Co., Ltd. regarding transfer of Fuji Kiko's seat business to Tachi-S and the acquisition of all Fuji Kiko stock by JTEKT through a takeover bid (TOB), to which Tachi-S will apply. The transaction will help JTEKT expand its steering system business, and Tachi-S strengthen its seat business. Fuji Kiko will be delisted from the first section of the Tokyo Stock Exchange. For the seat business, Fuji Kiko will first spin off its seat division to a new company that will be called TF-Metal in the middle of May. Tachi-S will subsequently acquire a 100% stake in TF-Metal. Fuji Kiko is currently an equity method affiliate of Tachi-S, which is its second largest shareholder with a 24.4% stake. JTEKT, the largest shareholder with a 33.4% share, will launch a takeover bid for Fuji Kiko to convert it into its wholly owned subsidiary. Tachi-S plans to sell all Fuji Kiko shares it owns in the TOB, where one Fuji Kiko share will be purchased for JPY 740. JTEKT is planning to spend approximately JPY 26.1 billion in the TOB. (From an article in the Nikkan Jidosha Shimbun on May 11, 2017)

R&D Expenses

(in million JPY)
FY ended Mar. 31, 2017 FY ended Mar. 31, 2016 FY ended Mar. 31, 2015
Steering column business 1,204 1,272 1,284
Seating business 526 424 465
Powertrain business 257 197 206
Total 1,988 1,894 1,956



R&D Structure

-The Company has most of the responsibility for conducting R&D activities.
-Since the Company’s major customers are Japanese OEMs, the Company in Japan conducts fundamental R&D activities up to the development and prototype stage, after that the subsidiaries outside Japan work to create the best possible vehicles by taking charge of R&D activities involving production prototypes.
-A total of 396 individuals are engaged in R&D activities, including those performing prototype work and testing.
-As of the end of March 2017, the Company had acquired 395 industrial property rights (170 in Japan and 225 outside Japan).


Established Global Technical Center
Fuji Kiko Co., Ltd. opened a technical center within the premises of its Washizu Factory in Shizuoka Prefecture, Japan in April 2016. The global development center has a floor area of 6,438 square meters. Fuji Kiko has integrated the development operations of its three core businesses, steering columns, seats, and powertrains, into the new technical center and is aiming to enhance development of its next-generation products. (From a press release on July 28, 2016)

Technology Licensing-in Agreement

(As of Mar. 31, 2017)
Country Licenser Content Period
Liechtenstein ThyssenKrupp Presta AG Patent cross license agreement for steering columns Jul. 30, 2007 - Apr. 17, 2017



Technology Licensing-out Agreement

(As of Mar. 31, 2017)
Country Licensee Content Period
Taiwan Taiwan Atsugi Co., Ltd. Production technology for steering columns Oct. 6, 1992 - Oct. 5, 2016
(Automatic renewal)
Taiwan Hsin Chong Machinery Works Co., Ltd. Production technology for seat reclining devices 5 years from Mar. 18, 2008 or the production life of the specific vehicle models
Spain Ficosa International S.A. Production technology for A/T shifters Jun. 20, 2011 -
(for as long as the subject vehicles are still under production)



Capital Expenditure

(in million JPY)
FY ended Mar. 31, 2017 FY ended Mar. 31, 2016 FY ended Mar. 31, 2015
Steering column business 2,875 2,753 3,165
Seating business 828 1,851 1,039
Powertrain business 396 208 422
Others 2 1,148 755
Total 4,101 5,961 5,383



Planned Capital Investments

(As of Mar. 31, 2017)
Company Name Location Business Planned investment
(in million JPY)
Start Completion Production capacity increase on completion
New Facilities
Washizu Plant Shizuoka Pref.,
Japan
R&D activities 1,315 Jun.
2016
Mar.
2018
The Company,
Arai Plant
Shizuoka Pref.,
Japan
Seating business 1,032 Mar.
2016
Mar.
2018
-
The Company,
Arai Plant
Shizuoka Pref.,
Japan
Steering column business 973 Dec.
2015
Mar.
2018
-
The Company,
Honjo Plant
Saitama Pref.,
Japan
Powertrain business 447 Jul.
2016
Mar.
2018
-
Fujikiko Tachi-S Mexico, S.A. de C. V. Aguascalientes,
Mexico
Seating business 889 Apr.
2017
Mar.
2018
-
Fuji Koyo Czech, s.r.o. Pilsner,
the Czech Republic
Steering column business 358 Apr.
2017
Mar.
2018
-