Mando Corporation Business Report FY ended Dec. 2015

Financial Overview (Consolidated)

(in millions of won)
FY ended Dec. 31, 2015 FY ended Dec. 31, 2014* Remarks
Sales 5,299,190 1,721,436 -
Operating income 265,644 79,261 -
Net income 129,573 47,893 -

*Due to the company split on September 1, 2014, FY ended Dec. 31, 2014 covers a 4-month period from September 1, 2014 through December 31, 2014 in the Group's financial statements.

Outlook
The Company announced that the Group aims to achieve KRW 9 trillion in sales and 7 percent in operating margin in 2020. Of this sales target, 40 percent is expected to be generated through business with the Hyundai and Kia Group, 20 percent through business with North American OEMs such as General Motors and Ford, 20 percent through business with Chinese automakers, and another 20 percent through business with European automakers and other companies. (From a press release on July 13, 2015)

Contracts


-The Company announced that its Highway Driving Assist (HDA) is mounted on the Hyundai Genesis EQ900, a large sedan released in December 2015. HDA helps expressway driving by automatically keeping a constant distance between the vehicle and the vehicle in front. In addition, the system does not require the driver to keep holding the steering wheel. (From a press release on January 8, 2016)

-The Company is supplying its Autonomous Emergency Braking (AEB) systems for the Hyundai Tucson compact crossover SUVs that were released earlier this year. The AEB used on the Tucson is an advanced version of Mando's AEB featured on the Hyundai Genesis large sedans. The new AEB has a pedestrian detection system, a function that was not included in AEB on the Genesis. Mando plans to expand the use of AEB systems also to medium-sized passenger vehicles in the future. (From a press release on June 22, 2015)


-Mando Corporation Poland Sp. z o. o., the Company's Polish subsidiary, began mass-producing brake calipers for Volkswagen. These brake components will be used on models including the Polo and the Golf. (From a press release on April 15, 2015)

New Company


-The Company announced that it will establish a wholly owned subsidiary in Mexico. The new company will be formed in June 2015 and will be called Mando Corporation Mexico (tentative name). The subsidiary will supply automotive components to Kia Motors' plant in Mexico. (From a press release on May 13, 2015)

Business Restructuring


-Mando (Beijing) Automotive Chassis System Co., Ltd., the Company's subsidiary in China, will absorb Mando (Harbin) Automotive Chassis System Co., Ltd., also Mando's Chinese subsidiary, into its own operations effective December 30, 2015. Mando (Harbin) located in Harbin, Heilongjiang Province, produces and sells master cylinders & brake boosters and other products. (From a press release on December 21, 2015)

R&D Structure


-Sungnam, Gyeonggi-do (Mando Global R&D Center)


-U.S. (Detroit, Michigan)
-China (Beijing)
-India (Haryana)
-Germany (Frankfurt)


-U.S. (Sault Ste. Marie, Michigan)
-China (Heihe, Heilongjiang province)
-Sweden (Arjeplog)
-New Zealand (Wanaka)

-The Company announced that it has established its facility at Korea Automobile Testing & Research Institute's (KATRI's) new Automotive Safety Research Support Center. KATRI, located in Hwaseong, Gyeonggi-do, operates under the Korea Transportation Safety Authority. KATRI will support manufacturers that join the support center by providing equipment to test product safety and performances, which will facilitate each company's development and testing processes. (From a press release on September 24, 2015)

R&D Expenditure

(in millions of won)
FY ended Dec. 31, 2015 FY ended Dec. 31, 2014* FY ended Dec. 31, 2013
Amount 259,555 77,870 208,244
% of sales 4.9% 4.5% 3.7%

*Due to the company split on September 1, 2014, FY ended Dec. 31, 2014 covers a 4-month period from September 1, 2014 through December 31, 2014 in the Group's financial statements.

Capital Expenditure (FY ended Dec. 31, 2015)

(in millions of won)
Business division Investment programs Amount
Brake

AHB Gen3 assembly line

17,936
Revamping MGH80 line 10,013
Others 7,455
Subtotal 35,404
Steering Revamping column-type electric power steering line 7,093
Others 5,608
Subtotal 12,702
Suspension Expanding S/ABS Curling type line 1,828
S/Strut assembly line remodeled for new vehicle 780
Others 2,300
Subtotal 4,908
Others 44,296
Total 97,307

Investment outside Korea


-On August 16, 2015, the Company held a groundbreaking ceremony for its new plant in Mexico. The plant will be constructed on a 110,000-square-meter site in Arteaga, Coahuila in northeast Mexico. It is scheduled to produce auto parts such as brake boosters and master cylinders, starting in January 2017. Mando intends to invest KRW 130 million in this plant by 2026. (From a press release on August 17, 2015)