Modine Manufacturing Company Business Report FY ended Mar. 2013

Business Highlights

Financial Overview

(in million USD)
  FY ended Mar. 31, 2013 FY ended Mar. 31, 2012 Rate of
change (%)
Net Sales 1,376.0 1,577.2 (12.8) 1)
Operating Income (0.6) 67.5 - 2)
Sales by segments
Europe 498.0 602.8 (17.4) 3)
North America 564.5 602.0 (6.2) 4)
Asia 59.5 84.1 (29.3) 5)
South America 133.8 175.6 (23.8) 6)

1) Net Sales
-The Company's net sales in the FY ended March 31, 2013 dropped from USD 1,577.2 million to USD 1,376.0 million. The decrease in sales in the FY ended March 31, 2013 was due to decreased overall sales volume. Specifically, automotive and commercial vehicle net sales decreased 21 percent and 14 percent, respectively, from the previous FY. Additionally, sales were hurt by a USD 61 million unfavorable impact of foreign currency exchange rate changes.

2) Operating Income
-In the FY ended March 31, 2013, the Company had an operating loss of USD 0.6 million compared to an operating income of USD 67.5 million the previous FY. This decrease was caused primarily due to lower sales volume. An additional USD 26 million in impairment charges that were recorded to reduce the carrying values of facilities being held for sale also impacted the operating income for the FY ended March 31, 2013. Another factor contributing to the decrease was USD 17 million in restructuring expenses in Europe due to a reduction of employees in the region.

3) Europe
-In the FY ended March 31, 2013, the Company's sales in Europe dropped from USD 602.8 million to USD 498.0 million due to the planned wind-down of the automotive cooling module program, a decrease in demand in the commercial vehicle and off-highway markets due to weaker economic conditions, and a USD 34 million unfavorable impact of foreign currency exchange rate changes.

4) North America
-Sales in North America decreased USD 37 million from USD 602.0 million to USD 564.5 million in the FY ended March 31, 2013 because of the overall weakness in the commercial vehicle, agriculture, and construction markets, and the wind-down of certain automotive and military programs.

5) Asia
-The Company's sales in Asia decreased to USD 59.5 million in the FY ended March 31, 2013 from USD 84.1 million the previous FY. This was due to a decrease in automotive module sales as the Company continues the wind-down of that business and a decline in sales in the off-highway vehicular market caused by weakening economic conditions.

6) South America
-Sales in South America dropped to USD 133.8 million in the FY ended March 31, 2013 from USD 175.6 million due to weakness in the commercial vehicle market following the January 1, 2012 change in emissions standards. The decrease in sales was also affected by an unfavorable impact of foreign currency exchange rate changes of USD 25 million.

Recent Development in the USA

-The Company has recently supplied its Advanced Cooling System to over one hundred transit agencies across the United States and Canada. The Advanced Cooling System utilizes a variable speed brushless electric fan for improved life and durability. Other components featured in the Advanced Cooling System include a light-weight aluminum radiator and a Bullet-Nose charge-air cooler. The Advanced Cooling System is reported to provide fuel savings of up to 15 percent along with reduced maintenance costs and increased service life and safety in various vehicle applications. (From a press release on March 6, 2013)

Recent Development Outside the USA

-The Company is scheduled to begin production of several new products from three facilities below during fiscal 2013.
  • Facility in Chennai, India is currently producing low volumes of products.
  • Facility in Changzhou, China is continuing to ramp up production.
  • During the FY ended March 31, 2013, the Company's light assembly facility in Shanghai, China was converted into an engine products focused manufacturing facility.

Outlook for FY ended March 31, 2014

-The Company anticipates consolidated year-over-year sales to range from flat to an increase of 5% due to the following expectations: 
  • Growth in South America
  • Stabilization in the China off-highway market
  • Improvement in the North American commercial vehicle market, particularly in the second half of the FY ending March 31, 2014
  • Declines in the European commercial vehicle and automotive markets along with slight growth in the off-highway market


R&D Expenditure

(in million USD)
  FY ended Mar. 31, 2013 FY ended Mar. 31, 2012 FY ended Mar. 31, 2011
Overall 68.4 70.2 67.0

-Over the last three years, the Company's R&D expenditures have been between 4 and 5 percent of sales.

R&D Structure

-The Company owns two global, state-of-the-art technology centers, dedicated to the development and testing of products and technologies in Racine, Wisconsin, USA and in Bonlanden, Germany.

-To achieve efficiencies and lower developmental costs, the Company's research and engineering groups work closely with its customers on special projects and systems designs.

R&D Activities

-The Company's current R&D activities are focused primarily on the areas of powertrain cooling, engine products and commercial HVAC products.

-Recently, the Company has worked with the US Department of Energy to develop waste heat recovery systems for US-based engine and truck manufacturers. These systems would help manufacturers meet demands for emissions reduction while improving powertrain efficiency and thus fuel economy.

-The Company has been developing next-generation aluminum radiators for commercial vehicle, agricultural, and construction markets, as well as exhaust gas recirculation technology to enable customers to meet stricter emission standards.


-The Company has acquired or been granted over 2,000 patents worldwide over its history.

Investment Activities

Capital Expenditure

(in million USD)
  FY ended Mar. 31, 2013 FY ended Mar. 31, 2012 FY ended Mar. 31, 2011
Asia 7.8 12.5 10.8
Europe 16.5 29.8 25.0
North America 19.0 15.4 12.9
South America 3.4 5.2 4.1
Commercial Products 3.1 1.7 2.3
Corporate and administrative - (0.2) -
Total capital expenditures 49.8 64.4 55.1

-Capital expenditure in FY ended March 31, 2013 included tooling and equipment purchases in conjunction with new global program launches with new and current customers in Europe, Asia and North America.