Johnson Electric Group Business Report FY ended Mar. 2016

Financial overview

(in million USD)

	FY ended Dec. 31, 2016	FY ended Mar. 31, 2015	Rate of change	Factors
Overall
Sales	2,235.95	2,136.05	4.68%	Note:1)
Operating profit	207.20	242.78		-
Profit before taxation	206.64	249.06
Profit after taxation	182.75	219.81
Automotive Products Group (APG)
Sales	1,423.20	1,457.45		Note:2)

1)
-The 4.68% increase in total sales to US$2,235.95 million included five months sales contribution from Stackpole International totalling US$182 million.

Automotive Products Group

2)
-The Automotive Products Group (“APG”), the largest operating division, achieved sales of US$1423.20 million, a decrease of 2.35% compared to a year earlier. The Company's regional market increased in Asia, Europe and America.

-Excluding currency effects, sales changes from FY ended Mar. 31, 2015 to FY ended Mar. 31, 2016: Overall increased 5%, Asia increased 4%, Europe increased 5% and Americas decreased 4%.

-In Asia,the Company maintained strong growth momentum. Sales of products for powertrain cooling systems, engine emissions control and sunroof applications increased. These increase were slightly offset by reduced sales of products for fuel pump and seat adjustment applications.

-In Europe,sales increased across a broad range of products, especially for heating ventilation and air-conditioning (HVAC) actuators and coolant valve actuators.

-In the Americas,sales increased, led by HVAC and door lock. These increase were partially offset by reduced sales of powertrain cooling products.

Acquisition

-The Company announced that it will acquire 100% of AML Développement shares for EUR 65 million. The transaction is scheduled to be completed in the second quarter of 2016. AML Développement is the holding company of AML Systems, which produces headlamp levelers, smart actuators, and headlamp cleaning systems for automobiles. The France-based company has 500 employees worldwide. (From an announcement by the company on February 5, 2016)

-The Johnson Electric Group announced that Johnson Electric International (UK) Limited, JE International Engineered Products Canada Limited, and JE International Powder Metal Canada Limited, which are its group companies, signed an agreement with S.I. Investors, under which Johnson Electric companies will acquire Stackpole International from S.I. Investors. The Johnson Electric Group will pay CAD 867 million to acquire 100% shares in three Stackpole companies: Stackpole International EP Holding, Ltd. that produces engine pumps; Stackpole International PM Holding, Ltd. that produces transmission pumps; and Stackpole International Global Holding Co. S.A. that produces powder metallurgy products. The Company announced that it acquired Stackpole International on October 28, 2015, turning it into its wholly owned subsidiary. (From a press release on October 28, 2015)

R&D Structure

- Engineering centers are located in Hong Kong, Germany, Switzerland, UK, Italy, Japan, China, Israel and the USA.

New Products

-In 2015, the Company introduced a new generation of engine coolant valve actuators with integrated electronics for engine cooling. This actuator platform provides fast response and precise position control to regulate coolant flow to maximise fuel economy and emissions reduction. This platform is useful in both internal combustion engine and hybrid vehicles. (From the Company's 2016 annual report)

-In 2015, the Company introduced a new generation of cooling fan modules with brushless DC motors to maximise vehicle heat rejection efficiency. The product is powered by a highly efficient, light-weight brushless DC motor and offer low operating noise due to intelligent software control. (From the Company's 2016 annual report)