Taiho Kogyo Co., Ltd Business Report FY ended Mar. 2019

Financial Overview

(in million JPY)

	FY ended Mar. 31, 2019	FY ended Mar. 31, 2018	Rate of Change (%)	Remarks
Overall
Sales	113,419	114,665	(1.1)	(Factors below)
Operating income	4,815	6,800	(29.2)	-
Ordinary income	4,705	6,785	(30.7)	-
Profit for the year attributable to owners of the parent	3,087	4,254	(27.4)	-
Automotive Component Business
Sales	95,903	95,262	0.7	-
Operating income	9,910	10,281	(3.6)	-

Factors
-The Company has set a sales strategy that is focused on increasing sales in China, based on the forecasted growth in the number of vehicles worldwide mounted with engines by 2035 and the forecasted increase in the number of new-vehicle sales in China by 2030. In the fiscal year that ended in March 2019, the number of new vehicles sold in China from July and after decreased year-on-year (y/y). As a result, sales of bearings, which account for 41% of sales company-wide, decreased 3.3% y/y. On the other hand, sales of other products such as systems, die-cast products, and gaskets increased y/y. However, the volume of orders won by the automotive products production facilities business fell 31% y/y, after having received several huge orders the previous year that resulted from OEMs’ redesigning numerous models. Sales on a consolidated basis fell 1.1% y/y to JPY 113,419 million.

>>>Earnings forecasts by Japanese suppliers

New Facilities

-The estimated amount of capital spending within the corporate group in the fiscal year that ends in March 2020 is JPY 8,000 million yen. It will be spent mainly for the following.

Plant	Facilities to be built	Planned investment (in million JPY)	Objective
Taiho Kogyo Co., Ltd. Headquarters and Headquarters plant (Aichi Pref., Japan)	Production facilities to manufacture die casting products, etc.	2,113	Switch over to new products; expand, and increase production capacity
Taiho Kogyo Co., Ltd. Hosoya plant (Aichi Pref., Japan)	Production facilities to manufacture bearings, etc.	1,738	Switch over to new products; expand, and increase production capacity
Taiho Kogyo Co., Ltd. Shinohara plant (Aichi Pref., Japan)	Production facilities to manufacture bearings, etc.+	225	Switch over to new products; expand and increase production capacity
Taiho Kogyo Co., Ltd. Kyushu plant (Kagoshima Pref., Japan)	Production facilities to manufacture bearings, etc.	315	Switch over to new products; expand and increase production capacity
Taiho Kogyo Co., Ltd. Koukai plant (Aichi Pref., Japan)	Production facilities to manufacture bearings, etc.	150	Switch over to new products; expand and increase production capacity
Taiho Kogyo Co., Ltd. Gifu plant (Gifu Pref., Japan)	Production facilities to manufacture bearings, etc.	753
Taiho Seiki Co., Ltd. Headquarters and Headquarters plant (Aichi Pref., Japan)	Production facilities to manufacture bearings, etc.	393	Expand and increase production capacity; streamline operations
TET Co., Ltd. Kasugai plant (Aichi Pref., Japan)	Processing facilities	220	Switch over to new products; expand and increase production capacity
Nippon Gasket Co., Ltd. Shiga Plant (Shiga Pref., Japan)	Production facilities to manufacture bearings, etc.	1,170	Switch over to new products; expand and increase production capacity
Taiho Corporation of America Headquarters and Headquarters plant (Ohio, USA)	Production facilities to manufacture bearings, etc.	176	Switch over to new products; expand and increase production capacity
PT. Taiho Nusantara Headquarters and Headquarters plant (West Java, Indonesia)	Production facilities to manufacture bearings, etc.	150	Expand and increase production capacity
Taiho Corporation of Europe Headquarters and Headquarters plant (Ujhartyan, Hungary)	Production facilities to manufacture bearings, etc.	53	Expand and increase production capacity; streamline operations
Taiho Corporation of Korea Headquarters and Headquarters plant (Daegu, Korea)	Production facilities to manufacture bearings, etc.	20	Expand and increase production capacity
Taiho Kogyo Corporation of Yantai Headquarters and Headquarters plant (Yantai, China)	Production facilities to manufacture bearings, etc.	473	Switch over to new products
Hengye Bearing Materials Co.,Ltd (Changzhou) Headquarters and Headquarters plant (Changzhou, China)	Production facilities to manufacture bearings, etc.	21	Expand and increase production capacity; streamline operations
Taiho Corporation of Thailand Headquarters office and plant （Pathum Thani Prov., Thailand）	Production facilities to manufacture bearings, etc.	30	Expand and increase production capacity

Capital Expenditure

(in million JPY)

	FY ended Mar. 31, 2019	FY ended Mar. 31, 2018	FY ended Mar. 31, 2017
Overall	10,120	10,303	6,904
Automotive Component Business	9,924	9,871	6,559

Automotive parts business
-Made capital investments to respond to new-product production, enhance production capacity, and maintain/upgrade facilities. The investments both in and outside Japan are outlined below.

Japan: (Nippon Gasket Co., Ltd.) Invested to respond to new-product production and augment production capacity.
China: (Taiho Kogyo Corporation. of Yantai) Invested to construct a third production plant.

-The Company developed and installed a “smart bearing-production line” as part of its engine-bearing production lines. This “smart” line takes up only 1/3 the amount of space as a conventional production line.

ｰInstalled an aluminum casting line in China at Hengye Bearing Materials Co., Ltd (Changzhou), an aluminum bearing manufacture that was turned into a subsidiary in 2012. As a result, Hengye Bearing Materials now can conduct seamless production operations, from materials up to processing.