Calsonic Kansei Corporation Business Report FY ended Mar. 2017

Business Results

(in millions of JPY)

FY ending Mar. 31, 2017
FY ended Mar. 31, 2016
Rate of Change
Sales 1,000,000 1,053,318 (5.1) -
Operating income 39,000 38,236 2.0 -
Ordinary income 37,000 34,387 7.6 -
Profit for the year attributable to owners of the parent 25,000 22,516 11.0 -

-Figures for Fiscal Year Ended in March 2017 are based on the estimated third-quarter financial statements announced on February 10, 2017.

Outlook for Fiscal Year Ending in March 2018

(in billions of JPY)

FY ending Mar. 31, 2018
FY ending Mar. 31, 2017
Rate of Change
Sales N/A 10,000 -
Operating income N/A 390 -
Ordinary income N/A 370 -
Profit for the year attributable to owners of the parent N/A 250 -

Estimated Operating Revenue by Region

(in billions of JPY)

FY ending Mar. 31, 2018
FY ending Mar. 31, 2017
Rate of Change
Japan N/A 3,700 -
Americas N/A 3,800 -
Europe N/A 1,200 -
Asia N/A 2,000 -

>>> Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)

R&D Expenditure

(in millions of JPY)

FY ended Mar. 31, 2017 FY ended Mar. 31, 2016 FY ended Mar. 31, 2015
Japan N/A 23,140 21,960
Americas N/A 3,220 2,900
Europe N/A 1,060 1,230
Asia N/A 1,790 1,610
Total N/A 29,210 27,720

R&D Structure

Name Location
R&D Center, Headquarters Saitama, Saitama, Japan
Testing Research Center Sano, Tochigi, Japan
Production Engineering Center Hiki, Saitama, Japan
Calsonic Kansei North America Technical Center Michigan, U.S.A.
Calsonic Kansei Europe Technology Center Carmarthenshire, U.K.
CTC-EU MB Bedfordshire, U.K.
Calsonic Kansei (Shanghai) Automotive Technology R&D Co., Limited Shanghai, China
Calsonic Kansei (Shanghai) Automotive Technology R&D Co., Limited,
Guangzhou Branch
Guangzhou, Guangdong, China

-The Company is expanding its global footprint based on collaboration among the R&D center, headquarters, and experiment/research center functions in Japan.

-The Company announced that it will open a new R&D center in Bedfordshire, England, the UK. The new center will be engaged in researching and developing to expand business with major auto parts suppliers in the country. With a workforce of approximately 40 employees, the new center is scheduled to start operations by mid-April 2016. (From a press release on March 31, 2016)

-The Company and L&T Technology Services inaugurated the dedicated Material Test Centre (MTC) at Chennai, India. The test center is set up and operated by L&T Technology Services to cater to Calsonic Kansei’s global needs of material testing including Japan, Europe, North America, Thailand and India. The new center is equipped with state-of-the-art machines to test a range of automotive plastics. (From a press release on February 26, 2016)

-As the center conducting R&D activities capable of responding to product requirements worldwide, it is in-charge of advanced, basic, and application development. The Company is adding more resources toward advanced and basic development activities, which create future development technology and are designed to enhance its competitive edge.
-In order to strengthen its predominance in terms of product pricing, one element of product competitiveness, the Company has been working on ways to reduce the costs of goods. Making use of R&D capabilities in LLCs is one of these. Specific examples include transferring R&D responsibilities to Calsonic Kansei Engineering Center India-L&T (CECI-L&T) and CK Engineering Shanghai.

-The Company makes use of its Americas R&D capabilities to finalize product development based on discussions with local customers, after basic developments and application specs of vehicle product developments are decided in Japan. The R&D activities for products designed for the Mexican market are managed and operated in the Americas Technical Center.

-The Europe Technology Center serves the same function as that of the American one. The Center is in charge of one critical part of R&D activities for Renault, based on its partnership with the company.

-The importance of R&D in Asia is tied to the growth of the Chinese market. The Company is significantly expanding the R&D structure at its Asian Technical Center, which shares the role with the Japan Technical Center in developing products for the Chinese market, aiming to create a very efficient and cooperative R&D structure.
-The Company has further expanded the R&D functions at Calsonic Kansei Engineering Center India-L&T (CECI-L&T) in Chennai, India, which was established during the fiscal year ended March 2013.

R&D Activities

Improving product competitiveness
-Developing components and systems that respond to environmental concerns.
-Developing an exhaust system, and the components for it, which can improve fuel economy and exhaust purification performance.
-Developing highly advanced modular products as well as to develop components that are higher in performance and lighter in weight.
-Developing meters and information delivery systems that enhance safety.
-Developing air-conditioning systems that provide a comfortable driving environment.
-Developing products for low-cost vehicles sold in emerging markets.

Developing strategic products
-Developing thermal and power management systems for next-generation green vehicles.
-Developing products related to human machine interfaces (HMIs), cockpit modules, and front-end modules, which significantly affect the vehicle's design and performance.

Developed Technology to Wrap Leather on Instrument Panels
-The company announced that it has developed a leather-wrapping technology for instrument panels. The new instrument panels are expected to be featured in new Nissan models that are scheduled to be released in the near future. Mass production of the new products has already begun on a highly efficient production line. The line uses automated machines for leather cutting, sewing, and bonding processes, and requires minimum manual labor. The company will propose this new technology to automakers by underlining the products' luxury surfaces that enhance the vehicle interior. The production line starts with leather cutting and sewing processes to create a three dimensional shape for the panel. Then, this leather part will be wrapped around a plastic core to produce a high-quality surface. Previously, the sewing process was done by hand, but the company was able to automate the operation by developing a sophisticated stitch position control technology. This achievement significantly increased productivity and made mass production possible. (From an article in the Nikkan Jidosha Shimbun on June 2, 2016)

Capital Expenditure

(in millions of JPY)

FY ended Mar. 31, 2016 FY ended Mar. 31, 2015 FY ended Mar. 31, 2014
Japan 12,800 9,000 7,000
Americas 5,700 6,900 10,400
Europe 1,400 2,500 3,600
Asia 5,800 5,900 9,100
Adjusted figure - - (1,000)
Total 25,700 24,300 29,100

-Mainly, the Company invested in production facilities for responding to vehicle model changes being made by its major customers. In addition, the Company invested in production facilities for capacity expansion to respond to production increasing, and invested in testing facilities for strengthening competitiveness.

Outlook of Capital Expenditure

(in millions of JPY)

FY ending Mar. 2017
Japan 9,400
Americas 8,200
Europe 1,200
Asia 6,200
Total 25,000

-In FY ending March 2017, the Company plans to invest increased by 4.2% over the previous year to JPY 25,000 million.