Nippon Sheet Glass Co., Ltd. Business Report FY ended Mar. 2013

Business Highlights

Financial Overview

(in millions of JPY)
  FY ended Mar. 31, 2013 FY ended Mar. 31, 2012 Rate of
change (%)
Sales 521,346 552,223 (5.6) -
Operating income (17,258) 4,386 -
Net income (31,939) (1,749) -
Automotive Glass Business
Sales 245,022 251,229 (2.5) -
Operating income 4,755 5,123 (7.2) -

Business Overview

Automotive Glass Division
-Operating revenue fell year-on-year. Auto production in Europe fell to its lowest level in the last 15 years, with unit production dropping sharply. On the other hand, the Company reported greater earnings because of the strong demand in Japan, following the drop caused by the Great East Japan Earthquake, and because of strong demand in North America.

-Sales in Europe account for 43% of the Automotive Glass Division's sales.
-The OE business, supplying factory-installed glass, reported lower revenue and profit year-on-year due to sluggish demand.  The AGR business, supplying glass to the aftermarket, reported sales of around the same level as what they were the previous fiscal year because the sluggish demand in general was offset by a greater rate of sales of products with high profit margins.

-Sales in Japan account for 19% of the Automotive Glass Division's sales.
-Both operating revenue and profit at the OE business increased year-on-year, while the operating revenue and profit at the AGR business stayed about the same level as they were the previous year.

<North America>
-Sales in North America account for 23% of the Automotive Glass Division's sales.
-Operating revenue at the OE business improved year-on-year because of increased production volumes, although operating profit continued to be marginal. Both operating revenue and operating profit at the AGR business were lower year on year due to lower demand.

<Other regions>
-Operating revenue based on local currencies remained around the same level as it was the previous year. Even though operating profit did increase year-on-year, the amount of increase was marginal.

Major Contracts

-The Company announced that engine timing belts utilizing its high tensile strength glass cord will be featured on PSA's new three-cylinder EB engine. This engine will be installed on the Peugeot 208 and is expected to be adopted widely. These timing belts are also used in the EcoBoost engines from Ford, as well as engines mounted on "MQB" platforms from Volkswagen. The EcoBoost engines are now installed on the Ford Fiesta and Focus, and will also be installed on the Ford Mondeo in the future, while "MQB" platforms are used in the Volkswagen Polo, Golf, and Jetta. (From a press release on January 9, 2013)


-The Company announced that it is selling its entire 6.25 percent ownership interest in U.S.-based FMC Wyoming Corporation for 80 million USD (approximately 7.6 billion yen) to FMC Corporation, effective March 28, 2013. In 1995, the Company acquired shares of FMC Wyoming as one of the measures to secure sources of supply of soda ash, which is a basic ingredient of glass. (From a press release on March 28, 2013)

-The Company announced that one of its UK float lines, "CH2" Float Line in Cowley Hill, will be kept out of operation on 'hot hold' from January 3, 2013. At present it is expected that the line will remain on hot hold for three months. (From a press release on December 14, 2012)

-The Company announced that it will shut down two automotive glass plants in Europe by the end of 2013. The company will close its Ylöjärvi plant in Finland that processes new vehicle glass and replacement glass, and its Orja plant in Sweden that has a tempered glass manufacturing facility. These actions are taken to respond to the decreasing demand for automobiles due to a sharp decline in the economy in Europe. Expenses for the shutdowns are estimated to reach approx. 31 million euros, of which 17 million euros will be paid in cash. The company is expecting to benefit around 14 million euros per year from the closure. (From an article in the Nikkan Jidosha Shimbun on Oct. 27, 2012)

Outlook for FY ending Mar. 31, 2014

(in 100 millions of JPY)
  FY ending Mar. 31, 2014
FY ended Mar. 31, 2013
(Actual Results)
Rate of Change
Sales 6,000 5,213 15.1
Operating income 30 (173) -
Net income (200) (319) -

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


R&D Expenditure

(in millions of JPY)
  FY ended Mar. 31, 2013 FY ended Mar. 31, 2012 FY ended Mar. 31, 2011
Overall 7,300 8,000 10,700
Automotive Glass Division 2,800 3,300 4,000

R&D Activities

Automotive Glass Division

-R&D activities involving the new production plant in Poland focused on the latest press-bending furnace for making frosted glass.
-The Company focused on expanding and improving the production capacity of new products such solar-control glass for sunroofs in Europe, and a super-efficient, UV-blocking coating in Japan.

Investment Activities

Capital Expenditure

(in millions of JPY)
  FY ended Mar. 31, 2013 FY ended Mar. 31, 2012 FY ended Mar. 31, 2011
Overall 26,000 34,700 31,900
Automotive Glass Division 13,500 18,800  16,100

Automotive Glass Division
-Capital investment was mainly in the new production plant in Poland.

Investments in Japan

- The Company announced that it will double its domestic production capacity of the Super UV cut glass for automotive windshields by November 2013. The UV cut glass, which blocks about 99 percent of UV rays, has been selected as original equipment on Toyota vehicles, including the Alphard and the Estima. (From a press release on June 13, 2013)

Investments Outside Japan

- The Company has announced an investment of 4 million pounds, approximately 500 million yen, at its NGF Europe glass cord manufacturing site in St Helens, UK, with the creation of 24 new jobs. The investment will add a fiber-forming facility at the site, a primary process in glass cord manufacture, involving the production of glass fiber filament. The site will become the first fully-integrated high tensile strength glass cord manufacturing factory in Europe and the only such facility outside Japan. The new fiber forming line is expected to be commissioned in June 2013.  (From a press release on September 3, 2012)