Nippon Sheet Glass Co., Ltd. Business Report FY ended Mar. 2014
Business Highlights
Financial Overview |
(in millions of JPY) |
FY ended Mar. 31, 2014 | FY ended Mar. 31, 2013 | Rate of change (%) |
Factors | |
Overall | ||||
Sales | 606,095 | 521,346 | 16.3 | - |
Operating income | 734 | (17,258) | - | |
Net income | (17,630) | (34,324) | - | |
Automotive Glass Business | ||||
Sales | 305,114 | 245,022 | 24.5 | 1) |
Operating income (before exceptional items) | 11,154 | 4,755 | 134.6 |
Business Overview
1) Automotive Glass Division -Sales increased mainly due to the impact of weaker yen.
<Europe>
-Sales in Europe account for 46% of the Automotive Glass Division's sales.
-Sales to automakers at the Original Equipment (OE) division slightly increased year-on-year on a local currency basis. Operating profit also rose from the previous year due to the effects of the Company's restructuring and cost-cutting efforts. Aftermarket sales at the Automotive Glass Replacement (AGR) division also gained thanks to growing demand.
<Japan>
-Sales in Japan account for 17% of the Automotive Glass Division's sales.
-Sales and operating profit increased from the previous year's results. Sales volume at the OE division grew, because vehicle exports were driven by weaker yen, while sales at the AGR division remained stable.
<North America>
-Sales in North America account for 24% of the Automotive Glass Division's sales.
-Sales and operating profit increased year-on-year. Sales volume at the OE division grew from the previous year, while the AGR division enjoyed greater demand due to the impact of the harsh winter weather.
<Other regions>
-Sales increased year-on-year due to growth in demand. The demand growth rate in South America slowed toward the end of the fiscal year.
The NSG Group's long-term strategic vision and mid-term business plan
<Strategic vision>-The Group aims to be recognized as a "Value-added (VA) Glass Company".
-The Group believes that the key growth sector in the glass market is value-added products featuring greater complexity and functionality. Its product line already includes a wide range of VA products, not only from the Technical Glass business unit but also from the Architectural and Automotive units.
-The Group will focus its business resources on the development and sales of VA glass. By becoming a VA Glass Company, the Group aims to become more profitable with a lighter asset base and a stable financial structure that is less susceptible to economic conditions.
<Mid-term business plan for April 2014 through March 2018>
-The Group is set to establish a financially sustainable business structure over the next four years by shifting its focus on more value-added products as stated in its long-term vision.
-The Group aims to increase the sales ratio of value-added products, while fully utilizing its existing production capacity.
-In terms of financial strategy, the Group aims to enhance its operational performances, generate free cash flows, reduce net debt, and cut down on financial expenses.
Financial targets for fiscal year ending March 2018
FY ending March 2018 (Targets) |
FY ended March 2014 (Actual results) |
|
Sales |
JPY 670 billion or more |
JPY 606.1 billion |
Operating profit (*) |
JPY 60 billion |
JPY 22.4 billion |
EBITDA | JPY 100 billion |
JPY 54.4 billion |
Net Debt |
JPY 300 billion |
JPY 379.1 billion |
ROE | 10% or more |
- |
Automotive Laminated Glass
-In 2013, the Company announced that its laminated glass for automotive windshields is installed on the Toyota i-ROAD ultra-compact mobility, which is presented at the 43rd Tokyo Motor Show 2013. The world's thinnest glass for windshields consists of 2.0 mm-thick glass on the outer side and 1.0 mm-thick glass on the inner side. By taking advantage of its computer simulation and processing technologies, the company has established a new method to manufacture thinner windshield glass. While meeting the required levels of transparency and quality in the global automotive industry, the new windshield offers a 23 percent weight reduction compared to standard products. Nippon Sheet Glass is poised to extend the adoption of the new product to mass production vehicles. (From an article in the Nikkan Jidosha Shimbun on November 28, 2013)Contract
-In 2013, 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)Sales of Shareholdings
-In 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, Nippon Sheet Glass 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)
Outlook for FY ending Mar. 31, 2015 |
(in millions of JPY) |
FY ending Mar. 31, 2015 (Forecast) |
FY ended Mar. 31, 2014 (Actual Results) |
Rate of Change (%) |
|
Sales | 620,000 | 606,095 | 2.3 |
Operating income | 21,000 | 734 | - |
Net income | 1,000 | (17,630) | - |
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
R&D
R&D Expenditure |
(in millions of JPY) |
FY ended Mar. 31, 2014 | FY ended Mar. 31, 2013 | FY ended Mar. 31, 2012 | |
Overall | 7,900 | 7,300 | 8,000 |
Automotive Glass Division | 2,800 | 2,800 | 3,300 |
R&D Activities
Automotive Glass Division-In Japan, where demand for high-performance UV-blocking glass is growing, the Company focused on developing new products and production processes that will contribute to boosting its production capacity.
-In Europe, the Company is developing heat-reflective glass integrated with an infrared reflective solar control technology or with the latest head-up display technology.
Investment Activities
Capital Expenditure |
(in millions of JPY) |
FY ended Mar. 31, 2014 | FY ended Mar. 31, 2013 | FY ended Mar. 31, 2012 | |
Overall | 31,600 | 26,000 | 34,700 |
Automotive Glass Division | 10,700 | 13,500 | 18,800 |
Automotive Glass Division
-Major investments included regular maintenance and repair costs on furnaces in the U.S. that produce automotive float glass.