Nippon Sheet Glass Co., Ltd. Business Report FY ended Mar. 2016

Financial Overview

(in million JPY)
FY ended Mar. 31, 2016 FY ended Mar. 31, 2015 Rate of change (%) Factors
Sales 629,172 626,713 0.4 -
Operating income 19,362 16,848 -
Profit before taxes (37,500) 4,807 -
Profit for the year (47,500) 2,893 -
Profit for the year attributable to owners of the parent (49,838) 1,668 -
Automotive Glass Business
Sales 316,327 313,956 0.8 1)
Operating income (before exceptional items) 9,813 9,372 4.7


1) Automotive Glass Division
-Sales remained at the same level as the previous year. Operating profit increased year-over-year (y/y) due to growth in sales volumes in Japan and the effects of the Company's cost cutting efforts.

-Sales in Europe account for 44% of the Automotive Glass Division's sales.
-Aftermarket sales: Sales at the automotive glass replacement (AGR) sector were strong due to continued market recovery thanks to increased vehicles sales in western Europe
-The total sales and operating profit (sales for both the OEM and the AGR market) based on the same currencies slightly increased y/y.

-Sales in Japan account for 18% of the Automotive Glass Division's sales.
-Despite a decrease in passenger vehicle sales due to changes in tax cut programs for environmentally friendly vehicles, sales volume at the Company increased y/y.
-Sales and operating profit at the OE glass division increased y/y. Operating profit at the AGR division also increased y/y.

-Sales in North America account for 28% of the Automotive Glass Division's sales.
-OEM sales based on same currencies increased y/y. AGR sales decreased y/y.

-Market conditions in South America continued to be severe. Passenger car sales declined significantly in Brazil.

R&D Activities

Automotive Glass Division
-Improved production and coating technology and processes for infrared rays (IR)- and ultraviolet (UV) rays-blocking glass
-Developed windshields that support advanced technologies like head-up display (HUD) systems
-Developed lightweight and complex-shaped rear window glass for plug-in hybrid vehicles

Technical Glass Division
-Developed ultra-thin glass sheets and other materials for fuel cells and secondary batteries for the next generation

Product Development

UV ray blocking glass
-The Company announced that it is aiming to develop a new range of automotive glass that can block the longest wavelength of UV rays. The new glass blocks 99% of UV rays, which includes a longer wavelength range of over 380 nm (one nanometer: one billionth of a meter), and it will be the first of its kind if it can be practically realized. The Company will begin development with goals including the establishment of volume production technology for automotive use. Currently car glass can block 99% of UV rays that are less than 380 nm in length. However, in medical terms it would be ideal to block the UV radiation up to a wavelength of 400 nm because the longest range (380 nm – 400 nm) can have minute effects on areas including deep layers of the skin. (From an article in the Nikkan Jidosha Shimbun on July 6, 2016)

R&D Expenditure

(in million JPY)
FY ended Mar. 31, 2016 FY ended Mar. 31, 2015 FY ended Mar. 31, 2014
Overall 8,200 7,900 7,300
-Automotive Glass Division 3,100 2,800 2,800

Capital Expenditure

(in million JPY)
FY ended Mar. 31, 2016 FY ended Mar. 31, 2015 FY ended Mar. 31, 2014
Overall 28,200 36,600 31,600
-Automotive Glass Division 13,300 17,500 10,700

Automotive Glass Division
-Investment was mainly for acquiring automotive glass machining facilities and installing float glass manufacturing facilities in Japan.

Planned Capital Investment

Company or
Target of Investment Planned Investment
(in million JPY)
Start End
Pilkington Automotive Poland Sp.zo.o
(Warsaw, Poland)
Facilities for producing processed glass 3,202 2nd quarter of fiscal year ending March 2015 3rd quarter of fiscal year ending March 2017

Forecast for FY ending March 2017

(in million JPY)
FY ending March 2017
FY ended March 2016
(Actual results)
Rate of change (%)
Sales 620,000 629,172 (1.5)
Operating profit 31,000 19,362 60.1
Profit before taxes 15,000 (37,439) -
Profit for the year 7,000 (47,500) -

Profit for the year attributable to owners of the parent

5,000 (49,838) -

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

Automotive Glass Division

-Europe: passenger car sales are expected to fall below the peak level, but the Company's sales are forecast to remain on a recovery trend.
-Japan: sales are expected to decline due to the market slowdown that began after the revision of eco-car tax reduction program in the previous year.
-North America: business is expected to pick up on the back of the strong automotive glass market.
-South America: the slowdown of passenger car sales are expected end, but the Company does not expect a significant recovery in sales volumes
-Southeast Asia: the Company expects continued brisk business

Technical Glass Division
-Glass cords for engine timing belts are expected to sell well due to the recovery in passenger car sales in Europe.

Mid-term Business Plan

-In May 2014, the Company announced its new mid-term management plan, under which it aims to improve capacity utilization rates and expand the percentage of value-added products of its lineup.

Long-term vision
-The Company aims to be recognized as a "Value-added glass company"

-Targets at Automotive Glass business:

  • To gain technical advantages in the areas of autonomous drive technology, next-generation information technology, high-performance UV and IR blocking glass, and lightweight products
  • To expand AGR business by growing its existing business and acquiring outside businesses

Mid-term business plan for April 2014 through March 2018

-Greatest objectives under the mid-term management plan:

  • To achieve financial sustainability
  • To accelerate changes to become a "Value-added (VA) Glass Company".

-Plans at the Automotive Glass Division:

  • South America: To integrate two plants in Brazil into one to reduce fixed costs. Expand sales of replacement glass.
  • Europe and the U.S.: To increase operational efficiency and productivity, and expand sales of high value-added glass

-High value-added products:

  • Automotive glass: high-performance UV and IR blocking glass, thinner sheet glass, windshields and glass that support head-up display systems and camera sensors, highly functional glass antennas, etc.
  • Technical glass: separators for automatic engine stop-start systems 

-Financial targets for FY ending March 2018

  • Net debt/EBITDA (D/E) ratio: 3
  • ROS: 8% or more
FY ending March 2018
FY ended March 2015
(Actual results)
FY ended March 2014
(Actual results)
Sales JPY 670 billion or more JPY 626.7 billion JPY 606.1 billion
Operating profit (*) JPY 60 billion JPY 25.2 billion JPY 22.4 billion
EBITDA JPY 100 billion JPY 57.9 billion JPY 54.4 billion
Net Debt JPY 300 billion JPY 374.1 billion JPY 379.1 billion
ROE 10% or more 0.9% -

Note: depreciation expenses for intangible assets acquired from Pilkington and operating profit before deduction of individual disclosure items.