KYB Corporation(Formerly, Kayaba Industry Co., Ltd.) Business Report FY ended Mar. 2018

Financial Overview

(in millions of JPY)
FY ended Mar. 31, 2018 FY ended Mar. 31, 2017 Rate of Change
Sales 392,394 355,316 10.4

-While the sales of automotive hydraulic shock absorbers fell in the U.S., they steadily increased in China, Europe and Japan.

ーAs for automotive hydraulic equipment, the sales of vane pumps for CVTs increased steadily, while the sales of electronic power steerings and hydraulic pumps fell, resulting in a decline in the overall sales.

Operating income 20,885 19,247 8.5 -
Profit before tax 20,881 18,852 10.8 -
Profit/loss for the year attributable to owners of the parent 15,202 14,544



Business Trends

ーThe Company announced that it will form a business tie-up with China-based Hubei Henglong Group for the development, production, and supply of electronic power steering (EPS) systems. The two companies will establish a joint venture in June and start production of EPS systems in September. KYB will strengthen its EPS business in China, the world's largest automotive market, by teaming up with Hubei Henglong, the largest Chinese EPS manufacturer. Both companies will also cooperate in the development of products for autonomous driving. KYB possesses EPS plants only in Japan and has been unable to satisfy the needs of OEMs for local procurement of EPS systems outside Japan. KYB will jointly develop products with Hubei Henglong. The joint venture will manufacture EPS systems and related parts for China and other overseas markets. (From an article in the Nikkan Jidosha Shimbun on April 27, 2018)

ーThe Company projects that Chinese carmakers will expand their shares in the Chinese market, and the steerings made by domestic makers will be replaced by EPSs. (from 50% to 73% in 2022). The Company intends to win a larger share of EPSs in China, expand the product lineup, and develop business globally from China.

R&D Expenditure

(in millions of JPY)

FY ended Mar. 31, 2018 FY ended Mar. 31, 2017 FY ended Mar. 31, 2016
Overall 8,102 7,621 7,760
-AC (Automotive Components) 5,258 4,770 5,121

R&D Structure

Facility Location Research Activities
KYB Developmental Experiment Center Kamo-gun,
Gifu Pref.
-Development and testing of suspensions and steering devices for four- and two-wheel vehicles
-Test course
Basic Technology R&D Center Sagamihara City,
Kanagawa Pref.
-Conducting basic research on hydraulic equipment and automobile devices and developing new products and technologies.
Electronics Technology Center Sagamihara City,
Kanagawa Pref.
-Designing and testing of electronic equipment. Accumulating production engineering technologies.
Production Technology R&D Center Kani City,
Gifu Pref.
-Development of technologies to improve product performances and reduce costs.
Machine Tools Center Kani City,
Gifu Pref.
-Accumulating knowhow for designing production equipment.
-Carrying out projects to manufacture production equipment in-house.
KYB Europe GmbH(Munich Branch) Munich, Germany ー*

<*Establishing Europe Technical Center>

The company announced that it has established the "Europe Technical Center" in Munich, Germany. The new technical center will begin operations on April 3, with an aim to expand the company's development capabilities for automotive components like shock absorbers and promote its products to European OEMs like German premium automakers. The new technical center will function as a branch of KYB Europe GmbH, KYB's European headquarters in Germany. KYB primarily markets shock absorbers among other automotive components. The company currently has a 16% share of the European shock absorber market. With an aim to increase the market share, the supplier will place designers at the Europe Technical Center and establish a system to quickly respond to customers' technical requests. KYB holds technical centers in Japan, the U.S., China, and Thailand. The new center in Munich, Germany will be the company's fifth technical center. (From an article in the Nikkan Jidosha Shimbun on March 29, 2018)

ーThe Company promotes the devleopment of lightweight shock absorbers using electronic-controlled suspension systems, aluminum and resin.

ーThe Company promotes the development of the fault-tolerant design that enables an EPS to continue operating properly in the event of the failure for a part of the EPS.

Capital Expenditure

(in millions of JPY)
FY ended Mar. 31, 2018 FY ended Mar. 31, 2017 FY ended Mar. 31, 2016
Overall 20,956 20,578 21,300
-AC (Automotive Components) 14,114 14,733 15,070

Planned Capital Investments

Planned investment FY ending Mar. 31, 2019: JPY 17,600 million
AC (Automotive Components): JPY 8,500 million

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