UNIPRES Corporation Business Report FY ended Mar. 2012

Business Highlights

Financial Overview

(in millions of JPY)
  FY ended Mar. 31, 2012 FY ended Mar. 31, 2011 Rate of
change (%)
Factors
Sales 239,086 219,032 9.2 Sales increased year-on-year because its customers produced more volume as a result of their having created new model vehicles; and because the Company's new production plants launched commercial operations.
Operating income 24,631 21,764 13.2 -
Ordinary income 24,255 20,313 19.4 -
Net income 14,529 11,750 23.7  -

Business Performance

<Japan>
-Even though business was disrupted due to the Great East Japan Earthquake, operating revenue, nevertheless, increased 7.1% year-on-year, to 134.1 billion yen. Compared to operating revenue in the previous fiscal year, this was an increase of 8.8 billion yen. Operating profit also increased year-on-year, by 17.7%, to 14.5 billion yen. This was 2.1 billion yen more than that of the previous fiscal year.

<North America>
-Even though negative currency translation greatly lowered the final results for the region, North America's operating revenue was still higher year-on-year by 5.7%, to 29.8 billion yen. This was a year-on-year increase of 1.6 billion yen, which resulted from greater numbers of new-vehicle units being produced by OEMs. As for operating profit, it increased by 400 million yen, to 3.0 billion yen for the year, which was a 19.1% increase.

<Europe>
-In spite of the fact that negative currency translation greatly lowered the final results for the region, Europe's operating revenue was higher year-on-year by 12.9%, to 24.3 billion yen. This was a year-on-year increase of 2.7 billion yen, which was due to a greater number of new-vehicle units being produced by OEMs. As for operating profit, it increased by 100 million yen, to 2.0 billion yen for the year, which was a 6.8% increase.

<Asia>
-Operations in Asia were negatively impacted by the flooding in Thailand, as well as by negative currency translation. However, in spite of this, the region was able to record higher, year-on-year financial results due to the launch of commercial operations in India and Thailand. Operating revenue was 50.7 billion yen, a 6.7 billion yen (15.4%) increase over that of the previous fiscal year. In spite of the initial expenses incurred to launch commercial operations at Unipres Precision Guangzhou, operating profit was up by 27.8% for the year, to 6.3 billion yen, or an increase of 1.3 billion yen.

Business Plan

-The Company, is poised to expand transactions with Honda. Its global sales to Honda now amount to 2,920 million yen and account for about 1.3 percent in total sales. The company plans to boost sales by 1.6 times to 4.8 billion yen and to increase share to at least 2 percent by fiscal 2013. In addition, it will accelerate activities to promote new technologies and products targeted at Honda, as well as to enhance supply capabilities, like building satellite plants close to Honda's overseas assembly plants. Last year, Unipres constructed a new branch plant for final assembly in the vicinities of Honda's assembly plant in Swindon in the south of the U.K. The plant has got into full operation this spring. The body parts supplier will also set up a new branch plant to serve Honda's assembly plant in the U.S. with the aim of expanding its customer base. Unipres plans to raise sales to Honda about 50 percent to 1.8 billion yen in the U.S., and about four times to 1.8 billion yen in the U.K., while maintaining transaction volume with Honda in Japan. This is pursuant to the strategy to seek steady growth with profitability by boosting business with Honda, which is the second biggest customer next to Nissan. (From an article in the Nikkan Jidosha Shimbun on July 5, 2011)

Subsidiary

-The Company, announced on October 31, 2011 its plans to establish a new production subsidiary in China and also to create a new regional headquarters in the country to oversee the group's local operations. The new manufacturing company, Unipres Zhengzhou Corporation, will be established in March 2012 in Zhengzhou, Henan Province. Its production operation is scheduled to begin in July 2013 and sales are expected to reach 14 billion yen in FY2014. Unipres is investing 5 billion yen in the production unit, aiming to meet a projected increase in demand for auto parts in inland China, where automakers are stepping up production. Unipres' Chinese headquarters, Unipres (China) Corporation, will be located in the city of Guangzhou. It will have Unipres' three Chinese subsidiaries under its wing, which are Unipres Guangzhou Corporation, Unipres Precision Guangzhou Corporation, and Unipres Zhengzhou Corporation, which will be created in March 2012. The establishment of the management unit is intended to help stabilize the group's business, streamline operations, and enhance controlling functions. Unipres (China) will be formed in February 2012 with a capital of 30 million dollars (approximately 230 million yen). (From an article in the Nikkan Jidosha Shimbun on November 2, 2011)

-The Company, said on June 13, 2011 that it will establish a wholly owned subsidiary in Indonesia to manufacture car body stamping products. Operation is scheduled to begin in June 2012, which is expected to expand Unipres' business with local plants of Nissan Motor and other automakers. P.T. Unipres Indonesia (tentative name) will be established in July with a capital of 17 million dollars. The plant will have a building area of 1,500 square meters on 88,000 square meters of land. The 2.8 billion yen investment will create about 170 jobs. Sales are forecast to reach 2.5 billion yen in 2014. (From an article in the Nikkan Jidosha Shimbun on June 14, 2011)

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

R&D

R&D Expenses

(in millions of JPY)
  FY ended Mar. 31, 2012 FY ended Mar. 31, 2011 FY ended Mar. 31, 2010
Overall 2,400 2,300 2,000

R&D Activities

-The Company has 218 research and development staff members as of March 31, 2012.
-The Company has 82 industrial property rights as of March 31, 2012.

-The Company will establish Unipres R&D Co., Ltd. on April 1, 2011. The new company will integrate the Group's technology development functions to engineer stamping technologies for body structural parts, precision parts for transmissions and plastic components. Based on the establishment, Unipres' Engineering Development Department, Engineering Department, Production Engineering Department, Transmission Engineering Development Department, and Transmission Engineering Department will be consolidated, while a new Engineering Division will be formed as a contact point between Unipres headquarters and the new company. Unipres R&D will be located in Yokohama City, Kanagawa Prefecture. Approximately 350 engineers at Unipres will be working at the new company. (From an article in the Nikkan Jidosha Shimbun on March 17, 2011)

<Product Development>
-Optimizing the strength and rigidity of products
-Developing products that are more compact and lighter in weight
-Designing products in which stamping technology can be applied
-Shortening development periods

<Material Development>
-High-strength steel plates
-Highly rigid plastic materials

<Process Development>
-Stamping process for super high-strength steel plats
-Hot stamping method
-Precision metal stamping
-Stamping process for light-alloy materials
-Welding process for light-alloy materials
-Processing of high-strength pipes
-Stamping process for high-strength plastics
-Compound molding process for plastic composites

Investment Activities

Capital Investment

(in millions of JPY)
  FY ended Mar. 31, 2012 FY ended Mar. 31, 2011 FY ended Mar. 31, 2010
Overall 17,800 14,400 13,700
Automotive Parts - - 13,600

-Japan
The Company invested 5.2 billion yen mainly to renew auto-parts production facilities and equipment to respond to model-changes made by its customers.

-North America
The Company invested 2.8 billion yen mainly to renew auto-parts production facilities and equipment to respond to model-changes made by its customers.

-Europe
The Company invested 1.7 billion yen mainly to renew auto-parts production facilities and equipment to respond to model-changes made by its customers.

-Asia
The Company invested 8.0 billion yen mainly to renew auto-parts production facilities and equipment to respond to model-changes made by its customers; and to establish a new company in China and Indonesia.

-Unipres Corporation is set to make continuous record-breaking investments in boosting production capacity of stamping and other parts within the next three or more years in the overseas market. In 2011 the stamping parts manufacturer is planning to make a capital investment of 24.1 billion yen in adding large scale transfer stamping equipment in Mexico and the U.K. in response to model changes and production increases planned by its leading customer, Nissan. This capital investment will be followed by that in projects of the same level in the next fiscal year and after for supporting Nissan's plants in Brazil and Russia as well as expanding sales to automakers other than Nissan. (From an article in the Nikkan Jidosha Shimbun on July 1, 2011)

Planned Capital Investments

(As of Mar. 31, 2012)
Company
Facility
(Location)
Target of Investment Planned
Investment
Total
(in million yen)
Start End
(Scheduled)
Capacity
Increase
after
Completion
Headquarters
(Kanagawa Japana, Shizuoka Japan)

Improve working environment and strengthen crisis management framework

1,900 Apr.
2012

Mar.

2013

-
The Company
Tochigi Plant
(Tochigi Pref., Japan
Kanagawa Pref., Japan)
Improving production operations, renewing production facilities and equipment to respond to model changes, and conducting other initiatives.  2,100 Apr.
2012

Mar.

2013

Slight increase
The Company
Fuji Plant
(Shizuoka Pref., Japan)
Improving production operations, renewing production facilities and equipment to respond to model changes, and conducting other initiatives.  1,900 Apr.
2012

Mar.

2013

Slight increase
Unipres Kyusyu Co., Ltd.
Headquarters & Plant
(Fukuoka Pref., Japan)
Improving production operations, renewing production facilities and equipment to respond to model changes, and conducting other initiatives.  4,500 Apr.
2012

Mar.

2013

Slight increase
Unipres U.S.A., Inc.
Headquarters & Plant
(U.S.A.)
Improving production operations, renewing production facilities and equipment to respond to model changes, and conducting other initiatives.  2,300 Apr.
2012

Mar.

2013

Slight increase
Unipres Mexicana, S.A. de C.V.
Headquarters & Plant
(Mexico)
Improving production operations, renewing production facilities and equipment to respond to model changes, and conducting other initiatives.  2,700 Jan.
2012
Dec.
2012
Slight increase
Unipres (UK) Limited
Headquarters & Plant
(UK)
Improving production operations, renewing production facilities and equipment to respond to model changes, and conducting other initiatives.  3,100 Jan.
2012
Dec.
2012
Slight increase
Unipres Guangzhou Corporation
Headquarters & Plant
(China)
Improving production operations, renewing production facilities and equipment to respond to model changes, and conducting other initiatives. 1,000 Jan.
2012
Dec.
2012
Slight increase
Unipres Zhengzhou Corporation
Headquarters & Plant
(China)
Establish a plant at a new production site and install new facilities and equipment 3,700 Jun.
2012
Dec.
2012
Increase annual production capacity to 200K unit range
Unipres Precision Guangzhou Corporation
Headquarters & Plant
(China)
Improve production operating structure and prepare new equipment to handle products designed for vehicles that underwent model changes 3,400 Jan.
2012
Dec.
2012
Slight increase
Unipres India Private Limited
Headquarters & Plant
(India)
Improving production operations, renewing production facilities and equipment to respond to model changes, and conducting other initiatives.  300 Apr.
2012
Mar.
2013
Slight increase
PT. Unipres Indonesia
Headquarters & Plant
(Indonesia)
Establish a plant at a new production site and install new facilities and equipment 1,500 Jan.
2012
Dec.
2012
Increase annual production capacity to 50K unit range