TS TECH Co., Ltd. Business Report FY ended Mar. 2018
|(in millions of JPY)|
|FY ended Mar. 31, 2018||FY ended Mar. 31, 2017||Rate of Change (%)||Factors|
|Profit for the year attributable to owners of the parent||30,115||19,622||53.5|
-The Company posted a year-over-year (y/y) growth in sales and record-high profits due to a healthy order trend from its major customers, which was for the first time in four years, a 18% increase in orders in Japan and a 14% growth in China, a favorable change in the automakers' model constitution, and currency translation effects generated by the weak yen.
Incomes rose due to an increase in sales, elimination of temporary costs incurred in the previous term in Asia and Europe segments caused by new model launches (troubles of new products and facilities in the Americas and the relocation of the Guangzhou site), as well as the compensation money received regarding the completion of the relocation of the Guangzhou site in China.
-Started producing the seats for the all-new Honda N-Box and the seats and interior parts for the all-new Honda Civic.
ｰWorked to establish a high-efficiency production system by introducing the group's latest batch welding equipment for the production launch of new models and upgrading the production line to enable flexble production to prepare for an increase in the production volume of mini vehicle seats and future production launches of new models.
ｰSales and profits: Remained unchanged from the previous term. A favorable change in the automakers' model constitution and a decrease in development costs were offset by an increase in orders from its major customers for the start of new model production and the price adjustment with royalty sales based on the Japan-U.S. APA agreements.
ｰOperating income: In addition to the above factors, operating income increased due to currency translation effects.
-Started production of the seats for the all-new Honda Odyssey and the seats and interior parts for the all-new Honda Accord.
ｰImproved efficiency of logistics in the plant premises using unmanned carriers, and production efficiency by thorough check of the production process.
ｰSales and profits: Sale increased due to a favorable change in the automakers' model constitution, an increase in sales to European major automakers, as well as currency translation effects.
ｰOperating income: Operating income decreased due to the price adjustment with royalty sales based on the Japan-U.S. APA agreements, as well as an increase in labor costs, which offset an increase in sales.
-Started production of the seats for the all-new Honda CR-V.
ｰAutomated production processes and improved logistics efficiency within the plant premises with the aim of establishing a high-efficiency production system in line with a substantial increase in production volume of its major customers.
ｰSet up a new sale office in Chongqing, China, to advance marketing targeting Chinese local automakers.
ｰSales and profits: Sales increased due to an increase in orders from its major customers, a favorable change in the automakers' model constitution, as well as currency translation effects.
ｰOperating income: Operating income increased due to an increase in sales and compensation money received with the completion of the relocation of its Guangzhou plant.
-Started producing the seats for the all-new Honda Civic Type R in the U.K. and the seats and interior parts for the all-new Honda CR-V in Indonesia.
ｰTemporary costs incurred in the previous term with the launch of new models were eliminated. The Company will work harder to improve profitability by producing seat parts internally and advancing thorough cost-cutting measures at all of its sites.
ｰTS Bangladesh Limited, which conducts cutting and sewing and started operations last fiscal year, contributed to improving cost competitiveness of the group in the automotive seat market by supplying trim covers to other sites.
ｰSales and profits: Sales increased due to an increase in orders from its major customers, a favorable change in the automakers' model constitution, an increase in parts sales as well as currency translation effects.
ｰOperating income: Operating income increased due to the elimination of the temporary costs incurred in the previous term with the launch of new models, in addition to an increase in sales.
ｰStarted production of new models in Hungary and Mexico, aiming to win new orders from new customers.
TS TECH Hungary Kft. received an order for the assembly of the third-row seat of new minivans of European automakers. Production of the seat for new models in one shift was made possible by improving the production line.
TST MANUFACTURING DE MEXICO, S. DE R.L. DE C.V. started manufacturing of trim covers for new models.
Production launch of new models in FY March 2018
|April-June 2017||June-Septempber 2017||October-December 2017||January-March 2018|
|Honda N-WGN||Honda N-BOX||Honda ODYSSEY||Honda N-BOX SLASH|
|Honda FIT||Honda Step WGN||Honda ACURA ILX(Americas)||Honda LEGEND|
|Honda GRACE||Honda SHUTTLE||Honda CR-V (Americas)||Honda RIDGELINE (U.S.)|
|Honda ACURA RDX (U.S.)||Honda CIVIC||Honda ACCORD(North America)*|
|Honda CIVIC SI(North America)||Honda FIT (Brazil)|
|Honda CITY (Philippines)||Honda CIVIC HATCHBACK (U.K.)|
|Honda MOBILIO(Thailand)||Honda JAZZ (India)|
|Honda ODYSSEY(North America)|
|Honda CR-V (Indonesia)|
|Honda CIVIC TYPE R (U.K.)|
ｰHonda ACCORD (North America): The Company received an order for seats and door trims of the Honda Accord to be released in October 2017. New rear seat frames and the use of thin steel plate reduced the weight by 20% and the welding time by 80%.
Mid-term business plan
-The Company, in launching its 13th mid-term management planed called 2020 Vision: Innovative Quality Company, which covers the fiscal year ending in March 2018 up through the fiscal year ending in March 2020, aims to create the foundation for establishing an ESG-oriented management framework.
-There are three fundamental pillars, outlined below, to becoming the world’s top company through focusing on quality, product competitiveness, localized management, and human-resources development.
- Sustainable business growth
- Diversified management
- Coexistence with the social environment
|(in millions of JPY)|
|FY ended Mar. 31, 2018||FY ended Mar. 31, 2017||FY ended Mar. 31, 2016|
|Technical Center||Tochigi Pref., Japan|
|Engineering Center||Tochigi Pref., Japan|
|Safety Technical Center||Tochigi Pref., Japan|
|TS Tech Americas, Inc.||Ohio, U.S.A.|
|TS Tech Asian Co., Ltd.||Bangkok, Thailand|
|TS Tech Deutschland GmbH||Tappenbeck, Germany|
|Guangzhou TS Tech Automotive Interior Research & Development Co., Ltd.||Guangzhou, China|
-The Company is working to develop automotive seats with an eye on the future. The company displayed automotive seating it developed to achieve maximum comfort by alleviating fatigue and stress at the Tokyo Motor Show 2017. Technologies required for autonomous driving vehicles, which are expected to be more prevalent in the future, will be different from existing technologies. TS Tech will develop new products without being bound by the traditional structure of automotive seats by combining the ideas of its employees and expertise provided from outside the company. (From an article in the Nikkan Jidosha Shimbun on December 2, 2017)
ｰWith the aim of strengthening the development and parts supply system on a global scale, the Company partially outsources operations of its development sites in Japan and North America to its subsidiary in the Philippines. By doing so, the Company aims to reduce operation costs by 30%. The Company's production site in Bangladesh will increase the production volume of trim covers.
|(in million JPY)|
|FY ended Mar. 31, 2018||FY ended Mar. 31, 2017||FY ended Mar. 31, 2016|
-The Company is planning to spend JPY 8,100 million in capital investments in the fiscal year ending in March 2019.
ｰThe Company will convert its Chinese business to focusing on internal demand. The company will gradually reduce the scale of its export of trim covers and other automotive parts from China to Japan and the U.S. Labor and material prices are rising in China, which has made the country less advantageous as a parts supply base for the global market. TS Tech will transfer Chinese automotive parts production operations for export to its new Bangladeshi plant. The company will reduce the impact of the shift on its global production system while focusing on profitability, and fulfill its supply responsibility to automakers. (From an article in the Nikkan Jidosha Shimbun on March 23, 2017)
ｰIn the fiscal year ended in March 2018, the Company enhanced sales operations to Big Three automakers in the U.S. and Chinese local carmakers, setting up sales offices in Detroit, U.S., and Chongqing, China. In FY 2018, the Company received five orders from new customers.
- The Company will focus its efforts on acquiring new orders from American automakers. The company opened a sales branch office in Detroit, Michigan in November 2017 in order to expand sales to the U.S. big three automakers. TS TECH has plants across the world, including in North America and Asia. The company will utilize these plants to develop new businesses in these regions and other emerging countries. It will expand new orders from automakers other than Honda Motor Co., Ltd. and expand its management portfolio. (From an article in the Nikkan Jidosha Shimbun on February 8, 2018)
ｰIn Japan, the Company expanded production at its Suzuka Plant by 35% to prepare for an increase of production and the launch of new mini vehicle series. At its Saitama Plant, the Company increased production volume and expanded capacity of the new automated welding line. The Company aims to improve its profit structure to flexibly meet production volume changes through automation and an improvement in efficiency.