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  5. Nichirin Co., Ltd. Business Report FY ended Dec. 2014

Nichirin Co., Ltd. Business Report FY ended Dec. 2014

Financial Overview

(in million JPY)
FY ended Dec. 31, 2014 FY ended Dec. 31, 2013 Rate of change
(%)		 Factors
Sales 47,618 44,522 7.0 1)
Operating income 4,505 3,519 28.0 -
Ordinary income 5,014 3,996 25.5 -
Net income 2,609 2,130 22.5 -


Factors
1) Sales
*
-Sales reached JPY 28,596 million, up 1.0 percent year-on-year. Sales were buoyed by strong demand from customers overseas, and also by the last-minute demand that arose before the Japanese consumption tax hike in April 2014. （Sales and production decreased after the tax hike.）

*
-Sales reached JPY 11,852 million, up 4.4 percent year-on-year. Production and sales were impacted by the extremely cold weather at the beginning of the year, but they recovered and remained stable after that.

*
-Sales reached JPY 9,190 million, up 6.7 percent year-on-year, reflecting the market recovery since the fourth quarter of 2013 that boosted both production and sales.

*
-Sales reached JPY 10,267 million, up 25.9 percent year-on-year. The automotive and motorcycle market in Thailand slowed impacted by the political crisis, but it recovered in the fourth quarter of 2014. Strong sales in other countries also boosted the Group's revenue in the region.

*
-Sales in Europe rose 48.4 percent year-on-year to JPY 2,310 million thanks to increased orders from European automobile manufacturers.

*Sales by geographic area include intersegment transactions.

Mid-term Management Plan

-Outline of the Nichirin Growth Strategy 2020: NGS2020, new mid-term business plan for 2015-2020

  • Sales: up 30 percent from the 2013 level
  • Operating income margin: over 8 percent
  • Net income margin: over 5 percent

 

  • Expanding business in high-growth areas: planning in accordance with market conditions
  • Creating new business: focusing on safety technologies and alternative energy technologies
  • Improving profitability: optimizing the allocation of management resources; reducing development lead-time

Awards

-Major awards in 2014 are as follows:

  • Certificate of Appreciation from Honda for cost-reduction
  • Certificate of Appreciation from Nissan for outstanding contribution to new vehicle development
  • Certificate of Appreciation from Nissan Shatai for outstanding contribution to new vehicle development
  • Certificate of Appreciation from Japan Climate Systems for excellent business performance

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

R&D Expenditure

(in million JPY)
FY ended Dec. 31, 2014 FY ended Dec. 31, 2013 FY ended Dec. 31, 2012
Overall 937 879 824

R&D Facilities

-Major R&D activities are carried out at Nichirin R&D Center located on the premises of the Himeji Plant.

R&D Activities

Automotive hoses
-The Company developed new hydraulic brake hoses, and began supplying them to Daihatsu and General Motors.

-The Company is developing hoses for automatic cruise systems, aiming to begin mass-production in 2015 or later.

-The Company developed hoses for compressed natural gas (CNG). The hoses are highly resistant to impurities in CNG. The CNG hoses are supplied to Thailand.

Technology Licensed-out Agreement

 (As of Dec. 31, 2014)
Company Country Content of Contract Period of Contract
From To
Hwaseung R&A Co.,Ltd. South Korea Manufacturing technology for air conditioner hoses used in automobiles Mar. 5, 2013 Mar. 4, 2016
Manufacturing technology for automotive brake hoses Mar. 5, 2013 Mar. 4, 2016
Manufacturing technology for automotive power steering hoses Mar. 5, 2013 Mar. 4, 2016

Capital Expenditure

(in million JPY)
FY ended Dec. 31, 2014 FY ended Dec. 31, 2013 FY ended Dec. 31, 2012
Japan 841 980 517
North America 157 320 254
China 116 167 107
Asia 700 115 301
Europe 17 48 39
Total 1,833 1,632 1,219

Investment outside Japan


-In November 2014, the Company built additional assembly plant on the premises of Nichirin Vietnam Co., Ltd. New plant assembles automotive and two-wheel brake and fuel hoses with monthly capacity of 586,100 units.


Planned Capital Investment

(As of Dec. 31, 2014)
Company or
Facility
(Location)		 Target of Investment Planned Investment
Total
(in million JPY)		 Start End
(Scheduled)		 Capacity Increase
after Completion
Himeji Factory
(Hyogo Pref., Japan)		 Facility for developing manufacturing process 65 June, 2014 June, 2015 -
Automation equipment 70 Jan. 2015 Dec. 2015 -
Nichirin Vietnam Co., Ltd.
(Bac Giang, Vietnam)		 Facility for manufacturing automotive hoses 130 Mar. 2014 June, 2015 -

Data

Number of Employees

  Dec. 2014 Dec. 2013 Dec. 2012
Japan 501 510 526
North America 288 301 315
China 298 233 226
Asia 509 492 313
Europe 37 36 39
Total 1,633 1,572 1,419

Sales by Segment

(in million JPY)
  FY ended Dec. 31, 2014 FY ended Dec. 31, 2013 FY ended Dec. 31, 2012
Sales Operating income Sales Operating income Sales Operating income
Japan 17,721 1,099 18,290 1,111 20,028 182
North America 11,851 473 11,348 547 8,709 19
China 6,419 932 5,912 715 4,129 515
Asia 9,316 2,125 7,414 1,562 3,691 544

Europe

 2,310 95 1,557 (33) 1,093 (73)
Adjustment - (222) - (383) - (15)

Total

 47,618 4,505 44,522 3,519 37,652 1,172

Consolidated

 >>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
  FY ended Dec. 31, 2010 FY ended Dec. 31, 2011 FY ended Dec. 31, 2012 FY ended Dec. 31, 2013 FY ended Dec. 31, 2014
Sales (million yen) 36,298 33,463 37,652 44,522 47,618
Income from ordinary business activities (million yen) 1,690 577 1,536 3,996 5,014
Net income (million yen) 880 (10) 729 2,130 2,609
Comprehensive income (million yen) - (235) 2,214 5,088 4,877
Net assets (million yen) 10,326 10,085 12,085 19,051 22,662
Total assets (million yen) 30,430 29,741 31,026 39,461 43,235
Net assets per share (yen) 1,069.51 1,013.60 1,211.65 1,441.87 1,713.55
Book value per share (yen) 97.98 (1.13) 81.17 210.81 236.31
Diluted EPS - - - - -
Net asset ratio (%) 31.6 30.6 35.1 40.3 43.8
ROE (%) 9.3 - 7.3 15.9 15.0
PER 4.3 - 5.5 4.1 6.2
Cash flow from operating activity (million yen) 1,499 (157) 1,972 3,945 3,988
Cash flow from investment activity (million yen) (1,151) (660) (1,178) (1,824) (1,543)
Cash flow from financial activity (million yen) 564 (348) (538) (134) (1,681)
Balance at the term-end of cash and cash equivalents (million yen) 4,481 3,212 3,683 6,141 7,426
Number of employees 1,300 1,396 1,419 1,572 1,633

Non Consolidated

  FY ended Dec. 31, 2010 FY ended Dec. 31, 2011 FY ended Dec. 31, 2012 FY ended Dec. 31, 2013 FY ended Dec. 31, 2014
Sales (million yen) 27,772 26,102 27,621 28,297 28,576
Income from ordinary business activities (million yen) 809 442 820 2,198 2,351
Net income (million yen) 643 130 535 1,503 1,718
Paid-in Capital (million yen) 1,729 1,729 1,729 2,158 2,158
Number of stock outstanding (thousand) 9,000 9,000 9,000 10,050 11,055
Net assets (million yen) 8,644 8,615 9,340 12,048 13,421
Total assets (million yen) 25,999 25,587 25,697 28,808 30,074
Book value per share (yen) 961.68 958.49 1,039.17 1,091.15 1,215.70
Dividend per share (yen) 9.00 12.00 12.00 16.00 22.00
EPS (yen) 71.57 14.56 59.55 148.73 155.63
Diluted EPS - - - - -
Net asset ratio (%) 33.2 33.7 36.3 41.8 44.6
ROE (%) 7.7 1.5 6.0 14.1 13.5
PER 5.9 23.6 7.6 5.8 9.3
Payout ratio (%) 12.6 82.4 20.1 9.8 14.1
Number of employees 398 394 386 367 360