Annual Report For the year ended March 31, 2007

Transcription

1 Annual Report 7 For the year ended March 31, 7

2 MESSAGE FROM THE CHAIRMAN AND THE PRESIDENT It is our pleasure to report to you on JTEKT's business performance for the fiscal year ended March 31, 7. Concerning the state of Japan's economy during this period, although the effect of such negative factors as increased raw material prices was felt, the economy continued to display moderate strength as a result of increased private-sector capital expenditures, an expanding employment environment, and other positive factors. Regarding economies around the world, Asian economies led by China maintained a high growth rate, the U.S. economy displayed firmness despite the failure of personal consumption to grow as expected, and European economies proceeded strongly in the direction of recovery. Given such a business climate, the JTEKT Group endeavored during this period to construct a production structure with improved efficiency and further strengthen its quality control and sales structures. As a result of these and other efforts, consolidated sales of 1,5,98 million yen were achieved, an increase of 3,948 million yen, or 41.5 percent, over the previous year's result. Concerning profit, rising raw material prices and other unfavorable factors were offset by increased sales, resulting in consolidated operating income of 64,63 million yen, an increase of,5 million yen, or 44.8 percent, over the previous term. Consolidated net income rose to 44,9 million yen, an increase of 17,614 million yen, or 64.6 percent, over the previous term. An end-of-term dividend of 1 yen per share was issued, bringing the total dividend for the year to 19 yen per share (the interim dividend was 9 yen per share), an increase of 4 yen per share from the previous term. The JTEKT Group will continue striving to strengthen its quality control structure, develop new products that foresee market needs, and solidify its base of profitability through the effective use of management resources in order to meet the expectations of customers and others. We hope for the continued support and cooperation of our shareholders. August 7 Chairman Takaya Yamada President Motohiko Yokoyama Contents Message from the Chairman and the President Consolidated Financial Highlights Business Domains Topics Global Network / Domestic Network Consolidated Balance Sheet Consolidated Statement of Income and Retained Earnings Consolidated Statement of Cash Flows Nonconsolidated Balance Sheet Nonconsolidated Statement of Income Company Profile

3 Consolidated Financial Highlights Consolidated sales Consolidated operating income Consolidated net income (unit: billions of yen) (unit: billions of yen) (unit: billions of yen) ,5 1, /5 3/6 3/7 3/5 3/6 3/7 3/5 3/6 3/7 Note: JTEKT's 3/6 results are a combination of the results of Koyo Seiko (the surviving legal entity) from April through December 5 and JTEKT's results from January through March 6. Koyo Seiko JTEKT Reference data A simple combination of the results of Koyo Seiko and Toyoda Machine Works is shown below. Consolidated sales (unit: billions of yen) Consolidated operating income (unit: billions of yen) Consolidated net income (unit: billions of yen) /4 3/5 3/6 3/4 3/5 3/6 3/4 3/5 3/6 Note: Each company's results for 3/6 are a combination of its results from April through December 5 and its attributable portion of JTEKT's results from January through March 6. Toyoda Machine Works Koyo Seiko

4 Business Domains Three axes and four product fields compose the structure of JTEKT. The horizontal axis represents systemization that will apply to a wide range of industrial fields, and in particular the systemization of steering products and driveline components. Supporting that axis is the technology "deep plowing" axis, representing further cultivation of fundamental technology in the fields of bearings, a basic element of all mechanical products, and machine tools, the means by which products are manufactured. Extending to an equal extent in the upward direction is the advanced technology development axis. Through utilizing the synergy created between these three axes and four product fields, JTEKT will pursue new possibilities and provide customers with the best in intelligent motion technology. Systemization Product combination Systemization axis Steering products Bearings Aim to create advanced technology Advanced technology development axis Technology deep plowing axis Driveline components Machine tools Systemization axis Systemization Product combination Fundamental technology Main Products Steering systems Column type electric power steering system Electronically controlled variable gear ratio steering Electronically controlled hydraulic power steering Power steering pump Driveline components Propeller shafts Couplings Torsens Driveshafts Bearings General-purpose bearings Automotive bearings (hub unit with built-in sensor) Machine tool bearings Steel mill bearings Machine tools Grinding machines Machining centers Special-purpose machines High-precision machine tools 3

5 TOPICS Aiming to be a "monozukuri" company friendly to the global environment Realization of "eco-factories" Provision of energy/resource-saving recyclable products JTEKT products contributing to the global environmental High-efficiency JTEKT Involute Chain for CVTs Currently there is a strong trend among automakers to adopt continually variable transmissions (CVT) as a means of improving vehicle fuel economy. While both metal belts and chains are used in current CVTs, JTEKT, utilizing its wealth of bearing element technology and based on an exclusive license agreement with Dutch company Gear Chain Industrial B.V., has developed the JTEKT Involute Chain, which possesses higher efficiency than existing metal belts and lower noise than existing chains. Features In the 1/15 fuel efficiency measurement mode, a 4%~5% fuel efficiency improvement is achieved (in-house calculation). Application in high torque ranges, which are difficult for current products to handle, is possible. This will enable CVT application on a greater range of vehicles and contribute to energy and resource conservation. Rack direct-drive electric power steering with integrated electronically controlled variable gear ratio mechanism Received Automotive Component Award at 4th Monozukuri Component Awards Ceremony This system, installed on Toyota Motor Corporation's Lexus LS and representing world-leading steering technology, comprises an electronically controlled mechanism that changes the gear ratio integrated in a one-piece structure with a rack direct-drive type electric power steering system having world top-class output. The variable gear ratio mechanism changes the steering gear ratio in accordance with vehicle speed so that the tires turn relatively much in response to turning at slow speeds or in stationary condition and relatively little in response to turning at high vehicle speeds, which improves driving stability. Features The high output of this system enables application on large vehicles up to the 5-liter class, and as vehicles equipped with electric power steering achieve 3%~5% better fuel efficiency than those using hydraulic power steering, it contributes significantly to energy conservation as well as to driving safety. Low friction torque (LFT-III) tapered roller bearing receives Minister of Economy, Trade and Industry Award Features This bearing, which has 8% less rotational torque loss than conventional tapered roller bearings, received the Minister of Economy, Trade and Industry Award at the 6 Energy- Conserving Machinery Awards in recognition of its significant energy-savings benefit. 4

6 Global Network / Domestic Network Global Network Europe Regional headquarters R&D centers Steering plants Driveline component plants Bearing plants Sales bases / service centers Sales for the region /3 3/4 3/5 3/6 JTEKT AUTOMOTIVE DIJON SAINT-ETIENNE S.A.S. JTEKT TORSEN EUROPE S.A Total 3 (unit: billions of yen) 188 3/7 Asia/Oceania, etc. (excluding Japan) Regional headquarters R&D centers Steering plants Driveline component plants Bearing plants Machine tool plants Sales bases / service centers Total 33 KOYO BEARINGS (EUROPE) LTD. TOYODA MITSUI EUROPE GMBH KOYO STEERING (THAILAND) CO., LTD. JTEKT AUTOMOTIVE (THAILAND) CO., LTD. Domestic Network Osaka head office No.5-8, Minamisemba 3-chome, Chuo-ku, Osaka, Tel Nagoya head office No.7-1, Meieki 4-chome, Nakamura-ku, Nagoya, Aichi Pref., , Japan Tel

7 North America Regional headquarters R&D centers Steering plants Driveline component plants Bearing plants Sales bases / service centers Total 13 Sales for the region (unit: billions of yen) /3 3/4 3/5 3/6 3/7 Sales for the region /3 3/4 3/5 3/6 JTEKT AUTOMOTIVE TENNESSEE- MORRISTOWN, INC. 81 (unit: billions of yen) /7 JTEKT AUTOMOTIVE TENNESSEE- VONORE CO. DALIAN KOYO WAZHOU AUTOMOBILE BEARING CO., LTD. TOYODA KOKI DO BRASIL INDUSTRIA E COMERCIO DE MAQUINAS, LTDA. KOYO CORPORATION OF U.S.A. [MANUFACTURING DIV.] Research & development centers No.333, Toichi-cho, Kashihara, Nara Pref., Tel No.4-1, Kokubu Higanjo-cho, Kashiwara, Osaka, No.1, Asahi-machi 1-chome, Kariya, Aichi Pref., Technical centers Chubu Technical Center No.1, Kotobuki-cho 1-chome, Toyota, Aichi Pref., Tel Toubu Technical Center No.18-, Shiroyama 1-chome, Midori-ku, Yokohama, Kanagawa Pref., 6-6 Tel Sales & Marketing Headquarters No.5-8, Minamisemba 3-chome, Chuo-ku, Osaka, Tel Steering System Operations Headquarters Bearing & Driveline Business Operations Headquarters Machine Tool & Mechatronics Headquarters Plants Kokubu Plant Kariya Plant Tokushima Plant Okazaki Plant Tokyo Plant Kagawa Plant Nara Plant Higashikariya Plant Toyohashi Plant Tadomisaki Plant Hanazono Plant Kameyama Plant Branch offices, business offices Tokyo Branch Office Higashinihon Branch Office Kitakanto Branch Office Hamamatsu Branch Office Toyota Branch Office I Toyota Branch Office II Nagoya Branch Office Kansai Branch Office Nishinihon Branch Office Tohoku Business Office Utsunomiya Business Office Mito Business Office Chiba Business Office Okazaki Business Office Kobe Business Office Okayama Business Office Kyushu Business Office Machine Tool & Mechatronics Headquarters Customer Center Tokyo Sales Office Saitama Sales Office Gunma Sales Office Sales Sect. for Middle Japan Hamamatsu Sales Office Hokuriku Sales office Osaka Sales Office Hiroshima Sales Office Fukuoka Sales Office Distribution centers Kansai Distribution Center Kawai Distribution Center Chubu Distribution Center Kanto Distribution Center Nishikanto Distribution Center Major related companies KOYO MACHINE INDUSTRIES CO., LTD. TOYOOKI KOGYO CO., LTD. KOYO SEALING TECHNO CO., LTD. CNK CO., LTD. KOYO THERMO SYSTEMS CO., LTD. KOYO ELECTRONICS INDUSTRIES CO., LTD. KOYO SALES, LTD. DAIBEA CO., LTD. UTSUNOMIYA KIKI CO., LTD. HOUKO CO., LTD. TOYODA VAN MOPPES LTD. 6

8 Financial data Consolidated Balance Sheet March 31, 7 ASSETS Current assets: Cash Time deposits Short-term investments Notes and accounts receivable: Trade Unconsolidated subsidiaries and affiliates Other Allowance for doubtful accounts Inventories Deferred tax assets Other current assets Total current assets Thousands of Millions of yen 7 7 7,146 1,9 5 7,39 1,97,464 6,743 (1,647) 59,96 13,75 1,171 7,1 484, ,147 8, ,95,53 19, ,356,8,756 (13,954),194,8 1,48,31 179,34 6,313 4,1,87 Investments and advances: Investments in securities Investments in and advances to unconsolidated subsidiaries and affiliates Property, plant and equipment: Buildings and structures Machinery and equipment Accumulated depreciation Land Construction in progress Deferred tax assets Other assets Total assets 64,54 6,517 91,57 196,155 68, ,914 (614,734) 64,18 5,789 19,95 336,91 11,66 1,96 945,39 546,716 4,63 771,346 1,661,65 5,783,64 7,445,67 (5,7,46),37, , ,11,854,5 93, ,73 8,7,698 As of March 31, 7, JTEKT had 91 consolidated subsidiaries and 11 affiliates accounted for by the equity method. The main ones of each type are shown below. (Consolidated subsidiaries) KOYO MACHINE INDUSTRIES CO., LTD. TOYOOKI KOGYO CO., LTD. KOYO SEALING TECHNO CO., LTD. CNK CO., LTD. KOYO THERMO SYSTEMS CO., LTD. KOYO ELECTRONICS INDUSTRIES CO., LTD. KOYO SALES, LTD. DAIBEA CO., LTD. UTSUNOMIYA KIKI CO., LTD. HOUKO CO., LTD. TOYODA VAN MOPPES LTD. JTEKT AUTOMOTIVE TENNESSEE- MORRISTOWN, INC. JTEKT AUTOMOTIVE TENNESSEE- VONORE CO. JTEKT AUTOMOTIVE LYON S.A.S. JTEKT AUTOMOTIVE DIJON SAINT-ETIENNE S.A.S. JTEKT AUTOMOTIVE VIRGINIA, INC. KOYO STEERING (THAILAND) CO., LTD. JTEKT AUTOMOTIVE (THAILAND) CO., LTD. KOYO CORPORATION OF U.S.A. KOYO BEARINGS (EUROPE) LTD. KOYO ROMANIA S.A. TOYODA MACHINERY USA CORP. (Affiliates accounted for by the equity method) FUJIKIKO CO., LTD. MITSUI SEIKI KOGYO CO., LTD. 7

9 LIABILITIES AND NET ASSETS Current liabilities: Short-term loans Current portion of long-term debt Notes and accounts payable: Trade Unconsolidated subsidiaries and affiliates Construction Other Thousands of Millions of yen ,833 6,68 198,546 13,8 16,85 18,73 46,65 574,69 6,5 1,681,881 11,53 14, ,94,89,389 Income tax payable Accrued expenses Other current liabilities Total current liabilities Long-term debt Accrued indemnities from retirement benefit plan Accrued severance indemnities for members of the board of directors and corporate auditors Deferred tax liabilities Other liabilities Total liabilities 15,636 36,39 18, ,81 98,65 67,545,81,57 1,33 583,463 13,453 38,73 157,74 3,488,453 83,397 57,175 19,3 1,47 8,751 4,94,53 Net assets: Shareholders' equity: Common stock: Authorized - 1,, thousand shares Issued - 3,136 thousand shares Capital surplus Retained earnings Less: Treasury shares Evaluation and conversion difference: Unrealized gain on other securities Translation adjustments on foreign currency financial statements Minority interests in consolidated subsidiaries Total net assets Total liabilities and net assets 36,96 98, ,83 (33) 6,61 3,1 15,43 361, ,39 37, ,15 1,54,56 (,797) 5,337 6,6 13,76 3,65,195 8,7,698 Conversion rate: per U.S. dollar 8

10 Financial data Consolidated Statement of Income and Retained Earnings For the year ended March 31, 7 Net sales Cost of sales Gross profit Selling, general and administrative expenses Operating income Other income (expenses): Interest and dividend income Interest expense Foreign currency exchange gain, net Gain on sales or disposal of property, plant and equipment, net Equity in earnings of unconsolidated subsidiaries and affiliates Other, net Thousands of Millions of yen 7 7 1,5,98 844,444 18, ,4 64,63,34 (3,89) 1, (3,394) (1,545) 8,685,8 7,153,73 1,53,9 984,57 547,48 19,836 (3,66) 13,339 6,475 8,75 (8,75) (13,91) Income before income taxes and items listed below Income taxes: Current Deferred Minority interests in net income of consolidated subsidiaries Net income Consolidated retained earnings: Balance at beginning of the year Net decrease due to the change in scope of consolidation Cash dividends Bonuses to directors and corporate auditors Balance at end of the year Per share: Net income Cash dividends Weighted average number of common shares outstanding (thousands) 63,85 3,65 (7,56) (,61) 44,9 144,44 (1,7) (5,748) (5) 181,84 Yen , ,391,334 (63,753) (17,46) 38,35 1,1,893 (9,68) (48,695) (4,44) 1,54, ,136 9

11 Consolidated Statement of Cash Flows For the year ended March 31, 7 Cash flows from operating activities: Income before income taxes Depreciation and amortization Equity in earnings of unconsolidated subsidiaries and affiliates Notes and accounts receivable Inventories Notes and accounts payable Bonuses to directors and corporate auditors Payment of income taxes Other, net Net cash provided by operating activities Thousands of Millions of yen ,85 44,93 (977) (11,) (,151) 4,566 (59) (3,761) 3,984 97,9 534, ,515 (8,75) (95,48) (18,3) 8,96 (5,) (1,78) 33,754 81,93 Cash flows from investing activities: Increase in time deposits Increase in marketable securities Purchases of property, plant and equipment Proceeds from sales of property, plant and equipment Increase in investments in securities Decrease in loans receivable Other, net Net cash used in investing activities Cash flows from financing activities: Decrease in short-term loans Decrease in long-term debt Cash dividends Other, net Net cash used in financing activities Exchange difference of cash and cash equivalents Net increase in cash and cash equivalents Cash and cash equivalents at beginning of the year Net increase due to the change in scope of consolidation Cash and cash equivalents at end of the year (38) (3) (59,685) 4,94 (878) 38 (1,697) (57,449) (4,63) (8,686) (6,4) (41) (19,14) 1,81,376 49,548 7,146 (,781) (5) (55,591) 41,539 (7,44),16 (14,369) (486,651) (34,419) (73,577) (5,7) (348) (161,66) 15, , ,71 1, ,147 1

12 Financial data Nonconsolidated Balance Sheet March 31, 7 ASSETS Current assets: Cash Notes and accounts receivable: Trade Subsidiaries and affiliates Other Allowance for doubtful accounts Thousands of Millions of yen 7 7 4,3 9,33 17,754 8,87 6,859 (57) 6,8 339,11 764,363 91,779 75,155 1,75,97 (483) 1,751,814 Inventories Deferred tax assets Other current assets Total current assets Investments and advances: Investments in securities Investments in and advances to subsidiaries and affiliates Property, plant and equipment: Buildings and structures Machinery and equipment Accumulated depreciation Land Construction in progress Deferred tax assets Other assets Total assets 41,93 8,541 1,63 98,98 38,37 159, ,93 111, ,97 49,595 (368,5) 1,95 39,8 9,514 17,617 1,19 15, ,77 355,193 7,35 13,745,53,14 34,494 1,351,939 1,676, ,19 3,9,716 4,155,85 (3,11,563) 1,34,6 33,434 8,596 1,445,9 1,8 18, 5,79,1 11

13 LIABILITIES AND NET ASSETS Current liabilities: Short-term loans Current portion of long-term debt Notes and accounts payable: Trade Subsidiaries and affiliates Construction Other Thousands of Millions of yen 7 7 8, 75, ,38 46,4 18,71 6,7 18,15 43, ,95 943,519 39,17 158,416 51,56 1,543,8 Income tax payable Accrued expenses Other current liabilities Total current liabilities Long-term debt Accrued indemnities from retirement benefit plan Accrued severance indemnities for members of the board of directors and corporate auditors Total liabilities Net assets: Shareholders' equity: Common stock: Authorized - 1,, thousand shares Issued - 3,136 thousand shares Capital surplus Retained earnings Less: Treasury shares Evaluation and conversion difference: Unrealized gain on other securities Total net assets Total liabilities and net assets Conversion rate: per U.S. dollar 9,64 16,4 9,68 66,6 76,41 49, ,868 36,96 98,937 13,531 (3) 5,44 9,94 683,77 81, ,567 78,514,58, ,19 416,9 6,317 3,37,98 37, ,9 1,15,7 (,557) 15,53,464,39 5,79,1 1

14 Financial data Nonconsolidated Statement of Income For the year ended March 31, 7 Net sales Cost of sales Gross profit Selling, general and administrative expenses Operating income Other income (expenses): Interest and dividend income Interest expense Foreign currency exchange gain, net Gain on sales or disposal of property, plant and equipment, net Other, net Income before income taxes Income taxes: Current Deferred Net income Thousands of Millions of yen , ,736 85,159 5,76 33,83 4,196 (1,15) 984,64 (7,4) (971) 3,11 13, ,513 5,378,191 4,656,81 71, ,136 8,45 35,544 (8,6) 8,335 19,18 (6,684) (8,5) 7, 117,747 5, ,355 Per share: Net income Cash dividends Weighted average number of common shares outstanding (thousands) Yen , ,136 13

15 Company Profile Profile Company name Head office locations Main business Capital Sales Number of employees Nagoya head office No.7-1, Meieki 4-chome, Nakamura-ku, Nagoya, Aichi Pref.,, Japan Osaka head office No.5-8, Minamisemba 3-chome, Chuo-ku, Osaka, 54-85, Japan Manufacture and sale of steering systems, driveline components, bearings, machine tools, etc. 36 billion yen Consolidated: 1,5 billion yen Nonconsolidated: 634 billion yen Consolidated: 31,355 Nonconsolidated: 9,919 Members of the Board and Officers Directors Corporate auditors Chairman Vice Chairman President Executive Vice President Senior Executive Director Senior Executive Director Senior Executive Director Executive Director Executive Director Executive Director Executive Director Executive Director Executive Director Director Takaya Yamada Kohshi Yoshida Motohiko Yokoyama Toshikatsu Taniguchi Taisuke Senoo Masakazu Nagai Nobuyoshi Hisada Shuji Miyawaki Tetsuo Inui Takaaki Suzuki Kazuro Kajiwara Hitoshi Akahane Hiroshi Itoh Takeshi Uchiyamada Corporate Auditor Corporate Auditor Corporate Auditor Corporate Auditor Corporate Auditor Managing officers Executive Executive Executive Executive Executive Takuo Sugiyama Kazuo Takeda Kiyohiko Yamazaki Koichi Fukaya Kyoji Sasazu Takao Yoneda Ryutaro Abe Toshihiko Daido Jiro Nakano Hitoshi Shimatani Kenji Sasaki Hideo Kuwabara Masaji Yamamoto Toshio Hirokawa Hiroshi Fujii Masakazu Isaka Hiroyuki Kaijima Tetsuro Shibukawa Ryuichi Kakui Yoshio Sakai Tomizou Nakaya Masayuki Kitamura Osamu Natsume Hisashi Matsumoto Hisami Takagi Kiyohiro Iritani Noriya Murase Motoyasu Nakamura Naoyasu Sugimoto Shareholder Information as of March 7 (share quantities in units of 1,) 1. Number of authorized shares: 1,, Number of issued shares: 3,136. Number of shareholders: 4, Major (top 1) shareholders Shareholder Toyota Motor Corporation Japan Trustee Services Bank, Ltd. Denso Corporation The Master Trust Bank of Japan, Ltd. Nippon Life Insurance Company Toyota Industries Corporation Resona Bank, Ltd. The Sumitomo Trust and Banking Co., Ltd. Sumitomo Mitsui Banking Corporation Toyota Tsusho Corporation No. of shares 7,435 17,868 17,611 17,486 1,361 7,493 6,749 6,79 6,366 5, Breakdown of shareholders (1% = total issued shares) Securities companies 9,139 (.9%) Individuals 6,388 (8.%) Foreign companies 54,799 (17.1%) Self-owned shares (.1%) Japanese companies 1,174 (37.5%) Financial organizations 19,414 (34.%) 14

16 Printed in Japan on 1% recycled paper and non-wood paper