Business Report for FY2010

Transcription

1 To Our Shareholders Business Report for FY21 From April 1, 21 to March 31, 211 Securities code: 725 Contents Financial Highlights 1 To Our Shareholders 2 Close-up 4 Business Results by Segment 5 Regional Results 6 Consolidated Financial Statements (summary) 7 Corporate Social Responsibility (CSR) Initiatives 9 Company Profile / Share Information 1

2 Financial Highlights for FY21 Consolidated net sales Consolidated ordinary income Dividend per share (full-year) 84.6billion yen (First increase for three years) 5.2billion yen (Hit a new high) 1yen (Up 3 yen from the previous fiscal year) Net sales Ordinary income Net income Consolidated figures Non-consolidated figures 1, 89,862 82,641 84,631 8,468 78,22 8, 7,32 63,9 6,761 58,575 58,49 6, 4, 6, 5, 4,475 3,976 4, 3,733 3, 2,527 2, 1, 5,281 3,595 2,637 1,993 4, 3,144 3, 2,24 2,335 2, 1,4 1, 2,969 2,498 1, , (Fiscal year) -3, -49-2, (Fiscal year) -2, , (Fiscal year) Net income per share Total assets Net assets (Yen) , 97,476 1,466 1, 93,4 87,249 89,985 85,468 82,227 81,934 78,34 8, 72,318 5, 45,644 43,138 4,97 38,797 39,126 4, 36,792 35,238 31,695 33,81 33,31 3, , 4, 2, , 1, (Fiscal year) (Fiscal year) (Fiscal year)

3 To Our Shareholders Establishing the fundamental strategies to forge a solid footing and promoting groundbreaking innovations to strengthen the corporate structure First and foremost we must express our sincere condolences to all those that lost family and friends in the recent Great East Japan Earthquake. Our heartfelt sympathies go out to everyone affected by the disaster. This year we set out to develop and implement fundamental strategies that would provide us a solid foundation to strengthen the corporate structure and promote groundbreaking innovation. With that in mind I am pleased to report the financial results and business activities of Pacific Industrial Co., Ltd. for fiscal 21 (April 1, 21 to March 31, 211). June 211 Shinya Ogawa President and Chief Executive Officer PACIFIC INDUSTRIAL CO., LTD. Consolidate financial results for FY21 During the fiscal year under review, the world economy was on a recovery path, Key factors included rapid growth in emerging economies, the turnaround in the U.S. economy, and economic stimulus packages in countries around the world. In the automobile industry, the main business area of the Pacific Industrial Group, the market was also recovering, in large part, due to economic growth in emerging markets, This occurred despite a reaction to the termination of subsidies for eco-friendly cars in Japan and the appreciation of the yen. In this environment, the Group sought to improve profitability by introducing and promoting the Cost Innovation 3 project. This project centers around activities to reduce total costs by 3% over two years, up to fiscal 211, through creative innovations, In addition we are working to create new product technologies that meet customer needs and protect the environment, as well as technologies to improve quality and reduce costs, with the aim of achieving the objectives of the OCEAN-12 Medium-Term Management Plan, which we adopted last year. As a result, for the fiscal year under review, the Group reported consolidated net sales of 84,631 million yen (an increase of 8.2% from the previous fiscal year), consolidated operating income of 5,151 million yen (up 67.6%), consoli- 2

4 To Our Shareholders dated ordinary income of 5,281 million (a rise of 46.9%) and consolidated net income of 2,969 million yen (an increase of 18.9%), with operating income and ordinary income hitting a new high. We had initially planned to pay a year-end dividend of 4 yen per share for the fiscal year under review. However, taking the operating results for the year into account, we increased the dividend by 1 yen to 5 yen per share, so that we were able to restore the annual dividend of 1 yen. Outlook for FY211 Given the enormous impact of the Great East Japan Earthquake, even though the world economy should continue to recover, the operating environment in Japan is likely to remain difficult for the foreseeable future. There is a serious concern about electricity shortages due to problems at the Fukushima I Nuclear Power Plant and the suspended operation at the Hamaoka Nuclear Plant of Chubu Electric Power. We will take rapid steps to respond to the expected power problem by changing summer holidays through rolling operations and conserving power and energy. To overcome the difficult conditions, we will continue to be ever vigilant in developing and promoting groundbreaking innovations and make maximum use of limited resources as outlined in our Medium-Term Business Plan so as to increase our earnings power. Medium- and long-term management strategies and issues to address Our Tohoku Plant, located in Kurihara City, Miyagi Prefecture, was struck by the earthquake but, fortunately, damage was minor and none of our employees, or their family members, was harmed. After a thorough review and analysis of the events immediately following the initial quake, we have rediscovered the vital importance of initial responses. To ensure that we quickly take the proper initial actions we believe that routine training and information management are essential and that devices to keep unexpected events within the scope of assumptions are vital. Going forward, we will improve our risk and crisis management to include natural disasters such as earthquakes. Our top priorities will be the safety and well being of human lives as well as the development of a business continuity plan (BCP) to improve our crisis management system. In the Pacific Glocal Vision 22, a long-term plan we adopted last year to mark the 8th anniversary of our foun- dation, we placed corporate social responsibility (CSR) as our most vital management issue. To survive in increasingly intense global competition and an ever more challenging operating environment, we will develop an emergency situation system and aim to practice amalgamated management rather than consolidated management. Specifically, we will introduce innovation to the Group s business structure by realigning operating bases in Japan and overseas and by refining our business focus, so that we will be able to smoothly respond to the global strategies of customers. We also intend to strengthen the foundations that support our business strategies by steadily building our human resources strength with an excellent work-life balance and by accelerating initiatives in areas such as technological development. With this approach, we aim to strengthen the competitiveness of existing products, facilitate a structural shift to higher value-added products, develop environmentally friendly products and technologies, manufacture with a commitment to excellence, and minimize the burden we place on the environment. The Pacific Industrial Group will extend its CSR activities and maximize corporate value through business structure innovation based on the five shinka, aiming to become a true glocal company that earns the trust and meets the expectations of its stakeholders. As we pursue these initiatives, we ask our shareholders and investors for their continued understanding and support in the years to come. The five shinka of the Pacific Industrial Group Deepening (Shinka) Evolution (Shinka) Stronger trust (Shinka) Updating (Shinka) True worth (Shinka) Deepening (Shinka) : Deepening our technologies, skills and knowledge Evolution (Shinka) : Innovating in products and manufacturing methods Updating (Shinka) : Developing new products and technologies True worth (Shinka) : Becoming a good company for stakeholders Stronger trust (Shinka) : Improving the basis for corporate activities such as compliance and work-life balance 3

5 Close-up New product information TPMS B-1, a new Tire Pressure Monitoring System product. Warns of reduced tire pressure with devices installed for general users The Company has developed the TPMS B-1, as a TPMS system for general users that is installed after purchase. The TPMS B-1 is a sensor within a transmitter device attached to a wheel. It is a system that detects the air pressure in tires and informs the driver through an in-car monitor (receiver). By monitoring the tire pressure and warning the driver of a decrease in pressure, it not only ensures safety and security while driving, but also improves efficiency and environmental performance by prolonging the life of tires. It does this by reducing partial abrasion, preventing fuel consumption from deteriorating and reducing CO2 emissions. The TPMS B-1 consists of sensors within transmitters attached to wheels and a monitor (receiver) attached to the dashboard. It receives electricity from an auto accessory power source. An acceleration sensor mounted on a transmitter device measures the air pressure inside the tires. If, while driving at speeds of approximately 4 km per hour or greater, there is a rapid decrease in tire pressure data is sent to the receiver by wireless. The receiver informs the driver of the state of tire pressure with lamps in three colors; red, yellow, and green. TPMS B-1 is distributed by Bridgestone FVS Co., Ltd. and sold at stores of COCKPIT and Taiyakan throughout Japan. Front face of the receiver Sensor transmitter Receiver Topics Website renewed As part of activities commemorating the 8th anniversary of our founding, the Company revamped its website at the end of March 211. In addition to making it easier to read and find objective information, we have created some new features that highlight our manufacturing commitment to excellence, our 8-year history, in addition to CSR and environmental information. We have also sought to improve ease of understanding by enhancing product and technology information as well as IR and investor information. We also plan to provide new information and familiar topics inside the Company in a timely manner. We hope that you visit our new site regularly. Website address Manufacturing with a commitment to excellence Top page 8-year history 4

6 Business Results by Segment 71.1% Stamping and Molding product business segment Net sales: 6.2 billion yen Operating income 2.9 billion yen Net sales for the segment were nearly in line with the year-ago level, with sales rising due to the market expansion in China and the effect of posting results for 15 months at subsidiaries in the United States, although sales declined from the previous fiscal year in Japan partly because of the effect of the Great East Japan Earthquake. As a result, consolidated net sales for the segment rose 2.7% from the previous fiscal year, to 6,29 million yen. The segment posted consolidated operating income of 2,95 million yen, an increase of 83.3% year on year, thanks to the contribution from the improved cost structure and a decline in depreciation expenses. Net sales and operating income 75, Net sales Operating income 6, 63,24 58,61 6,29 57,49 2,95 3, 45, 3, 2, 1,69 1,254 15, 1, (Fiscal year) Stamping and Molding products R/F hood lock hook Hybrid battery case Luggage hinge Oil pan Carrier plate Engine cover Wheel cap Center ornament 28.5% Valve product business segment Net sales: 24. billion yen Operating income 2.2 billion yen Net sales increased from the previous fiscal year, as an increase in sales of TPMS (Tire Pressure Monitoring System) products in the United States, the major market, made a contribution, and sales of tire valves and valve-related products remained firm. As a result, consolidated net sales for this segment increased 26.% from the previous fiscal year, to 24,91 million yen. On the profit front, consolidated operating income rose 48.6% from the previous fiscal year, to 2,219 million yen, thanks to an increase in the quantity and the improved cost structure, offsetting negative factors such as rising raw material prices and the appreciation of the yen. Net sales and operating income Net sales Operating income 3, 26,85 24,91 22,96 3, 2, 19,12 2,314 2,219 2, 1,494 1, 1, (Fiscal year) Valve products Valve core Tubeless valve Tube valve TPMS transmitter Relief valve Charge valve Check valve 5

7 Regional Results Asia 14.7 % Net sales by North America 24.2 % Japan 61.1 % region 84.6 billion yen Net sales by region Japan Net sales declined from the previous fiscal year mainly in the Company, reflecting the effects of the termination of subsidies for eco-friendly cars and the Great East Japan Earthquake. As a result, consolidated net sales for Japan decreased 3.5% from the previous fiscal year, to 51,686 million yen. In terms of profits, consolidated operating income rose 29.6% year on year, to 1,998 million yen as the improved cost structure and a fall in depreciation expenses contributed. North America Consolidated net sales for North America rose a significant 3.1% from the previous fiscal year, to 2,489 million yen, as the period became 15 months due to the change in closing date, in addition to the recovery in automobile Operating income by region Japan North America Asia Japan North America Asia 6,279 6, 3, 5,668 53,55 51,686 1,992 1,998 2, 4, 1,553 1,542 1,634 1,235 1,188 1,229 1, 2, 21,474 21,58 2, , ,455 8,18 8,291 8,94-2, , (Fiscal year) (Fiscal year) production. Consolidated operating income for this region rose 635.4% from the previous fiscal year, to 1,229 million yen. The amount of the effect of changing the closing date at two U.S. subsidiaries (from December 31 to March 31) was an increase of 3,99 million yen for net sales and a rise of 227 million yen for operating income. Asia Net sales increased substantially from the previous fiscal year with the expansion of automobile production in China, in addition to generally favorable business in Asia. As a result, consolidated net sales for Asia grew 39.9% from the previous fiscal year, to 12,455 million yen, and consolidated operating income was up 37.6% year on year, to 1,634 million yen. PACIFIC INDUSTRIAL Group members Domestic companies Taiheiyo Sangyo Co., Ltd. (manufacturing and sales of automotive parts) Pacific Development Co., Ltd. and Taiyo Kosan Co., Ltd. (asset management and operation of golf courses) Overseas Companies Stamping and Molding product business segment PI System Co., Ltd. (development and sales of software and insurance agent business) PEC Holdings Corporation (manufacturing and sales of automotive parts and electric appliance components) Controlling company Taiwan United States China United States Pacific Valve (Taiwan) Co., Ltd. Pacific Manufacturing Ohio Inc. Tianjin Pacific Auto Parts Co., Ltd. Pacific Industries USA Inc. Valve product business segment South Korea South Korea Thailand China Pacific Valve Industrial Co., Ltd. Pacific Air Control Co., Ltd. Pacific Industries (Thailand) Co., Ltd. Qingdao Pacific Hongfeng Industrial Co., Ltd. 6

8 Consolidated Financial Statement (Summary) POINT1 Consolidated Balance Sheet (Unit: million yen, amounts of less than one million yen are discarded) Item At the end of FY21 At the end of FY29 (Assets) Current assets 26,21 31,232 Cash and bank balance 8,965 11,117 Notes and accounts receivable 9,18 12,573 Inventories 5,339 4,588 Others 2,727 2,965 Allowance for doubtful receivables Fixed assets 55,732 61,771 Tangible fixed assets 38,118 42,772 Buildings and structures 11,724 12,256 Machinery and vehicles 12,752 15,63 Tools, equipment and fixtures 3,947 6,232 Land 5,813 5,453 Leased assets 1,65 1,311 Construction in progress 2,815 1,886 Intangible fixed assets Investments and other assets 17,374 18,792 Investments in securities 14,44 15,631 Prepaid pension expenses 2,167 2,22 Others Allowance for doubtful receivables Total assets 81,934 93,4 POINT2 POINT2 POINT2 POINT2 (Unit: million yen, amounts of less than one million yen are discarded) Item At the end of FY21 At the end of FY29 (Liabilities) Current liabilities 21,24 3,798 Notes and accounts payable 8,387 9,372 Short-term loans payable 2,645 1,894 Convertible bonds payable within one year 6, Long-term loans payable within one year 59 3,79 Accrued expenses 5,17 6,444 Others 4,383 4,7 Long-term liabilities 21,783 23,48 Long-term loans payable 15,47 16,12 Deferred tax liabilities 3,948 4,421 Others 2,364 2,867 Total liabilities 42,87 54,27 (Net assets) Shareholders' equity 37,51 35,14 Capital stock 4,32 4,32 Capital surplus 4,58 4,58 Retained earnings 28,932 26,455 Treasury stock Accumulated other comprehensive income ,21 Other unrealized gains on marketable securities 4,665 5,375 Foreign currency translation adjustments - 5,584-4,173 Minority interests 2,544 2,58 Total net assets 39,126 38,797 Total liabilities and net assets 81,934 93,4 Notes for FY21 (as indicated in Consolidated Balance Sheet) POINT1 Tangible fixed assets Tangible fixed assets decreased 4.6 billion yen from the end of the previous fiscal year, reflecting factors such as reduced capital investment and depreciation. POINT2 Short-term loans payable, convertible bonds payable within one year, long-term loans payable within one year and long-term loans payable The sum total of convertible bonds payable and short-term and long-term loans payable declined 8.3 billion yen from the end of the previous fiscal year, given the redemption of convertible bonds payable and the repayment of certain loans payable. Consequently the balance of interest-bearing debt came to 18.7 billion yen. 7

9 POINT3 POINT4 Consolidated Statement of Income (Unit: million yen, amounts of less than one million yen are discarded) Item At the end At the end of FY21 of FY29 Net sales 84,631 78,22 Cost of sales 71,93 67,713 Gross margin 12,727 1,488 Selling, general and administrative expenses 7,576 7,415 Operating income (operating loss) 5,151 3,73 Non-operating income 717 1,49 Non-operating expenses Ordinary income (ordinary loss) 5,281 3,595 Extraordinary income 4 55 Extraordinary loss Net income before income tax, etc. 4,548 3,457 Income tax, inhabitant tax and enterprise tax 1, Income tax adjustments Income before minority interests 2,961 Minority interests (losses) Net income (Net loss) 2,969 2,498 Consolidated Statement of Cash Flow (Unit: million yen, amounts of less than one million yen are discarded) Item At the end of FY21 At the end of FY29 Cash flows from operating activities 12,695 17,85 Cash flows from investing activities - 5,121-5,28 Cash flows from financing activities - 9,624-4,562 Translation adjustments for cash and cash equivalents Increase (decrease) in cash and cash equivalents - 2,347 8,256 Balance of cash and cash equivalents at the beginning of the fiscal year 1,693 2,426 Increase in cash and cash equivalents from newly consolidated subsidiary 1 Increase in cash and cash equivalents associated with merger 33 Balance of cash and cash equivalents at the end of the fiscal year 8,379 1,693 Notes for FY21 (as indicated in Consolidated Statements of Income) POINT3 Net sales: Net sales increased 8.2% from the previous fiscal year, mainly reflecting a rise in the number of automobiles produced by major customers in the United States and China. POINT4 Ordinary income: Ordinary income: Ordinary income reached a new record high, thanks to the effects of an increase in sales quantity, the improved cost structure and a fall in depreciation expenses, offsetting foreign exchange losses attributable to the stronger yen and a decline in sales prices. Consolidated Statement of Changes in Equity (for FY21) (Unit: million yen, amounts of less than one million yen are discarded) Item Capital stock Capital surplus Shareholders equity Retained earnings Treasury stock Total shareholders equity Accumulated other comprehensive income Other unrealized gains on marketable securities Foreign currency translation adjustments Total accumulated other comprehensive income Minority interests Total net assets Balance as of March 31, 21 4,32 4,58 26, ,14 5,375-4,173 1,21 2,58 38,797 Changes during the consolidated fiscal year under review Cash dividends Net income 2,969 2,969 2,969 Acquisition of treasury stock Changes of scope of consolidation and equity method Net changes in items other than shareholders equity during the consolidated fiscal year under review ,411-2, ,157 Total changes during the consolidated fiscal year under review 2, , ,411-2, Balance as of March 31, 211 4,32 4,58 28, ,51 4,665-5, ,544 39,126 8

10 Corporate Social Responsibility (CSR) Initiatives Actively contributing to the community as a good corporate citizen With the aim of becoming a true glocal company that earns the trust and meets expectations of our stakeholders, we will contribute to the development of a sustainable society through all our business activities in countries and regions around the world. 1 Donation of aid, supplies, and relief money to victims of the Great East Japan Earthquake Donating aid supplies such as sets of bedding to Kurihara City, Miyagi Prefecture The Company sent two shipments of supplies such as gasoline, kerosene, blankets and bedding, drinking water, towels, and toothbrushes to Kurihara City, Miyagi Prefecture where the Company s Tohoku Plant is located, to assist in the recovery. We also raised relief money in the Company and donated it through the Japanese Red Cross Society. 2 Women s soft tennis team promoted to the Japanese League The women s soft tennis team: promoted to the top Japanese League The Company s women s soft tennis team won first prize in the qualification match of the Soft Tennis Japanese League in fiscal 21 and achieved its long-cherished promotion to the Japanese League. Soft tennis, a popular sport for the Company, is a certified sport for Gifu Prefecture, and our women s soft tennis team practices hard every day, hoping to take first place in the Gifu Seiryu National Athletic Meet to be held in Gifu Prefecture in 212. The Company supports this competition as an official sponsor of the Gifu Seiryu National Athletic Meet, and the promotion to the Japanese League this time has provided strong impetus ahead for the National Athletic Meet. Pacific Satoyama Woodland Activity The Pacific Industrial Group works together with local communities to promote global environmental protection and forest environment education for the next generation through activities to develop satoyama woodland. 3 We support FC Gifu Children enjoy mini games and kicking at a target. The Company is a shareholder in FC Gifu, which belongs to the J2 League of Japan Professional Football. We barrack for FC Gifu as a Group, supporting their active promotion of social action programs for children, closely tied to local communities based on a club philosophy Dream to Children! We also hold a soccer clinic featuring invited FC Gifu players. 9

11 Company Profile / Share Information (as of March 31, 211) Company Profile Name: Pacific Industrial Co., Ltd. Head Office location: 1 Kyutoku-Cho, Ogaki City, Gifu Prefecture, Japan TEL (main switchboard) Established: August 8, 193 Capital stock: 4,32 million yen Number of employees: 1,62 (consolidated: 3,12) Businesses: Manufacturing and sales of automotive parts, electric appliance components, electronic devices and other products Operations in Japan: Seven plants in Japan Corporate Directors, Auditors and Officers (as of June 18, 211) Chairman, Member of the Shinya Ogawa Board of Directors Vice President, Member of the Chikashi Suzuki Board of Directors *promoted Senior Managing Officer, Member Masaharu Oba of the Board of Directors Senior Managing Officer, Member Takayuki Ishizuka of the Board of Directors Managing Officer, Member Katsuya Suzuki of the Board of Directors Managing Officer, Member Kenji Mizobe of the Board of Directors *newly appointed Member of the Board of Hiroshi Kurokawa Directors (outside) Hiroshi Nagata Fulltime Corporate Auditor Kenichi Uchida Fulltime Corporate Auditor *newly appointed Yukio Manita Corporate Auditor (outside) Katsuhiro Takahashi Corporate Auditor (outside) Toshiteru Ando Managing Officer *promoted Tsunenaga Moshino Managing Officer *promoted Toshinori Tanahashi Officer Kunihiro Yanagihara Officer Hisashi Kayukawa Officer Terumi Noda Officer Yoshio Mori Officer *newly appointed Tetsushi Ogawa Officer *newly appointed State of Shares Number of shares the Company is authorized to issue: 9,, shares Number of shares already issued: 54,646,347 shares Number of shareholders: 4,166 parties Principal Shareholders (top 1 shareholders) Shareholder name Number of shares held (thousands of shares) Shareholding ratio (%) The Bank of Tokyo-Mitsubishi UFJ, Ltd. 2, Ogaki Kyoritsu Bank, Ltd. 2, The Juroku Bank, Ltd. 2, Nippon Life Insurance Company 2, The Dai-ichi Mutual Life Insurance Company 2, PEC Holdings Corporation 1, Giken K. K. 1, Japan Trustee Services Bank, Ltd. (trust account) 1, The Master Trust Bank of Japan, Ltd. (trust account) 1, Nipponkoa Insurance Co., Ltd. 1, (Note) The shareholding ratio excludes treasury stock. Share Distribution by Owner Treasury stock Individuals and others Foreign corporations Securities companies Financial institutions Other Japanese corporations Changes in Dividends / Dividend Payout Ratio (Non-consolidated) Interim dividends Year-end dividends Dividend payout ratio (yen/share) (%) yen 5 1yen 5 1yen 7yen 42.5% 5 9 8yen % % % (Fiscal year) * Dividend payout ratio for the fiscal year 28 is not shown as the Company posted net loss. 1

12 Notes for Shareholders Business year From April 1 to March 31 in the following year Date of record for payment of year-end dividends March 31 Date of record for payment September 3 of interim dividends Ordinary shareholders' general meeting June every year Transfer agent Special account management institution Mitsubishi UFJ Trust and Banking Corporation Mitsubishi UFJ Trust and Banking Corporation, Contact address Corporate Agency Division 1-11, Higashisuna of office 7-chome, Koto-ku, Tokyo Tel: (toll free) Stock exchange First Sections of the Tokyo Stock Exchange and the Nagoya Stock Exchange Share trading unit 1, shares Securities code 725 We make electronic public notices on the Company s website ( Public notice co.jp/koukoku/). If we cannot make electronic notices due to accidents or other unavoidable reasons, we place public notices in the Chubu Keizai Shimbun and the Nihon Keizai Shimbun. Introducing Our Website The Company s website posts a range of information about the Company, its CSR and environmental activities, as well as IR and investor information. Shareholders holding shares of less than one trading unit (1, shares) Shareholders holding shares of less than one trading unit may request the sale of shares to constitute one trading unit or request the purchase of shares constituting less than one trading unit. With a request for the sale of shares to constitute one trading unit, shareholders who hold shares of less than one trading unit (1, shares) can purchase additional shares from the Company to constitute one trading unit. With the request for the purchase of shares constituting less than one trading unit, the Company purchases shares of less than one trading unit (1, shares) from the shareholders. Both requests are received at the institution where the shareholder maintains their account (such as a securities company). For shares that are recorded in a special account, the requests are received at Mitsubishi UFJ Trust and Banking Corporation, which manages the special account. The receipt of the request for the sale of shares to constitute one trading unit terminates during the periods from ten business days before March 31 and September 3 to March 31 and September 3 every year. The paintings on the cover page are posters for environmental protection created by the children of some of our employees. We seek and exhibit the posters in the lobby of the Company each year to raise awareness about the environment for future generations. 1 Kyutoku-Cho, Ogaki City, Gifu Prefecture, Japan Tel: (main) Fax: Date of issue: June 19, 211 This printing uses environmentally friendly vegetable oil-based ink.