Mid-term Management Plan “Breakthrough to 2020” This document is based on the data available as of February 6, 2015. The opinions and forecasts described here is based on our judgments made at the time of creation and may be changed without prior notice. February 25, 2015 (FY2016-2020)
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Mid-term Management Plan
“Breakthrough to 2020”
This document is based on the data available as of February 6, 2015.
The opinions and forecasts described here is based on our judgments
made at the time of creation and may be changed without prior
notice.
February 25, 2015
(FY2016-2020)
1
Agenda
1. Disposal of Plastics Business
2. Mid-term Management Plan
“Breakthrough to 2020”
- Challenge to the Comprehensive
Metalworking Manufacturer -
2
1. Disposal of Plastics Business
3
1-1. Disposal of Plastics Business
At the board of directors held on February 25, Advanex Inc. resolved to transfer all the
holding shares of Daiichi Kasei Holdings., Co., Ltd. to ABICO Group of Taiwan.
(As of March 31, 2015)
Purpose: Focus management resources on profitable Precision spring
business to accelerate our growth strategy to become
comprehensive metalworking manufacturer.
Detail: 49% of shares of subsidiary which operates plastic business was
transferred to ABICO group of Taiwan in July 2014. The remaining 51%
of shares will also be transferred to ABICO group. All the plastic
business except insert molding is now disposed as it is not our core
business.
Founded in 1965 in Taiwan. Currently owns
15 production bases and 20 sales bases
worldwide and has more than 15,000
employees.
Disposal price: Approx.1 billion yen
Gains(losses) of disposal: Unknown (No significant impact is expected
on company’s consolidated business
performance in the current period)
4
1-2. Outline of Plastics Business
Acquired the share of its parent company, Daiichi Kasei Holdings Co., Ltd.,
from an investment fund in October 2007 and made it a wholly owned
subsidiary.
Foundation: 1963
Headquarters: Shimotsuke city, Tochigi
Representative: Masami Obara (Director of Advanex)
Business: Production and sales of injection-molding products made of
plastics and ceramics, precision assemblies and unit
products
Number of employees: 890 (Consolidated)
Overseas group company: 4 (Malaysia, Vietnam, 2 in China)
Consolidated performance: Net sales: Approx. ¥11.3 billion (FY2014)
Net income: ¥406 million
Total assets: ¥7,220 million
Net assets: ¥1,583 million
Daiichi Kasei Co., Ltd.
5
1-3. Comparison of Profitability
6
1-4. Percentage of Consolidated Results
Consolidated Net sales
¥ 27,100 million
Consolidated
Operating income ¥ 820 million
Results for FY2014
Precision
springs
59.2%
Plastics
40.8%
Precision
springs
59.5%
Plastics
40.5% Precision
springs
71.2%
Plastics
28.8%
Consolidated Net sales
¥ 21,904 million
Consolidated
Operating income ¥ 769 million
Precision
springs
57.7%
Plastics
42.3%
Results for FY2015 3rd Quarter
7
1-5 Net Sales and Operating Income by Business Segment
Net Sales
Operating Income
FY2014
3Q
FY2015
3Q
8,765
11,641
8,868
13,036
0
5,000
10,000
15,000
Precision Springs Plastics
307344
544
219
0
200
400
600
800
1,000
Precision Springs Plastics
(Million Yen)
FY2014
3Q
FY2015
3Q
FY2014
3Q
FY2015
3Q
FY2014
3Q
FY2015
3Q
Reason: Decreased sales
to AV equipment market
at Malaysian subsidiary
and fell into the red
Operating income of Plastics
business decreased
(Results for FY2015 3rd Quarter)
8
2. Mid-term Management Plan
“Breakthrough to 2020”
- Challenge to the Comprehensive
Metalworking Manufacturer -
9
2-1. Main Points of Mid-term Management Plan
◆Focus on metalworking domain
By setting precision springs business as our core business, expand our
business in metalworking domain, then accelerate growth as leading
company in this technology
◆Invest aggressively for expansion of global business
◆Growth strategy with automotive related market as our
core target
◆Enhance R&D and increase sales of our products
(standard products)
◆Expand technical domain and markets through M&A
◆ Improve financial health and return to shareholders
10
271 280
176
350
8 10 7 40
0
100
200
300
400
2014/3 2015/3 2015/3（Excluding Plastics）
2020/3
Net sales Operating income
2-2. Mid-term Performance Targets
Performance target: FY2020 (in 5 years)
Consolidated Net sales : ¥35 billion
Operating Income: ¥4 billion
(Operating income ratio 11%, ROE 22%)
(Hundred million)
(Forecast) (Forecast) (Target)
11
2-3. Four Strategies
1) Area strategy
Accelerate global business operation through aggressive oversea investment
2) Market strategy
Set automotive market as our core target and medical equipment and housing equipment markets as our focus area
3) Product strategy
Expand standard product business
Expand insert collar, insert molding and deep drawing product business overseas
4) M&A strategy
Acquisition of manufacturers of medical equipment, die-set design and manufacturing and secondary process area
12
2-3. 1) Area Strategy
Purpose: Extend market for Japanese and European automotive part manufacturers in
emerging markets
Plan: Asia Expand Vietnam factories (expand Hanoi factory, new factory in Ho Chi Minh)
Set up new factory in India (Offices in 3 locations + new factory)
Set up new sales liaison office in Chongqing, Restructure business in China
Europe Make inroads into Central Europe (new factory in Czech Republic)
Americas Reinforce business in Latin America (second factory in Mexico, make
inroads into Brazil)
Expand Global Business
UK
Singapore
India
California China
Central Europe
Latin America
USA
Tokyo
Vietnam
13
Purpose: Pursuit of opportunities for growth in market with most demand for springs
Grow business with Japanese and German part manufacturers
Plan: Establish new factory in Japan dedicated to production of automotive parts
Main product: Fastening parts for automotives (Insert collar)
Outline of new factory in Japan
■Location: Honjo City, Saitama
■Area: Ground area approx. 12,000sqm
Floor area approx. 5,000 sqm
■Investment: Approx. ¥1.5 billion
■Employees: Approx. 30
■ Completion planned: October, 2015
■Planned expansion: 2020
■Forecasted production volume: ¥3 billion (FY2019)
1) Increase sales in automotive market (core market)
2-3. 2) Market Strategy
Image of factory at the time of completion
14
2-3. 2) Market Strategy
Plan: Increase sales in European market and develop new markets among
emerging markets
- Reinforce group structure centering our UK subsidiary
- Develop new markets in Asia and South America
Main products: Springs for metered dose inhalers for asthma puffer
Coil springs for indwelling needles (Japan, Vietnam)
Spring for blood sampling needles (new product)
■ Increase sales to medical equipment market
■Increase sales to infrastructure and housing related markets
2) Establish third pillar of business following automotive and OA
equipment
Plan: Develop new business for infrastructures such as railroads, roads and
power facilities, for agriculture and fishery related, play equipments in
amusement parks and housing equipments
- Received orders for window sash for apartment buildings
- Developing new products for other housing related equipments
Main product: TAMONT (Spring to prevent nut from becoming loose or
dropping)
15
2-3. 3) Product Strategy
Purpose: Find new customers and expand business of made-to-order
products
Plan: Expand online direct sales and marketing
■ In cooperation with 2 sales companies, number of product types
sold online will increase to 3,100 from March 2015
Plan to open our own website
■ Start sales through trading companies and exports from this year
Main products: Fastening products, (Tangless and insertion tools, TAMONT,
etc.) Dampers, push-up units
Strategic Focus: Expand standard product business
R&D and production focusing on metal working products
■ Expand oversea sales of insert collars, insert moldings and deep drawing
products
■ Strengthen standard product business, enhance technological R&D, in-
house production of secondary processes
■ Develop materials such as metallic glass and alloy of copper and iron,
develop processing technologies such as MIM and powder metallurgy
16
■Expand technical domain: Part manufacturers for medical equipments,
die-set designing and manufacturing, secondary processes and insert
moldings
■ Expand production base: Acquire factories overseas
2-3. 4) M&A Strategy
Acquisition of Funabashi Electronics Co., Ltd. (April 2014)
■ Acquired a company with outstanding deep drawing technology in metal
stamping domain.
■ Through acquisition of business from Funabashi from April 2015, promote
R&D for automotive and expand business overseas
Accelerate M&A strategy
17
Suppl.1) Planned Schedule
Event Purpose 2014/3 2015/3 2016/3 2017/3 2018/3 2019/3 2020/3
Acquisition of Funabashi Electrics Expand domain ★
Disposal of Daiichi Kasei Selection and centralization ★
Online sales/marketing Standard product business ★
Inhouse online sales/marketing Strenghten standard products business ★
Start operating Saitama Factory Strengthen auto business ★
Expantion of Saitama factory Increase production capacity ★
Expantion of Hanoi Factory Enhance Vietnam business ★
Set up new factory in Ho Chi Minh Expand Vietnam business ★
Set up sales liaison office in India Expand business in Asia ★ ★
Set up new factory in India Enhance business in Asia ★
Set up sales liaison office in Indonesia Increase sales in SE Asia ★
Set up sales liaison office in Chongping Increase sales in China ★
Reorganize business in China Restructure business in China ★
Set up sales liaison office in Czech Expand European business ★
Set up new factory in Czech Strengthen European business ★
Set up sales liaison office in Mex ico Ex pand business in N & C Americas ★
Set up new factory in Mexico Strengthen business in N&C Americas ★
Set up sales liaison office in Brazil Expand business to S America ★
Set up new factory in Brazil Strengthen business in S America ★
18
Suppl.2) Change of Net sales by Geographical Segment
FY2014
Net sales ¥27,100 million
Reference：Excluding Plastics
¥15,635 million
FY2020 (Plan)
¥35,000 million
19
Suppl.3) Change of Net Sales by Market
FY2014
Net sales ¥ 27,100 million
Reference：Excluding Plastics
¥15,635 million
FY2020（Plan）
¥35,000 million
20
Suppl.4)
Sales Targets of Strategic Products Approx. ¥7.4 billion with 4 types of products
( Approx. 21% of Consolidated net sales)
(Million yen)
¥2 billion
¥2 billion
¥2 billion
14億円 ¥1.4 billion
21
Suppl.5) Transition of Capital Investment
(Million yen)
Springs only
（Forecast)
22
Change of Interest-bearing debt and equity ratio
（million of yen）
2-4. Improve Financial Health and Return to Shareholders
1) Repay borrowings and improve shareholders’ equity
2) Return to Shareholders ■Introduction of shareholder special benefit program (started in FY2016)
QUO cards given to shareholders according to number of holding shares
■ Increase dividend payout ratio to 20% as soon as possible. Next target: 30%
(FY2014 actual: 12.2%)
Advanex Inc.
Corporate Communication Office
TEL：03 - 3822 - 5865 FAX：03 - 3822 - 5873
URL：http://www.advanex.co.jp
（Contact）
“Breakthrough to 2020”
- Challenge to the Comprehensive
Metalworking Manufacturer -
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