Europe [Informaţii privind compania]

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Financial Review

Review of Operations

During the consolidated fiscal year ending March 31, 2017, Japan recorded a decline in the sales of light vehicles (“kei cars”) due to the continued effects of increased tax and fraud issues in Japan. However, thanks to strong sales of new passenger cars, sales increased over the previous year for the first time in three years. Worldwide, sales of new cars slowed in some developing countries in Asia, South America and elsewhere. However, the United States, China and many other countries experienced increases.

In this market environment the Clarion Group has been working to build business as an in-vehicle information solutions provider, incorporating the strategies of business portfolio transformation, expanded business in growth markets, and low cost operation.

Revenues decreased by 9.9% year-on-year to 194,841 million yen, because although OEM (original equipment manufacturer) sales in the US and China increased, the figures are greatly affected by the exchange rate due to the higher value of the yen compared to the previous year.

Regarding profit and loss, adjusted operating income increased 2.5% year-on-year to 11,241 million yen as the result of efforts to reduce expenses by promoting cost reduction activities. Operating income decreased 1.6% year-on-year to 11,367 million yen, due to factors including reductions in other revenues. Pretax net income increased 4.7% year-on-year to 10,992 million yen, due to factors including a reduction in foreign-exchange loss. Net income attributable to the parent company shareholders decreased by 0.2% year-on-year to 7,727 million yen.

Results by geographic segment (excluding intra-Group transactions) are as follows.

■ Japan

Although Japan experienced increased sales of Safety & Information Systems business related products, sales of existing products decreased, causing revenues for this segment to decrease 16.3% year-on-year to 70,368 million yen. However, operating income increased 32.1% year-on-year to 5,591 million yen, thanks to an improved operating rate for increased production for North America, and company-wide cost cutting activities.

■ Americas

Although sales increased thanks to strong U.S. vehicle sales and expansion of products for the OEM market, this was not enough to absorb the effect of the higher yen exchange rate compared to the previous year, so revenues in this segment decreased 3.5% year-on-year to 87,658 million yen, and operating income decreased 22.5% year-on-year to 2,382 million yen.

■ Europe

Although there were signs of gradual economic expansion in Europe, the expansion in sales was offset by the effect of the higher yen exchange rate compared to the previous year, so revenues in this segment decreased 3.7% year-on-year to 13,331 million yen, and operating income decreased 61.7% year-on-year to 219 million yen.

■ Asia and Australia

Revenues in this segment decreased 14.3% year-on-year to 23,482 million yen, and operating income decreased 12.3% year-on-year to 3,193 million yen. Although sales to the OEM market in China increased, the decrease was caused by factors including the effects of the exchange rate, and reduced sales to the OEM market in Thailand.

* Forward-Looking Statements

Future company plans, strategies and other items contained in this report, or content related to future results are based on judgments and assumptions in light of information currently available to the company. Judgments and assumptions contain an element of risk and uncertainty, and actual future results may differ considerably, as a result of various factors. Risks and uncertainties include, without limitation, economic conditions and other factors in Clarion’s market.

Financial Position

Total equity at the end of the period was 129,413 million yen, a reduction of 1,618 million yen from the previous fiscal year-end. Of this figure, current equity totaled 73,116 million yen, 1,87 million yen higher than the previous fiscal year-end. Non-current equity totaled 56,297 million yen, 3,488 million yen lower than the previous fiscal year-end.

Total liabilities were 85,548 million yen, 7,627 million yen lower than the previous fiscal year-end.

Shareholder equity from the parent company totaled 43,709 million yen, 6,02 million yen higher than the previous fiscal year-end. Due to the recording of a net profit, the profit surplus increased to 7,135 million yen. The stronger yen in general compared to the previous fiscal year-end led to a smaller conversion difference for overseas sales activity. This, among other factors, led to a 1,109 million yen reduction in total cumulative profit value.

Cash Flows

With regard to cash flow relating to operating activities, there was a decrease in accounts receivable, but due to the posting of net income, depreciation and amortization, as well as amortization of intangible assets and a reduction in inventory assets, revenues totaled 19,964 million yen (compared with 19,465 million yen in the previous fiscal year).

With regard to cash flow relating to investment, purchases of tangible fixed assets and intangible assets led to total spending of 9,003 million yen (compared with 10,993 million yen in the previous fiscal year).

With regard to cash flow relating to finance, cash dividend payments and repayment of long-term debt obligations led to total spending of 6,632 million yen (compared with 1,583 million yen in the previous fiscal year).

As a result of these factors, cash and cash equivalents at the end of the year amounted to 18,763 million yen (compared with 14,326 million yen at the previous fiscal year-end).

Outlook for the Next Fiscal Year

Our consolidated earnings forecasts for the full year are set out below. Exchange rates are assumed to be 110 yen to the US dollar and 120 yen to the Euro.

Next consolidated fiscal year (April 1, 2017 to March 31, 2018)
  • Revenues: 200 billion yen
  • Adjusted operating income: 10.5 billion yen
  • Pretax net income: 10.0 billion yen
  • Net income attributable to parent company shareholders: 7.0 billion yen

Note: The Clarion Group has applied International Financial Reporting Standards (IFRS) since the consolidated financial statements in the Annual Securities Report for the fiscal year ended March 2015.

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