DENSO announces third-quarter results; new president to be elected in June
DENSO Corporation today announced its third quarter global financial results for the nine months ending Dec. 31, 2014.
• Consolidated net sales totaled 3,160.3 billion yen (US$26.2 billion), a 4.8 percent increase from the previous year.
• Consolidated operating income totaled 255.3 billion yen (US$2.1 billion), an 11.9 percent decrease from the previous year.
• Consolidated net income totaled 195.4 billion yen (US$1.6 billion), a 13.4 percent decrease from the previous year.
"DENSO's sales increased due to an overseas production volume increase," said Kenichiro Ito, executive director of DENSO Corporation. "However, despite cost reduction efforts, an increase in production volume as well as the depreciation of yen, research and development expenditures and investment costs for strengthening future growth led to a decrease in operating income."
In Japan, the market shift towards compact cars and the decrease of export sales led to a decrease in sales to 1,972.4 billion yen (US$16.4 billion), a 2.4 percent decrease from the previous year. The decrease in production volume and the increase in labor costs and other expenses led to an operating income of 164.6 billion yen (US$1.4 billion), a 25.2 percent decrease from the previous year.
In North America, an increase in car production, boosted by the steady economic growth, led to an increase in sales to 695.9 billion yen (US$5.8 billion), a 16.0 percent increase from the previous year. As a result of the increase in production volume and the cost reduction effort, the operating income totaled 26.3 billion yen (US$218.5 million), a 125.6 percent increase from the previous year.
In Europe, car production increased due to the recovery of the economic slump, which led to an increase in sales to 402.7 billion yen (US$3.3 billion), a 13.2 percent increase from the previous year. Due to the increase in production volume and the cost reduction effort, the operating income totaled 11.2 billion yen (US$92.8 million), a 73.2 percent increase from the previous year.
In Asia and Oceania, the increase of car production, mainly in China, resulted in a sales increase of 771.8 billion yen (US$6.4 billion), a 9.1 percent increase from the previous year. The increase in labor costs and the expenditure on production and research and development capability for strengthening future growth led to an operating income of 54.1 billion yen (US$448.4 million), a 7.8 percent decrease from the previous year.
In other areas, mainly the South American region, including Brazil and Argentina, sales totaled 56.9 billion yen (US$471.9 million), a 1.3 percent increase from the previous year. The operating income totaled 0.9 billion yen (US$7.1 million), a 112.7 percent increase from the previous year.
"Considering business conditions, such as the decrease in car production mainly in Japan and Asia and Oceania, and the depreciation of the yen, we have decided to upwardly revise the original forecasts for the full-year financial results," said Ito.
Denso also announced plans to elect Koji Arima as new president and CEO after the annual shareholders meeting in June. Current President and CEO Nobuaki Katoh will be promoted to chairman.
“I am both honored and determined to lead DENSO to further success as we continue to focus on developing world-first technologies, innovations in manufacturing, and true globalization,” Arima said. “I am dedicated to meeting the needs of our current and future customers, as well as fostering a sense of community and collaboration among DENSO’s 140,000 global employees.”
Arima joined DENSO in 1981, after earning a bachelor’s degree in Engineering from Kyoto University in Kyoto, Japan. He currently serves as senior executive director of DENSO’s Manufacturing Innovation Center.
Before assuming leadership of the Manufacturing Innovation Center, Arima’s assignments included serving as president of DENSO Manufacturing Italia and as executive director of DENSO’s Engine Electrical Systems Business Unit. Additional overseas experience included a stint at DENSO Manufacturing Tennessee in Maryville, Tennessee.
Katoh has served as DENSO’s president and CEO since June 2008. Katoh led DENSO through the economic recession that followed the Lehman Brothers bankruptcy and the instability caused by the Great East Japan Earthquake, focusing on sustainable growth and increasing localization.
“It has been my honor and pleasure to serve as DENSO’s president for the past seven years,” said Katoh. “Arima has the qualities DENSO needs to stay competitive in the rapidly changing global business environment—a clear vision for the future, strong leadership and global experience, and broad business perspective.”
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