Expanding the European platform and product portfolio through the acquisition of Hay Group

「Although we continued to implement improvement measures such as cost controls, sales declined despite the impact of foreign exchange movements, among other factors. Revenue was ¥41,176 million, down 2.3% year on year, and the segment recorded a loss of ¥1,284 million, compared with a profit of ¥652 million in the same period of the previous year.」

「Although we continued to implement improvement measures such as cost controls, sales declined despite the impact of foreign exchange movements, among other factors. Revenue was ¥41,176 million, down 2.3% year on year, and the segment recorded a loss of ¥1,284 million, compared with a profit of ¥652 million in the same period of the previous year.」

「引き続きコスト管理などの改善施策を推進しましたが、為替の影響があった一方で販売が減少したこと等により、売上高は21,731百万円（同0.7％増）、セグメント損失は495百万円（前年同期は295百万円の利益）となりました。」

「In the European market, in light of the challenging market environment, we decided to undertake structural reforms centered on optimizing production capacity and reorganizing sites. We aim to transform the business into one capable of generating stable profits.」

「Amid a sluggish automotive market overall, continued improvement initiatives, including cost management, resulted in revenue of ¥42,158 million, down 11.6% year on year, and a segment profit of ¥652 million, compared with a profit of ¥15 million in the same period of the previous year.」

「(Europe) As customer demand continued to decline, revenue was ¥89,274 million, down 7.1% year on year, and the segment posted a loss of ¥740 million, compared with a profit of ¥145 million in the previous fiscal year.」

「(Europe) Despite lower customer demand, revenue was ¥47,691 million, down 1.9% year on year, partly reflecting the impact of the weaker yen. The segment posted a profit of ¥15 million, compared with a loss of ¥9 million in the same period of the previous year.」

「The additional shares acquired represented 19.99% of the voting rights. The purpose of the additional acquisition was to maximize value for the Group by making Musashi Holdings Europe GmbH a wholly owned subsidiary, taking into account its existing business and coordination with our Group.」

「(Europe) Despite continuing inflation, revenue was ¥71,033 million, up 12.2% year on year, reflecting the pass-through of higher material costs to selling prices and the impact of the weaker yen. The segment posted a profit of ¥332 million, compared with a loss of ¥2,446 million in the same period of the previous year.」

「(Europe) Despite continuing inflation, revenue was ¥48,618 million, up 14.3% year on year, reflecting the pass-through of higher material costs to selling prices and the impact of the weaker yen. The segment loss was ¥9 million, compared with a loss of ¥1,074 million in the same period of the previous year.」

「(Europe) Despite continuing inflation, revenue was ¥24,620 million, up 18.3% year on year, reflecting the pass-through of higher material costs to selling prices and the impact of the weaker yen. The segment loss was ¥344 million, compared with a loss of ¥1,001 million in the same period of the previous year.」

「(Europe) Revenue was ¥87,456 million, up 31.0% year on year, reflecting the pass-through of higher material costs to selling prices and the impact of the weaker yen. The segment loss was ¥3,401 million, compared with a loss of ¥2,764 million in the previous fiscal year, due in part to the impact of significant inflation, including higher electricity costs, and the effects of responding to production fluctuations caused by semiconductor shortages.」

「(Europe) Despite ongoing cost reductions, the pass-through of higher material costs to selling prices, and the positive impact of the weaker yen, the significant impact of inflation resulted in revenue of ¥63,311 million, up 34.0% year on year, and a segment loss of ¥2,446 million, compared with a loss of ¥2,837 million in the same period of the previous year.」

「(Europe) Despite ongoing cost reductions, the pass-through of higher material costs to selling prices, and the positive impact of the weaker yen, the significant impact of inflation resulted in revenue of ¥42,537 million, up 29.9% year on year, and a segment loss of ¥1,074 million, compared with a loss of ¥1,269 million in the same period of the previous year.」

「(Europe) Revenue was ¥20,811 million, up 16.4% year on year, while the segment loss was ¥1,001 million, compared with a loss of ¥107 million in the same period of the previous year.」

「(Europe) Revenue was ¥66,783 million, up 26.9% year on year, reflecting the pass-through of higher raw-material costs to selling prices and other factors. On the earnings front, the segment loss was ¥2,764 million, compared with a loss of ¥2,326 million in the previous fiscal year, due in part to higher energy costs.」

「(Europe) Revenue was ¥47,260 million, up 32.6% year on year, while the segment loss was ¥2,837 million, compared with a loss of ¥2,065 million in the same period of the previous year.」

「(Europe) Revenue was ¥32,749 million, up 60.4% year on year, while the segment loss was ¥1,269 million, compared with a loss of ¥1,875 million in the same period of the previous year.」

「(Europe) Revenue was ¥17,872 million, up 167.1% year on year, while the segment loss was ¥107 million, compared with a loss of ¥1,908 million in the same period of the previous year.」

「Following a review of the future outlook for the European and global automotive market environment for Musashi Europe GmbH, a consolidated subsidiary, we reduced the carrying amount to the recoverable amount because the total estimated cash flows over the originally assumed period are expected to decrease.」

「In Europe, we changed the corporate names of the former HAY Group companies acquired in 2016, adding “Musashi” to the names of all locations to unify the brand name, thereby seeking to further increase recognition of the Musashi brand and strengthen integration with the Musashi Europe companies.」

「With Musashi Europe, acquired two years ago and formerly part of the HAY Group, we have enhanced our development capabilities and competitiveness by creating synergies in forging and machining technology, strengthened our business base in Europe, and increased our presence in global markets. We also changed the corporate names of the former HAY Group companies, adding “Musashi” to the names of all locations and unifying the brand name, thereby seeking to further increase recognition of the Musashi brand in Europe and strengthen integration with the Musashi Europe companies.」

「During the cumulative consolidated first quarter, we changed the names of the companies in the HAY Group acquired two years ago to names incorporating “Musashi.” Through this change, we aim to accelerate integration, increase recognition of the Musashi brand in Europe, and enhance the value of the Group.」

「On the business front, to maximize synergies with the HAY Group, we are advancing motorcycle-component manufacturing using the ultra-high-speed forging machines in which the HAY Group has particular expertise, broadly deploying its large-gear manufacturing technology, and strengthening sales activities focused on European customers.」

「In addition, at our Indonesian facility, we are advancing plans to manufacture motorcycle components using the ultra-high-speed forging machines in which the HAY Group has particular expertise.」

「We are pursuing technical exchanges to combine the respective strengths of the HAY Group, as well as further improvements in production efficiency.」

「In Europe, robust HAY Group results accompanying the recovery in the commercial vehicle market resulted in revenue of ¥18,794 million, 12.5 times the year-earlier figure, and segment profit of ¥661 million, up 183.1% year on year.」

「On 10 August 2016, the company entered into a basic agreement to transfer 25% of the shares in the Group to SUMITOMO CORPORATION (SUMITOMO SHOJI KAISHA,LTD.). Based on this basic agreement, the transfer to SUMITOMO CORPORATION (SUMITOMO SHOJI KAISHA,LTD.) was completed on 31 March 2017.」

「The results for the nine months ended 30 September 2016 include the consolidated results of Musashi Holding Europe GmbH, the parent company of Hay Holding GmbH acquired on 30 June 2016, for the third quarter from 1 July 2016 to 30 September 2016.」

「Meanwhile, to strengthen its business platform in Europe and further enhance its presence in global markets, the company acquired shares in Hay Holding GmbH, headquartered in Germany. Through this transaction, the Group took a step toward further strengthening its business platform by expanding its product lineup in the powertrain business, enhancing its ability to develop unit products through technology integration, and building strong relationships, particularly with leading automakers and suppliers in Europe. For the business combination with Hay Holding GmbH conducted on 30 June 2016, provisional accounting treatment had been applied because the purchase price allocation had not been completed during the first quarter of the fiscal year. The purchase price allocation was finalized during the second quarter, and goodwill increased by ¥8,558 million as of the end of the second quarter.」

「At a meeting of the Board of Directors held on 9 May 2016, the company resolved to acquire all shares of Hay Holding GmbH, headquartered in Germany, through a special-purpose company (SPC), making the company and its subsidiaries into consolidated subsidiaries, and entered into a share transfer agreement on the same date.」

「Through this acquisition, we will strengthen our business platform in Europe and enhance our presence in global markets, while expecting synergies in production, development and sales. We will achieve a major advance as a truly global company with high competitiveness worldwide.」