Damien Germès talks about the future and recent performances in globally unprecedented times
1. Mr Germès, let us first start with a look at the results. How would you describe the performance of your company over the course of the last financial year which ended on 31 March?
DG: NGK SPARK PLUG performed impressively throughout the latest financial year, with an overall global turnover of 3.7 billion Euros, a figure which everybody in the company can be proud of. This number represents a historic company sales record, with an increase compared to the previous financial year despite the first negative effects of the Covid-19 pandemic. All Group divisions made notable contributions. Our Automotive Components Group, which encompasses OE and IAM, continued to perform strongly, with a sales development approximately twice as high as the automotive average. In addition, the growing Technical Ceramics Group, which includes medical products, had very promising results, generating a combined 18% of the overall global turnover. The performance throughout the latest financial year demonstrates that we are a financially robust company, well-equipped to overcome the current extraordinary global situation.
2. You oversee the company's EMEA region. How did this particular part perform during the last financial year?
DG: Personally, I am very pleased with our development within the EMEA region, which is making significant progress and a major contribution to the overall company, accounting for 27% of global sales. Our business grew in the OE and IAM over the last financial year, with sales of spark and glow plugs increasing by more than 5%, and those of oxygen sensors reaching nearly 10% growth.
These results are a testament to our high levels of customer satisfaction. Customer satisfaction has always been a main focus, and now levels are particularly high. The OE business was recognised by the Ford Motor Company as a top-performing global supplier at the 21st Annual Ford World Excellence Awards, receiving a Smart Brand Pillar World Excellence Award for achieving the highest levels of excellence in quality, cost, performance and delivery. Additionally, the IAM business was awarded ‘Supplier of the Year’ by the automotive international trading group, ‘Autodistribution International’ (ADI). Being considered worthy of such distinctions is very gratifying. Moreover, our Net Promoter Score (NPS), which measures the willingness of customers to recommend a company, has obtained a very impressive score of 65 for our IAM business, well over the average benchmark value of 44.
3. The Covid-19 pandemic is having an unprecedented impact on global business. What effect do you see it having on the company’s overall turnover in the current financial year? Has it presented any opportunities as well?
DG: As of now, it is hard to evaluate the overall impact which Covid-19 will have on the company, but NGK SPARK PLUG is a strong, stable and dynamic company, well-equipped to withstand challenges, and even turn them into opportunities. This has been demonstrated by the highly positive experiences we’ve had in terms of creating flexible work environments for our employees and accelerating digitalisation projects which we had already put in place. In addition, the pandemic has created opportunities for our medical sector companies. It may come as a surprise to some, but we have been active in the medical industry for a considerable amount of time. For example, our subsidiary CAIRE Inc., which we acquired in 2018, has seen a significant increase in demand for its oxygen supply equipment, confirming it as a prudent investment by NGK SPARK PLUG.
4. The internal combustion engine (ICE) is expected to see a large decline in use by the mid-2030s. How is NGK SPARK PLUG adapting to this challenge?
DG: Although the internal combustion engine (ICE) will see a decline, people are still going to be driving cars in the future, just ones with different powertrains. This means that our automotive business will remain equally important to us, just with our focus shifting towards different powertrain components.
Apart from that, structures have already been implemented to transform NGK SPARK PLUG into a more wide-ranging company, with new business targets and products. These are beginning to bear fruit, with a major increase in returns expected from these areas over the next 10 to 20 years.
We plan to increase investments in new and growth business, aiming for 40% of our global turnover coming from non-ICE-related sales by 2030, further increasing to 60% by 2040.
5. How do you see the company adapting to future developments concerning climate change?
DG: Part of our company philosophy, named the ‘Nittoku Way’, concerns the duty we have to future generations. Fighting climate change requires a joint effort and we are playing our part. Our plugs and sensors already contribute to reducing CO2 emissions. In addition, we are constantly investigating new sustainable business areas. These include solid oxide fuel cells, solid-state batteries and power to gas (PTG), which have already led to exciting opportunities.
6. The development of technology, products, and businesses which contribute positively to social issues is of utmost importance to NGK SPARK PLUG. Which future developments in these areas are you most excited about?
DG: All areas are exciting and have potential. Now it is necessary to acquire more diversified knowledge because we will be sharing different business domains with new competitors. Our 2040 Vision named ‘Beyond ceramics, eXceeding imagination’ gives the company the direction it needs to reinvent itself and to drastically change beyond the current way. With our Long-Term Management Plan called ‘NITTOKU BX’, we have set the milestones for the next 10 years which will light the path towards achieving our company vision. ‘NITTOKU BX’ will see our company establish strong business pillars in four different business fields which will secure our competitiveness in the long run. Working towards these goals will allow NGK SPARK PLUG to contribute to society, strengthen our foundations and capture new business opportunities.
7. Can you tell us more about these business pillars?
DG: These four strong business pillars are: ‘Environment & Energy’, ‘Mobility’, ‘Medical’ and ‘Communication’ and they are based on the UN’s 17 ‘Sustainable Development Goals’ (SDGs). However, our core competences of today will pave the way for the development of innovative and exciting solutions in these four areas. For me, the most exciting transformation will happen in ‘Mobility’, since our company already has a very strong foothold in an automotive industry that is undergoing radical transformation. We will continue to play a major role in ‘Mobility’ in the future. We will extend our offers, for example, by providing maintenance services tailored to fit the lifestyles of our customers, as well as Mobility-as-a-Service (MaaS) to fit special needs. Moreover, our roots in ceramics will continue to make a significant company contribution, with ceramic components being used to improve electric power in electric vehicles.
8. What are the main goals planned for the next 10 years?
DG: Over the past 10 years we have made a lot of progress as a company within our current areas of business. A main long-term goal, therefore, will be the transformation of our business portfolio and investing in new businesses. These milestones will go hand in hand with a clarification on our organisational responsibilities, as well as creating a strong ‘Change with Will’ culture within our company society to achieve the outlines of our vision.
9. Could you elaborate on the company’s plans on promoting cultural reform and diversity with regard to human resources?
DG: Promoting cultural reform and diversity within our company means building a workforce that reflects our globally diverse image. This means becoming a more progressive company where the fostering of common values that benefit all employees is given precedence. A company where employees are empowered to think outside of the box and take risks. This also means promoting more women to leading positions. The same applies to foreign nationals who work for us. It should always be the best person getting the job.
10. The ‘Nittoku Way’ was the management philosophy until now. How will this be reflected in the new vision, ‘NITTOKU BX?’
DG: The ‘Nittoku Way’ continues to be our philosophy, which contains and explains our four corporate values: ‘Sincerely, do our very best’, ‘Believe in one’s own ability, and take actions by oneself’, ‘Unite efforts with the people of the world, and utilise each other’s differences’, and ‘Have cherished desire, and carry it through till the end’. They form the base of our 2030 Long-Term Management Plan ‘NITTOKU BX’: ‘BX’, two letters taken from the 2040 Vision ‘Beyond ceramics, eXceeding imagination’, come as an addition, providing direction for the next 20 years. During this period, we will become a company that coexists with the world and society, featuring diverse human resources, that reflect our ‘Change with Will’ culture.
11. ‘Beyond ceramics, eXceeding imagination’ is the long-term vision up to 2040. How would you describe this new direction?
DG: This vision perfectly sums up the new and exciting directions which NGK SPARK PLUG is going in. Although our company has its roots in the manufacture of ceramics, we will transform into a multi-faceted organisation, comprised of passionate individuals working together to face challenges head-on in order to bring about a better society. NGK SPARK PLUG will become a company that transcends the imagination, with technology that transcends boundaries.