Minebeamitsumi Inc. · TSE:6479
Minebeamitsumi — Q3 FY3/2019 Earnings Presentation
31 slides from Minebeamitsumi's earnings presentation, Feb 6, 2019
Slide 1: Introduction to Q3 FY3/2019 results
My name is Yoshida. Today I would first like to explain the consolidated financial results for the third quarter of the fiscal year ending March 31, 2019, and then Mr. Kainuma, Representative Director, CEO & COO, will explain the updates and present strategy on machined components, electronics devic
Slide 2: Consolidated results for Q3 FY3/2019
Consolidated net sales for the third quarter of the fiscal year ending March 31, 2019 totaled 249,570 million yen, up 11.2% year on year and up 5.6% quarter on quarter. Operating income was up 47.9% year on year and 58.6% quarter on quarter to total 31,124 million yen. Profit for the period attribut
Slide 3: Quarterly trend in net sales and operating income
This is the quarterly trend in net sales, operating income and operating margin. The bar graph on the left is net sales, and the one on the right is operating income along with a line chart for the operating margin. The operating margin for the third quarter was 12.5%, up 2.6 percentage points year
Slide 4: Q3 actual results versus November forecast by segment
Here shows the difference between forecast as of November and actual results for net sales and operating income by business segment for third quarter. While net sales for the machined components segment were almost on a par with the forecast, sales for the electronic devices and components segment,
Slide 5: Q2 versus Q3 results by segment
Here shows the difference between actual results for second quarter and third quarter, for net sales and operating income by business segment. Net sales for the machined components segment were almost on a par with second quarter. Sales for the electronic devices and components segment increased mai
Slide 6: Machined components segment results
Now let’s take a look at the results by segment, starting with machined components segment. On the left is a graph indicating quarterly net sales trends and on the right is a graph with a bar chart showing quarterly operating income trends along with a line chart for operating margins. Net sales for
Slide 7: Electronic devices and components segment results
This slide shows the results for the electronic devices and components segment. Net sales increased 31% quarter on quarter to total 114.4 billion yen. Looking at the results by product, we see that sales of motors dropped 4% quarter on quarter to reach 47.1 billion yen. Quarter on quarter sales of e
Slide 8: Mitsumi business segment results
Finally, let's look at the performance of the Mitsumi business segment. Net sales decreased 13% quarter on quarter to total 87.6 billion yen. While sales of optical devices and semiconductors increased, sales decreased for other products, primarily mechanical components. Operating income was 13.0 bi
Slide 9: Quarterly inventory trend
Next we have the quarterly inventory trend. At the end of the third quarter, inventories totaled 156.8 billion yen, which is 20.0 billion yen less than what it was three months ago. Although some smartphone related inventory increased, total amount decreased thanks to inventories that had been held
Slide 10: Net interest-bearing debt and free cash flow
This graph contains a bar chart showing trends in net interest-bearing debt, which is total interest-bearing debt minus cash and cash equivalents, and a line chart indicating free cash flows. At the end of the third quarter, net interest-bearing debt, totaling 47.0 billion yen, was down 5.5 billion
Slide 11: Forecast for fiscal year ending March 2019
This is a summary of the forecast for the fiscal year ending March 31, 2019. In fourth quarter, we foresee a slowdown of smartphone and HDD mainly from demand decrease in China in addition to the demand decrease due to the trade friction between US and China. Given this backdrop, we have revised our
Slide 12: Forecast by business segment
This is a summary of the forecast for the fiscal year ending March 31, 2019. In fourth quarter, we foresee a slowdown of smartphone and HDD mainly from demand decrease in China in addition to the demand decrease due to the trade friction between US and China. Given this backdrop, we have revised our
Slide 13: Q4 forecast versus November forecast by segment
This slide shows the difference between our fourth quarter forecast and the forecast announced in November along with the second quarter results for net sales and operating income by business segment. Net sales for the machined components segment will be almost on a par with the previous forecast. T
Slide 14: CEO highlights and outlook
Hello, I’m Yoshihisa Kainuma. First, I'd like to go over the highlights of today's presentation. Compared with our initially projected operating income of 28 billion yen, the third quarter results were pretty much within the margin of error excluding some special factors. Looking at the outlook, fir
Slide 15: China slowdown and shipment volume outlook
In short, although performance had been up until the third quarter, we have started to see the impact of China's economic slowdown. We must keep a close eye on how long the downturn in the Chinese market will continue. According to the forecast for the next fiscal year that I obtained today from sal
Slide 16: Commercial jet demand forecast
This is the demand forecast for commercial jets. Currently there are about 22,000 aircraft under operation. As airline fleets age, demand for replacement aircraft should hit 16,000 and a little over 17,000 for new aircraft in the next 20 years. In the meantime, we will boost our strength in this are
Slide 17: Motors and LED backlight outlook
As you have been informed, the motor business is losing steam mostly for HDD, office automation, and home appliance applications due primarily to declining demand in China. The situation for LED backlights is also somewhat bleak as mentioned earlier. On the bright side though, it’s been proven that
Slide 18: Optical devices and mechanical components outlook
When it comes to optical devices, we are often asked why we don't make more OISs, but I'm glad that we just have the right production capacity. I've always believed that placing too much emphasis on one particular industry would pose a risk in times like this. Although we’ve felt some impact, overal
Slide 19: U-Shin due diligence and integration
We are still working on the due diligence for U-Shin, which should be completed soon. We completed the procedure for meeting all competition law requirements. Now that we are ready for business integration, I spent all of last week visiting U- Shin's six European locations. I gave a one-hour livecas
Slide 20: New products: SALIOT and smart cities
As the slide here says, our "New Product Trio took off," and we finally started to get 100 to 200 orders a week for SALIOT. In addition to eight salespersons, we started selling the product to lighting companies we have contact with. We’ve gotten positive feedback from museums, including art museums
Slide 21: If you read the slide, you’ll see that I’ve already talked about this.
If you read the slide, you’ll see that I’ve already talked about this. 21
Slide 22: Reference
February 6, 2019 Reference 22 22
Slide 23: Difference between JGAAP and IFRS for 3Q FY3/18
Difference between JGAAP and IFRS for 3Q of FY3/18 (Billions of yen) -1.4 > 22.4 _ soa 04, 244 Operating -41.4 Ye — Income 70.5 Fair value Other differences Reversals of Shift from JGAAP measurement in accounting Goodwill non-operating/ ; IFRS of Employee methodology amortization extraordinary : sha
Slide 24: Machined Components
AAP until FY3/18, IFRS for FY3/19 a) -_ ra o i= 3 2. £ fo} O 5 ® = £ rs) © = Operating income {Billions of yen) Net sales (Billions of yen) —O- Operating margin se Operating income [_=Ballbearings =Rod-endsFasteners = Pivot assemblies = Other | 25.0% 24.9% & 4 4 Excluding ¥0.7bn of | 49.0 PPA impact
Slide 25: Electronic Devices & Components
Electronic Devices & Components *JGAAP until FY3/18, IF > for FY3/19 Net sales (Billions of yen) Operating income (Billions of yen) = Motors | ‘=== Operating income —o- Operating margin ] » Electronic devices » Sensing devices «= Other 445.5 441.6 451.5 389 3 ar 396.0 H { 8.9% 1 36.5} . 344.7 pa 6.9
Slide 26: Mitsumi Business
Mitsumi Business Net sales (Billions of yen) Operating income (Billions of yen) [ ‘=== Operating income —o- Operating margin 250.6 178.0 163.6 153.0 FY315 —FY3MG 0 FY3/17.FY3/18 : FY315 = FY316.—FY3N7T = F318 FY3/19E [GAAP] [GAAP] LIFRS 1 February 6, 2019 26 MinebeaMitsumi 26
Slide 27: Sustainability Topics
Sustainability Topics _ Setting ‘up Nomination and Compensation Committee > Established in December 2018 via revised Corporate Governance Code > Majority (3 out of 4) made up of independent outside directors > Chaired by an independent outside director Enhance independence, objectivity, and accounta
Slide 28: Other Financial Data
Other Financial Data 1 *JGAAP until FY3/18, IFRS for FY3/19 Net sales Operational profitimargin ene ont oe 249.6 2358 2259 236.3 213.0 1964 493.2 1674 154.8 120.3 Profit attributable to owners of the parenvEPS $.G.&A. expencelratio mene we) See eenecae owe me pee [ corte mnee oe sheen) February 6, 2
Slide 29: Other Financial Data: Capital Expenditure/D&A
Other Financial Data 2 *JGAAP until FY3/18, IFRS for FY3/19 Capital Expenditure/D&A Expense eae ree a FSS Frais FY3A7 FYS8 FY3A9 FYat9 Frans Prané Pn Prats FY3ng FY319 10-30 Forecast jt eur (UFRs} (our (UFRS) February 6, 2019 29 MinebeaMitsumi 29
Slide 30: ROIC (Return On Invested Capital)
ROIC (Return On Invested Capital) MinebeaMitsumi NOPAT *JGAAP until FY3/18, IFRS for FY3/19 (Operating income + extraordinary profit/ioss) x (1-tax rate) ROIC Invested capital (Notes receivable/accounts receivable + inventories + non-current assets - notes payable/accounts payable) Calculated using
Slide 31: February 6, 2019
February 6, 2019 MinebeaMitsumi Passion to Create Value through Difference Any statements in this presentation which are not historical are future projections based on certain assumptions and executive judgments drawn from currently available information. Please note that actual performance may vary