Minebeamitsumi Inc. · TSE:6479
Minebeamitsumi — Q1 2023 Earnings Presentation
53 slides from Minebeamitsumi's earnings presentation, Aug 5, 2022
Slide 1: Business Results First Quarter of Fiscal Year Ending March 31, 2023
Business Results First Quarter of Fiscal Year Ending March 31, 2023 MinebeaMitsumi Inc. August 5, 2022
Slide 2: Today's Agenda
Today’s Agenda 1. Financial Results 2. Business Update & Management Strategy August 5, 2022 2
Slide 3: Financial Results
Financial Results Katsuhiko Yoshida Director, Senior Managing Executive Officer August 5, 2022 3
Slide 4: Summary of Consolidated Business Results for 1Q
Summary of Consolidated Business Results for 1Q Net sales hit 1Q record high Operating income exceeded initial forecasts, despite impact of the lockdown FY3/22 FY3/23 Change (Millions of yen) 1Q 4Q 1Q YoY QoQ Net sales 248,305 289,532 251,040 +1.1% -13.3% Operating income 19,628 21,671 14,255 -27.4%
Slide 5: Net Sales, Operating Income/Margin
Net Sales, Operating Income/ Margin (Billions of yen) Net sales Operating income Operating margin 304.3 289.5 275.7 282.0 274.3 251.0 248.3 251.0 Excluding special factors such as the lockdown in Shanghai approx. ¥8.3bn in 1Q 187.5 25.8 25.0 22.6 21.7 19.6 19.6 17.5 14.3 10.7 8.9% 8.5% 7.9% 3.4 6.4%
Slide 6: 1Q Actual: Differences from the Forecast as of May
1Q Actual: Differences from the Forecast as of May (Billions of yen) 251.0 245.0 Net Sales 14.3 12.0 Operating Income August 5, 2022 6
Slide 7: Machined Components
Machined Components Net sales (Billions of yen) Operating income (Billions of yen) Ball bearings Rod-ends/Fasteners Pivot assemblies Operating income Operating margin 26.9% 27.0% 24.8% 24.5% 22.0% 20.9% 20.1% 20.0% 18.2% Special Special factor factor approx. approx. -¥0.4bn -¥0.4bn 46.0 46.4 44.1 44
Slide 8: Electronic Devices & Components
Electronic Devices & Components Net sales (Billions of yen) Operating income (Billions of yen) Motors Electronic devices Sensing devices Other Operating income Operating margin 8.7% 5.6% 4.7% 6.0% 6.5% 4.1% 4.1% 2.7% 0.2% 98.6 94.9 96.2 1.1 93.7 8.7 90.7 1.1 90.4 0.9 90.7 1.4 1.1 8.9 0.9 1.0 9.1 9.3
Slide 9: MITSUMI Business
MITSUMI Business Net sales (Billions of yen) Operating income (Billions of yen) Operating income Operating margin 10.2% 11.3% 9.5% 10.5% 8.7% 134.2 6.8% 6.6% 3.6% 114.3 0% 110.7 111.0 -1.0% 107.2 15.2 86.8 79.4 11.3 76.8 10.2 9.9 9.1 7.6 56.6 5.1 2.9 (0.6) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3
Slide 10: U-Shin Business
U-Shin Business Net sales (Billions of yen) Operating income (Billions of yen) Operating income Operating margin 5.4% 4.5% 2.9% 0% -0.1% -0.2% -0.9% -0.9% 39.9 36.9 1.7 36.1 36.0 -7.9% 1.2 1.2 32.7 30.7 32.3 -13.9% 26.6 (0.1) (0.0) (0.3) (0.3) 15.6 (2.2) (2.5) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
Slide 11: Profit Attributable to Owners of the Parent / EPS
Profit Attributable to Owners of the Parent / EPS (Billions of yen) Profit for the period attributable to owners of the parent Earnings per share, basic (yen) 20.4 18.4 16.1 15.5 14.7 13.2 50.4 45.4 10.7 38.2 39.5 36.1 32.3 7.2 26.4 2.2 17.6 5.4 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY3/21 FY3/22 FY3/
Slide 12: Inventory
Inventory (Billions of yen) 264.4 224.6 214.1 219.3 204.4 195.5 186.5 174.3 171.4 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY3/21 FY3/22 FY3/23 August 5, 2022 12
Slide 13: Net Interest-bearing Debt / Free Cash Flow
Net Interest-bearing Debt / Free Cash Flow (Billions of yen) Net interest-bearing debt * Free cash flow 179.7 Including CB** of ¥13.2bn which has been almost all converted 117.0 34.0 84.4 86.9 75.2 83.0 46.5 42.9 23.2 21.7 14.8 (27.9) (85.3) FY3/19 FY3/20 FY3/21 FY3/22 FY3/23 FY3/23 1Q Forecast *Net
Slide 14: Forecast for Fiscal Year Ending March 31, 2023
Forecast for Fiscal Year Ending March 31, 2023 There are various up and down factors, but no need to change the initial plan FY3/22 FY3/23 (Millions of yen) Full Year 1st Half 2nd Half Full Year YoY Net sales 1,124,140 568,000 632,000 1,200,000 +6.7% Operating income 92,136 41,000 61,000 102,000 +10
Slide 15: Forecast for Business Segment
Forecast for Business Segment FY3/22 FY3/23 (Millions of yen) Full Year 1st Half 2nd Half Full Year YoY Net sales 1,124,140 568,000 632,000 1,200,000 +6.7% Machined components 177,470 96,000 99,000 195,000 +9.9% Electronic devices and components 371,023 184,500 210,500 395,000 +6.5% MITSUMI business
Slide 16: Business Update & Management Strategy
Business Update & Management Strategy August 5, 2022 Yoshihisa Kainuma Representative Director, CEO & COO August 5, 2022 16
Slide 17: Today's Points
Today's Points Achieved 1Q targets despite the impact of Shanghai lockdown over a period of two months. Took a cautious view of changes in the macroeconomic environment Overall such as inflation. New third growth strategy following organic growth and M&A. (explained later) Overview of M&A an
Slide 18: Today's Points (2): Adhere to the initial plan
Today's Points (2) Adhere to the initial plan （with possibility of transitory profits) The sale process of the Tokyo Headquarters in Mita is progressing well. → Possible gain on sale of property (not included) PPAs for M&As carried out this time will be conducted after closing. → Potential upsid
Slide 19: 3 spears + 1
3 spears + 1 August 5, 2022 19
Slide 20: Ball Bearing Business Update
Ball Bearing Business Update Strong performance maintained regardless of macroeconomic trends Despite a two-month shutdown at the Shanghai plant, initial plan is expected to be achieved Keywords Strong sales 1 Increase usage per one car + increase market share, also for data centers. Miniature/small
Slide 21: Motor Business Update
Motor Business Update Sales expected to reach initial plan despite lockdown Keywords Motor Sales by Application (Billions of yen) Sales recovery 300.0 1 Sales recovered in June and increase from August onwards. The effects of the price revision will be seen from now on. 267.2 Other OA & IT Strong sp
Slide 22: Analog Semiconductor Business Update
Analog Semiconductor Business Update There are some up and down factors, but on track overall Keywords 1 1Q plan achieved Achieved initial plan despite Shanghai lockdown and semi-conductor shortage. 2 The annual operating profit plan is also expected to be achieved Slowdown in PC/smartphones, etc.,
Slide 23: Optical Device Business Update
Optical Device Business Update Exceeding initial forecast Keywords 1 Loading rate increase Significant growth in TAM of the key product, accompanied by a significant increase in sales. 2 Everything's ready Production prepared for the coming demand season - no problems. 3 Start new business Expansion
Slide 24: Growth strategy
Growth strategy August 5, 2022 24
Slide 25: Sustainability is the Essence of Our Business
Sustainability is the Essence of Our Business Mitigate risk via INTEGRATION of various technologies, products, and markets with synergy Sustainable Growth Possible risk factors Temporary slowdown in PC/smartphone demand Impact of China’s lockdown Delay in resolving semiconductor shortage Fur
Slide 26: Eight Spears Strategy - Selection and Concentration with Synergy
Eight Spears Strategy - Selection and Concentration with Synergy - Because of the VUCA era... 1 Bearings 2 Motors 3 Analog semiconductors Spears 4 Access products 5 Sensors What is the definition of “Spear"？ 1. Products that are sold in a niche market within a big market 6 Connectors/switches 2. Pro
Slide 27: Growth Strategy through FY3/29 (Overview)
Growth Strategy through FY3/29 (Overview) 1 Organic Growth As global GDP grows, disposable income per person in the market rises. Sales of high-end functional products will increase the necessity for high-end components 2 M&A Integrate companies with synergies, mainly in the eight spears produ
Slide 28: Growth Strategy through FY3/29 (Products to Solve Social Issues)
Growth Strategy through FY3/29 (Products to Solve Social Issues) Social issues to be solved Low birthrate/aging, Population, Healthcare, Remote healthcare EV, Autonomous driving, Environment, Robotics, Energy, Climate change, etc. New technologies of the Fourth Industrial Revolution will solve socia
Slide 29: Efforts to Solve Social Issues
Efforts to Solve Social Issues Cultivate and INTEGRATE 8 Spears technologies to solve social issues Analog Access Connectors Power supply Wireless/com./ 1 Bearings 2 Motors 3 4 5 Sensors 6 /switches 7 components 8 software semi. products Autonomous driving and telemedicine as an example. Analog Sens
Slide 30: New M&A deals
New M&A deals August 5, 2022 30
Slide 31: Commencement of TOB of Honda Tsushin Kogyo
Commencement of TOB of HONDA TSUSHIN KOGYO CO.,LTD. 1. Outline of HONDA TSUSHIN KOGYO CO.,LTD. Name HONDA TSUSHIN KOGYO CO.,LTD. Osaki MT Building, 5-9-11, Kitashinagawa, Shinagawa-ku, Tokyo, Address Japan Title and Name of Kinji Kashio, President and Representative Director Representative Manufactu
Slide 32: Acquisition of All Shares of Sumiko Tec
Acquisition of All Shares of SUMIKO TEC CO., LTD. ２. Outline of SUMIKO TEC CO., LTD. Name SUMIKO TEC CO., LTD. 4F, Prime Shin-Yokohama Building, 2-3-19, Shin-Yokohama, Address Kohoku-ku, Yokohama-shi, Kanagawa, Japan Title and Name of Yoshiyuki Ebihara, President & Representative Director Representa
Slide 33: Solidify the Foundation as 8 Spear by Integrating Companies
Solidify the Foundation as８Spear by Integrating 3 Companies Achieving synergy in technology, production, and sales to global niche top connector manufacturers Global sales force as Tier1 manufacturers In-house automated equipment Oversea plants Design engineering Terminal & Component Techn
Slide 34: Connectors' Future with Ultra High-Speed Communications
Connectors' Future with Ultra High-Speed Communications As high-speed transmission advances, needs for signals, shapes (downsizing and weight reduction), etc., diversifies and expands. Diversifying connector needs CLOUD High High Multi Down High Lighting Reliability Custom Speed Capacity Connection
Slide 35: Image of connector-related in-vehicle products after integration
Image of connector-related in-vehicle products after integration Various product lineups to meet diversifying and expanding needs ECU AV equipment Monitor Antenna Compact power supply- HONDA TSUSHIN KOGYO con. HSD/FAKRA FAKRA I/F In-vehicle SUMIKO TEC camera ECU, monitor Waterproof relay MinebeaMits
Slide 36: Aiming for sales of 50 billion yen and operating income of 5 billion yen
Solidify the Foundation as８spear by Integrating 3 Companies Aiming for sales of 50 billion yen and operating income of 5 billion yen 50.0 FY3/22 Net Sales （billion yen） 33.8 18.5 Operating Margin 9.8 10% 5.5 Simple aggregation FY28 Target August 5, 2022 36
Slide 37: Acquisition of All Shares of Honda Lock Mfg. Co., Ltd.
Acquisition of All Shares of Honda Lock Mfg. Co., Ltd. 3. Outline Honda Lock Mfg. Co., Ltd. Name Honda Lock Mfg. Co., Ltd. 3700, Shimonaka, Sadowara-cho, Miyazaki-City, Miyazaki, Address Japan Title and Name of Noboru Takahashi, President & Representative Director Representative Manufacture and sale
Slide 38: Strengthening the access products business via integration
Strengthening the access products business via integration Establish Tier1 position and expand customer base Strengthen synergies in the access products business Products • Mainly key locks, outer door handles and mirrors. • Product areas overlap with U-Shin except for mirrors. Expand Tier1 biz due
Slide 39: Expand automotive Tier1 business based on access products
Expand automotive Tier1 business based on access products Greatly increase Tier1 business opportunity Automotive Product（Antenna）Business Resolver Receive Nissan Global Innovation Award Resolver for traction motor High-precision GNSS Antenna ※Electronic Devices Realize autonomous driving by high-pre
Slide 40: Strengthening the Access Products Business
Strengthening the Access Products Business Aiming for sales of 300 billion yen and operating margin of 10% Become a firm part of 8 spears 300.0 FY3/22 Net Sales （billion yen） 239.1 145.6 Operating 93.5 Margin 10% Simple aggregation FY28 Target August 5, 2022 40
Slide 41: Name of New Tokyo Base and Shareholders Return, etc
Name of New Tokyo Base and Shareholders Return, etc August 5, 2022 41
Slide 42: Name of the New Tokyo Base
Name of the New Tokyo Base MinebeaMitsumi Tokyo X Tech Garden Location 1-9-3 Higashi Shimbashi, Minato-ku, Tokyo, Japan Site area 5,518.54m2 Total floor area 53,078.82m2 Acquisition amount 73.2 billion yen Date of the conclusion the sale and purchase agreement December 24, 2021 Date of property tran
Slide 43: Conversion Status of Convertible Bonds
Conversion Status of Convertible Bonds 99.9% converted into shares, allocated by treasury stock （Reference） Euro-Yen Denominated Convertible Bonds with Stock Acquisition Rights Exercise due date July 20, 2022 Maturity date August 3, 2022 Conversion price 2,068 yen Amount of issue 20.0 billion yen To
Slide 44: Shareholders Return
Shareholders Return Shareholder return policy unchanged It will be implemented as appropriate to improve Share shareholder returns and equity efficiency and to buyback promote an appropriate and dynamic financial strategy that reflects our financial standing and other factors. We determine the annua
Slide 45: Forward-looking statements disclaimer
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 significantly from any particular projection due to various factors. Facto
Slide 46: Reference
Reference August 5, 2022 46
Slide 47: Machined Components
Machined Components Net sales (Billions of yen) Operating income (Billions of yen) Ball bearings Rod-ends/Fasteners Pivot assemblies Operating income Operating margin 25.8% 26.2% 25.4% 22.0% 195.0 19.8% 188.3 180.9 177.5 19.0 51.0 29.5 47.8 24.5 22.5 157.4 45.7 30.5 20.5 27.0 39.9 37.6 39.3 27.8 31.
Slide 48: Electronic Devices & Components
Electronic Devices & Components Net sales (Billions of yen) Operating income (Billions of yen) Motors Electronic devices Sensing devices Other Operating income Operating margin 5.8% 4.6% 4.8% 5.1% 4.4% 387.3 395.0 379.4 4.0 4.2 363.8 371.0 4.3 37.0 36.4 4.2 32.5 4.6 32.6 35.4 54.0 21.6 64.2 20.0 158
Slide 49: MITSUMI Business
MITSUMI Business Net sales (Billions of yen) Operating income (Billions of yen) Operating income Operating margin 10.5% 9.8% 7.2% 6.4% 6.6％ 447.0 5.5% 429.1 Excluding following one 47.0 361.0 time cost ABLIC PPA -¥2.1bn 41.8 Optical Device -¥1.9bn Total -¥4.0bn 308.4 292.2 Extraordinary expenses/los
Slide 50: U-Shin Business
As a result of change of the fiscal year end, U-Shin Business both net sales and operating income of FY12/18 are pre-merger results. FY3/20 does not include Jan.-Mar. 2019 results. JGAAP until FY12/18 Net sales (Billions of yen) Operating income (Billions of yen) Operating income Operating margin 16
Slide 51: S.G.&A. Expense / Ratio
S.G.&A. Expense / Ratio (Billions of yen) S.G.&A. expenses S.G.&A. to sales ratio 32.8 32.7 31.9 30.1 30.4 29.0 27.5 26.1 25.2 13.4% 13.0% 11.5% 12.1% 10.8% 11.3% 10.0% 10.5% 9.5% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY3/21 FY3/22 FY3/23 August 5, 2022 51
Slide 52: Capital Expenditure / D&A Expense
Capital Expenditure / D&A Expense (Billions of yen) Capital expenditure Depreciation & Amortization expenses 140.0** 85.0 ** 73.5** 54.2 50.1* 48.6 48.0 46.2 45.5 45.2 36.4 11.9 FY3/19 FY3/20 FY3/21 FY3/22 FY3/23 FY3/23 1Q Forecast * Capital expenditures of FY3/20 do not include the increase of asse
Slide 53: ROIC (Return On Invested Capital)
ROIC for U-Shin business are pre-merger result and based ROIC (Return On Invested Capital) on JGAAP, and are not included in the Total until FY3/19. JGAAP until FY3/18 MinebeaMitsumi ＝ NOPAT (Operating income + extraordinary profit/loss) x (1-tax rate) ROIC Invested capital (Notes receivable/account