Slide 1: Business Results, Fiscal Year Ended March 2013
Minebea Passion to Exceed Precision Business Results . Fiscal Year Ended March | 2013 May 9, 2013 Minebea Co., Ltd.
Slide 2: 1. Financial Results 2. Policy and Strategy
May 9, 2013 Minebea Passion to Exceed Precision 1. Financial Results 2. Policy and Strategy
Slide 3: Financial Results
May 9, 2013 Minebea Passion to Exceed Precision Financial Results Hiroharu Katogi Director, Senior Managing Executive Officer
Slide 4: Net sales for fiscal year ended March 2013 increased 12.4%
Net sales for the fiscal year ended March 31, 2013, increased by 12.4% to total 282,409 million illi yen on a year-on-year basis. b i O Operating ti iincome also l iincreased dbby 18 18.3% 3% tto 10 10,169 169 million yen. However, net income dropped by 69.5% to 1,804 million yen. While sales had re
Slide 5: Fourth quarter of fiscal year ended March 2013
The fourth quarter of fiscal year ended March 31, 2013 saw significant and precipitous production d ti adjustments dj t t iin our major j products d t as d demand d ffellll with ith th the sinking i ki global l b l economy. Net sales during the quarter decreased 0.1% quarter-on-quarter to reach 71,6
Slide 6: Summary Text of the Presentation of Fiscal Year
Summary Text of the Presentation of Fiscal In the fiscal year ended March 31, 2013, Year net sales were up 12.4% year on year at 282.4 billion yen, which hi h iincludes l d a fforeign i exchange h Ended gain March i off 7 7.8 31, yen d 8 billi billion due tto th the d depreciation i ti off th the Ja
Slide 7: Operating income for the fiscal year increased 18.3%
Operating income for the fiscal year ended March 31, 2013 increased by 18.3% year on year t 10.2 to 10 2 billi billion yen while hil the th operating ti margini was up by b 00.2 2 percentage t points i t tto 3 3.6%. 6% O Our estimates indicate that foreign exchange rates have caused our operating in
Slide 8: Machined components business segment
Now I will touch on each business segment. Th These graphs h show h annuall nett sales l and d operating ti iincome ffor th the machined hi d componentst bbusiness i segment. Net sales for the fiscal year ended March 31, 2013 totaled 113.6 billion yen, up 6.1% from the previous fiscal year. Operatin
Slide 9: Rotary components business segment
In the rotary component business segment, net sales for the fiscal year ended March 31, 2013 i increasedd 11 11.6% 6% ffrom th the previous i fi fiscall year att 101 101.9 9 billi billion yen while hil year-on-year operating losses widened to 4.4 billion yen. HDD spindle motors experienced an extrao
Slide 10: Electronic devices and components business segment
In the electronic devices and components business segment, net sales for the fiscal year ended d dM Marchh 31 31, 2013 were 57 57.2 2 billi billion yen, a 50 50.9% 9% jjump ffrom th the previous i fi fiscall year d due to a large increase in LED backlight sales which made up most of the electronic d
Slide 11: Other business segment
In the other business segment, net sales for the fiscal year ended March 31, 2013 were 9.7 billi yen, d billion down 35 35.5% 5% year on year ddue tto th the d downsizing i i off our kkeyboard b db business i d during i the previous fiscal year. Operating income was 0.2 billion yen while the operati
Slide 12: Net income decreased 69.5%
Net income for the fiscal year ended March 31, 2013 decreased by 69.5% from the previous fi fiscal l year tto ttotal t l 1.8 1 8 billi billion yen with ith nett iincome per share h ttotaling t li 4 4.8 8 yen. This drop was caused by extraordinary gains totaling 7.1 billion yen and extraordinary loss
Slide 13: SG&A expenses
SG&A expenses for the fiscal year ended March 31, 2013 increased by 2.8 billion yen year on year to t total t t l 47.1 47 1 billi billion yen as sales l iincreased. d HHowever, d due tto our expense reduction d ti efforts, the SG&A expenses-to-sales ratio decreased by 0.9 percentage points to 16.7%.
Slide 14: Inventories
Inventories as of March 31, 2013 were up 9.2 billion yen year on year. This uptick was due to a positive iti currency iimpactt off 8 billi billion yen as wellll as iincreased d sales. l Wh When sales l b began tto taper off in the second quarter we responded by cutting back production of ball bearin
Slide 15: Capital expenditures and depreciation
Capital expenditures for the fiscal year ended March 31, 2013 totaled 43.7 billion yen while d depreciation i ti andd amortization ti ti expenses ffor th the period i d ttotaled t l d 20 20.8 8 billi billion yen. Capital expenditures for the fiscal year exceeded spending in recent years mainly becau
Slide 16: Net interest-bearing debt
This graph shows annual net interest-bearing debt, which is total interest-bearing debt minus cash h andd cash h equivalents. i l t Net interest-bearing debt at the end of the fiscal year rose 22.0 billion yen year on year to total 136.2 billion yen. This increased debt is due to increased cash need
Slide 17: Forecast for fiscal year ending March 2014
This is a summary of our forecast for the fiscal year ending March 31, 2014. We are expecting significantly higher sales and profits due to increased sales from ball bearings, aircraft parts, hybrid components and LED backlights as well as improved motor business profitability due to restructuring.
Slide 18: New business segments and forecasts
Following the structural reorganization that took place in April, we will change our business segmentt classifications l ifi ti starting t ti this thi fi fiscall year. Our new business segment categories include, machined components, electronic devices and components, other, as well as adjustment. M
Slide 19: Policy and Strategies
Now let's move on to policy and Strategies. 18
Slide 20: Second-half forecast versus actual results
As explained earlier, our forecast for the second half of the fiscal year ended March 2013 was, I' sorry to I'm t say, quite it different diff t from f the th actual t l results. lt While Abenomics seems to have given the Japanese economy a shot in the arm, market conditions during the period of Jan
Slide 21: Second-half sales volume versus target
As you can see from the graph here, actual sales volume for the second half of the fiscal year ended d dM Marchh 2013 ffellll short h t off our ttarget. t Th The percentages t off our ttargets t mett iinclude l d 92% ffor bearings, 87% for pivot assemblies, and 84% for motors. LED backlight sales we
Slide 22: Criteria for expanding, restructuring or terminating businesses
This slide shows the criteria we use to decide on which business to expand, restructure, or t terminate. i t 21
Slide 23: Target market portfolio
This slide shows the market portfolio we are aiming for and how we are going to realize it from now on. 22
Slide 24: Expected growth in machined components, LED backlights, hybrid components
We expect markets and sales to expand for machined components, LED backlights, and h b id components. hybrid t 23
Slide 25: Machined components and A&A strategy
Based on the outlook that the HDD market will remain flat, we have been stepping up our efforts, ff t since i January, J to t increase i sales l off ball b ll b bearings i tto markets k t we were unable bl tto ffocus on when we were too busy supplying products to the HDD market. These efforts paid o
Slide 26: Ball bearing market outlook
While ball bearing sales bottomed out in the second half of the last fiscal year, I believe the ball bearing market will definitely expand as the growth of emerging economies raise standard of living along with the sales of luxury products. Currently ball bearing sales are up and may soar even highe
Slide 27: Rod ends and Boeing 787
We do not expect any major problems with rod ends now that the Boeing 787 will be back in th air. the i 26
Slide 28: Pivot assemblies outlook
We project that pivot assembly sales will remain flat although we expect to see a new type of HDD application li ti forf network t k access servers in i the th future, f t which hi h will ill h hopefully f ll iimprove th the HDD market. In the area of high value-added products entailing strict quali
Slide 29: LED backlights
We saw demand for LED backlights spiral downward in the months of January through March. Whil we h While hadd expected t d iin th the b beginning i i off th the llastt fi fiscall year th thatt sales l might i ht exceed d our 50 billion yen target and reach 60 billion yen, production of LED backlight
Slide 30: Hybrid components sales target
We have been aiming for 50 billion yen in hybrid components sales, and now that the Tokyo R Research h&DDevelopment l tCCenter t iis up and d running, i we will ill speed d up efforts ff t tto iincrease sales. l 29
Slide 31: Turbocharger bearings
In looking at our machined components, I would like to turn your attention to our turbocharger b i bearings. T Today's d ' need d ffor ffuel-efficient, l ffi i t energy saving i vehicles hi l iis d driving i i d demand d ffor automobile turbochargers up. While the market currently consumes 20 millio
Slide 32: Ultra-thin light guide plate
We have also successfully developed a new, ultra-thin light guide plate for LED backlights with ith a thickness thi k off less l than th 0.3 0 3 mm. This Thi ddevelopment l t makes k us ththe only l manufacturer f t who h can manufacture products less than 0.3 mm thick via mold injection. The major
Slide 33: Structural reforms in response to market changes
What may be problematic is the structural reforms we need to implement in response to the changes h iin markets. k t W We h have tto di dissolve l ththe jjoint i t venture t with ith P Panasonic i tto cutt overlapping l i costs, and we also had to restructure our operations for micro actuators, HDD
Slide 34: Restructuring of information motor business
We posted an impairment loss on non-performing assets for HDD spindle motors. On top of that, we had to pull out of the coreless vibration motor business in March, which left us with little choice but to close all the business' factories in China and let all the employees there go. These tough measu
Slide 35: Streamlining MMMC operations and production shifts
We streamlined MMMC operations to cut indirect costs. Growing sales of high-value added products gave us a bigger share of the HDD spindle motor market while ongoing work to cut depreciation costs should put our monthly performance on the plus side starting in May. We finished shifting micro actuato
Slide 36: Foreign exchange and loss-making businesses
Now for the most difficult part. Foreign exchange factors have the biggest impact on our business segments that are running in the red. Although we implemented structural reforms for these businesses, we are still experiencing persistent problems affecting our overall operations. As technology chang
Slide 37: Termination of coreless vibration motor and speaker businesses
As you can see from the slide, we decided to terminate the coreless vibration motor and speaker k b businesses. i 36
Slide 38: Organizational changes
We made some organizational changes in line with the changes in our overall strategies. Th These changes h iincluded l d d reorganizing i i our manufacturing f t i di divisions i i iinto t th the El Electronic t i D Device i & Component Manufacturing Headquarters and the Machined Components Manufact
Slide 39: Organizational Reform
' = Z Minebea Organizational Reform: Aims Passion to Eceed Proiion Increase efficiency and speed of operations Maximize synergy between sales and R&D via the new Electronic Device & Component Manufacturing HQ Major organizational changes ® Minebea absorbed Minebea Motor Manufacturing Corp., turning
Slide 40: Impact of weak yen on balance sheet
The weak yen not only had a negative but also a positive impact on our balance sheet as b tt fforeign better i currency ttranslation l ti adjustments dj t t quickly i kl bbrought ht th the nett D/E ratio ti up tto 1.0. 10 39
Slide 41: M&A and alliance strategies
As far as our M&A and alliance strategies, while we were preparing for some major M&A d l th deals, the ffallll off th the yen since i N November b 2012 hhas ddriven i purchase h prices i up over 20% on a yen basis. In light of this development, we will think twice before entering into any large M&A
Slide 42: myonic acquisition of APB's business assets
myonic bought APB's business assets. APB specializes in bearings with inner diameters ranging i ffrom 80 mm tto 800 mm ththatt are used d iin tturn ttables bl ffor machine hi ttools. l Ihhear th thatt th the European market for high precision AX bearings generates 8 billion yen annually. Once myonic
Slide 43: Capital and business alliance with KJP
This is about the capital and business alliance with KJP we announced at 5:00 p.m. today. 42
Slide 44: New Matsuida plant for special devices
Our special device business has seen growing demand from the Ministry of Defense due to recentt events. t WeW have h broken b k ground d in i Matsuida M t id on a new plant l t outlined tli d hhere. The factory will have enough space to produce various types of actuators, not only for defense-relate
Slide 45: Annual dividend of 7 yen per share
We will propose to pay an annual dividend of 7 yen per share. 44
Slide 46: Medium-term business plan targets
While current market conditions have required us to revise the targets set in our medium-term b i business plan, l we will ill work k tto achieve hi an operating ti iincome th thatt goes b beyond d th these ttargets. t 45
Slide 47: Business Results
May 9, 2013 Minebea Co., Ltd. Business Results http://www.minebea.co.jp/ Any statements in this presentation which are not historical are future projections based on certain assumptions and executive judgments drawn trom currently available information. Please note that actual performance may vary s