Slide 1: Business Results, Second Quarter of Fiscal Year Ending March 31, 2013
Business Results Second Second Quarter Quarter of of Fiscal Fiscal Year Year Ending Ending March March 31, 31, 2013 2013 November 2, 2012 Minebea Co., Ltd.
Slide 2: 1. Financial Results 2. Policy and Strategy
1. Financial Results 2. Policy and Strategy November 2, 2012 1
Slide 3: Financial Results
Financial Results Hiroharu Katogi Director, Senior Managing Executive Officer November 2, 2012 2
Slide 4: Summary of Consolidated Business Results for 1H
Summary of Consolidated Business Results for 1H Despite of yen appreciation and increased labor costs, sales and profits rebounded from the Tohoku Earthquake and the Thai Floods. But, we missed the initial targets. FY ended FY ending 1H of FY ending Change Mar. '12 Mar. '13 Mar. '13 (Millions of yen
Slide 5: Summary of Consolidated Business Results for 2Q
Summary of Consolidated Business Results for 2Q Despite of a continued but slow rebound from the Thai Floods, sales and profits momentum weakened due to yen appreciation and global economic slowdown. Many product markets started to shrink gradually from early autumn. FY ended FY endi ng Change (Mi l
Slide 6: Net Sales Quarterly
Net Sales Quarterly Increased 4.2% YoY (Billions of yen) Increased 2.7% QoQ 80.0 67.9 69.8 67.5 67.6 68.6 70.5 63.9 64.8 62.2 60.0 56.7 40.0 20.0 0.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q FY 3/11 FY 3/12 FY 3/13 November 2, 2012 5
Slide 7: Operating Income Quarterly
Operating Income Quarterly Increased 6.9% YoY (Billions of yen) Increased 8.5% QoQ 10.0 9.1% 10% 8.9% 8.3% 8.0 8% 6.6% 6.0 6.3 5.5% 5.7% 6.0 5.6 5.4% 6% 4.2 4.0 4.0 3.6% 3.7 3.7 4% 2.7% 2.3 2.0 1.5% 2% 1.7 0.9 0.0 0% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q FY 3/11 FY 3/12 FY 3/13 Operating income Operating ma
Slide 8: Machined Components Business Quarterly
Machined Components Business Quarterly Net sales Operating income (Billions of yen) Pivot assemblies (Billions of yen) Rod-ends/Fasteners 30.0 Operating Income Operating Margin 30.0 Ball bearings 8.0 28.2 28.0 7.5 27.5 27.1 7.3 26.8 26.6 26.3 27.0 7.1 7.1 7.0 6.9 6.8 24.4 6.5 30% 8.7 6.3 7.4 8.0 7.0
Slide 9: Rotary Components Business Quarterly
Rotary Components Business Quarterly Net sales Operating income (Billions of yen) (Billions of yen) Operating Income 30.0 1.0 Operating Margin 5% 26.7 25.6 26.1 25.3 24.9 24.3 24.3 24.1 1.0% 0.5 22.1 0.3 0.1% 0.0 0.0 20.0 19.3 0.0 0% 0.0% -1.6% -2.1% -2.1% -2.3% (0.5) (0.4) (0.5) (0.5) (0.5) 10.0 (1
Slide 10: Electronic Devices & Components Business Quarterly
Electronic Devices & Components Business Quarterly Net sales Operating income (Billions of yen) (Billions of yen) Operating Income 16.0 Measuring components 2.0 20% 15.0 Operating Margin Electronic devices 15.4% 14.0 2.3 1.5 1.5 12.3% 15% 12.1 1.3 12.0 10.9 8.4% 10.7 10.5 2.2 1.0 0.9 10% 10.0 9.7 1.
Slide 11: Other Business Quarterly
Other Business Quarterly Net sales Operating income (Billions of yen) Operating Income (Billions of yen) Keyboards Operating Margin 6.0 Speakers 5.7 Special devices & Other 5.1 0.4 7.4% 8% 4.7 0.3 4.4 5.3% 4.1 4.0 6.1% 4.0 2.7 3.8 2.6 2.6 0.2 0.2 4% 2.0 1.9 1.8 1.4 2.2% 2.2% 0.1 2.8 0.1 0.1 1.1 0.5
Slide 12: Net Income Quarterly
Net Income Quarterly Decreased 4.7% YoY Increased 16.5% QoQ (Billions of yen) (yen) 8.0 20.0 16.4 6.2 6.0 10.0 9.2 8.7 10.0 3.8 5.6 5.4 4.0 3.5 4.8 4.6 3.3 1.8 1.8 2.1 2.0 2.0 1.7 0.0 0.7 (8.1) 0.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q (10.0) FY 3/11 FY 3/12 FY 3/13 (2.0) (3.1) (4.0) (20.0) Net income Net i
Slide 13: S.G. & A. Expenses Quarterly
S.G. & A. Expenses Quarterly (Billions of yen) 15.0 11.7 11.8 30% 11.5 11.4 11.7 11.0 11.1 10.9 10.9 10.6 10.0 19.2% 17.3% 16.5% 17.5% 17.6% 20% 16.5% 16.3% 16.4% 17.1% 16.8% 5.0 10% 0.0 0% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q FY 3/11 FY 3/12 FY 3/13 S.G. & A. expenses S.G. & A. to sales ratio November 2,
Slide 14: Inventories Quarterly
Inventories Quarterly (Billions of yen) 60.0 54.8 51.8 50.0 49.0 46.5 42.7 44.0 44.3 45.3 41.7 39.3 40.0 30.0 20.0 10.0 0.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q FY 3/11 FY 3/12 FY 3/13 November 2, 2012 13
Slide 15: Net Interest-Bearing Debt Yearly
Net Interest-Bearing Debt Yearly (Billions of yen) (Billions of yen) 160.0 Net interest-bearing debt Free cash flow (right axis) 128.5 130.7 129.6 30.0 120.0 109.6 114.2 110.0 103.6 23.4 96.9 22.7 15.0 80.0 17.7 12.5 40.0 (4.2) 0.0 (8.8) (13.3) (11.2) 0.0 (15.0) Mar.'07 Mar.'08 Mar.'09 Mar.'10 Mar.'
Slide 16: Capital Expenditure & Depreciation Yearly
Capital Expenditure & Depreciation Yearly (Billions of yen) Capital Expenditure Depreciation & Amortization Expenses 40.0 Initial forecast 36.0 Revised forecast except new building purchase 30.0 26.4 29.0 27.3 27.3 24.6 24.9 24.0 20.2 21.1 20.8 19.6 20.8 19.7 20.0 17.0 11.1 9.6 10.0 0.0 Mar.'07 Mar.
Slide 17: Forecast for Fiscal Year Ending March 31, 2013
Forecast for Fiscal Year Ending March 31, 2013 Full year forecast is revised downward due to global economic slowdown Fiscal Year ending FY ended Fiscal Year ending Mar. '13 Mar.'13 Mar. '12 Initial forecast (Millions of yen) 2H Full Year Full Year 1H revised revised YoY 2H Full Year Forecast Foreca
Slide 18: Forecast for Business Segment
Forecast for Business Segment FY ended FY endi ng Mar. '13 Change Mar. '12 (Millions of yen) 2H Full Year Ful l year 1H revised revised YoY Forecast Forecast Net sal es 251,358 139,101 152,899 292,000 +16.2% Machined components 107,037 56,944 54,256 111,200 +3.9% Rotary components 91,363 50,219 51,2
Slide 19: Policy and Strategy
Policy and Strategy November 2, 2012 Yoshihisa Kainuma Representative Director, President and Chief Executive Officer 18
Slide 20: Changing Business Environment
Changing Business Environment Rebound from the earthquake and the floods OP margin improved in all business segments Changing business environment Global economy slowdown gathers force (European debt crisis lengthen, China slows down) → HDD market cools down (PC sales sluggish) → Factory automation,
Slide 21: HDD market cooling and the pivot business
HDD market cooling and the pivot business PC sales fail to thrive, leading (Million units) HDD shipping volume (quarterly) to HDD market’s sudden chill 200 190 Actual Initial forecast Revised forecast 183 181 Downward revision of pivot sales projections for this FY 157 150 150 146 HDD market medium-
Slide 22: Changing Business Environment
Changing Business Environment Rebound from the earthquake and the floods OP margin improved in all business segments Changing business environment Global economy slowdown gathers force (European debt crisis lengthen, China slows down) → HDD market cools down (PC sales sluggish) → Factory automation,
Slide 23: HDD spindle motor business
HDD spindle motor business HDD market cooling 2Q falls just short of actual break-even targets Restoration of post-Thai Floods in-house production capacity nearly complete Renewal of new facilities for greatly increased productivity Maintaining servers and 7mm height high-value-added products at cen
Slide 24: Changing Business Environment
Changing Business Environment Rebound from the earthquake and the floods OP margin improved in all business segments Changing business environment Global economy slowdown gathers force (European debt crisis lengthen, China slows down) → HDD market cools down (PC sales sluggish) → Factory automation,
Slide 25: Business Mix, Product Mix, Market Mix
Minebea’s strengths in the current business environment Business Mix Retaining diversified businesses Product Mix Supplying a wide range of products from general- purpose to high-value-added products Market Mix Supplying parts to a variety of product markets Sales Region Mix Supplying products globa
Slide 26: Focus on cash flow
Changing business environment and actions in response Unfavorable business environment foreseen for 2H as well Responding to the changing environment with a shift from active investment to selective investment Focus on cash flow ・ Curbing unnecessary/non-urgent capital expenditure ・ Compressing inve
Slide 27: Focus on cash flow and curbing of capital expenditure
Focus on cash flow and curbing of capital expenditure Focus on cash flow and curbing non-urgent capital expenditure, given the increase in net interest-bearing debts (Billions of yen) (Billions of yen) (Billions of yen) 40.0 Capital Expenditure Initial 160.0 Depreciation & Amortization Expenses fore
Slide 28: Focus on cash flow
Changing business environment and actions in response Unfavorable business environment foreseen for 2H as well Responding to the changing environment with a shift from active investment to selective investment Focus on cash flow ・ Curbing unnecessary/non-urgent capital expenditure ・ Compressing inve
Slide 29: Focused Measures in 2H
Focused Measures in 2H Turn Japanese customers’ China Plus One into a business chance ・ Draw out merits of Cambodia and Philippines plants ・ Accelerate expansion of hybrid components Complete rotary components structural reform by March 2013 Further enhance machined components business Strengthen bu
Slide 30: Draw out merits of Cambodia and Philippines plants
Draw out merits of Cambodia and Philippines plants Minebea is China Plus Two In Cambodia, micro actuators and brush DC motors production shift now taking place. Since time is required to organize reception structure and customers’ approval, completion within this FY is the target. Brushless motors,
Slide 31: Focused Measures in 2H
Focused Measures in 2H Turn Japanese customers’ China Plus One into a business chance ・ Draw out merits of Cambodia and Philippines plants ・ Accelerate expansion of hybrid components Complete rotary components structural reform by March 2013 Further enhance machined components business Strengthen bu
Slide 32: Re-expansion of hybrid components sales
Re-expansion of hybrid components sales Sales Target : ¥25.2 billion for this FY ¥50.0 billion for FY3/15 Enhance R&D (Billions of yen) Composite products net sales 50.0 50.0 40.0 35.0 30.0 25.2 19.4 19.4 20.0 Focus Focus on on medical, medical, automotive, automotive, photographic, photographic, an
Slide 33: Focused Measures in 2H
Focused Measures in 2H Turn Japanese customers’ China Plus One into a business chance ・ Draw out merits of Cambodia and Philippines plants ・ Accelerate expansion of hybrid components Complete rotary components structural reform by March 2013 Further enhance machined components business Strengthen bu
Slide 34: Complete rotary components structural reform by March 2013
Complete rotary components structural reform by March 2013 Reduce deficits in unprofitable businesses Complete production shift to Cambodia by March 2013 Establish sound profit structure regardless of economic cycle European Motion Technologies business unit turned profitable in September Moatech sa
Slide 35: Focused Measures in 2H
Focused Measures in 2H Turn Japanese customers’ China Plus One into a business chance ・ Draw out merits of Cambodia and Philippines plants ・ Accelerate expansion of hybrid components Complete rotary components structural reform by March 2013 Further enhance machined components business Strengthen bu
Slide 36: Toward the next fiscal year
Toward the next fiscal year New Medium-term Business Plan Targets (Billions of yen) Boost ball bearing sales (Sales) (Operating Income) （Operating Margin） Focus on applications other than 500 50 for HDD pivot assemblies 8.3% 5.3% Expand sales in rod-ends and 400 40 fasteners 3.4% 350.0 300 292.0 29.
Slide 37: Global economic slowdown and ball bearings business
Global economic slowdown and ball bearings business Ball bearings sales volume Global economic slowdown & (Million units) (external sales + internal sales) HDD market’s sudden chill 250 242 Actual Initial forecast Revised forecast Downward revision of sales projections for this FY 215 200 Change in
Slide 38: Toward the next fiscal year
Toward the next fiscal year New Medium-term Business Plan Targets (Billions of yen) Boost ball bearing sales (Sales) (Operating Income) （Operating Margin） Focus on applications other than 500 50 for HDD pivot assemblies 8.3% 5.3% Expand sales in rod-ends and 400 40 fasteners 3.4% 350.0 300 292.0 29.
Slide 39: Steady orders in rod-end fastener business
Steady orders in rod-end fastener business Boeing, Airbus commercial aircraft deliveries Aircraft orders increase, (Number of aircraft) aircraft parts market continues to expand Boeing deliveries medium-term. 1,400 Airbus deliveries 1,200 Sales and profitability continue to increase Minebea 1,000 st
Slide 40: Toward the next fiscal year
Toward the next fiscal year New Medium-term Business Plan Targets (Billions of yen) Boost ball bearing sales (Sales) (Operating Income) （Operating Margin） Focus on applications other than 500 50 for HDD pivot assemblies 8.3% 5.3% Expand sales in rod-ends and 400 40 fasteners 3.4% 350.0 300 292.0 29.
Slide 41: Sales & profits jump up in LED backlight business
Sales & profits jump up in LED backlight business Solid profit contribution in 2H (Billions of yen) LED Backlight Sales 50.0 Solutions at hand for technical problems in various fields 40.0 Sales for tablet PCs and smartphones show sharp rise 30.0 Toward further increased sales, tablet PC-sized produ
Slide 42: Toward the next fiscal year
Toward the next fiscal year New Medium-term Business Plan Targets (Billions of yen) Boost ball bearing sales (Sales) (Operating Income) （Operating Margin） Focus on applications other than 500 50 for HDD pivot assemblies 8.3% 5.3% Expand sales in rod-ends and 400 40 fasteners 3.4% 350.0 300 292.0 29.
Slide 43: Opening of Tokyo Research Development Center under president's direct control
Opening of Tokyo Research Development Center under president’s direct control Positioning as a profit-center rather than cost center ・ In new Tokyo Headquarters building purchased in August 2012, opening planned at the beginning of 2013 (about 60 employees to begin with) ・ In Tokyo, where researcher
Slide 44: Toward the next fiscal year
Toward the next fiscal year New Medium-term Business Plan Targets (Billions of yen) Boost ball bearing sales (Sales) (Operating Income) （Operating Margin） Focus on applications other than 500 50 for HDD pivot assemblies 8.3% 5.3% Expand sales in rod-ends and 400 40 fasteners 3.4% 350.0 300 292.0 29.
Slide 45: M&A and alliance strategies
M&A and alliance strategies Given current economic trends, large-scale M&As to be handled cautiously for the moment Precedence given to enhancing machined components business ・ Enhance various alliances in machined components business field ・ In other business fields as well, use M&A and alliances a
Slide 46: Toward the next fiscal year
Toward the next fiscal year New Medium-term Business Plan Targets (Billions of yen) Boost ball bearing sales (Sales) (Operating Income) （Operating Margin） Focus on applications other than 500 50 for HDD pivot assemblies 8.3% 5.3% Expand sales in rod-ends and 400 40 fasteners 3.4% 350.0 300 292.0 29.
Slide 47: Dividend Policy
Dividend Policy Dividend FY03/2013 interim dividend: 3 yen/share Dividend forecast for FY03/2013: Year-end: 4 yen/share Total year: 7 yen/share Dividend Policy Our basic dividend policy gives priority to enhancing equity efficiency and improving returns to our shareholders, with dividends reflecting
Slide 48: Minebea Co., Ltd.
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 from currently available information. Please note that actual performance may vary significantly