Slide 1: Business Results, Second Quarter of Fiscal Year Ending March 31, 2015
Minebea ty Excwed Previaicn Business Results Second Quarter of Fiscal Year Ending March 31, 2015 November 5, 2014 Minebea Co., Ltd.
Slide 2: Financial Results; Policy and Strategy
Minebea Paserun to Excved Previaion 1. Financial Results 2. Policy and Strategy
Slide 3: Financial Results
Minebea Paserun to Excved Previaion Financial Results Hiromi Yoda Managing Executive Officer
Slide 4: First half consolidated business results
Looking at consolidated business results for the first half of the fiscal year ending March 31, 2015, we see that net sales were up 19.8% year on year to total 216,557 million yen. Operating income climbed 90.4% year on year to reach 24,761 million yen while net income hit 17,817 million yen, twice
Slide 5: Second quarter results
For the second quarter of the fiscal year ending March 31, 2015, net sales were 117,025 million yen. That’s up 22.6% from the same period last year and an increase of 17.6% over the previous quarter. Operating income jumped to 14,237 million yen for an increase of 50.4% from the same period last yea
Slide 6: Net sales
In the second quarter of the fiscal year ending March 2015, sales were up 17.6% from the previous quarter to total 117.0 billion yen. It was another record high surpassing the previous quarter’s total, due to a significant sales volume increase for LED backlights. Net sales have continued to climb y
Slide 7: Operating income
Operating income for the second quarter jumped to 14.2 billion yen, a new record high surpassing the former record set in the previous quarter. Our operating margin improved 1.6 percentage points from the previous quarter to hit 12.2%. Operating income, which has continued to increase year-on-year f
Slide 8: Machined Components segment
Second quarter net sales for the Machined Components business segment rose 1.3% from the previous quarter to total 37.1 billion yen. Operating income was up 2.3% from the previous quarter to reach 9.8 billion yen. The operating margin rose 0.3 percentage points to hit 26.4%. Robust demand continued
Slide 9: Electronic Devices and Components segment
In the Electronic Devices and Components business segment, second quarter net sales totaled 79.7 billion yen, a whopping increase of 27.1% from the previous quarter. Operating income in the mean time was 2.3 times higher than it was last quarter, hitting 6.9 billion yen. The operating margin was 8.7
Slide 10: Net income
As operating income increased, net income for the second quarter jumped 60.8% from the previous quarter to total 11.0 billion yen. Major extraordinary losses included a 0.4 billion yen loss from restructuring efforts at our US subsidiary aimed at realigning the workforce which followed on the heels
Slide 11: SG&A expenses
Second quarter SG&A expenses increased 1.1 billion yen from the previous quarter to total 14.9 billion yen due to a huge jump in sales. However, the SG&A expenses-to-sales ratio continued its drop, by 1.0 percentage point further from the previous quarter, to 12.8%.
Slide 12: Inventories
Inventories at the end of the second quarter were up 10.7 billion yen compared to the previous quarter end to total 78.1 billion yen. This uptick was due to an impact of increased sales as well as a foreign exchange gain of 4.5 billion yen.
Slide 13: Capital expenditures and depreciation
Capital expenditures for the first half came to 15.7 billion yen while depreciation and amortization expenses for the period totaled 12.1 billion yen. We originally planned to curb capital spending below depreciation and amortization expenses this fiscal year since we already aggressively expanded o
Slide 14: Net interest-bearing debt and free cash flow
Net interest-bearing debts, which are interest-bearing debts minus cash and cash equivalents, totaled 105.3 billion yen at the end of the second quarter, down 4.6 billion yen from the end of the previous fiscal year. Free cash flow for the first half was a positive 9.3 billion yen. We revised upward
Slide 15: Upward revision of full-year forecast
When we announced our first quarter results this past July, we made an upward revision to the first half forecast. Since we have surpassed that target in the second quarter and the business is moving squarely on track we have decided to make another upward revision to the forecast for the second fis
Slide 16: Revised forecasts by business segment
This slide shows the revised forecasts by business segment.
Slide 17: Management policy and business strategy
Now I would like to talk about our management policy and business strategy.
Slide 18: Performance surpassing forecasts for sixth consecutive quarter
We achieved performance surpassing forecasts for the sixth consecutive quarter, and were also able to revise record-high forecasts for net sales, ordinary income and net income upwards. I think you can consider even this forecast to be a conservative one. As an aside, we had a plan called the 5 & 5
Slide 19: Three-year Medium-Term Business Plan revision
We announced our three-year plan this May, and if operating income reaches the 50 billion yen mark this fiscal year, we will hit the target for the third year of the Medium-Term Business Plan in one year, so in this respect we regret the error we made in setting the target so low. We need to revise
Slide 20: Two pillars of the business
In addition to the machined components business segment, the electronic devices and components segment has developed into a pillar of our business, marking the completion of two pillars. When I went on my first IR tour to the US as President, and explained that I would like to establish the machined
Slide 21: Machined components and the Five Arrows
The machined components business segment has continued to grow steadily, and I believe we will reach the target for the first of the Five Arrows for ball bearings next fiscal year. The combined shipment volume for internal and external sales of ball bearings was 242 million units in September, the h
Slide 22: LED backlights sales target
One area I think everyone is concerned about or interested in is LED backlights. Our new sales target for this year is 125 billion yen. Around this time last year, I explained that the target for the fiscal year was 60 billion yen and that we expected sales to be 80 to 100 billion yen the following
Slide 23: New investment in LED backlight business
Yesterday, a decision was made in the Senior Executive Officer Council to make a new investment of 16.3 billion yen in the LED backlight business. We planned 2.3 billion yen in the original forecast, but this was raised to 5 billion yen in July, and 16.3 billion yen this time. Considering the reason
Slide 24: Three (plus one) tail winds
It says there are three (plus one) tail winds for Minebea products, and the first wind is the fact that the global economy has grown steadily and that there has been a steady expansion of wealth since the Lehman crisis. The second wind is the increase in demand for higher quality and greater functio
Slide 25: Tail winds and smartphone market outlook
(Continued from previous page) However, the end of monetary easing by the US resulted in the weakening of Asian currencies. The yen weakened further with the recent surprise, and the deficits posted by overseas subsidiaries all became profits, ensuring the effect of the weak yen was positive this ti
Slide 26: Motors profitability
As explained earlier about motors, fixed expenses of each individual business being borne by a variety of areas has helped, and along with the increased utilization of the Cambodian Plant, we are progressively boosting profits at present.
Slide 27: Expansion of EMS
One of the Five Arrows was the expansion of EMS (Electro Mechanics Solutions® (*registered in Japan)), which I registered the name as a trademark as soon as I was appointed President. This is aimed at releasing complex products combining a variety of our technology. At first, my plan was for 50 bill
Slide 28: China ball bearing joint venture
We launched a joint venture in China to manufacture ball bearings. I have mentioned this on numerous occasions in the past, but we have tried to make our own second brand to target the low-priced, mass produced ball bearing market several times in the past, but unfortunately could not increase the y
Slide 29: Wireless technology and Smart Display Light
We are conducting a variety of research on wireless technology, and we have invested in Swiss wireless networking company Paradox, with four Swiss personnel currently working in this building. I will introduce our products next year, but today I would like to tell you about the Smart Display Light t
Slide 30: Current state of the Five Arrows
The current state of the Five Arrows is shown here. We have taken the initiative to capture future demand next to smartphones. 29
Slide 31: Capital expenditure plan
Our capital expenditure includes 16.3 billion yen to be invested in LED backlights on an order basis as mentioned earlier. Furthermore, I gave instructions to make investments to strengthen operations in our recent Business Unit Meeting. This is not simply investment in increased production. We have
Slide 32: Dividend forecast
We had originally forecast a dividend of 8 yen per share this fiscal year. This was raised to 10 yen in July and 12 yen now. As a management executive, I think it is my job to ride this wind and make an effort to so. Making investments to increase the earning capacity of Minebea is in the best inter
Slide 33: M&A approach
With regard to M&A, the cost of overseas deals has increased due to the weakening of the yen. However, the euro is still relatively undervalued, and we are focusing on European deals. We would also like to take any opportunities that are presented to us in Japan, and we would appreciate more time to
Slide 34: Minebea Co., Ltd.
Minebea Co., Ltd. Business Results http://www.minebea.co.jp/ Any statements in thes presentation which are net historical are fut, and executive judgments drawn fom currently available information 8 projections based on certain assump Please nate that actual performance may vary significantly trom a