Minebeamitsumi Inc. · TSE:6479
Minebeamitsumi — Q2 FY3/18 Earnings Presentation
34 slides from Minebeamitsumi's earnings presentation, Nov 8, 2017
Slide 1: Business Results Second Quarter of Fiscal Year Ending March 31, 2018
Business Results Second Quarter of Fiscal Year Ending March 31, 2018 MinebeaMitsumi Inc. November 8, 2017
Slide 2: Financial Results; Policy and Strategy
1. Financial Results 2. Policy and Strategy November 8, 2017 2
Slide 3: Financial Results
Financial Results Katsuhiko Yoshida Managing Executive Officer November 8, 2017 3
Slide 4: Summary of Consolidated Business Results for 1H
Summary of Consolidated Business Results for 1H Net sales, operating income, ordinary income, and net income hit half year record highs FY3/17 FY3/18 Change 1H of FY3/18 (Millions of yen) 1H 1H YoY August Forecast VS. Forecast Net sales 275,133 429,027 +55.9% 436,400 -1.7% Operating income 18,594 41
Slide 5: Summary of Consolidated Business Results for 2Q
Summary of Consolidated Business Results for 2Q Net sales, operating income, ordinary income, and net income hit quarterly record highs FY3/17 FY3/18 Change (Millions of yen) 2Q 1Q 2Q YoY QoQ Net sales 154,844 193,204 235,823 +52.3% +22.1% Operating income 11,623 17,062 24,889 X2.1 +45.9% Ordinary i
Slide 6: Net Sales Quarterly
Net Sales Quarterly Net sales hit quarterly record high 235.8 （Billions of yen） 196.4 193.2 178.7 168.2 167.4 154.8 135.6 127.4 120.3 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q FY3/16 FY3/17 FY3/18 November 8, 2017 6
Slide 7: Operating Income Quarterly
Operating Income Quarterly OP hit quarterly record high, OPM recovered to 10%+ (Billions of yen) Operating income Operating margin 24.9 17.1 16.1 14.9 15.5 14.3 12.5 11.6 8.5 10.6% 9.8% 7.0 9.6% 8.9% 8.7% 8.8% 7.5% 7.3% 6.3% 5.8% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q FY3/16 FY3/17 FY3/18 November 8, 2017 7
Slide 8: Machined Components Quarterly
Machined Components Quarterly Net sales (Billions of yen) Operating income (Billions of yen) Pivot assemblies Operating income Rod-ends/Fasteners Operating margin Ball bearings 26.0% 25.6% 25.9% 24.7% 24.5% 24.3% 24.2% 42.3 26.5% 41.0 40.8 41.3 40.6 41.7 25.3% 39.8 39.2 24.5% 38.5 37.3 9.5 7.9 10.6
Slide 9: Electronic Devices & Components Quarterly
Electronic Devices & Components Quarterly Net sales (Billions of yen) Operating income (Billions of yen) Other Sensing devices Electronic devices Motors Operating income Operating margin 137.8 8.6% 0.7 133.1 7.3% 6.6% 9.4 128.7 1.0 6.5% 125.8 1.2 5.4% 5.5% 5.5% 4.9% 0.7 9.7 8.5 2.5% 9.7 117.4 11.4 1
Slide 10: Mitsumi Business Quarterly
Both net sales and operating income in and before 3Q FY3/17 are Mitsumi Business pre-merger results. 4Q FY3/17 results are based on managerial accounting for the three months. Quarterly Net sales (Billions of yen) Operating income (Billions of yen) Operating income Operating margin 10.8% 7.1% 7.9% 2
Slide 11: Net Income Quarterly
Net Income Quarterly Net income hit quarterly record high （Billions of yen） Income attributable to owners of the parent Net income per share (yen) 20.1 16.2 14.2 11.8 12.2 47.7 10.1 9.6 39.7 7.7 32.4 33.5 31.6 6.8 26.9 25.5 20.6 3.2 18.2 8.5 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q FY3/16 FY3/17 FY3/18 Novembe
Slide 12: S.G. & A. Expenses Quarterly
S.G. & A. Expenses Quarterly (Billions of yen) S.G. & A. expenses S.G. & A. to sales ratio 25.3 23.3 23.8 18.3 18.4 18.1 18.7 17.0 17.4 17.4 13.3% 14.5% 13.3% 12.1% 11.9% 12.3% 10.7% 10.9% 10.3% 10.4% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q FY3/16 FY3/17 FY3/18 November 8, 2017 12
Slide 13: Inventories Quarterly
Inventories Quarterly (Billions of yen) 163.2 134.0 126.7 118.1 120.4 103.0 94.5 96.4 96.7 87.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q FY3/16 FY3/17 FY3/18 November 8, 2017 13
Slide 14: Capital Expenditure & Depreciation
Capital Expenditure & Depreciation Yearly (Billions of yen) Capital Expenditure Depreciation & Amortization Expenses 48.0 43.9 37.6 34.8 33.0 31.8 28.8 28.2 23.7 22.3 20.7 14.9 Mar.'14 Mar.'15 Mar.'16 Mar.'17 Mar.'18 Mar.'18 1H Forecast November 8, 2017 14
Slide 15: Net Interest-Bearing Debt/Free Cash Flow
Net Interest-Bearing Debt/Free Cash Flow Yearly （ (Billions of yen) Net interest-bearing debt Free cash flow 109.9 97.5 93.1 70.9 67.4 36.3 45.0 39.3 11.5 24.2 24.5 -1.1 Mar.'14 Mar.'15 Mar.'16 Mar.'17 Mar.'18 Mar.'18 1H Forecast November 8, 2017 15
Slide 16: Share Buyback
Share Buyback 1. Resolution on the buyback at the Board Meeting on February 13, 2017 (1) Type of shares to be repurchased: Common stock of MINEBEA MITSUMI (2) Number of shares: Up to 12 million shares (3) Amount: Up to 15 billion yen (4) Period: From February 14, 2017 to September 22, 2017 2. Cumula
Slide 17: Forecast for Fiscal Year Ending March 31, 2018
Forecast for Fiscal Year Ending March 31, 2018 Expecting net sales, operating income, ordinary income & net income hit record highs FY3/17 FY3/18 (Millions of yen) 2H Full Year Full Year 1H Revised Revised YoY Forecast Forecast Net sales 638,926 429,027 380,973 810,000 +26.8% Operating income 49,015
Slide 18: Forecast for Business Segment
Forecast for Business Segment FY3/17 (Millions of yen) 1H 2H Revised Full Year Full Year YoY Actual Result Forecast Forecast Net sales 638,926 429,027 380,973 810,000 +26.8% Machined 156,310 82,374 80,626 163,000 +4.3% components Electronic devices and components 441,615 237,453 180,547 418,000 -5.3
Slide 19: Management Policy & Business Strategy
Management Policy & Business Strategy November 8, 2017 Yoshihisa Kainuma Representative Director, CEO & COO November 8, 2017 19
Slide 20: Evaluation of 1H (FY3/18) Results
Evaluation of 1H (FY3/18) Results Both sales and income greatly surpass half-year records! ● All products from Mitsumi business contributed to boosting earnings Key Points from 1H ● LED backlights production volume recovered form previous year ● Ball bearing productivity improvements progressed stea
Slide 21: Key Points of Full Year Revised Forecast (FY3/18)
Key Points of Full Year Revised Forecast (FY3/18) Conservative forecast for 2H due to uncertainty of smartphone components ● Machined components: Productivity improvement of ball bearing and recovery of rod-ends & fasteners Key Points ● Electronic devices & components: Conservative assumption on LED
Slide 22: Operating income analysis
Operating income analysis Former Minebea business boosts earnings as well! (billions of yen) +17.7 73.0 +9.0 +5.6 +1.5 -0.7 -3.5 +3.4 49.0 Including Mistumi OP of 2.3 bn yen FY3/17 FY3/18 OP FY3/17 FY3/18 Headquarter Machined Electronic Mitsumi OP (Actual) Expense for Expense for Expenses Components
Slide 23: Ball Bearing Business Strategy
Ball Bearing Business Strategy Establish monthly production of 285 million units/month this fiscal year for substantial increase in income ● External sales demand continues to be robust External ball bearing sales (million units/month) (1) Automotive, (2) high-end home appliances and 210 (3) data ce
Slide 24: LED Backlight Business Strategy
LED Backlight Business Strategy Business opportunities for LED backlights still continue! 1. This year’s forecast at mostly unchanged from original plan ● Solid demand for our ultra-thin processing technology ● Completion of accelerated depreciation to contribute to earnings ● Automotive LED backlig
Slide 25: New development of high sensitivity/high resistance strain gauge (MINEGE)
New development of high sensitivity/high resistance strain gauge (MINEGETM) “Gauge of dreams” a reality after 15 years of R&D What’s Outstanding: Solving the “curling” issue ｜General mechanism of strain gauges｜ ｜Strain gauge single element｜ Resolved the “curling” issue by controlling expansion coeff
Slide 26: Mitsumi Business Strategy
Mitsumi Business Strategy Established as third pillar of earnings with ongoing improvements in profitability Tremendous contribution on profit 1. OIS/VCM productivity improvements will progress , and the business will continue to grow 2. Mechanical components will continue to grow as a result of syn
Slide 27: Aiming for Medium- to Long-Term Growth: Automotive Applications
Aiming for Medium- to Long-Term Growth: Automotive Applications Automotive innovation & high functionality to lead to creation of new business opportunities Expecting growth of ball bearings/motors/sensors/connectors/coils/antennas/wireless modules etc. EV Environment / Energy consumption Automotive
Slide 28: Major Areas Driving Future Growth
Major Areas Driving Future Growth Major growth areas 5 pillars Smartphones Automotive ＋ Game consoles Machined components (Robots/Aerospace) New products about to be taken to market ・Haptics ・ High sensitivity /high resistance strain gauges ・6 axis sensors ・ NEW SALIOT, etc. November 8, 2017 28
Slide 29: Medium-Term Business Outlook
Medium-Term Business Outlook Big potential to achieve 1 trillion yen sales and/or 100 billion yen OP a year ahead of schedule! Medium-Term Business Outlook (billions of yen) Figures announced on May 2017 (billions of yen) Sales Operating income 1,000 100 1,000 100 M&A OP margin 900 M&A 950 810 82 90
Slide 30: Medium-Term Business Outlook by Segment
Medium-Term Business Outlook M&A Raising medium-term numerical targets in every segment +10 billion yen (in OP) Machined components Electronic devices and components Mitsumi business FY3/20 target operating income FY3/20 target operating income FY3/20 target operating income ¥51 billion ¥33 billion
Slide 31: Acquisition of all shares of US-based C&A Tool Engineering
Strengthening Machined Components Business through M&As - 1 Acquisition of all shares of US-based C&A Tool Engineering Name C&A ToolEngineering,Inc Medical Location Indiana, USA Principal Precision machinery metal machining business (1) Medical (2) Aircraft Industry and Fuel Systems SPINE DISK * FDA
Slide 32: Acquisition of all shares of Mach Aero group
Strengthening Machined Components Business through M&As - 2 Acquisition of all shares of Mach Aero group Name Mach Aero Bretigny Rectification SAS Name Mach Aero Components Private Ltd. (MAB) (MACPL) Location France, suburb of Paris Location India, Bangalore Principal Development, manufacturing, and
Slide 33: Shareholders Return
Shareholders Return Huge jump on dividend forecast in response to the new financial forecast FY3/17 FY3/18 Actual Actual/Forecast yen/share 13 Interim yen/share dividend 7 Previous forecast: 10 yen/share * yen/share Year-end dividend 7 yen/share 13 Previous forecast: 10 yen/share * yen/share 26 yen/
Slide 34: Business Results
Business Results MinebeaMitsumi Inc. http://www.minebeamitsumi.com/ 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 signif