Minebeamitsumi Inc. · TSE:6479
Minebeamitsumi — Minebea — FY2015 Earnings Presentation
48 slides from Minebeamitsumi's earnings presentation, May 8, 2015
Slide 1: Business Results
Business Results Fiscal Year Ended March 31, 2015 May 8, 2015 Minebea Co., Ltd.
Slide 2: 1. Financial Results 2. Policy and Strategy
1. Financial Results 2. Policy and Strategy May 8, 2015 1
Slide 3: Financial Results
Financial Results Hiromi Yoda Managing Executive Officer May 8, 2015 2
Slide 4: Summary of Consolidated Business Results
Summary of Consolidated Business Results Posting record high net sales, operating income, ordinary income and net income FY ended FY ended FY ended Mar.'15 Change (Millions of yen) Mar. '14 Mar. '15 February forecast Full year Full year YoY Full year VS. Forecast Net sales 371,543 500,676 +34.8% 490
Slide 5: Summary of Consolidated Business Results for 4Q
Summary of Consolidated Business Results for 4Q 8th consecutive higher-than-plan quarterly results FY ended FY ended Change (Millions of yen) Mar. '14 Mar. '15 4Q 3Q 4Q YoY QoQ Net sales 93,608 145,403 138,715 +48.2% -4.6% Operating income 8,883 19,080 16,259 +83.0% -14.8% Ordinary income 7,943 18,5
Slide 6: Net Sales Yearly
Net Sales Yearly Topping record high net sales (Billions of yen) 700.0 650.0 Increased 34.8% YoY 600.0 500.7 500.0 400.0 371.5 300.0 269.1 282.4 256.2 251.4 228.4 200.0 100.0 0.0 Mar.'09 Mar.'10 Mar.'11 Mar.'12 Mar.'13 Mar.'14 Mar.'15 Mar.'16E May 8, 2015 5
Slide 7: Operating Income Yearly
Operating Income Yearly Topping record high operating income (Billions of yen) Increased 86.7% YoY 70.0 67.0 15% 60.1 60.0 50.0 12.0% 8.7% 10% 40.0 8.2% 10.3% 32.2 30.0 5.2% 5.3% 22.2 3.6% 5% 20.0 3.4% 13.4 12.1 8.6 10.2 10.0 0.0 0% Mar.'09 Mar.'10 Mar.'11 Mar.'12 Mar.'13 Mar.'14 Mar.'15 Mar.'16E Op
Slide 8: Machined Components Business Yearly
Machined Components Business Yearly Net sales Operating income (Billions of yen) (Billions of yen) Pivot assemblies Operating income Operating margin 167.9 Rod-ends/Fasteners 50.0 35% 155.0 Ball bearings 150.0 140.0 38.0 42.4 39.7 37.9 40.0 30% 113.6 35.0 107.8 107.0 33.6 33.3 100.0 30.4 30.0 28.1 2
Slide 9: Machined Components Business Quarterly
Machined Components Business Quarterly Net sales Operating income (Billions of yen) (Billions of yen) Pivot assemblies Rod-ends/Fasteners Operating income Operating margin 41.5 12.0 40% Ball bearings 39.8 40.0 37.1 10.3 36.5 36.6 10.1 9.5 10.0 9.8 34.1 34.6 34.8 9.5 9.6 10.1 35% 30.5 8.9 9.2 9.2 8.5
Slide 10: Electronic Devices & Components Business Yearly
Electronic Devices & Components Business Yearly Net sales Operating income (Billions of yen) (Billions of yen) 500.0 478.5 Other Operating Income Operating margin 3.5 Measuring components 32.2 35.0 33.9 15% Electronic devices Motors 400.0 29.7 30.0 343.8 5.9 25.0 10% 13.4 8.6% 300.0 273.8 7.1% 20.0
Slide 11: Electronic Devices & Components Business Quarterly
Electronic Devices & Components Business Quarterly Net sales Operating income (Billions of yen) (Billions of yen) Other 104.9 12.0 Operating income 11.4 15% 1.8 Measuring components 3.2 Operating margin 100.0 96.6 Electronic devices 1.6 10.9% 4.7 Motors 9.0 8.7% 8.4 10% 79.7 8.7% 80.0 1.4 2.8 60.3 6
Slide 12: Net Income Yearly
Net Income Yearly Posting record high net income (Billions of yen) (Yen) Increased 91.0% YoY 50.0 48.0 150 39.9 40.0 120 128.4 30.0 106.7 90 20.9 20.0 60 12.5 55.9 10.0 6.7 30 5.9 32.6 1.8 2.4 6.2 17.2 15.6 4.8 0.0 0 Mar.'09 Mar.'10 Mar.'11 Mar.'12 Mar.'13 Mar.'14 Mar.'15 Mar.'16E Net income Net inc
Slide 13: S.G. & A. Expenses Quarterly
S.G. & A. Expenses Quarterly (Billions of yen) 20.0 15.9 30% 15.4 14.9 15.0 13.9 13.8 13.5 13.0 13.2 11.7 11.8 11.6 12.0 17.1% 16.8% 20% 10.0 16.2% 16.7% 15.2% 14.8% 13.8% 13.9% 13.8% 12.8% 11.5% 10% 5.0 10.6% 0.0 0% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY 3/13 FY 3/14 FY 3/15 S.G. & A. expenses S.G.
Slide 14: Inventories Quarterly
Inventories Quarterly (Billions of yen) 100.0 89.6 92.2 78.1 80.0 65.5 63.7 67.4 60.2 58.2 59.1 60.5 60.0 54.8 51.8 40.0 20.0 0.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY 3/13 FY 3/14 FY 3/15 May 8, 2015 13
Slide 15: Capital Expenditure & Depreciation Yearly
Capital Expenditure & Depreciation Yearly (Billions of yen) Capital Expenditure Depreciation & Amortization Expenses 50.0 43.7 40.0 37.6 37.0 32.2 30.0 28.8 27.3 27.3 24.0 23.7 21.1 20.8 20.8 20.2 19.6 20.7 20.0 11.1 10.0 0.0 Mar.'09 Mar.'10 Mar.'11 Mar.'12 Mar.'13 Mar.'14 Mar.'15 Mar.'16 Forecast M
Slide 16: Net Interest-Bearing Debt Yearly
Net Interest-Bearing Debt Yearly (Billions of yen) Net interest-bearing debt Free cash flow (right axis) (Billions of yen) 136.2 40.0 29.3 120.0 110.0 114.2 103.6 109.9 24.5 25.0 96.9 93.1 90.0 24.2 17.7 70.2 10.0 12.5 60.0 (4.2) (8.8) (5.0) 30.0 (14.8) 0.0 (20.0) Mar.'09 Mar.'10 Mar.'11 Mar.'12 Mar
Slide 17: Forecast for Fiscal Year Ending March 31, 2016
Forecast for Fiscal Year Ending March 31, 2016 Expecting increase in sales and profits for 4 consecutive fiscal years due to a big jump up of sales in electronic devices and other factors FY ended Fiscal year ending Mar. '16 (Millions of yen) Mar. '15 Full year 1st Half 2nd Half Full year YoY Net sa
Slide 18: Forecast for Business Segment
Forecast for Business Segment FY ended Fiscal year ending Mar. '16 Mar. '15 (Millions of yen) Full year 1st Half 2nd Half Full year YoY Net sales 500,676 294,500 355,500 650,000 +29.8% Machined components 154,986 82,900 85,000 167,900 +8.3% Electronic devices and 343,842 209,800 268,700 478,500 +39.
Slide 19: Policy and Strategy
Policy and Strategy May 8, 2015 Yoshihisa Kainuma Representative Director, President and Chief Executive Officer
Slide 20: Table of contents
Table of contents FY3/2015 results New mid- to long-term targets Mid-term Business Plan FY3/2016 plan May 8, 2015 19
Slide 21: FY3/2015 results
FY3/2015 results Achieved 500 bil. yen sales and 60 bil. yen OP Mid-term Business Plan Targets (Announced on May 9, 2014) (billion yen) Operating (billion yen) Record highs for sales, 600 Sales Income 80 OP, ordinary & 500.7 70 net income ! 500 500.0 60.1 450.0 60 400.0 400 50.0 3 year targets 371.5
Slide 22: Drivers behind fast growth in FY3/15
Drivers behind fast growth in FY3/15 Steady demand growth in • Ball bearing external shipment volume increased 6% machined components average 137 million units / month (FY3/14) to 145(FY3/15) led by ball bearings • Increased share to large maker in addition to expanded Higher-than-expected customer
Slide 23: Steadily seeding for the future
Progress with Five Arrows strategy ahead of 100th Anniversary Steadily seeding for the future Sell 150 million ball bearings externally per month on average Achieved 3 times on a monthly basis and aim to achieve for the entire FY3/16 Develop and boost sales of new EMS products Higher-than-plan sales
Slide 24: Table of contents
FY3/2015 results New mid- to long-term targets Mid-term Business Plan FY3/2016 plan May 8, 2015 23
Slide 25: New challenge to ¥1 tri. sales and/or ¥100 bil. OP by 2020
New challenge to ¥1 tri. sales and/or ¥100 bil. OP 1 and/or 100 by 2020 Execution of large M&A! by 2020 3 pillars Including by 2017 new products Enlarging w/ wireless or other by 2014 2 pillars technology Completion of 2 pillars Mid- to long-term targets Mid-term targets 1 trillion yen in sales and/
Slide 26: Key factors towards 1 and/or 100 project
Key factors towards 1 and/or 100 project Boost integration of our vertical and horizontal strengths : maximize synergy Cultivate demand in existing product markets and expand assembly business to increase sales of other Minebea components Aggressive R&D and sales of new (EMS) products Large-scale M&
Slide 27: New products to support further growth
New products to support further growth “meres a" laa r ' wv | a Lad = Hil = ols | A vow) (ee) i j ] | Analysis ! Ultra-precision | Measurement Mass production GP . l a! I et xisting Materials machining Minebea products Fusinaln Minebea technologies HR aE and assembly Capability jy BI tn enaad iin +r
Slide 28: "Five Arrows for new products" strategy
“Five Arrows for new products” strategy Smart Cities Smart Street Lighting System etc. Smart Lighting Smart Buildings Smart Adjustable LED Light LED Lighting Drivers with Telecommunication LED Tunnel Light Functions etc. etc. Technologies Assembly Smart Sensors Minebea’s unique Agricultural original
Slide 29: Minebea's wireless networking technology
Minebea’s wireless networking technology Both high- and low-speed networks can communicate with each other as an integrated system. Network optimization can be achieved by connecting application-oriented networks. Future expansion of any application can be easier due to the use of both high- and low
Slide 30: Smart City Projects in Phnom Penh, Cambodia
Smart City Projects in Phnom Penh, Cambodia Infrastructure Car Parking Maintenance Management Wi-Fi Spot System System System Bus and Taxi Management System Garbage Collection Management System Smart Building Monitoring System EV Power Charging Station System Smart LED Street Lights with Wireless Ne
Slide 31: New products (1)
New products (1) 1. LED Exterior Lights (for tunnels) • Developed thin plastic lens utilizing ultra-precision machining and optical technology. • Wider area coverage with lower power can contribute to lower CO2 emissions. • Less glare from lights improves driving safety. Image of tunnel lights with
Slide 32: New products (2)
New products (2) 4. Bolt Sensors • Developed sensors to measure and observe tightness of bolts and nuts. • Now evaluating for use in infrastructure inspection and management in cooperation with Associate Professor Miyashita from the Nagaoka University of Technology. • Tightening or loosening to a ce
Slide 33: Table of contents
FY3/2015 results New mid- to long-term targets Mid-term Business Plan FY3/2016 plan May 8, 2015 32
Slide 34: New Mid-term Business Plan targets
New Mid-term Business Plan targets Targets as simple check points to our goal for 2020 (billion yen) (billion yen) New Mid-term Business Plan targets 800 120 Sales Operating 750.0 Income 700.0 650.0 100 600 80.0 500.7 80 73.0 67.0 60.1 400 60 40 200 20 0 0 FY3/15 FY3/16 FY3/17 FY3/18 Plan Plan Plan
Slide 35: New Mid-term Business Plan by segment
New Mid-term Business Plan by segment Steady global GDP growth and cultivation of new demand 2015 global GDP growth of +3.5% (IMF estimate), Machined expanding middle class Components Cultivate new demand in existing product markets Steady business Develop new applications in cooperation with
Slide 36: Smartphone market: LED backlights
Smartphone market: LED backlights LED backlight business is becoming our second pillar Worldwide smartphone shipments by price range Smartphones keep growing (million units) 2,500 2014 Minebea share Use of our ultra-thin LED backlights High-end : about 80% are expanding from high-end to High-end
Slide 37: Automobile market: ball bearings & motors
Automobile market: ball bearings & motors Down-sizing and energy-savings are our tailwinds Worldwide automobile production and Minebea ball bearings Growth of Minebea ball +10% / year bearings for automobiles Increased (million units) usage per vehicle 100 80 Worldwide automobile production & global
Slide 38: Automobile: ball bearings & motors are growing
Automobile: ball bearings & motors are growing Minebea ball bearings and motors are growing for newer functions A look at Minebea products used In one European luxury car # of Minebea-size ball bearings used/vehicle 42 For head lamp motors 20 EPS 2 For seat fan motors 6 Radiator Fan 2 EGR 3 Other 7
Slide 39: Growth of aircrafts: Rod-ends & fasteners
Growth of aircrafts: Rod-ends & fasteners Worldwide Revenue Passenger-Kilometers (billions) (Yearly) Aircraft production to grow 10,000 (Source: ICAO and Forecasts 8,000 forecasts by Airbus) 1. Responding to production ramp-up In addition to steady production of existing models, mass production and
Slide 40: The new "Five Arrows" strategy
The new “Five Arrows” strategy From “Seeding for the future” to “Cultivating growth” Sell 180 million ball bearings externally per month on average (before new factory construction) Cultivate new demand in existing product markets and develop new applications in cooperation with customers Develop an
Slide 41: Table of contents
FY3/2015 results New mid- to long-term targets Mid-term Business Plan FY3/2016 plan May 8, 2015 40
Slide 42: FY3/2016 plan
FY3/2016 plan FY3/16 sales and OP targets 1. Smartphone related 800 (billion yen) assembly business Sales Operating Income 100 expansion 650.0 2. Growth of existing 600 businesses (+5%) 500.7 67.0 75 3. Better profitability from all 60.1 businesses plus additions 400 from Sartorius Mechatronics 50 T
Slide 43: Tasks for FY3/16
Tasks for FY3/16 Ball bearing external shipment volume of 1 150 million units / month on average 2 Smartphone related assembly business expansion 3 Increase LED backlight volume (2 and 3 makes 100 billion yen sales increase) 4 Improve motor profitability 5 Boost measuring component profits 6 Turn ar
Slide 44: Better balance sheet
Better balance sheet As free cash flow increases, cash will pile up if there are no major M&As. Free cash flow and Capital expenditures and net interest-bearing debt Depreciation & amortization expenses (billion yen) Net interest-bearing debt (billion yen) Cap Ex D&A 150 136.2 Free cash flow 50 43.7
Slide 45: First we invest
First we invest Seize investment opportunities for future cash returns Ban Wa 2 purchase will Constructing a new 2-story building supplement Ban Wa 1 at Cambodia factory (Open #3 building (new) space) Building area : Building area : 31,500m2 31,500m2 （150m×210m） （150m×210m） Floor space： Floor space：
Slide 46: Dividend and buy-back policies
Dividend and buy-back policies Dividend Policy year-end yen/ Total yen FY ended 3/2015 dividend: 6 share; 12 year: /share Interim: TBD yen/share Dividend forecast for FY ending 3/2016: Year-end: TBD yen/share Aiming for about 20% payout ratio for FY3/16! Our basic dividend policy gives priority to e
Slide 47: Forecast for Fiscal Year Ending March 31, 2016
Forecast for Fiscal Year Ending March 31, 2016 EPS of FY3/16 is expected to increase 20%+. FY ended Fiscal year ending Mar. '16 Mar. '15 (Millions of yen) Full year 1st Half 2nd Half Full year YoY Net sales 500,676 294,500 355,500 650,000 +29.8% Operating income 60,101 28,400 38,600 67,000 +11.5% Or
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