Slide 1: Business Results Fiscal Year Ended March 31, 2010
Business Results Fiscal Fiscal Year Year Ended Ended March March 31, 31, 2010 2010 May 7, 2010 Minebea Co., Ltd.
Slide 2: Financial Results; Policy and Strategy
１．Financial Results ２．Policy and Strategy May 7, 2010 1
Slide 3: Financial Results
Financial Results Hiroharu Katogi Director, Senior Managing Executive Officer May 7, 2010 2
Slide 4: Summary of Consolidated Business Results
Summary of Consolidated Business Results Significantly improved sales and profits in the second half, after the straggling first half FY ended FY ended Forecast announced Change (Millions of yen) Mar. '09 Mar. '10 in February 2010 Full year Full year YoY Full year vs. forecast Net sales 256,163 228,
Slide 5: Summary of Consolidated Business Results for 4Q
Summary of Consolidated Business Results for 4Q Net sales and profits continued to improve for the past four quarters FY ended FY ended Mar. '10 Change (Millions of yen) Mar. '09 4Q 3Q 4Q YoY QoQ Net sales 46,384 58,716 60,461 +30.3% +3.0% Operating income -2,824 4,449 5,494 N.M. +23.5% Ordinary inc
Slide 6: Net Sales Yearly
Net Sales Yearly (Billions of yen) Decreased 10.8% YoY 400 331.0 334.4 318.4 294.4 300 256.2 265.0 228.4 200 100 0 Mar.'05 Mar.'06 Mar.'07 Mar.'08 Mar.'09 Mar.'10 Mar.'11E May 7, 2010 5
Slide 7: Operating Income Yearly
Operating Income Yearly (Billions of yen) Decreased 10.0% YoY 35 9.2% 10% 8.9% 30 7.9% 30.8 8% 25 26.3 23.5 6.1% 5.2% 5.3% 6% 20 4.8% 19.3 15 4% 14.1 13.4 10 12.1 2% 5 0 0% Mar.'05 Mar.'06 Mar.'07 Mar.'08 Mar.'09 Mar.'10 Mar.'11E Operating income Operating margin May 7, 2010 6
Slide 8: Machined Components Business Yearly
Machined Components Business Yearly Net sales Operating income (Billions Ball bearings Rod-ends (Billions of yen) Operating Income Operating Margin Pivot assemblies Other machined components of yen) 30 26% 150 27.8 144.0 137.7 26.2 24% 18.0 24.6 129.6 19.4 116.1 20.0 115.9 21.6 22% 30.4 15.1 107.1 1
Slide 9: Machined Components Business Quarterly
Machined Components Business Quarterly (Billions Net sales Operating income of yen) (Billions Ball bearings Rod-ends Operating Income 40 Pivot assemblies Other machined components of yen) Operating Margin 6.3 33.9 18.9% 20% 33.3 6 18.7% 5.6 4.1 4.0 17.8% 5.4 30 28.7 16.3% 27.1 26.8 27.3 4.8 3.1 16.8
Slide 10: Electronic Devices & Components Business Yearly
Electronic Devices & Components Business Yearly Net sales (Billions Operating income HDD spindle motors Information motors of yen) Others Keyboards (Billions Electronic devices Speakers 6 3% of yen) Measuring components Operating Income 200 Operating Margin 193.4 188.8 190.4 7.9 4 178.3 7.7 10.7 14.
Slide 11: Electronic Devices & Components Business Quarterly
Electronic Devices & Components Business Quarterly (Billions Net sales (Billions Operating income of yen) of yen) Measuring components 42.7 Speakers Electronic devices and components Electronic devices business 40.8 Operating Margin 3.9 Keyboards 1 5% 40 3.5 Others 1.8 Information motors 1.9 HDD spi
Slide 12: Net Income Yearly
Net Income Yearly (Billions of yen) Increased x 2.7 YoY (yen) 18 40.9 45 16 40 32.2 32.7 14 35 16.3 12 30 10 12.9 12.5 25 8 17.2 20 13.9 6 10.7 15 6.7 4 5.6 6.2 10 4.3 2 5 2.4 0 0 Mar.'05 Mar.'06 Mar.'07 Mar.'08 Mar.'09 Mar.'10 Mar.'11E Net income Net income per share (right axis) May 7, 2010 11
Slide 13: S.G. & A. Expenses Yearly
S.G. & A. Expenses Yearly (Billions of yen) 60 20% 17.8% 18.0% 48.3 49.2 50.0 50 47.1 16.2% 45.6 16.4% 41.1 15% 40 15.5% 43.0 14.9% 14.2% 30 10% 20 5% 10 0 0% Mar.'05 Mar.'06 Mar.'07 Mar.'08 Mar.'09 Mar.'10 Mar.'11E S.G. & A. expenses S.G. & A. to sales ratio May 7, 2010 12
Slide 14: S.G. & A. Expenses Quarterly
S.G. & A. Expenses Quarterly (Billions of yen) 21.2% 15 19.9% 12.6 18.4% 20% 12.3 17.6% 17.6% 17.1% 10.9 9.8 10.3 10.1 10.3 10.3 10 16.6% 16.5% 15% 10% 5 5% 0 0% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Mar.'09 Mar.'10 S.G. & A. expenses S.G. & A. to sales ratio May 7, 2010 13
Slide 15: Inventories Yearly
Inventories Yearly (Billions of yen) 50 48.9 47.0 45.9 42.4 40 38.7 35.9 30 20 10 0 Mar.'05 Mar.'06 Mar.'07 Mar.'08 Mar.'09 Mar.'10 May 7, 2010 14
Slide 16: Capital Expenditure & Depreciation Yearly
Capital Expenditure & Depreciation Yearly (Billions of yen) 30.0 30 26.4 24.6 24.9 24.0 24.0 23.1 22.5 21.9 22.6 21.1 20.2 20 17.0 11.1 10 0 Mar.'05 Mar.'06 Mar.'07 Mar.'08 Mar.'09 Mar.'10 Mar.'11E Capital Expenditure Depreciation & Amortization Expenses *From FY 3/09, due to change in lease account
Slide 17: Net Interest-Bearing Debt Yearly
Net Interest-Bearing Debt Yearly (Billions of yen) (Billions of yen) 160 150.7 30 146.9 128.5 23.4 120 22.7 109.6 110.0 96.9 99.0 20 80 17.7 12.5 10 9.1 40 3.8 1.0 0 0 Mar.'05 Mar.'06 Mar.'07 Mar.'08 Mar.'09 Mar.'10 Mar.'11E Net interest-bearing debt Free cash flow (right axis) Net Interest-bearing
Slide 18: Forecast for Fiscal Year Ending March 31, 2011
Forecast for Fiscal Year Ending March 31, 2011 With gradual global economic recovery, stronger demand and tighter supply in several product markets are assumed FY ended Fiscal Year ending Mar. '11 (Millions of yen) Mar. '10 Full year 1st Half 2nd Half Full year YoY Net sales 228,446 129,000 136,000
Slide 19: New Business Segments
New Business Segments Following amendments in the Japanese Accounting Standards, we will change our Business Segment as follows starting the fiscal year ending March 31, 2011. Old business segments New business segments (for FY ended Mar. '10) (for FY ending Mar. '11) Machined components Machined co
Slide 20: Policy and Strategy
Policy and Strategy May 7, 2010 Yoshihisa Kainuma Representative Director, President and Chief Executive Officer 19
Slide 21: Review of Business Strategy for FY Ended March 2010
Review of Business Strategy for FY Ended March 2010 May 7, 2010 20
Slide 22: My Mission as CEO
Message delivered at my first investor meeting My Mission as CEO Increase earnings per share Maximize earnings per share Increase and increase shareholders’ shareholders’ value value Lay foundation for Minebea’s 100th anniversary Enhance corporate resources Enhance and be clear about exactly corpora
Slide 23: Major Initiatives for FY3/2010 (1)
Major Initiatives for FY3/2010 (1) 1. Boost vertical and horizontal Organizational restructuring and strength Reorganize business portfolio power shift Agreement reached for taking over Panasonic’s 2. Expansion of motor business (1) Information Equipment Motor Business May 7, 2010 22
Slide 24: Expansion of Motor Business
Expansion of Motor Business Acquired Panasonic’s Information Equipment Motor Business Strengthened motor engineer base Enhanced intellectual property rights portfolio Gained additional brushless DC motor product lines Actively participated in reshuffling small size motor industry Increased use of Mi
Slide 25: Major Initiatives for FY3/2010 (1)
Major Initiatives for FY3/2010 (1) 1. Boost vertical and horizontal Organizational restructuring and strength Reorganize business portfolio power shift Agreement reached for taking over Panasonic’s 2. Expansion of motor business (1) Information Equipment Motor Business 3. Expansion of motor business
Slide 26: EMT Business Unit launched
Expansion of Motor Business: EMT Business Unit launched EMT Business Unit (European Motion Technologies) • Supply brushless DC motors to the European market • Based in Germany, production facility in Slovakia • 4 product lines: Brushless DC motors for industrial equipment Brushless DC motors for aut
Slide 27: Major Initiatives for FY3/2010 (1)
Major Initiatives for FY3/2010 (1) 1. Boost vertical and horizontal Organizational restructuring and strength Reorganize business portfolio power shift Agreement reached for taking over Panasonic’s 2. Expansion of motor business (1) Information Equipment Motor Business 3. Expansion of motor business
Slide 28: Major Initiatives for FY3/2010 (2)
Major Initiatives for FY3/2010 (2) 6. Boost horizontal strength Developed the COOL LEAF [EMS] (1) Acquired DPM May 7, 2010 27
Slide 29: EMS Products: Developed COOL LEAF Products
EMS Products: Developed “COOL LEAF” Products Horizontal Strength Developed first line of Machined Rotary Electronic components components devices and components “COOL LEAF” products Lighting devices (Guide plates/optical designs) Keyboards Measuring (Electrostatic components Capacity type) (Force se
Slide 30: Acquisition of DPM Co., Ltd.
Acquisition of DPM Co., Ltd. Agreement reached for acquiring DPM Co., Ltd., a precision plastic gear mold maker Overview of DPM Co., Ltd. Address: 3-28-23 Haginaka, Ota-ku, Tokyo Founded: May 1973 Capital: 100 million yen (FY 3/2010) President: Koji Maruyama Number of employees (consolidated): 160 (
Slide 31: Acquisition of DPM Co., Ltd. Advantages
Acquisition of DPM Co., Ltd. Advantages • Can quickly design/produce molds for ultra-precision gears • Can produce ultra-precision molded products using these molds • Can design precision gears and gear boxes • Enhance EMS (horizontal strength) In-house production of precision plastic gears combined
Slide 32: Major Initiatives for FY3/2010 (2)
Major Initiatives for FY3/2010 (2) 6. Boost horizontal strength Developed the COOL LEAF [EMS] (1) Acquired DPM 7. Boost horizontal strength Progress on the EMS projects [EMS] (2) May 7, 2010 31
Slide 33: Projected Increase of Hybrid Component Sales
Boost Horizontal Strength (3) Projected Increase of Hybrid Component Sales (Billions of yen) Third year 30 HMSM HMSM target target of of ¥5 ¥5 billion billion 20 COOL COOL LEAF, LEAF, etc. etc. target target of of ¥5 ¥5 billion billion 10 0 FY 03/2010 FY 03/2011 FY 03/2012 May 7, 2010 32
Slide 34: Major Initiatives for FY3/2010 (2)
Major Initiatives for FY3/2010 (2) 6. Boost horizontal strength Developed the COOL LEAF [EMS] (1) Acquired DPM 7. Boost horizontal strength Progress on the EMS projects [EMS] (2) 8. IR for individual investors Held individual investor meeting Record high level production 9. Increase ball bearing pro
Slide 35: Ball Bearing Production Hit Record High Level
Ball Bearing Production Hit Record High Level Ball Bearings (million units • Global economy on track to Ball bearing production / month) recovery 201 203 • Production returned to peak level in March 80 Past Most high recent low • March external sales almost Q1 FY03/2009 Q4 FY03/2009 March 2010 hit p
Slide 36: Ball Bearing Business Strategies
Message delivered at investor meeting held on Nov. 2009 Ball Bearing Business Strategies [ Market change after global economic downturn ] Expansion of market for low-priced, mass-produced products IL Y A R Consider strategic entry R E D into the market P O N Target: Dstandard size E M P E T US (Ball
Slide 37: Major Initiatives for FY3/2010 (2)
Major Initiatives for FY3/2010 (2) 6. Boost horizontal strength Developed the COOL LEAF [EMS] (1) Acquired DPM 7. Boost horizontal strength Progress on the EMS projects [EMS] (2) 8. IR for individual investors Held individual investor meeting Record high level production 9. Increase ball bearing pro
Slide 38: Increasing Pivot Assembly Production
Increasing Pivot Assembly Production Pivot Assemblies • Quick recovery of HDD Pivot Assembly Shipments market (million units / month) PC market 33 Cloud computing 28 Home appliance market 17 Other emerging storage Past high markets Most recent low • Shipment volume for March Q3 FY03/2008 Q4 FY03/200
Slide 39: Major Initiatives for FY3/2010 (2)
Major Initiatives for FY3/2010 (2) 6. Boost horizontal strength Developed the COOL LEAF [EMS] (1) Acquired DPM 7. Boost horizontal strength Progress on the EMS projects [EMS] (2) 8. IR for individual investors Held individual investor meeting Record high level production 9. Increase ball bearing pro
Slide 40: Keyboard Business Completely Turned Around
Keyboard Business Completely Turned Around Beefed up production Improved per capita productivity Improved quality Reduced scrap Boosted ability to meet increased production demand Business returned to profitability in Q4 May 7, 2010 39
Slide 41: Major Initiatives for FY3/2010 (2)
Major Initiatives for FY3/2010 (2) 6. Boost horizontal strength Developed the COOL LEAF [EMS] (1) Acquired DPM 7. Boost horizontal strength Progress on the EMS projects [EMS] (2) 8. IR for individual investors Held individual investor meeting Record high level production 9. Increase ball bearing pro
Slide 42: Significantly improved results in Electronic Devices and Component segment
Significantly improved results in Electronic Devices and Component segment Sales declined by 18.9 billion yen YoY Operating loss shrunk by 1.9 billion yen YoY Sales down / Loss narrowed (returned to profitability) Moving toward sales up / profit increase • Information motors (confirmed restructuring
Slide 43: Downside (1) Failed to Turn Around Spindle Motor Business
Downside (1) Failed to Turn Around Spindle Motor Business Minuses • Lower unit price • Delay in production increase Pluses • Strong growth of HDD market • Increased customer trust as a result of quality improvement measures • Better product mix • Supplying products for latest models • Better competi
Slide 44: Downside (2) Failed to Turn Around Speaker Business
Downside (2) Failed to Turn Around Speaker Business Delay in sales recovery Now focusing on high power micro speakers to increase sales Enhance outsourcing strategy May 7, 2010 43
Slide 45: Results of Cost Cuts
Results of Cost Cuts Top-down and Bottom-up (Sales)Cost Reduction Effects (Operating income) Cost Cuts in FY03/2010 300 30 (Billions of yen) •Implemented a system to solicit cost reduction proposals 250 256.2 25 228.4 •Eliminated wasteful spending and 200 20 practices Sales •Reduced scrap 150 13.4 1
Slide 46: Relative Stock Performance Since I Became CEO
Relative Stock Performance Since I Became CEO March 31, 2010 = 125 130 Minebea/Nikkei Average 120 Minebea/TOPIX 110 100 March 31, 2010 = 116 90 April 1, 2009 = 100 80 Apr. 2009 Dec. 2009 Jan. 2010 Mar. 2010 May 7, 2010 45
Slide 47: Road Map to Goals for FY Ending March 2011
Road Map to Goals for FY Ending March 2011 May 7, 2010 46
Slide 48: Business Strategy
Business Strategy No.1 (Market Leader) Strategy Enhance ability to supply products and meet demand Machined for better cost performance backed by our large components market share Tap into M&A and new market opportunities with an eye to further expansion May 7, 2010 47
Slide 49: Machined Components Business (Ball Bearings)
Machined Components Business (Ball Bearings) Driving overall sales and profits Deciding to Market leader strategy build a new factory ! Ball bearings Ball Bearings Sales Plan • Increase production to keep (million units / month) pace with rising demand 200 215 216 • Reap the results of 196 200 185 p
Slide 50: Machined Components Business (Pivot Assemblies)
Machined Components Business (Pivot Assemblies) Driving overall sales and profits Deciding to Market leader strategy build a new factory ! Pivot assemblies (Minebea • The HDD market is expected HDD Market Outlook Estimates) to grow at a double-digit (million units) percentage rate annually over 880
Slide 51: Machined Components Business (Rod Ends)
Machined Components Business (Rod Ends) Market expected to quickly recover Leveraging Market leader strategy new factories ! Rod ends • Demand for aircraft is at the early stage of recovery • Have boosted production capacity with new facilities designed for increasing future demand New Karuizawa pla
Slide 52: Business Strategy
Business Strategy No.1 (Market Leader) Strategy Enhance ability to supply products and meet demand Machined for better cost performance backed by our large components market share Tap into M&A and new market opportunities with an eye to further expansion Rotary Solutions Providing Strategy Products
Slide 53: Rotary Components Business
Rotary Components Business Strengthening foundation Start looking for a of the second pillar new factory location ! Low-price and solutions providing strategy Products for cutting costs and increasing production volume Strengthen production to enhance quality and cut costs Consolidate suppliers/raw
Slide 54: Business Strategy
Business Strategy No.1 (Market Leader) Strategy Enhance ability to supply products and meet demand Machined for better cost performance backed by our large components market share Tap into M&A and new market opportunities with an eye to further expansion Rotary Solutions Providing Strategy Products
Slide 55: Electronic Devices & Components Business / Special Devices Business
Electronic Devices & Components Business / Special Devices Business Turn them into profit engines “One-and-only” strategy = differentiation Offer high added value no other companies offer Operations focused on core technologies Rebuild businesses that are running in the red Go for the highest market
Slide 56: Business Strategy
Business Strategy No.1 (Market Leader) Strategy Enhance ability to supply products and meet demand Machined for better cost performance backed by our large components market share Tap into M&A and new market opportunities with an eye to further expansion Rotary Solutions Providing Strategy Products
Slide 57: Making Spindle Motor Business Profitable
Making Spindle Motor Business Profitable Creating a profit engine Market Market outlook: outlook: HDD HDD market market to to enter enter aa new new high high growth growth stage stage Profitability-focused strategy • Enhance manufacturing capability to improve profitability Focus on increasing prod
Slide 58: Medium-term Business Plan
Medium-term Business Plan May 7, 2010 57
Slide 59: Medium-term Business Plan
Medium-term Business Plan (Profitability to Recover and Increase) Macro assumption: Global economy will be at 80% capacity in the 1st year, 90% the 2nd year, and 100% the 3rd year 3-year business plan image: Increase sales at least 10% every year Ensure operating margin of 10% (Operating (Sales) Tar
Slide 60: Machined Components Business Segment
Machined Components Business Segment Plan to invest 48.4 billion yen over 3 years No.1 (market leader) strategy Medium-term Business Plan Targets (Billions of yen) • Aim for 145 billion yen in sales in (Sales) Sales (Operating income) FY03/2013 200 Operating income 60 • Enhance ability to supply pro
Slide 61: Rotary Components Business Segment
Rotary Components Business Segment Plan to invest 22.2 billion yen over 3 years Medium-term Business Plan Targets Solutions Providing strategy (Billions of yen) (Sales) Sales (Operating income) Input resources to second pillar 200 Operating income 20 Operating margin • Aim for 165 billion yen in sal
Slide 62: Rotary Components Business Segment (2)
Rotary Components Business Segment (2) (Spindle Motor Business) Boost production capacity to 9 million units/month in response to the growing HDD market Business strategy (Minebea HDD Market Outlook Estimates) HDD market will see further growth (million units) • Maintain market share as the 880 800
Slide 63: Electronic Devices & Components / Special Devices Business Segment
Electronic Devices & Components Business Segment / Special Devices Business Segment Plan to invest 22.4 billion yen over 3 years (including 9.9 billion yen welfare and IT investments) Medium-term Business One-and-only (differentiation) strategy Plan Targets (Billions of yen) Electronic Components Ot
Slide 64: Ongoing Policy
Ongoing Policy Boost vertical and M&A to boost horizontal strengths Vertically strengths integrated production Boost vertical strength Extensive product Boost Enhanced ability to meet customer lines and horizontal requirements technologies strength Enhanced ability to meet demand for flexible pricin
Slide 65: Debt Reduction and Strategy for the Future
Debt Reduction and Strategy for the Future Brought Brought net-interest net-interest bearing bearing debt debt down down below below medium-term medium-term target target of of ¥100 ¥100 billion billion (Billions of yen) (Billions of yen) 160 150.7 146.9 30 Maintain sound 128.5 23.4 financial health
Slide 66: Dividend Policy
Dividend Policy Dividend FY03/2010 year-end dividend: 4 yen / share Total year: 7 yen / share Dividend forecast for FY03/2011: Interim 3 yen / share Year-end 4 yen / share Dividend Policy Our basic dividend policy gives priority to enhancing equity efficiency and improving returns to our shareholder
Slide 67: Minebea Co., Ltd.
Minebea Co., Ltd. Business Results http://www.minebea.co.jp/ Any statements in the presentation which are not historical fact are future projections made based on certain assumptions and executive judgment drawn from currently available information. Please note that actual performance may vary signi