Minebea Mitsumi Inc U/Adr

Hello, this is Yoshida. Today I would like to explain the consolidated financial results for the third quarter of the fiscal year ending March 31st, 2022. Consolidated in itself for the third quarter for the fiscal year ending March 31st, 2022 was up 10.4% year-on-year and up 7.9% quarter-and-quarter to total 304.345 billion yen. Operating income total 25.532 billion yen, which was 32.1% up year-on-year and up 3.3% quarter-on-quarter. Purpose for the period attribute double to owners of the parent increased 14% year-on-year and decreased 9.8% quarter-on-quarter to 18.395 billion yen. Net sales hit record high for a quarter. Also, net sales, operating income, and quarterly profit all hit record highs for nine months. We estimate that foreign currency translations have a year-on-year impact of ¥16.3 billion in net sales and ¥4.6 billion in operating income. Quarter-on-quarter impact was ¥4.3 billion in net sales and ¥1.5 billion in operating income. We made slight retrospective changes to last fiscal year's financial statements due to the PPA for ABLIC. Please note that the figures on the following pages are revised figures. Please go to the next slide. This is for the quarterly trend in net sales, operating income, and operating margin. The operating margin for the third quarter was 8.5% up 1.4 percentage points year on year and down 0.4 percentage points quarter on quarter. This is the difference between the forecast as of November and actual results for net sales and operating income by business segment for the third quarter. Net sales for the machine components business segments were slightly lower than projected due to sluggish sales for office automation and home electronics caused primarily by the shortage of semiconductors. Electronic devices and components business saw lower than expected net sales and that were also mainly due to lagging sales for office automation and home electronics in addition to a slow recovery of sales to the automobile industry. The Mitsumi business enjoyed higher-than-projected sales mainly for mechanical components and optical devices. Sales for the Yuxin business were almost on par with the forecast. Operating income for the machine components business segment was almost on par with the forecast if we were to exclude the negative impact of approximately 0.4 billion yen due to the special factor of a sharp rise in electricity prices in Singapore. The electronic devices and components business experienced lower than expected operating income due mostly to the sharp rise in materials prices. The Mitsumi business operating income exceeded the forecast thanks to growing sales of optical devices and mechanical components that pushed profits up along with a further increase in the profitability of analog semiconductors. The Yushin business experienced lower than expected operating income due to a change in the sales mix. Please go to the next slide. Now let's take a look at the results by segment starting with the machine components business segment. On the left is a graph indicating quarterly net sales trends and on the right is a bar chart showing quarterly operating income trends along with a line chart for operating margins. Third quarter net sales decreased 2.7 percent quarter on quarter to total 43.1 billion yen. Bull-bearing sales dipped 3.0% quarter-and-quarter to a total of 3.9 billion yen. The monthly external shipment volume was down 3.7% quarter-and-quarter for an average of 232 million units. This is due primarily to a slowdown in sales with office automation and home electronics. Sales of aircraft bearings remained sluggish due to the stagnant market. Sales of rod ends and fasteners totaling ¥6.4 billion were down 1.5% from the previous quarter. Sales of pivot assemblies decreased 2.2% quarter-on-quarter to total ¥5.8 billion. Operating income for the quarter totaled ¥11.6 billion and the operating margin was 27%. operating income decreased 2.4% quarter-on-quarter, while the operating margin improved 0.1 percentage points. If the special factor mentioned earlier, that is the sharp rise in electricity prices in Singapore, were excluded, operating income would have totaled 12 billion yen, and the operating margin would have stood at 27.9%. Looking at the results by product, we see that operating income for ball bearings and pivot assemblies decreased quarter-on-quarter, while for rod ends and fasteners was up compared with the last quarter. Please let go to the next slide.

Now let's look at the electronic devices and components segment. Net sales decreased 3.2% quarter-on-quarter to total ¥90.7 billion. Looking at the results by product, we see that sales of motors increased 0.5% quarter-on-quarter to reach 66.5 billion yen. This is mainly due to robust sales for HDD despite impact of decrease of production in the office automation industry caused by the shortage of semiconductors. Sales of electronic devices decreased 18% quarter-on-quarter to total 14.2 billion yen. Sales of sensing device totaling ¥9 billion were down 3.5% from the previous quarter. Operating income came to ¥3.7 billion and the operating margin was 4.1%. It was down 38.7% quarter-on-quarter, while the operating margin decreased at 3.4 percentage points. This downturn was mainly due to a drop in electronic device sales and raw material price hikes. Looking at the results by product, the operating income for sensing devices, for electronic devices and for motors were all down from the previous quarter. For your reference, figures shown for the fiscal year ended March 2021 and before are based on the classification used before the business segments were changed. Please note that the same applies to the rest of the presentation. Next slide, please. Let's look at the performance for the Mitsumi business segment. Net sales increased 21% to total ¥134.2 billion. As seasonal demand picked up, so did the sales of optical devices and mechanical components. The sales of analog semiconductors remained strong. Operating income came to 15.2 billion yen, and the operating margin was 11.3% on a quarter-on-quarter basis. Operating income increased 34.4%, while the operating margin rose 1.1 percentage points. The primary factors behind these increases include a further increase in the profitability of analog semiconductors in addition to seasonal demand. Next slide, please. Finally, let's look at the Yuxin business segment. Net sales increased 10.5% quarter on quarter to hit 36.1 billion yen. This jump was due to the diminishing impact from production adjustments made by some automakers in response to the semiconductor shortage. While our operating loss totaled 0.3 billion yen, the operating margin was negative 0.9%. Next slide, please. The bar graph here shows trends in profit attributable to owners of the parent, while the line graph shows changes in the profit for the period per share. The profit for the period was 18.4 billion yen. Earnings per share was 45.4 yen. Next slide, please. Next, we have the quarterly inventory trend. At the end of the third quarter, inventory totaled ¥224.6 billion, which is ¥10.5 billion more than what it was three months ago. Next slide, please. This graph contains a bar chart showing trends in net interest-bearing debt, which is total interest-bearing debt minus cash and cash equivalents, and a line chart indicating free cash flow. At the end of the third quarter, net interest-bearing debt totaling 115.5 billion yen was up 31.1 billion yen from what it was at the end of the previous fiscal year. Next slide, please. We made upward revisions to the full-year forecast for the fiscal year ending March 2022, which was announced in November. We have revised the forecast for the net sales to 1.1 trillion yen and the operating income to 92 billion yen. The estimated net sales figures for the electronic devices and components Mitsumi businesses and Yushin businesses were revised upward. Along with the revisions of net sales, we have revised the operating income figures, respectively. The exchange rate is assumed to be 114 yen to US dollar. This slide shows the forecast by business segment. This concludes my presentation. Thank you.