Minebea Mitsumi Inc U/Adr

This is Yoshida. Today, I would like first to explain about the consolidated financial results for the fiscal year ended March 31st, 2022. Next slide, please. Consolidated net sales for the fiscal year March 2022 was 1 trillion 124.14 billion yen, while operating income was 92.136 billion yen, and profit for the period attributable to the owners of the parent was 68.935 billion yen. These figures represent year-on-year increases of 13.7%, 80.1%, and 77.9%, respectively, with net sales, operating income, et cetera, and all hit record highs. Operating income includes special expenses of approximately 3.2 billion yen incurred due to the impact of COVID-19. Foreign currency exchange rates are estimated to have a year-on-year impact of plus 50.9 billion yen in net sales and plus 12 billion yen in operating income. Next slide, please. Consolidated net sales for the fourth quarter of the fiscal year March 2022 was up 15.4 percent year-on-year and down 4.9 percent quarter-on-quarter to total 289.532 billion yen, hitting a record high for the fourth quarter. Operate income increased by two times a year on year and down 16.1% quarter and quarter to 21.671 billion yen. Profit for the period attributable to owners of the parent increased by 2.2 times year-on-year and down 15.8% quarter-on-quarter to 15.488 billion yen. Operating income for this quarter in terms of sales and operating income was at a record high level. An operating income for this quarter includes special expenses of approximately 0.9 billion yen incurred due to the impact of COVID-19. We estimate that the foreign currency translations have year-on-year impact of plus 17.3 billion yen in net sales and plus 4.8 billion yen in operating income. Quarter-on-quarter impact was plus 3.9 billion yen in net sales and plus 0.4 billion yen in operating income. We made a 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. Next slide, please. This is the annual trend in net sales, operating income, and operating margin. The bar graph on the left is net sales, and the one on the right is operating income, along with a line chart for the operating margin. The operating margin for the fiscal year ending in March 2022 was 8.2%, up 3.0 percentage points year on year. Next slide, please. This is the quarterly trend for the net sales operating income and operating margin. The operating margin for the fourth quarter was 7.5%. This was up 3.2 percentage points year on year and down 1 percentage points quarter on quarter. Next slide, please. This shows the difference between the forecast as of February and actual results for net sales and operating income by business segment for the fourth quarter. Although sales in the machine component segment were impacted by semiconductor shortages and strong sales of mainly bulb bearings for FAM motors meant that overall sales were largely in line with our forecast. In the electronic devices and component segment, although sales of electronic sensing devices fell below our forecast, sales were higher than projected thanks to strong overall performance in motors. The Mitsumi business enjoyed higher than projected sales overall predominantly thanks to mechanical components, optical devices, and semiconductors. Sales in the Yushin business were overall higher than projected mainly due to strong performance in Europe. Operating income in the machine component segment was slightly lower than forecast due to a less favorable product mix. Operating income in the electronic devices and component segment fell below a forecast, mainly due to lower capacity utilization rate caused by the lockdowns of some plants in China and the impact of shortage of semiconductors. In the Mitsumi business, operating income exceeded projections thanks to strong sales of optical devices and semiconductors and improved profitability. Operating income in the Yuxin business was marginally higher than forecast. Next slide, please. Now let's take a look at the results by segment, starting with machine component segment. On the left is a graph indicating yearly net sales trends and on the right is a graph with a bar chart showing yearly operating income trends along with the line chart with the operating margins. In the fiscal year March 2022, net sales were up 12.7% year-on-year at 177.5 billion yen. Sales above bearings increased 17.3% year-on-year to reach 128 billion yen. The monthly average of bearing sales volume totaled 238 million units, an increase of 14.2% year-on-year. Looking at the sales by application, there was an overall increase, particularly in data centers and automobile applications. Sales of rod ends and fasteners were down 3.1% year on year at 27 billion yen. Sales of assemblies increased 9.8% year on year to total 22.5 billion yen. Our share was held at 8% and steadily contributing to a bottom line. Operating income for the fiscal year March 2022 was 45.7 billion yen, putting the operating margin at 25.8%. We saw operating income increase 46.4% and operating margin rise 6 percentage points year-on-year. Looking at the year-on-year result by products, we see that profits for ball bearings, rod head fasteners, and pure assemblies all rose. For the fiscal year ending March 2023, we expect an increase in sales for ball bearings due to continued increases in demand in a wide range of applications, mainly for automobiles and service, as well as our strength in the production capacity. In our aircraft related business, including rod ends and fasteners, we expect recovery in the second half of this fiscal year. For pivot assembly, we anticipate a decline in the demand as the HDD market shrinks. Next slide, please. This slide shows the quarterly trend in the machine component segment. Fourth quarter net sales increased 6.8% quarter-and-quarter at 46 billion yen. Sales of ball bearings increased 6.7% quarter-and-quarter to 33 billion yen. The monthly external shipment volume was down 0.4% quarter-and-quarter, with an average of 231 million units. Although sales to data centers remained robust, they were affected by the shortage of semiconductors, particularly in the automobile sector and the lockdown in China. Sales of aircraft bearings remained sluggish due to the stagnant market. Sales of rod and fasteners totaling 7.6 billion yen were up 19.2% over the previous quarter. Sales of pivot assemblies decreased 6.5% quarter-on-quarter to total ¥5.4 billion. Operating income for the quarter was ¥11.3 billion, and the operating margin was 24.5%. On a quarter-on-quarter basis, operating income decreased 2.9%, while the operating margin dropped 2.5 percentage points. Looking at the results by product, we see that profits for pivot assemblies fell along with the sales decrease, while route ends and fasteners rose. Operating income for ball bearings remained almost unchanged. Next slide, please. Now, let's look at the electronic devices and components segment. In the fiscal year March 2022, net sales were up 2% year-on-year to a total of 371 billion yen. Looking at the results by product, the sales of motor increased 32.3% year-on-year to reach 267.2 billion yen. This increase was due to the sales of spindle motors for HCTs as well as the expansion of applications for motors in automobile and the launch of new products. Electronic device sales were down 48.5% year-on-year to 64.2 billion yen. This is due to the declining number of sales units of models that use LED backlights at major customers, in addition to the impact from changes to the business segments as well. Net sales of sensing devices was 35.4 billion yen, increasing 8.5% year-on-year. Operating income was 21.6 billion yen with operating margin of 5.8%. Compared to the previous fiscal year, operating income increased by 22.3% and operating margin rose by 1 percentage point. Looking at the results by product, we see that operating income was up for motors and sensing devices, but down for electronic devices. For fiscal year March 2023, we anticipate accelerated growth for motors due to the recovery in the automobile market, an increasing number of applications, and the launch of new products. And we expect a significant increase in both sales and profit. For electronic devices, we expect a decrease in sales and profits due to the decrease in the number of units and models that use LED backlights. Sales of sensing devices will also be almost flat, but profits are expected to increase due to improved profitability. Reference figures shown for the fiscal year ended March 2021 and before, based on the classifications used before changes to the business segments were made. Please note that the same applies to the rest of the presentation as well

This slide describes the quarterly trends in the electronic devices and components segment. Net sales increased 6.1% Q on Q to reach 96.2 billion yen. Looking at the results by product, we saw that sales of motors increased 5.9% a quarter on quarter to reach 70.4 billion yen. This was because sales of motors in the automotive application remained steady. Sales of electronic devices were up 8.1% from the previous quarter to a total of 15.4 billion yen. due to the launch of models that use LED backlights by our key customers. Sales of sensing devices totaled 9.1 billion yen, up 1.6% from the previous quarter. Operating income came to 3.9 billion yen, and the operating margin was 4.1%. On a quarter-on-quarter basis, operating income increased by 5.2%, while the operating margin remained unchanged. Please turn to the next slide. Now we're looking at the performance of the Mitsumi business segment. The sales increased 18.9% year-on-year to total 429.1 billion yen in the fiscal year ended March 2022. This increase was driven by the strong sales growth in optical devices and continued strong performance of analog semiconductors. operating income came to ¥41.8 billion and operating margin was 9.8%. These figures represent a 2.1 times year-on-year increase in operating income and 4.3 percentage point year-on-year increase in the operating margin. Profits for optical devices and analog semiconductors significantly increased while other businesses saw a decrease. for the fiscal year ending March 2023. Despite having conservative outlook for mechanical components, we anticipate continued growth mainly in optical devices and semiconductors and expect further increase in sales and profit. Please turn to the next slide. This slide is showing the Mitsumi business segment's quarterly trend. Net sales decreased 20.2%, quarter on quarter, to a total of 107.2 billion yen. While sales of analog semiconductors increased, sales decreased for other products, primarily, mechanical components and optical devices as the peak demand period has passed. Operating income totaled 10.2 billion yen while the operating margin was 9.5%. Operating income decreased 33% and operating margin declined 1.8 percentage points quarter on quarter. This was due to the decrease in profit caused by decrease in sales of optical devices and mechanical components that I mentioned earlier. Next slide, please. Lastly, I would like to explain the Yuxin business segment. net sales increased 38.5% year-on-year to total 145.6 billion yen in the fiscal year ended March 2022. This was due to an increase of approximately 30 billion yen resulting from a change in the business segments as well as recovery in sales towards the domestic automotive market. Operating income came to 700 million yen and operating margin was 0.5%. This was a 2.3 percentage point improvement year on year. For the fiscal year ending March 2023, in addition to recovering automotive market, we anticipate positive effect from the fixed cost reduction achieved by structural reforms in Europe that we announced in March 2021, and we expect an increase in both sales and profit. Please turn to the next slide. This slide explains the Yuxin business segment's quarterly trends. Net sales increased 10.3% QoQ to hit 39.9 billion yen. This was due to partial recovery in automotive production, although the level of recovery varied by regions and customers. Operating profit came to 1.2 billion yen, and the operating margin was 2.9%, improving by 3.8 percentage points QoQ. This was mainly due to the improvement in the product mix. Please turn to the next slide. The bar graph here shows the trend in profit attributable to owners or parent, while the line graph describes the changes in earnings per share. The profit for the period was 68.9 billion yen, earnings per share was 170.08 yen. Please go to the next slide. Here is the quarterly trend. The profit for the period was 15.5 billion yen. Earnings per share was 38.2 yen. Moving to the next slide. Here, I would like to explain the quarterly trend for inventory. At the end of the fourth quarter, inventory totaled 219.3 billion yen, which was 5.3 billion yen less than three months ago. This was due mainly to the fact that we were able to consume the inventory that we have built up strategically. Please move to the next slide. The bar graph on this page is showing trends in net interest-bearing debt, which is total interest-bearing debt minus cash and cash equivalents, as well as line graphs showing the free cash flow. At the end of the fourth quarter, net interest-bearing debt totaled 86.9 billion yen, which improved by 2.5 billion yen year-on-year. Despite planned expenditures on the new headquarter building acquisition, the cash position is expected to improve in the fiscal year ending March 2023 thanks to our strong ability to generate cash. Moving on to the next slide. This is the summary of the forecast for the fiscal year ending March 2023. Net sales, operating income and profit attributable to owners or parents are all expected to reach record highs this fiscal year. Overall, net sales are expected to increase to 1.2 trillion yen, with businesses growing mainly in ball bearings, motors, analog semiconductors, and optical devices, compensating for falls in sales in LED backlights and mechanical components. Despite various risks, including the Ukraine issue, operating income is expected to exceed 100 billion yen, thanks to growth in the businesses I have just mentioned, as well as through thorough cost reduction measures across all businesses. The exchange rate is assumed to be 115 yen to the US dollar. Next slide, please. This slide shows the forecast by business segment. And this completes my explanation.