Minebea Mitsumi Inc U/Adr

My name is Yoshida. Today I would like to explain the consolidated financial results for the first quarter of the fiscal year ending in March 2023. Consolidated net sales for the first quarter of the fiscal year ending March 2023 was up 1.1% year-on-year and down 13.3% quarter-on-quarter to a total of 251,040,000,000 yen. Operating income down 27.4% and down 34.2% quarter-on-quarter to a total of 14.255,000,000 yen. Profit for the period, attributable to the owners of the parent, down 26.8% yen and down 30.7% quarter to total 10.734 billion yen. Net sales hit first quarter record high. In addition, operating income exceeded the initial forecast despite the impact of the lockdown. We estimate that the foreign currency translations have a year-on-year impact of ¥21.2 billion in net sales and ¥4.7 billion in operating income. quarter-on-quarter impact was plus 14.2 billion yen in net sales and plus 2.4 billion yen in operating income. Next slide, please. This is for quarterly trend in net sales, operating income, and operating margin. The operating margin for the fourth quarter was 5.7%, down 2.2% point year-on-year, and down 1.8% points quarter-on-quarter. If the loss of approximately 8.3 billion yen due to special factors such as the lockdown in Shanghai were excluded, the operating margin would be 9% up, 1.5 percentage points, quarter on quarter. Next slide, please. Here shows the difference between the forecast as of May and actual results for net sales and operating income by business segment for the first quarter. Net sales of the machined components were higher than projected, mainly because of steady sales of ball bearings for data centers despite the impact of the lockdown in Shanghai. Net sales of the electronic devices and components were lower than the projection due to the impact of the lockdown in Shanghai. a lagging recovery in automotive motor sales caused by semiconductor shortage and a slowdown in smartphone backlight sales. The Mitsumi business enjoyed higher-than-projected sales overall, mainly for mechanical components, semiconductors, and optical devices. The Yushin business experienced slightly lower-than-expected sales due to a slow recovery in automobile production, operating income for the machined components, was almost on par with our forecast, but was lower than the projection for the electronic devices and components, primarily due to the impact of the lockdown in Shanghai. The Mitsumi business enjoyed higher than expected operating income thanks to the increased sales of mechanical components and further improvements in the profitability of bus semiconductors. In the Yushin business, quarterly operating income was almost on par with our forecast, although sales to the automobile industry started showing signs of recovery in June. Next page, please. 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 graph that the chart's quarterly operating income trends along with the line chart for operating margins. First quarter net sales increased 0.8% quarter-on-quarter to a total of 46.4 billion yen. Sales of ball bearings increased 3.2% quarter-on-quarter to a total of 34 billion yen. The monthly external shipment volume was down 3.9% quarter-on-quarter for an average of 222 million units. Net sales remained strong as sales began to rebound, mainly in the automobile market, although they were affected by the shortage of semiconductors and the lockdown in China. Sales of rod ends and fasteners totaling 7.6 billion yen were up 0.1% over the previous quarter, Sales of pivot assemblies decreased 12.9% quarter-on-quarter to total 4.7 billion yen. Operating income for the quarter totaled 10.2 billion yen, and the operating margin was 22% on a quarter-on-quarter basis. Operating income decreased 9.6% while the operating margin dropped 2.5 percentage points. Next slide, please. Now, let's look at the electronic devices and components segment. Net sales decreased 15.4% quarter on quarter to total 81.4 billion yen. Looking at the results by product, we see that the sales of motors decreased 10.9% quarter on quarter to reach 62.7 billion yen. This is mainly due to the impact of the lockdown in Shanghai. Sales of electronic devices were down 36.6% from the previous quarter to total 9.7 billion yen. This is due to decline the sales of LED backlight models used by our key customers. Sales of sensing devices totaling 8.2 billion yen were down 10% from the previous quarter. Operating income came to 0.2 billion yen and the operating margin was 0.2%. On a quarter-on-quarter basis, operating income decreased 95% while the operating margin decreased 3.9 percentage points. Next slide, please.

Let's look at the performance for the Mitsumi business segment. Net sales decreased 19% quarter-on-quarter to total 86.8 billion yen. This is primarily due to the seasonal drop in demand for optical devices and mechanical components. Operating income totaled 9.1 billion yen, while the operating margin was 10.5%. Operating income decreased 10.6%, while the operating margin rose 1 percentage points quarter on quarter. This is due to a profit loss resulting from the aforementioned seasonal decrease in demand that brought the sales down. Next slide, please. Finally, let's look at the Yuxin business segment. Net sales decreased 9.6% quarter on quarter to 636 billion yen. This is mainly due to the lagging recovery in automobile production caused by the lockdown in Shanghai. Operating loss totaled 0.3 billion yen, and the operating margin was minus 0.9%. Next slide, please. The bar graph here shows the trends in the profit attributable to owners of the parent while the line graph chart shows changes in the profit for the period per share. The profit for the period was 10.7 billion yen. Earnings per share was 26.4 yen. Please go to the next slide. Next, here we have the quarterly inventory trend. At the end of the first quarter, inventory totaled 264.4 billion yen, which is 45.1 billion yen more than what it was three months ago. This is primarily due to the foreign exchange effects as well as the fact that we strategically built up our inventory to secure enough stock to keep pace with the growing sales of optical devices and other products that we currently expect. 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 flows. At the end of the first quarter, net interest-bearing debt totaling 179.7 billion yen was up 92.8 billion yen from what it was at the end of the previous fiscal year. This is mainly due to the expenditure for the purchase of the new headquarters building, as well as the increase in inventories. of this amount. 13.2 billion yen of CB Euro-yen denominated convertible bonds with stock acquisition rights has been almost all converted by due date of redemption of August 3. At the end of the fiscal year ending March 2023, the net interest-bearing debt forecast is expected to increase from the end of the previous fiscal year. However, excluding the expenditures for M&A announced recently, the net interest-bearing debt forecast is expected to be at the same level as the end of the previous fiscal year. So although the first quarter results exceeded initial estimates, we made no revision to the full year forecast for the fiscal year ending March 31, 2023, taking a cautious view of inflation and other changes in the macroeconomic environment. The exchange rate is assumed to be 115 yen to the US dollar. Next slide, please. This slide shows a forecast by each business segment. This is all for me.