Minebea Mitsumi Inc U/Adr

My name is Yoshida. I would like to explain the consolidated financial results for the Q3 of fiscal year ending in March 2023. Consolidated net sales for the third quarter was up 22% year-on-year and up 12.5% quarter-on-quarter to total 371,424,000,000 yen. Operating income was up 2.3% year-on-year and up 0.1% quarter-on-quarter to total 26,432,000,000 yen. Profit for the period attributable to the owners of the parent was down 28.5% year-on-year and down 34.5% quarter-on-quarter to total ¥13,148,000,000. We estimate the foreign currency translations and we record high sales in terms of the quarterly result. We estimate that foreign currency translation have a quarter-on-quarter impact of ¥15.3 billion in net sales and ¥3.5 billion in operating income. Iaonia impact of ¥57.2 billion in net sales and ¥7.7 billion in operating income. This chart shows quarterly trend in net sales, operating income, and operating margin. The operating margin for the third quarter was 7.1%, down 1.4% year-on-year, and down 0.9% quarter-on-quarter. There was a negative impact on operating income from more than expected fluctuations of exchange rate as we had Forex forward contracts. Our estimation of the foreign exchange effects are shown in the boxes for your reference as we did in the first and second quarters. The operating income figure for the third quarter includes foreign exchange gain of ¥1.9 billion and ¥2.9 billion loss on the FX forward contract. Excluding the impact from the Forex forward contract, operating income would have been ¥29.3 billion. Next slide, please. Here shows 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 machined components business were generally on track with the forecast thanks to soaring sales in the aircraft market, although bearing sales were lower than expected. The electronic devices and components of business experienced lower-than-expected sales due mainly to the slowdown in HDD motor sales. The Mitsumi business enjoyed higher-than-projected sales mainly for mechanical components, using sales for higher-than-projected mainly for automobile applications, operating income for the machined components of business was lower than expected due to a slight decline in profitability resulting from production adjustments for bearing the electronic device and components of business so operating income falls slightly below our forecast due to a drop in sales operating income for Mitsumi business was almost on the par with a forecast using operating income was marginally lower than our Next slide, please. This slide shows the quarterly trend of the machined components of business. The left graph indicates quarterly net sales trend, and the right chart's quarterly operating income trend, along with the line chart for operating margins. The third quarter net sales decreased 1.6% quarter-on-quarter to a total of 50.5 billion yen. Sales of ball bearings decreased 4.1% quarter-on-quarter to total 37.6 billion yen. The monthly external shipment volume was down 10.4% quarter-on-quarter for an average of 225 million units. This was due to slowdown in the market mainly for data centers. Sales of rod end and fasteners are totaling 9.6 billion yen were up 16.5% over the previous quarter. Sales increased with the recovery of aircraft production. Sales of pivot assemblies decreased 14.3% quarter-on-quarter to total 3.3 billion yen. Operating income for the quarter totaled 11.5 billion yen and the operating margin was 22.9%. On a quarter-on-quarter basis, operating income decreased 7.8% while the operating margin dropped 1.5 percentage points. Looking at the results by product, we see that the operating income for ball bearings and pivot assemblies decreased quarter-on-quarter, while operating income for rod ends and fasteners was up compared with last quarter. Next slide, please. Let's look at the electronic device and components segment. Net sales decreased 7.5% quarter-on-quarter to total ¥90.7 billion. Looking at the results by product, we see that sales of motors decreased 8.3% quarter-on-quarter to reach ¥65.4 billion. This was primarily due to a decrease in demand for HDD motors. Sales of electronic devices were down 7.8% from the previous quarter to total ¥14.3 billion. This is due to decline declined sales of LED backlight models used by our key customers. Sales sensing devices totaling ¥9.9 billion were down 2.4% from the previous quarter. Operating income came to ¥2 billion and the operating margin was 2.2% on a quarter-on-quarter basis. Operating income decreased 37.8% while the operating margin dropped 1.1 percentage points. The results include a loss of ¥1.4 billion due to the special factor of foreign exchange effects noted earlier. Next page, please.

This is the performance for the Mitsumi business segment. We have included Minibia Connect, formerly Sumikotech, in this group of consolidation since November 1, 2022. Net sales increased 33%, quarter-and-quarter, at 182.7 billion yen. This was due to increased revenues accompanied by seasonality of optical devices and mechanical components and others. Operating income totaled 17.3 billion yen, while the operating margin was 9.5%. Quarter-and-quarter, operating income increased 10.7%, and operating margin dropped by 1.9 percentage points. Note that this figure include 1.7 billion yen of negative goodwill of MediBear Connect, formerly Sumiko Check. Excluding this, operating income would be 15.6 billion yen, stable quarter-and-quarter, and operating margin 8.6% or down 2.8 percentage points. This was primarily due to the changes in product mix. Next slide. A look at the Yuxin business segment. Net sales were up 7.9% quarter-on-quarter at 46.3 billion yen. This is due to the recovery of production by car manufacturers gradually, although the situation varied from region to region and customer to customer. Operating income totaled 0.3 billion and the operating margin The bar graph shows the trends in profit attributable to owners of the parent, and the line graph chart shows changes in the profit for the period per share. The profit for the period was 13.1 billion yen. Earnings per share was 31.9 yen. The quarterly inventory trend At the end of Q3, inventory totaled 275.9 billion yen, an increase of 3.1 billion yen over three months ago. Next slide. The bar chart shows trends in net interest bearing debt, which is total interest bearing debt minus cash and cash equivalents. The line chart represents free cash flows. At the end of Q3, net interest bearing debt totaled $211.8 billion, up $124.9 billion from the end of the previous fiscal year. Next slide. We have made revisions to the full year forecast. Net sales were revised upward. from 1,250 billion yen to 1,300 billion yen, and operating income was revised downward from 115 billion yen to 100 billion yen. The operating income forecast includes one-time revenues such as negative goodwill associated with M&A and restructuring costs. Net sales, operating income, and profit for the period are all expected to reach record highs in the current fiscal year. The exchange rate is assumed to be 125 yen to the US dollar. Next slide. This is the forecast by business segment. Sales and profits of Minibia Access Solutions, formerly Honda Lock, in the scope of consolidation since January 27th of this year are included in the Yuxin business segment for the second half of this fiscal year. This concludes my presentation.