Minebea Mitsumi Inc U/Adr

Thank you, this is Yoshida speaking. I'd like to explain the overview of financial results for the fiscal year ended March 31, 2026 and the medium-term earnings forecast for the fiscal year ended March 31, 2027 and beyond. Consolidated net sales for the fiscal year ended March 31, 2026, increased by 9.3% year-on-year, totaling ¥1,664.4 billion, operating income increased by 10.1% year-on-year, totaling ¥104 billion. Profit for the period attributable to owners of a parent increased by 66.6% year-on-year, totaling ¥99 billion. Both net sales and operating income exceeded the plan. Operating income includes structural reform expenses of approximately ¥2.6 billion. In addition, profit for the period attributable to owners of a parent includes special factors. Details will be explained later in the slides. Due to the appreciation of the yen, There was a negative foreign exchange impact on the previous year, decreasing net sales by 1.2 billion yen and operating income by 10.7 billion yen. Consolidate net sales for the fourth quarter of fiscal year ended March 31, 2096 was up 15.3% year-on-year and down 4.8% quarter-on-quarter to total 432.2 billion yen. Operating income was up 31.5% year-on-year and down 9.5% quarter-on-quarter to total 28.3 billion yen. Profit for the period attributable to owners of a parent was up 2.9 times year-on-year and up 2.3 times quarter-on-quarter to total ¥49.2 billion. As mentioned earlier, profit for the period attributable to owners of a parent for the fourth quarter includes special factors. We estimate that foreign currency exchange rates had a quarter-on-quarter impact of plus 12.2 billion yen and year-on-year impact of plus 13.6 billion yen in net sales. Quarter-on-quarter impact was plus 0.1 billion yen and year-on-year impact was minus 1.6 billion yen in operating income. This slide shows the difference between the forecast as of February and the actual results for net sales and operating income by business segment for the fourth quarter. For net sales, PT sales were higher than expected primarily due to strong performance in bearings for data centers and aircraft products. MLS sales were higher than expected due to steady growth mainly in motors for HDDs and electronic devices. SE sales were higher than expected due to strong performance in mechanical components and optical devices. AES sales were above the forecast mainly for automotive devices. With regard to operating income, PT exceeded the forecast due to an increase in production volume of bearings and other products. MLS was below the forecast due to the impact of soaring material prices for motors and other products. SC exceeded the forecast due to steady growth mainly in optical devices. AES exceeded the forecast due to steady growth mainly for Europe. This chart shows the annual trends for sales operating income and operating margin. The bar graph on left shows net sales and the graph on right shows operating income and the line graph indicates the operating margin. The operating margin for the fiscal year ended March 31, 2026 was 6.2%. This slide shows the quarterly trends in net sales operating income and operating margin. The operating margin for the full quarter was 6.5%. This was up 0.8 percentage points year-on-year and down 0.4 percentage points quarter-on-quarter. Next is the situation of each business segment starting with the precision technologies segment. The graph on the left shows annual net sales trends. The graph on the right, the bar chart represents operating income and the line chart indicates operating margin. In the fiscal year ended March 2026, net sales increased by 10% year-on-year, totaling 281.2 billion yen. sales of ball bearings increased by 8.5% year-on-year to reach 186.4 billion yen. The monthly average of external bearing sales volume totaled 277 million units, an increase of 16.9% year-on-year. By application, sales of products for data centers increased, driving overall growth. Sales of rod ends and fasteners increased by 11.7% year-on-year, totaling 66 billion yen. Products for aircraft applications showed strong performance. Sales of PMC increased by 16% year-on-year, totaling ¥28.7 billion. Operating income for the fiscal year ended March 31, 2026, totaled ¥62.2 billion, with an operating margin of 22.1%. This represents a year-on-year increase of 11.8% in operating income and an increase of 0.3 percentage points in operating margin. by product operating income for all products including bearings, rod ends and fasteners and PMC increased reaching a record high. For the fiscal year ending March 31, 2027, ball bearings, we expect volume growth for data centers due to continued demand and steady growth for automobiles due to continued content growth. In our aircraft-related businesses, including rod ends and fasteners, we will improve profitability through strong aircraft demand and price adjustments and accelerate earnings growth by strengthening our supply system. For PMC, we expect sales to increase primarily driven by automotive components for LiDAR. This slide shows for quarterly trends. Fourth quarter net sales increased 11% quarter-on-quarter to a total of 77.8 billion yen. Sales of bow bearings increased 9.4% quarter-on-quarter to total 50.6 billion yen. The monthly external shipment volume increased 3.9% quarter-on-quarter, averaging 287 million units. Sales showed steady growth driven primarily by applications for data centers. Sales of rod ends and fasteners increased 17.4% quarter-on-quarter to total 19 billion yen. Sales of PMC increased 7.3% quarter-on-quarter to total 8.2 billion yen. Operating income for the quarter totaled 17.7 billion yen and the operating margin was 22.8%. On a quarter-on-quarter basis, operating income increased 12.2% and the operating margin was up 0.2 percentage points. Please note that due to the PPA of Minibia Linear Motion Inc, we made a retrospective adjustment of approximately ¥0.5 billion to the operating income for the third quarter of the fiscal year ended March 31, 2026. Next is the motor lighting and sensing segment. For a fiscal year end March 31, 2026, net sales increased by 12% year-on-year, totaling 456.5 billion yen. Byproduct sales of motors increased by 5.6% year-on-year to reach 340.3 billion yen. This was due to steady growth in motors for HDDs as well as automotive and non-automotive motors. Sales of electronic devices increased by 65.2% year-on-year, totaling ¥68 billion. Sales of sensing devices increased by 4.5% year-on-year, totaling ¥38.5 billion. Operating income was ¥26.9 billion with an operating margin of 5.9%. This represents a year-on-year increase of 17.2% in operating income and an increase of 0.3 percentage points in operating margin. Please note that the fourth quarter includes one-time expenses of approximately 1.6 billion yen. This is due to the recording of structural reform expenses in the European sensing business. For the fiscal year ending March 31, 2027, we expect motors to show steady growth driven by server demand. We also expect an increase in sales for both electronic devices and sensing devices. These are quarterly trends for the motor lighting and sensing segment. Net sales increased 8.6% quarter-on-quarter to total 124.1 billion yen. Byproduct sales of motors increased 9% quarter-on-quarter to total 91.7 billion yen. Sales of electronic devices increased 5.3% quarter-on-quarter to total 18.4 billion yen. Sales of sensing devices increased 7% quarter-on-quarter to total 10.6 billion yen. Operating income for the quarter totaled ¥6.3 billion and operating margin was 5.1%. On quarter-on-quarter basis, operating income decreased 24% and operating margin was down 2.1 percentage points. The aforementioned one-time expenses of ¥1.6 billion were recorded in the fourth quarter. Excluding these one-time expenses, operating income was ¥7.9 billion and operating margin was 6.2%. Next, I will explain the semiconductor and electronic segment. In the fiscal year ended March 31, 2096, net sales increased by 11.9% year-on-year, totaling 590.3 billion yen. This is primarily due to an increase in sales of mechanical components. Operating income was ¥26.7 billion, operating margin was 4.5%. This represents a year-on-year increase of 21.1% in operating income and an increase of 0.3 percentage points in operating margin. Please note that operating income includes special factors of approximately ¥1 billion. Excluding these factors, operating income was approximately ¥27.7 billion. This is due to the recording of structural reform expenses in a power supply business. For the fiscal year ending March 2027, although we expect a decrease in net sales due to lower sales of mechanical components, we expect optical devices and semiconductors to show strong performance, resulting in an increase in operating income. This shows quarterly trends for the semiconductor and electronics segment. Net sales decreased 26.9% quarter-on-quarter to a total of 136.4 billion yen. This was due to seasonality as sales of mechanical components decreased in the fourth quarter. Operating income for the quarter totaled 6.2 billion yen. and operating margin was 4.5%. On a quarter-on-quarter basis, operating income decreased 43% and operating margin was down 1.3 percentage points.

And finally, I will explain the access solution segment. In the fiscal year ended March 2026, net sales increased by 1.3% year-on-year, totaling 332.2 billion yen. This was due to factors such as increased demand for communication antennas and industrial equipment components. Operating income was ¥17.1 billion with an operating margin of 5.1%. This represents a year-on-year increase of 7.3% in operating income, an increase of 0.2% in terms of operating margin. For the fiscal year ending March 2027, we expect an increase in operating income due to acceleration of mass production of high-value-add products. This slide shows the quarterly trend for the access solution segment. Net sales increased 12.9% quarter on quarter to 92.5 billion yen. Operating income for the quarter came to 6.7 billion yen and operating margin was 7.2%. On a quarter on quarter basis operating income approximately doubled and operating margin was up 3.2 percentage points. In addition to recovery from Nexperia-related impact in the previous quarter, seasonal factors such as malt sales in March boosted earnings. On this slide, the bar graph shows the trend in profit attributable to owners of a parent, and the line graph is showing the trend in earnings per share. Profit for the period was ¥99 billion and earnings per share was ¥246.6. Profit for the period for the fiscal year ended March 2026 includes profit impact of approximately ¥25.2 billion resulting from valuation of financial assets held by the company at fair value. Excluding this factor, profit for the period on a real basis was ¥73.8 billion and earnings per share was ¥183.87. This slide shows the quarterly trend. Profit for the period was ¥49.2 billion and earnings per share was ¥122.46. The special factors of ¥25.2 billion I mentioned earlier were recorded in this fourth quarter. Next slide shows the quarterly inventory trend. At the end of the fourth quarter inventory totaled 391.3 billion yen which was a decrease of 20.4 billion yen from the 411.7 billion yen recorded three months earlier. Compared to the end of the previous fiscal year, which was 350.9 billion yen, this represents an increase of approximately 40 billion yen. However, approximately 26 billion yen of this was due to the depreciation of the yen, meaning that the increase on a real basis was approximately 14 billion yen. This was primarily due to factors such as the build-up of necessary inventory as sales are expected to remain strong in the first half of the next fiscal year. This slide shows the trending cash flows. The bar graph on the left shows operating cash flow, the bar graph on the right shows the investing cash flow, and the line graph is representing the free cash flow. The adjusted free cash flow, which excludes one-time factors such as M&A expenditures, is shown in red. During the fiscal year ended March 2026, the strong business environment continued through the fourth quarter. Inc U'Adr Inc U'Adr This slide shows the trends in return on invested capital. The line graph on the left shows the annual trend and the line graph on the right shows the quarterly trend. Company-wide RIC has been on a gradual recovery since bottoming out in the fiscal year ended March at 2024. On a quarterly basis, it has been showing a steady improvement. I will explain the segment changes. Beginning with the fiscal year ending March at 2027, I will make the following changes. First, the large size machine components for aircraft and other applications which previously belonged to the MLS segment will be transferred to the PT segment. The name of the sub-segment, as previously referred to as Broad End Fasteners, will be changed to Aerospace. From this page onwards, I will continue to present by explaining the medium-term business forecasts for the fiscal year ending March 2027 and beyond. This slide summarizes the earnings forecast from the current fiscal year in the March 31st, 2027 through to fiscal year in the March 2029 to fiscal year in the March 2027. We are assuming an exchange rate of 155 yen to the US dollar. This slide shows the forecast by the business segments. This slide summarises the trend in cash flow forecast from the current fiscal year ending March 2027 through to fiscal year ending March 2029. We expect operating cash flow to expand along with growth of net sales and operating income. Regarding investing cash flow, we anticipate it to remain at approximately 90 to 92 billion yen under a disciplined capital expenditure plan. As a result, we expect to see steady improvement in free cash flows. I will explain our medium-term cash flow allocation plan for the three years from fiscal year ending March 2027 to fiscal year ending March 2029. Our basic policy, 50% of generated operating cash flow will be allocated to a capital expenditure for organic growth of the remaining 50%. Half will be allocated to shareholder returns and the other half will be earmarked as a budget for potential M&A investments. We anticipate a cumulative operating cash flows of 500 billion yen over the next three years. Of this total, approximately 270 billion yen will be invested as capital expenditures to support the growth of our HBS core products, and approximately 80 billion yen will be allocated for dividend payments. We will consider the remaining 150 billion yen as funds for M&A investments and share buybacks. Furthermore, we will flexibly consider the use of debt financing for large-scale projects. Finally, I will explain the medium-term ROIC forecast. While we place the highest priority on improving our profit margins, we are also focusing on improving capital efficiency as one of our key management metrics. Over the next three years, we will strive to further improve capital efficiency by focusing on two key drivers, earnings growth in our core business and the combination of disciplined capital expenditures and the optimisation of inventory levels. Given the current environment of rising interest rates, it is clear that higher capital efficiency than ever before is required. We are committed to achieving profitability that consistently exceeds the cost of capital and will continue to strive towards enhancing our corporate value. This concludes my presentation. Thank you.