MinebeaMitsumi Inc.

Hello, this is Yoshida. Today, I would like to explain the overview of financial results and the earnings forecast for the second quarter of the fiscal year ending March 31st, 2027. The consolidated net sales for the second quarter of the fiscal year ending March 31st, 2027 came to 464.2 billion yen, increasing by 12.8% year-on-year and by 8.8% quarter-on-quarter. Operating income was 31.8 billion yen, increasing by 17.8% year-on-year and by 20.7% quarter-on-quarter. Profit for the period attributable to owners of the parent came to 29.7 billion yen, increasing by 67.9% year-on-year and by 39.5% quarter-on-quarter. Net sales, operating income and all other key figures recorded during the second quarter hit record highs for the second quarter. Regarding the impact of foreign exchange during the second quarter, net sales improved by 33.6 billion yen year on year and by 3.3 billion yen quarter on quarter. Operating income was positively impacted by 3.1 billion yen year on year and by 1.2 billion yen quarter on quarter. This slide shows the summary for the first half of the fiscal year. Net sales, operating income and all other figures recorded during the first half of the fiscal year hit record highs for the half year period. This slide shows the difference between the forecast announced in August and the actual results for net sales and operating income by business segment for the second quarter. Net sales for PT exceeded expectations due to strong performance in bearings and for data centers and aircraft products. MLS exceeded expectations driven primarily by increased demand for HDD spindle motors and for fire motors used in solar power and data centers. SE exceeded expectations mainly due to strong cells in mechanical components and semiconductors. AS exceeded expectations driven primarily by automotive devices and industrial equipment components. Operating income for PT exceeded expectations mainly due to strong performance in bearings and aircraft products. MLS exceeded expectations supported by solid performance in HDB spindle motors. SE fell short of expectations in mechanical components and optical devices. AS fell short of expectations mainly due to weak market in China and slowdown at key customers in Europe. This slide shows the quarterly trend in net sales, operating income, and operating margin. The operating margin for the second quarter was 6.8%. up 0.2% point year-on-year and up 0.6 percentage points quarter-on-quarter. This slide shows the quarterly trends of the precision technology segment. The second quarter net sales came to ¥84.8 billion, increasing by 3.3% quarter-on-quarter. Sales of ball bearings totaled ¥54.1 billion, improving by 1.6% quarter-on-quarter. Meanwhile, monthly external shipment volume averaged 306 million units, down 1.2% quarter on quarter. This was due to logistics impacts, including air freight delays resulting from the flood that hit Thailand in September. Sales of aerospace totaled 21.6 billion yen, up 5.6% over the previous quarter. Sales of PMC totaled 9.2 billion yen, up 9.2% quarter-on-quarter. Operating income for the quarter totaled 21 billion yen, and the operating margin was 24.7%. On a quarter-on-quarter basis, operating income increased by 1.8 billion yen, and the operating margin improved by 1.4 percentage points.

This slide shows the quarterly trends for the motor lighting and sensing segment. Net sales totaled 129.5 billion yen, an increase of 4.0% compared to the previous quarter. Byproduct, sales of motors amounted to 101.3 billion yen, up 5.6% quarter-on-quarter. Sales of electronic devices reached 17.6 billion yen, a decrease of 7.7% from the previous quarter. Sales of sensing devices totaled 10.4 billion yen, an increase of 9.8% compared to the previous quarter. Operating income came to 9.7 billion yen, with an operating margin of 7.5%. Quarter on quarter, operating income increased by 2.1 billion yen, and the operating margin rose by 1.4 percentage points. This slide shows quarterly trends for the semiconductor and electronics segment. Net sales totaled 160.4 billion yen, an increase of 19.5% compared to the previous quarter. Operating income amounted to 5.2 billion yen, with an operating margin of 3.2%. Quarter on quarter, operating income decreased by 800 million yen, and the operating margin fell by 1.3 percentage points. This slide shows a quarterly trend for the access solutions segment. Net sales totaled 88.3 billion yen, an increase of 4.6% compared to the previous quarter. Operating income came to 3.3 billion yen with an operating margin of 3.8%. Quarter on quarter, operating income increased by 3.2 billion yen, and the operating margin rose by 3.7 percentage points. The bar graph here shows trends in profit attributable to owners of the parent, while the line graph shows the changes in earnings of her share. Profit for the period was 29.7 billion yen. Earnings per share was 73.98 yen. Please note that Q2 of the fiscal year ending March 2027 includes a profit impact of approximately 8.4 billion yen resulting from the fair value measurement of financial assets held by the company. Excluding this special factor, profit for the period on an underlying basis was 21.3 billion yen, and earnings per share was 53.03 yen. Next, we have the quarterly inventory trend. At the end of the second quarter, inventories totaled 416.7 billion yen. This was a decrease of 16.2 billion yen from 432.9 billion yen three months earlier. This slide shows the trends in cash flows. The bar graph on the left shows operating cash flow, the bar graph on the right shows investing cash flow, and the line graph indicates free cash flow. The adjusted free cash flow, which excludes one of factors such as M&A expenditure, is shown in red. As for free cash flow for the fiscal year ending March 2027, no M&A acquisition costs are included at present. Thank you very much. In March 2027, we have revised our net sales and operating income from the forecast announced in August. Please note that the profit attributable to owners of the parent for the second quarter includes a special factor mentioned earlier. Even excluding the special factor, we forecast a record high profit for the period. The assumed exchange rate for the second half is 155 yen to US dollar. This slide shows the forecast by business segment. I will now explain the update to our three-year medium-term cash allocation plan. The main update this time is that with a firm view of the significant potential for the organic growth in the five growth areas plus one, we intend to expand our capital expenditure allocation. Accordingly, we have revised our policy so that the allocation for M&A investment in particular is no longer fixed and part of it will be shifted to capital expenditure. We expect a cumulative operating cash flow of approximately 500 billion yen over the next three years and our basic policy of earmarking approximately 80 billion yen of that amount as a stable source of dividends remains unchanged. This concludes my presentation. Thank you for listening.

Mr. Kainuma, over to you. So please allow me to start with this page. And this is quite understandable by reading it, but the key point is that during the first half of the fiscal year, in all our key items, we have achieved record highs. I will talk about operating income later on, but we saw 8.7% afford a real operating margin. For March 2029, we have a target of 10%. So I think we have been able to get on the right track, if you like. So next page, please. I apologize for the slide being quite busy. I have two key messages here. The first is that in the second half of the year, we are expecting the lower revenue but higher profit. And so you can see in the middle section, 890.8 billion yen. They're coming down to 839.2 billion yen. And the reason is quite obvious. One is gain, and the revenue is expected to come down about 38 billion yen, and optical device as well. We expect about 15 billion yen of a decrease. So this is kind of the assumptions that we have made. However, we are expecting profit to improve. And the reason here is AS, for one. This has been the case every year, but we have been able to recoup the mold on expenses. and various profit items realized. And that is one of the significant drivers for data profit increase. And the second is, and as was the case with the previous results announcement, but if you only look at the The earnings profit for the period, we tend to see the fluctuations and the certified accountant on a half year period, we asked to revalue the shares that we have in Toshiba. Now Kyoxya's share price does have significant impact on the Toshiba's share price and because of the fluctuation in the Kyoxya price, the value of Toshiba also fluctuates. And so because of this, on this occasion, we did revaluation and if we reflect that as 100 billion yen and when you look at this table, and if you could look at the operating income line, or sorry, if you could look at the profit for the period line, and if you look at the numbers in parentheses, sorry, so the operating profit going up by 23.1%, and if you go to the profit for the period, if you look at the number in the bracket, The previous fiscal year was at 3.8 billion yen. This will increase to 91.6 billion yen. And if we reflect the valuation gain on top of that, even if you reflect the special factors, we expect the profit to increase. and as I've been repeating on many occasions, what I would like for you to focus on is not the valuation of the Toshiba shares but The operating income that is generated based on our core operation. So if you could look at how that changes. So now to the next page, please. And this is the situation regarding PP. And for the forecast for the March 2029 is operating income of 80 billion yen. And this is what we are thinking of. Now this number and when we put together a three-year plan and March 2029 in three years time and the operating income to be generated at that point in time so that was the plan that we had to begin with and I apologize but we were in fact have essentially achieved that target in one year rather than in three years. And so this is due to the five growth area plus one, and the bearing demand has been very strong. And also the aircraft demand has also been very strong. And so if I start with the situation concerning the bearings, and in October we ended up with 360 units of production and we ended up passing 374 million units and so our external sales was 320 million and internal sales was 54 million and so when we talk about 360 or 370 million our current capacity is 404 million so we are not quite there as yet but for us to get there and so the utilization rate of factories where we have the bearing production also with the number of the operating days this must improve and we need to also see the utilization rate which be the maximum level and so for now we are working on various initiatives to improve the utilization so shortening the changeover times and so forth. And for PMC, their pivot, this has also performed quite well. And one of the reasons for this is in China, and so apparently for school utilization, but the desktop, there's been a significant order has been placed for the desktop and they come with hard disk drive apparently. And so this is seeing increase in the quantity. This may settle a little bit in the second half of the year, but the near line for AI servers, we expect that to increase. And so for the full year, We expect the strength or strong performance to continue. And also for the aircraft, the situation remains to be quite strong. For example, Boeing, for September 2025, the build rate, if we consider that at 100, then September 2026, the build rate is 123. That is a 23% pickup. and so the supply chain in fact dropped quite a lot and so we are seeing that recover. Airbus for September 25 was 100 and is now 110 so here is 10% pickup as well for Airbus and so when we look at the three operations within PT, bearing, aircraft and PMC, if we look at the three operations, they are all performing very strongly. So that is something that I wanted to communicate to you. Now moving to the next page, please. MLS also continues to perform strongly, and for the motors, performing very strongly. Spindle motors for hard disk, and fan motors as well, and also stepping motor. Those used for AI service, so BBU, the battery protection module, that has also performed quite well. I'm going to explain about this later on, but we will start the operation of the plant in the Philippines as well. In regards to sensing devices, for quite a long period, it wasn't one of the spheres. It was kind of hidden behind the shades of the arrows, but we are starting to see the seed bud. So the two robotics manufacturers in U.S. have provided inquiry. We have started to make deliveries. And so 20 per unit is the utilization rate. And so the production capacity here is about 30,000 sets. That's the 600,000 units per month. And so... That can be accommodated for by the investments that we've made already, but 30,000 units, if we start to exceed that level, then we would probably require additional investments in this area. And MLF and PT, these two operations continue to perform very, very strongly.